MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT, 485BPOS, 1997-04-23

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
485BPOS, 1997-04-23

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File Number 2-97564

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment Number
-------- ----

Post-Effective Amendment Number X 14
-------- ----
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment Number 13
-------- ----

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
--------------------------------------------------------------------
(Exact Name of Registrant)

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
--------------------------------------------------------------------
(Name of Depositor)

400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101-2098
--------------------------------------------------------------------
(Address of Depositor's Principal Executive Offices) (Zip Code)

(612) 665-3500
--------------------------------------------------------------------
(Depositor's Telephone Number, Including Area Code)

Dennis E. Prohofsky Copy to:
Senior Vice President, J. Sumner Jones, Esq.
General Counsel and Secretary Jones & Blouch L.L.P.
The Minnesota Mutual Life Insurance Company 1025 Thomas Jefferson St., N.W.
400 Robert Street North Suite 405 West
St. Paul, Minnesota 55101-2098 Washington, D.C. 20007
(Name and Address of Agent for Service)

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)
immediately upon filing pursuant to paragraph (b)
---
X on May 1, 1997 pursuant to paragraph (b) of Rule 485
---
60 days after filing pursuant to paragraph (a)(i)
---
on (date) pursuant to paragraph (a)(i)
---
75 days after filing pursuant to paragraph (a)(ii)
---
on (date) pursuant to paragraph (a)(ii) of Rule 485.
---

IF APPROPRIATE, CHECK THE FOLLOWING BOX:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940,
Registrant has previously elected to register an indefinite amount of its
variable annuity contracts under the Securities Act of 1933. The Rule 24f-2
Notice for Registrant's most recent fiscal year was filed on February 26,
1997.

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VARIABLE ANNUITY CONTRACT PROSPECTUS
FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACT
SINGLE PAYMENT VARIABLE ANNUITY CONTRACT
OF MINNESOTA MUTUAL'S VARIABLE ANNUITY ACCOUNT

COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS
FOR PERSONAL RETIREMENT PLANS

The individual variable annuity contracts offered by this Prospectus are
designed for use in connection with personal retirement plans, some of which may
qualify for federal income tax advantages available under sections 401, 403, 408
or 457 of the Internal Revenue Code. They may also be used apart from a
qualified plan. Two different contracts are offered: (1) a Flexible Payment
Variable Annuity Contract (no minimum initial purchase payment), and (2) a
Single Payment Variable Annuity Contract (minimum initial purchase payment of
$5,000 and may not exceed $250,000, except with our consent).

The owner of a contract may elect to have contract values accumulated on a
completely variable basis, on a completely fixed basis (as part of Minnesota
Mutual's General Account and in which the safety of principal and interest are
guaranteed) or on a combination fixed and variable basis. To the extent that
contract values are accumulated on a variable basis, they will be a part of the
Variable Annuity Account. The Variable Annuity Account invests its assets in
shares of Advantus Series Fund, Inc. and Class 2 of the Templeton Developing
Markets Fund (the "Funds"). The variable accumulation value of the contract and
the amount of each variable annuity payment will vary in accordance with the
performance of the Portfolio or Portfolios of the Funds selected by the contract
owner. The contract owner bears the entire investment risk for any amounts
allocated to the Portfolios of the Fund.

This Prospectus sets forth concisely the information that a prospective
investor should know before investing in the Variable Annuity Account, and it
should be read and kept for future reference. A Statement of Additional
Information, bearing the same date, which contains further contract information,
has been filed with the Securities and Exchange Commission and is incorporated
by reference into this Prospectus. A copy of the Statement of Additional
Information may be obtained without charge by calling (612) 665-3500, or by
writing Minnesota Mutual at its principal office at Minnesota Mutual Life
Center, 400 Robert Street North, St. Paul, Minnesota 55101-2098. A Table of
Contents for the Statement of Additional Information appears in this Prospectus
on page 30.

This Prospectus is not valid unless attached to a current prospectus of Advantus
Series Fund, Inc. and the Templeton Developing Markets Fund.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.

LOGO

The Minnesota Mutual Life Insurance Company
400 Robert Street North
St. Paul, MN 55101-2098
Ph 612/665-3500
http://www.minnesotamutual.com

The date of this document and the Statement of Additional Information is: May 1,
1997

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Special Terms..................................................................... 3

Questions and Answers About the Variable Annuity Contracts........................ 4

Expense Table..................................................................... 9

Condensed Financial Information................................................... 13

Performance Data.................................................................. 15

General Descriptions
The Minnesota Mutual Life Insurance Company................................... 16
Variable Annuity Account...................................................... 16
Advantus Series Fund, Inc..................................................... 16
Templeton Variable Products Series Fund....................................... 17
Additions, Deletions or Substitutions......................................... 18

Contract Charges
Sales Charges................................................................. 18
Mortality and Expense Risk Charges............................................ 19

Exchange Offer.................................................................... 20

Voting Rights..................................................................... 20

Description of the Contracts
General Provisions............................................................ 21
Annuity Payments and Options.................................................. 22
Death Benefits................................................................ 26
Purchase Payments, Value of the Contract and Transfers........................ 26
Redemptions................................................................... 28

Federal Tax Status................................................................ 29

Restrictions Under the Texas Optional Retirement Program.......................... 33

Statement of Additional Information............................................... 33

Appendix A--Illustration of Variable Annuity Values............................... 34
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THE PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

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SPECIAL TERMS

As used in this Prospectus, the following terms have the indicated meanings:

ACCUMULATION UNIT: an accounting device used to determine the value of a
contract before annuity payments begin.

ACCUMULATION VALUE: the sum of your values under a contract in the General
Account and in the Variable Annuity Account.

ANNUITANT: the person who may receive lifetime benefits under the contract.

ANNUITY: a series of payments for life; for life with a minimum number of
payments guaranteed; for the joint lifetime of the annuitant and another person
and thereafter during the lifetime of the survivor; or for a period certain.

ANNUITY UNIT: an accounting device used to determine the amount of annuity
payments.

CODE: the Internal Revenue Code of 1986, as amended.

CONTRACT OWNER: the owner of the contract, which could be the annuitant, his
employer, or a trustee acting on behalf of the employer.

CONTRACT YEAR: a period of one year beginning with the contract date or a
contract anniversary.

FIXED ANNUITY: an annuity providing for payments of guaranteed amounts
throughout the payment period.

FUND: the mutual fund or separate investment portfolio within a series mutual
fund which we have designated as an eligible investment for the Variable Annuity
Account, namely, Advantus Series Fund, Inc. and its Portfolios and Class 2 of
the Templeton Developing Markets Fund.

GENERAL ACCOUNT: all of our assets other than those in the Variable Annuity
Account or in other separate accounts established by us.

PLAN: a tax-qualified employer pension, profit-sharing, or annuity purchase plan
under which benefits are to be provided by the variable annuity contracts
described herein.

PURCHASE PAYMENTS: amounts paid to us under a contract.

VALUATION DATE: each date on which a Fund Portfolio is valued.

VARIABLE ANNUITY ACCOUNT: a separate investment account called the Minnesota
Mutual Variable Annuity Account, where the investment experience of its assets
is kept separate from our other assets.

VARIABLE ANNUITY: an annuity providing for payments varying in amount in
accordance with the investment experience of the Fund.

WE, OUR, US: The Minnesota Mutual Life Insurance Company.

YOU, YOUR: the Contract Owner.

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QUESTIONS AND ANSWERS ABOUT THE VARIABLE ANNUITY CONTRACTS

WHAT IS AN ANNUITY?
An annuity is a series of payments for life; for life with a minimum number of
payments guaranteed; for the joint lifetime of the annuitant and another person
and thereafter during the lifetime of the survivor; or for a period certain. An
annuity with payments which are guaranteed as to amount during the payment
period is a fixed annuity. An annuity with payments which vary during the
payment period in accordance with the investment experience of a separate
account is called a variable annuity.

WHAT ARE THE CONTRACTS OFFERED BY THIS PROSPECTUS?

The contracts are combined fixed and variable annuity contracts issued by us
which provide for monthly annuity payments. These payments may begin immediately
or at a future date elected by you. Purchase payments received by us under a
contract are allocated either to our General Account or Variable Annuity
Account, as specified by you. In the General Account, your purchase payments
receive interest and principal guarantees; in the Variable Annuity Account, your
purchase payments are invested in each Fund, and receive no interest or
principal guarantees.

This Prospectus describes only the variable aspects of the contracts, except
where fixed aspects are specifically mentioned. Please look to the language of
the contracts for a description of the fixed portion of the contracts. For more
information on the contracts, see the heading "Description of the Contracts" in
this Prospectus.

WHAT TYPES OF VARIABLE ANNUITY CONTRACTS ARE AVAILABLE?
We offer two types of contracts. They are the single payment variable annuity
contract and the flexible payment variable annuity contract.

WHAT INVESTMENT OPTIONS ARE AVAILABLE FOR THE VARIABLE ANNUITY ACCOUNT?

Purchase payments allocated to the Variable Annuity Account may be invested in
shares of each Fund. Each Fund is a mutual fund of the series type, which means
that it has several different portfolios which it offers for investment. Shares
of the Fund will be made available at net asset value to the Variable Annuity
Account to fund the variable annuity contracts. The Fund is also required to
redeem its shares at net asset value at our request. We reserve the right to
add, combine or remove other eligible funds.

The investment objectives and certain policies of the Portfolios of the
Advantus Series Fund are as follows:

The Growth Portfolio seeks the long-term accumulation of capital. Current
income, while a factor in portfolio selection, is a secondary objective. The
Growth Portfolio will invest primarily in common stocks and other equity
securities. Common stocks are more volatile than debt securities and involve
greater investment risk.
The Bond Portfolio seeks as high a level of long-term total rate of return
as is consistent with prudent investment risk. A secondary objective is to
seek preservation of capital. The Bond Portfolio will invest primarily in
long-term, fixed-income, high-quality debt instruments. The value of debt
securities will tend to rise and fall inversely with the rise and fall of
interest rates.
The Money Market Portfolio seeks maximum current income to the extent
consistent with liquidity and the stability of capital. The Money Market
Portfolio will invest in money market instruments and other debt securities
with maturities not exceeding one year. The return produced by these
securities will reflect fluctuation in short-term interest rates.
AN INVESTMENT IN THE MONEY MARKET PORTFOLIO IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE
PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE.
The Asset Allocation Portfolio seeks as high a level of long-term total
rate of return as is consistent with prudent investment risk. The Asset
Allocation Portfolio will invest in common stocks and other equity
securities, bonds and money market instruments. The Asset Allocation
Portfolio involves the risks inherent in stocks and debt securities of
varying maturities and the risk that the Portfolio may invest too much or
too little of its assets in each type of security at any particular time.
The Mortgage Securities Portfolio seeks a high level of current income
consistent with prudent investment risk. In pursuit of this objective, the
Mortgage Securities Portfolio will follow a policy of investment primarily
in mortgage-related securities. Prices of mortgage-related securities will

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tend to rise and fall inversely with the rise and fall of the general level
of interest rates.
The Index 500 Portfolio seeks investment results that correspond generally
to the price and yield performance of the common stocks included in the
Standard & Poor's Corporation 500 Composite Stock Price Index (the "Index").
It is designed to provide an economical and convenient means of maintaining
a broad position in the equity market as part of an overall investment
strategy. All common stocks, including those in the Index, involve greater
investment risk than debt securities. The fact that a stock has been
included in the Index affords no assurance against declines in the price or
yield performance of that stock.
The Capital Appreciation Portfolio seeks growth of capital. Investments
will be made based upon their potential for capital appreciation. Therefore,
current income will be incidental to the objective of capital growth.
Because of the market risks inherent in any equity investment, the selection
of securities on the basis of their appreciation possibilities cannot ensure
against possible loss in value.
The International Stock Portfolio seeks long-term capital growth. In
pursuit of this objective, the International Stock Portfolio will follow a
policy of investing in stocks issued by companies, large and small, and debt
obligations of companies and governments outside the United States. Current
income will be incidental to the objective of capital growth. The Portfolio
is designed for persons seeking international diversification. Investors
should consider carefully the substantial risks involved in investing in
securities issued by companies and governments of foreign nations, which are
in addition to the usual risks inherent in domestic investments.
The Small Company Portfolio seeks long-term accumulation of capital. In
pursuit of this objective, the Small Company Portfolio will follow a policy
of investing primarily in common or preferred stocks issued by small
companies, defined in terms of either market capitalization or gross
revenues. Investments in small companies usually involve greater investment
risks than fixed income securities or corporate equity securities generally.
Small companies will typically have a market capitalization of less than
$1.5 billion or annual gross revenues of less than $1.5 billion.
The Value Stock Portfolio seeks the long-term accumulation of capital. In
pursuit of this objective, the Value Stock Portfolio will follow a policy of
investing primarily in the equity securities of companies which, in the
opinion of the adviser, have market values which appear low relative to
their underlying value or future earnings and growth potential. As it is
anticipated that the Portfolio will consist in large part of dividend-paying
common stocks, the production of income will be a secondary objective of the
Portfolio.
The Maturing Government Bond Portfolios seek to provide as high an
investment return as is consistent with prudent investment risk for a
specified period of time ending on a specified liquidation date. In pursuit
of this objective, each of the four Maturing Government Bond Portfolios seek
to return a reasonably assured targeted dollar amount, predictable at the
time of investment, on a specific target date in the future through
investment in a portfolio composed primarily of zero coupon securities.
These are securities that pay no cash income and are sold at a discount from
their par value at maturity. The current target dates for the maturities of
these Portfolios are 1998, 2002, 2006 and 2010, respectively. On maturity
the Portfolio will be converted to cash and reinvested at the direction of
the contract owner. In the absence of instructions, liquidation proceeds
will be allocated to the Money Market Portfolio.
The Small Company Value Portfolio seeks the long-term accumulation of
capital. The Portfolio will follow a policy of investing primarily in the
equity securities of small companies, defined in terms of market
capitalization and which appear to have market values which are low relative
to their underlying value or future earnings and growth potential. Dividend
income will be incidental to the investment objective for this Portfolio.
The International Bond Portfolio seeks to maximize current income
consistent with protection of principal. The Portfolio pursues its objective
by investing primarily in a managed portfolio of non-U.S. dollar debt
securities issued by foreign governments, companies and supranational
entities.

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The Index 400 Mid-Cap Portfolio seeks to provide investment results
generally corresponding to the aggregate price and dividend performance of
publicly traded common stocks that comprise the Standard & Poor's 400 Mid
Cap Index. The Portfolio pursues its investment objective by investing
primarily in the 400 common stocks that comprise the Index, issued by
medium-sized domestic companies with market capitalizations that generally
range from $200 million to $5 billion. It is designed to provide an
economical and convenient means of maintaining a diversified portfolio in
this equity security area as part of an over-all investment strategy. The
inclusion of a stock in the Index in no way implies an opinion by Standard &
Poor's as to its attractiveness as an investment, nor is it a sponsor or in
any way affiliated with the Portfolio.

The Micro-Cap Value Portfolio seeks capital appreciation. The Portfolio
will pursue its objective by investing in a diversified portfolio of
securities that the sub-advisor believes to be undervalued. It will invest
primarily in common stocks and stock equivalents of micro-cap companies,
that is, companies with a market capitalization of less than $300 million.

The Macro-Cap Value Portfolio seeks to provide high total return. It
pursues this objective by investing in equity securities that the
sub-adviser believes, through the use of dividend discount models, to be
undervalued relative to their long-term earnings power, creating a
diversified portfolio of equity securities which typically will have a
price/earnings ratio and a price to book ratio that reflects a value
orientation. The Portfolio seeks to enhance its total return relative to
that of a universe of large-sized U.S. companies.

The Micro-Cap Growth Portfolio seeks long-term capital appreciation. It
pursues its objective by investing primarily in equity securities of smaller
companies which the sub-adviser believes are in an early stage or
transitional point in their development and have demonstrated or have the
potential for above average revenue growth. It will invest primarily in
common stocks and stock equivalents of micro-cap companies, that is,
companies with a market capitalization of less than $300 million.

ALTHOUGH THE MACRO-CAP VALUE, THE INDEX 400 MID-CAP, THE SMALL COMPANY VALUE,
THE MICRO-CAP VALUE, THE MICRO-CAP GROWTH AND THE INTERNATIONAL BOND PORTFOLIOS
OF THE FUND ARE INCLUDED IN THIS PROSPECTUS, THEY WILL NOT BE AVAILABLE IN THE
CONTRACT UNTIL OCTOBER 1, 1997.

In addition to the investments in the Advantus Series Fund, the Variable
Annuity Account invests in the Templeton Developing Markets Fund, a diversified
portfolio with two classes of shares of the Templeton Variable Products Series
Fund, a mutual fund of the series type.

ALTHOUGH THE TEMPLETON DEVELOPING MARKETS FUND IS INCLUDED IN THIS PROSPECTUS
IT WILL NOT BE AVAILABLE IN THE CONTRACT UNTIL OCTOBER 1, 1997.

The investment objectives and certain policies of the Templeton Developing
Markets Fund available under the contract are as follows:

The Templeton Developing Markets Fund seeks long-term capital
appreciation. It pursues this objective by investing primarily in equity
securities of issuers in countries having developing markets. Countries
generally considered to have developing markets are all countries that are
considered to be developing or emerging countries by the International Bank
for Reconstruction and Development (more commonly referred to as the World
Bank) or the International Finance Corporation, as well as countries that
are classified by the United Nations or otherwise regarded by their
authorities as developing.

There is no assurance that any Fund will meet its objectives. Additional
information concerning the investment objectives and policies of the Portfolios
can be found in the current prospectus for each Fund, which is attached to this
Prospectus. A person should carefully read the Fund's Prospectus before
investing in the contract.

CAN YOU CHANGE THE PORTFOLIO SELECTED?
Yes. You may change your allocation of future purchase payments by giving us
written notice or a telephone call notifying us of the change. And before
annuity payments begin, you may transfer all or a part of your accumulation
value from one Portfolio to another or among the Portfolios. After annuity
payments begin, transfers may be made with respect to variable annuity payments
and, subject to some restrictions, amounts held as annuity reserves may be
transferred among the variable annuity

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sub-accounts and the Funds. Annuity reserves may be transferred only from a
variable annuity to a fixed annuity during the annuity period.

WHAT CHARGES ARE ASSOCIATED WITH THE CONTRACTS?

We deduct from the net asset value of the Variable Annuity Account an amount,
computed daily, equal to an annual rate of 1.25% for mortality and expense risk
guarantees. This total represents a charge of .80% for our assumption of
mortality risks and .45% for our assumption of expense risks. We reserve the
right to increase the charge for the assumption of expense risks to not more
than .60%. If this charge is increased to this maximum amount, then the total of
the mortality risk and expense risk charge would be 1.40% on an annual rate.

In addition, Advantus Capital Management, Inc., ("Advantus Capital") one of
our subsidiaries, acts as the investment adviser to the Advantus Series Fund,
Inc. and deducts from the net asset value of each Portfolio of the Fund a fee
for its services which are provided under an investment advisory agreement. The
investment advisory agreements with Advantus Capital provide that the fee shall
be computed at the annual rate which may not exceed .4% of the Index 500 and
Index 400 Micro-Cap Portfolios, .75% of the Capital Appreciation, Value Stock,
Small Company Value and the Small Company Portfolios, 1.0% of the International
Stock Portfolio .6% of the International Bond Portfolio, .7% of the Macro-Cap
Value Portfolio, 1.1% of the Micro-Cap Growth Portfolio and 1.25% of the
Micro-Cap Value Portfolio and .5% of each of the remaining Portfolio's average
daily net assets other than the Maturing Government Bond Portfolios. The
Maturing Government Bond Portfolios pay an advisory fee equal to an annual rate
of .25% of average daily net assets, however, the Portfolio which matures in
1998 will pay a rate of .05% from its inception to April 30, 1998, and .25%
thereafter and the Portfolio which matures in 2002 will pay a rate of .05% from
its inception to April 30, 1998, and .25% thereafter of average daily net
assets.

The Funds are subject to certain expenses that may be incurred with respect to
their operations and those expenses are allocated among the Portfolios. For more
information, see the prospectuses of each Fund, which are attached to this
Prospectus. The Templeton Developing Markets Fund pays its investment adviser
management fees at an annual rate of 1.25% of the Fund's average daily net
assets and pays other operating expenses which will vary every year but, for the
most recent fiscal year, were 0.53% of its average daily net assets. In
addition, Class 2 of the Templeton Developing Markets Fund has a rule 12b-1 plan
and may pay up to 0.25% annually of the average daily net assets for
distribution. For more information, see the Fund's prospectus.

In addition, a deferred sales charge may apply. Deductions for any applicable
premium taxes may also be made (currently such taxes range from 0.0% to 3.5%)
depending upon applicable law.
For more information on charges, see the heading 'Contract Charges' in this
Prospectus. The deferred sales charge is discussed below.

WHAT IS THE DEFERRED SALES CHARGE?
We deduct a deferred sales charge on contract withdrawals, surrenders and some
annuity elections during the first ten contract years for expenses relating to
the sale of the contracts. The amount of any deferred sales charge is deducted
from the accumulation value.
Under the flexible payment variable annuity contract, the amount of deferred
sales charge, as a percentage of the amount surrendered, withdrawn or applied to
provide an annuity, decreases uniformly during the first ten contract years from
an initial charge of 9% to no charge after ten contract years.
Under the single payment variable annuity contract, the amount of the deferred
sales charge, as a percentage of the amount surrendered, withdrawn or applied to
provide an annuity, decreases uniformly during the first ten contract years from
an initial charge of 6% to no charge after ten contract years.
The deferred sales charge is not applicable to some partial withdrawals from
the contracts. Also, there is no deferred sales charge on amounts paid in the
event of the death of the owner and the accumulation value is applied to provide
annuity payments under an option where benefits are expected to continue for a
period of at least five years. For more information on this charge, see the
heading "Sales Charges" in this Prospectus.

CAN YOU MAKE PARTIAL WITHDRAWALS FROM THE CONTRACT?
Yes. You may make withdrawals of the accumulation value of your contract before
an annuity begins. Partial withdrawals must be pursuant to your written request.
Partial withdrawals are generally subject to the deferred sales charge.
However, if

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withdrawals during the first calendar year are equal to or less than 10% of the
purchase payments made during the first calendar year and, if in subsequent
calendar years they are equal to or less than 10% of the accumulation value at
the end of the previous calendar year, the deferred sales charge will not apply
to those partial withdrawals. The deferred sales charge described above will
apply to all withdrawal amounts which exceed 10% of that accumulation value in
any calendar year. In addition, a penalty tax may be assessed upon withdrawals
from variable annuity contracts in certain circumstances. For more information,
see the heading "Federal Tax Status" in this Prospectus.

DO YOU HAVE A RIGHT TO CANCEL THE CONTRACT?
Yes. You may cancel the contract any time within ten days of your receipt of the
contract by returning it to us or your agent. In some states, such as
California, the free look period may be extended. In California, the free look
period is extended to thirty days' time for contracts issued or delivered to
owners that are sixty years of age or older at the time of delivery. These
rights are subject to change and may vary among the states.

IS THERE A GUARANTEED DEATH BENEFIT?
Yes. The single payment variable annuity contract has a guaranteed death benefit
if you die before annuity payments have started. The death benefit shall be
equal to the greater of: (1) the amount of the accumulation value payable at
death; or (2) the amount of the total purchase payment paid to us during the
first year as consideration for this contract, less all contract withdrawals. As
a matter of company practice, we use this method except that total purchase
payment will include all contributions, even those made after 12 months, to
determine the death benefit for all contracts offered by this Prospectus.

WHAT ANNUITY OPTIONS ARE AVAILABLE?
The contracts specify several annuity options. Each annuity option may be
elected on either a variable annuity or fixed annuity or a combination of the
two. Other annuity options may be available from us on request. The specified
annuity options are a life annuity; a life annuity with a period certain of
either 120 months, 180 months or 240 months; a joint and last survivor annuity
and a period certain annuity.

WHAT IF THE OWNER DIES?
If you die before payments begin, we will pay the accumulation value of the
contract as a death benefit to the named beneficiary. If the annuitant dies
after annuity payments have begun, we will pay whatever death benefit may be
called for by the terms of the annuity option selected.
If the owner of this contract is other than a natural person, such as a trust
or other similar entity, we will pay a death benefit of the accumulation value
to the named beneficiary on the death of the annuitant, if death occurs prior to
the date for annuity payments to begin.

WHAT VOTING RIGHTS DO YOU HAVE?

Contract owners and annuitants will be able to direct us as to how to vote
shares of the underlying Fund held for their contracts where shareholder
approval is required by law in the affairs of the Funds.

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EXPENSE TABLE

The tables shown below are to assist a contract owner in understanding the costs
and expenses that a contract will bear directly or indirectly. For more
information on contract costs and expenses, see the Prospectus heading "Contract
Charges" and the information immediately following. The table does not reflect
deductions for any applicable premium taxes which may be made from each purchase
payment depending upon the applicable law. Surrender amounts in years shown
reflect the contract owner's ability to withdraw an amount equal to ten percent
of the accumulation value at the end of the previous calendar year without the
imposition of the deferred sales charge. The tables show the expenses of each
Fund after expense reimbursement.

The following contract expense information is intended to illustrate the
expenses of the MultiOption Annuity variable annuity contracts. All expenses
shown are rounded to the nearest dollar. The information contained in the tables
must be considered with the narrative information which immediately follows them
in this heading.

CONTRACT OWNER TRANSACTION EXPENSES
SINGLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT

<TABLE>
<S> <C>
Deferred Sales Load (as a percentage of amount 6%
surrendered)............................................... decreasing uniformly
by .05% for each of
the first 120 months
from the contract
date
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fees.............................. 1.25%
-----
Total Separate Account Annual Expenses................... 1.25%
-----
-----
</TABLE>

FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT

<TABLE>
<S> <C>
Deferred Sales Load (as a percentage of amount 9%
surrendered)............................................... decreasing uniformly
by .075% for each of
the first 120 months
from the contract
date
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fees.............................. 1.25%
-----
Total Separate Account Annual Expenses................... 1.25%
-----
-----
</TABLE>

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FUND ANNUAL EXPENSES

(As a percentage of average net assets for the described Advantus Series Fund,
Inc. Portfolios and the Templeton Variable Product Series.)

<TABLE>
<CAPTION>
OTHER TOTAL FUND
EXPENSES ANNUAL EXPENSES
(AFTER EXPENSE (AFTER EXPENSE
INVESTMENT REIMBURSEMENTS DISTRIBUTION REIMBURSEMENTS
MANAGEMENT FEES IF ANY) EXPENSES IF ANY)
--------------------- --------------------- ------------- ---------------------
<S> <C> <C> <C> <C>
Advantus Series Fund, Inc.:
Growth Portfolio..................... 0.50% 0.09% -- 0.59%
Bond Portfolio....................... 0.50% 0.06% -- 0.56%
Money Market Portfolio............... 0.50% 0.10% -- 0.60%
Asset Allocation Portfolio........... 0.50% 0.04% -- 0.54%
Mortgage Securities Portfolio........ 0.50% 0.08% -- 0.58%
Index 500 Portfolio.................. 0.40% 0.05% -- 0.45%
Capital Appreciation Portfolio....... 0.75% 0.10% -- 0.85%
International Stock Portfolio........ 0.74% 0.32% -- 1.06%
Small Company Portfolio.............. 0.75% 0.06% -- 0.81%
Maturing Government Bond 1998
Portfolio (1)(2)................... 0.05% 0.15% -- 0.20%
Maturing Government Bond 2002
Portfolio (1)(2)................... 0.05% 0.15% -- 0.20%
Maturing Government Bond 2006
Portfolio (2)...................... 0.25% 0.15% -- 0.40%
Maturing Government Bond 2010
Portfolio (2)...................... 0.25% 0.15% -- 0.40%
Value Stock Portfolio................ 0.75% 0.08% -- 0.83%
Small Company Value Portfolio (3).... 0.75% 0.15% -- 0.90%
International Bond Portfolio (3)..... 0.60% 1.00% -- 1.60%
Index 400 Mid-Cap Portfolio (3)...... 0.40% 0.15% -- 0.55%
Micro-Cap Value Portfolio (3)........ 1.25% 0.15% -- 1.40%
Macro-Cap Value Portfolio (3)........ 0.70% 0.15% -- 0.85%
Micro-Cap Growth Portfolio (3)....... 1.10% 0.15% -- 1.25%
Templeton Variable Products Series:
Templeton Developing Markets
Portfolio Class 2 (4).............. 1.25% 0.53% 0.25% 2.03%
</TABLE>

(1) Investment management fees for the Maturing Government Bond 1998 and 2002
Portfolios are equal on an annual basis to .05% of average daily net assets
until April 30, 1998 at which time the fees will be .25% of average daily
net assets.

(2) Minnesota Mutual voluntarily absorbed certain expenses of the Maturing
Government Bond 1998, Maturing Government Bond 2002, Maturing Government
Bond 2006 and Maturing Government Bond 2010 Portfolios for the year ended
December 31, 1996. If these portfolios had been charged for expenses, the
ratio of expenses to average daily net assets would have been .72%, 1.14%,
1.58% and 2.18%, respectively. It is Minnesota Mutual's present intention to
waive other fund expenses during the current fiscal year which exceed, as a
percentage of average daily net assets, .15%. Minnesota Mutual also reserves
the option to reduce the level of other expenses which it will voluntarily
absorb.

(3) Although the Small Company Value, International Bond, Index 400 Mid-Cap,
Micro-Cap Value, Macro-Cap Value, and Micro-Cap Growth Portfolios will not
be available until October 1, 1997, Minnesota Mutual has voluntarily agreed
to absorb or waive other fund expenses which exceed, as a percentage of
average daily net assets, 1.00% for International Bond and .15% for Small
Company Value, Index 400 Mid-Cap, Micro-Cap Value, Macro-Cap Value and
Micro-Cap Growth Portfolios for the period ended December 31, 1997. If the
Portfolios were to be charged for these expenses, it is estimated that the
ratio of total expenses to average daily net assets

10
<PAGE>

would be 3.04% for Small Company Value, 3.19% for International Bond, 2.20%
for Index 400 Mid-Cap, 4.07% for Micro-Cap Value, 2.97% for Macro-Cap Value,
3.77% for Micro-Cap Growth and 3.75% for Templeton Developing Markets.
Minnesota Mutual also reserves the option to reduce the level of other
expenses which it will voluntarily absorb.

(4) Templeton Developing Markets--Class 2. Figures are estimates for 1997 based
on annualized Class 1 1996 figures. The Fund began operations in March 1996.
Class 2 shares of the Fund were first offered May 1, 1997, and have a
distribution plan or "Rule 12b-1 Plan" which is described in the Fund's
prospectus. In addition, figures do not reflect the Investment Manager's
agreement in advance to waive a portion of its fees during 1996. After the
waiver, actual management fees and total operating expenses of the portfolio
were 1.17% and 1.95% of net assets, respectively. This waiver agreement has
been terminated.

CONTRACT OWNER EXPENSE EXAMPLE
SINGLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT

You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.

<TABLE>
<CAPTION>
IF YOU SURRENDERED YOUR
CONTRACT AT THE END OF
THE APPLICABLE TIME PERIOD
---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Growth Portfolio.................................. $ 69 $ 99 $ 131 $ 216
Bond Portfolio.................................... $ 69 $ 98 $ 130 $ 213
Money Market Portfolio............................ $ 69 $ 100 $ 132 $ 217
Asset Allocation Portfolio........................ $ 68 $ 98 $ 129 $ 211
Mortgage Securities Portfolio..................... $ 69 $ 99 $ 131 $ 215
Index 500 Portfolio............................... $ 67 $ 95 $ 124 $ 201
Capital Appreciation Portfolio.................... $ 71 $ 107 $ 144 $ 243
International Stock Portfolio..................... $ 73 $ 113 $ 154 $ 265
Small Company Portfolio........................... $ 71 $ 106 $ 142 $ 239
Maturing Government Bond 1998 Portfolio........... $ 65 $ 88 $ 114 $ 188
Maturing Government Bond 2002 Portfolio........... $ 65 $ 88 $ 114 $ 188
Maturing Government Bond 2006 Portfolio........... $ 67 $ 94 $ 122 $ 195
Maturing Government Bond 2010 Portfolio........... $ 67 $ 94 $ 122 $ 195
Value Stock Portfolio............................. $ 71 $ 106 $ 143 $ 241
Small Company Value Portfolio..................... $ 72 $ 108 n/a n/a
International Bond Portfolio...................... $ 78 $ 129 n/a n/a
Index 400 Mid-Cap Portfolio....................... $ 68 $ 98 n/a n/a
Micro-Cap Value Portfolio......................... $ 77 $ 123 n/a n/a
Macro-Cap Value Portfolio......................... $ 71 $ 107 n/a n/a
Micro-Cap Growth Portfolio........................ $ 75 $ 119 n/a n/a
Templeton Developing Markets Portfolio Class 2.... $ 83 $ 141 n/a n/a

<CAPTION>
IF YOU ANNUITIZE AT THE END OF THE
APPLICABLE TIME PERIOD OR YOU DO
NOT SURRENDER YOUR CONTRACT*
---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Growth Portfolio.................................. $ 19 $ 58 $ 100 $ 216
Bond Portfolio.................................... $ 18 $ 57 $ 98 $ 213
Money Market Portfolio............................ $ 19 $ 58 $ 100 $ 217
Asset Allocation Portfolio........................ $ 18 $ 56 $ 97 $ 211
Mortgage Securities Portfolio..................... $ 19 $ 58 $ 99 $ 215
Index 500 Portfolio............................... $ 17 $ 54 $ 92 $ 201
Capital Appreciation Portfolio.................... $ 21 $ 66 $ 113 $ 243
International Stock Portfolio..................... $ 23 $ 72 $ 124 $ 265
Small Company Portfolio........................... $ 21 $ 65 $ 111 $ 239
Maturing Government Bond 1998 Portfolio........... $ 15 $ 46 $ 82 $ 188
Maturing Government Bond 2002 Portfolio........... $ 15 $ 46 $ 82 $ 188
Maturing Government Bond 2006 Portfolio........... $ 17 $ 52 $ 90 $ 195
Maturing Government Bond 2010 Portfolio........... $ 17 $ 52 $ 90 $ 195
Value Stock Portfolio............................. $ 21 $ 65 $ 112 $ 241
Small Company Value Portfolio..................... $ 22 $ 67 n/a n/a
International Bond Portfolio...................... $ 29 $ 88 n/a n/a
Index 400 Mid-Cap Portfolio....................... $ 18 $ 57 n/a n/a
Micro-Cap Value Portfolio......................... $ 27 $ 82 n/a n/a
Macro-Cap Value Portfolio......................... $ 21 $ 66 n/a n/a
Micro-Cap Growth Portfolio........................ $ 25 $ 78 n/a n/a
Templeton Developing Markets Portfolio Class 2.... $ 33 $ 101 n/a n/a
</TABLE>

*Annuitization for this purpose means the election of an Annuity Option under
which benefits are expected to continue for at least five years.

11
<PAGE>
CONTRACT OWNER EXPENSE EXAMPLE
FLEXIBLE PAYMENT DEFERRED VARIABLE ANNUITY CONTRACT

You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period.

<TABLE>
<CAPTION>
IF YOU SURRENDERED YOUR
CONTRACT AT THE END OF
THE APPLICABLE TIME PERIOD
---------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Growth Portfolio.................................. $ 94 $ 120 $ 147 $ 216
Bond Portfolio.................................... $ 94 $ 119 $ 145 $ 213
Money Market Portfolio............................ $ 94 $ 120 $ 147 $ 217
Asset Allocation Portfolio........................ $ 93 $ 119 $ 144 $ 211
Mortgage Securities Portfolio..................... $ 94 $ 120 $ 146 $ 215
Index 500 Portfolio............................... $ 93 $ 116 $ 140 $ 201
Capital Appreciation Portfolio.................... $ 96 $ 128 $ 160 $ 243
International Stock Portfolio..................... $ 98 $ 134 $ 170 $ 265
Small Company Portfolio........................... $ 96 $ 126 $ 158 $ 239
Maturing Government Bond 1998 Portfolio........... $ 90 $ 109 $ 130 $ 188
Maturing Government Bond 2002 Portfolio........... $ 90 $ 109 $ 130 $ 188
Maturing Government Bond 2006 Portfolio........... $ 92 $ 115 $ 137 $ 195
Maturing Government Bond 2010 Portfolio........... $ 92 $ 115 $ 137 $ 195
Value Stock Portfolio............................. $ 96 $ 127 $ 159 $ 241
Small Company Value Portfolio..................... $ 97 $ 129 n/a n/a
International Bond Portfolio...................... $ 103 $ 149 n/a n/a
Index 400 Mid-Cap Portfolio....................... $ 94 $ 119 n/a n/a
Micro-Cap Value Portfolio......................... $ 101 $ 143 n/a n/a
Macro-Cap Value Portfolio......................... $ 96 $ 128 n/a n/a
Micro-Cap Growth Portfolio........................ $ 100 $ 139 n/a n/a
Templeton Developing Markets Portfolio Class 2.... $ 107 $ 161 n/a n/a

*Annuitization for this purpose means the election of an Annuity Option under
which benefits are expected to continue for at least five years.

12
<PAGE>

CONDENSED FINANCIAL INFORMATION

The financial statements of Minnesota Mutual Variable Annuity Account and of The
Minnesota Mutual Life Insurance Company may be found in the Statement of
Additional Information.

The table below gives per unit information about the financial history of each
sub-account from the inception of each to December 31, 1996. This information
should be read in conjunction with the financial statements and related notes of
Minnesota Mutual Variable Annuity Account included in this prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991 1990 1989
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Sub-Account:
Unit value at beginning of
period.................... $2.630 $2.143 $2.152 $2.084 $2.012 $1.520 $1.535 $1.234
Unit value at end of
period.................... $3.043 $2.630 $2.143 $2.152 $2.084 $2.012 $1.520 $1.535
Number of units outstanding
at end of period.......... 38,448,452 35,809,340 33,090,790 25,980,318 18,152,996 10,204,896 6,759,950 4,899,370
Bond Sub-Account:
Unit value at beginning of
period.................... $2.153 $1.820 $1.931 $1.773 $1.683 $1.450 $1.370 $1.232
Unit value at end of
period.................... $2.189 $2.153 $1.820 $1.931 $1.773 $1.683 $1.450 $1.370
Number of units outstanding
at end of period.......... 36,732,062 28,069,241 23,798,963 18,794,458 11,267,890 6,184,694 5,250,072 3,880,390
Money Market Sub-Account:
Unit value at beginning of
period.................... $1.515 $1.455 $1.421 $1.402 $1.375 $1.321 $1.241 $1.157
Unit value at end of
period.................... $1.570 $1.515 $1.455 $1.421 $1.402 $1.375 $1.321 $1.241
Number of units outstanding
at end of period.......... 22,929,634 14,809,515 11,720,778 9,783,391 7,414,734 6,618,010 6,183,393 4,053,104
Asset Allocation Sub-Account:
Unit value at beginning of
period.................... $2.486 $2.014 $2.068 $1.967 $1.858 $1.460 $1.426 $1.202
Unit value at end of
period.................... $2.762 $2.486 $2.014 $2.068 $1.967 $1.858 $1.460 $1.426
Number of units outstanding
at end of period.......... 116,211,650 110,975,477 109,044,286 99,680,197 66,121,882 33,820,537 22,938,615 16,134,930
Mortgage Securities Sub-
Account:
Unit value at beginning of
period.................... $1.934 $1.660 $1.739 $1.612 $1.535 $1.337 $1.237 $1.104
Unit value at end of
period.................... $2.010 $1.934 $1.660 $1.739 $1.612 $1.535 $1.337 $1.237
Number of units outstanding
at end of period.......... 32,527,955 31,277,934 31,542,405 33,032,291 20,284,849 9,817,276 8,632,895 6,903,370
Index 500 Sub-Account
Unit value at beginning of
period.................... $2.425 $1.794 $1.796 $1.657 $1.563 $1.220 $1.285 $0.998
Unit value at end of
period.................... $2.913 $2.425 $1.794 $1.796 $1.657 $1.563 $1.220 $1.285
Number of units outstanding
at end of period.......... 46,097,553 35,272,024 29,639,298 23,455,059 16,294,129 11,254,609 13,788,252 10,567,879
Capital Appreciation Sub-
Account:
Unit value at beginning of
period.................... $2.524 $2.082 $2.062 $1.891 $1.823 $1.303 $13.344 $0.984
Unit value at end of
period.................... $2.932 $2.524 $2.082 $2.062 $1.891 $1.823 $1.303 $1.344
Number of units outstanding
at end of period.......... 51,023,999 45,964,468 40,739,415 30,907,396 21,822,440 10,874,168 6,767,806 3,831,974
International Stock Sub-
Account:
Unit value at beginning of
period.................... $1.462 $1.296 $1.317 $0.925 $1.000(b)
Unit value at end of
period.................... $1.730 $1.462 $1.296 $1.317 $0.925
Number of units outstanding
at end of period.......... 86,521,264 68,725,183 61,474,893 38,637,487 16,751,564
Small Company Sub-Account:
Unit value at beginning of
period.................... $1.591 $1.220 $1.164 $1.000(c)
Unit value at end of
period.................... $1.673 $1.591 $1.220 $1.164
Number of units outstanding
at end of period.......... 59,295,273 43,234,716 29,723,609 9,554,322

<CAPTION>
YEAR ENDED DECEMBER 31,
1988 1987 1986
---------- ---------- -----------
<S> <C> <C> <C>
Growth Sub-Account:
Unit value at beginning of
period.................... $1.081 $1.051 $1.074
Unit value at end of
period.................... $1.234 $1.081 $1.051
Number of units outstanding
at end of period.......... 3,160,624 2,786,799 1,359,015
Bond Sub-Account:
Unit value at beginning of
period.................... $1.166 $1.162 $1.063
Unit value at end of
period.................... $1.232 $1.166 $1.162
Number of units outstanding
at end of period.......... 2,588,056 2,045,581 1,827,496
Money Market Sub-Account:
Unit value at beginning of
period.................... $1.099 $1.055 $1.013
Unit value at end of
period.................... $1.157 $1.099 $1.055
Number of units outstanding
at end of period.......... 1,728,357 1,320,469 726,577
Asset Allocation Sub-Account:
Unit value at beginning of
period.................... $1.103 $1.088 $1.065
Unit value at end of
period.................... $1.202 $1.103 $1.088
Number of units outstanding
at end of period.......... 12,633,285 11,334,709 5,796,509
Mortgage Securities Sub-
Account:
Unit value at beginning of
period.................... $1.030 $1.000(a)
Unit value at end of
period.................... $1.104 $1.030
Number of units outstanding
at end of period.......... 5,611,257 5,103,386
Index 500 Sub-Account
Unit value at beginning of
period.................... $0.870 $1.000(a)
Unit value at end of
period.................... $0.998 $0.870
Number of units outstanding
at end of period.......... 6,238,579 5,527,842
Capital Appreciation Sub-
Account:
Unit value at beginning of
period.................... $0.926 $1.000(a)
Unit value at end of
period.................... $0.984 $0.926
Number of units outstanding
at end of period.......... 2,038,085 1,363,363
International Stock Sub-
Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
Small Company Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
</TABLE>

13
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991 1990 1989
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maturing Government Bond 1998
Sub-Account:
Unit value at beginning of
period.................... $1.124 $0.981 $1.000(d)
Unit value at end of
period.................... $1.156 $1.124 $0.981
Number of units outstanding
at end of period.......... 3,911,112 3,330,772 2,578,506
Maturing Government Bond 2002
Sub-Account:
Unit value at beginning of
period.................... $1.200 $0.972 $1.000(d)
Unit value at end of
period.................... $1.205 $1.200 $0.972
Number of units outstanding
at end of period.......... 2,935,860 2,417,823 2,528,509
Maturing Government Bond 2006
Sub-Account:
Unit value at beginning of
period.................... $1.281 $0.963 $1.000(d)
Unit value at end of
period.................... $1.250 $1.281 $0.963
Number of units outstanding
at end of period.......... 2,334,109 1,878,731 1,808,705
Maturing Government Bond 2010
Sub-Account:
Unit value at beginning of
period.................... $1.326 $0.951 $1.000(d)
Unit value at end of
period.................... $1.265 $1.326 $0.951
Number of units outstanding
at end of period.......... 2,077,124 924,681 913,358
Value Stock Sub-Account:
Unit value at beginning of
period.................... $1.375 $1.047 $1.000(d)
Unit value at end of
period.................... $1.778 $1.375 $1.047
Number of units outstanding
at end of period.......... 43,796,523 18,744,902 7,178,675

<CAPTION>
YEAR ENDED DECEMBER 31,
1988 1987 1986
---------- ---------- -----------
<S> <C> <C> <C>
Maturing Government Bond 1998
Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
Maturing Government Bond 2002
Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
Maturing Government Bond 2006
Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
Maturing Government Bond 2010
Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
Value Stock Sub-Account:
Unit value at beginning of
period....................
Unit value at end of
period....................
Number of units outstanding
at end of period..........
</TABLE>

(a) The information for the sub-account is shown for the period June 1, 1987 to
December 31, 1987. June 1, 1987 was the effective date of the 1933 Act
Registration for the sub-account.

(b) The information for the sub-account is shown for the period May 1, 1992 to
December 31, 1992. May 1, 1992 was the effective date of the 1933 Act
Registration for the sub-account.

(c) The information for the sub-account is shown for the period May 3, 1993 to
December 31, 1993. May 3, 1993 was the effective date of the 1933 Act
Registration for the sub-account.

(c) The information for the sub-account is shown for the period May 2, 1994 to
December 31, 1994. May 2, 1994 was the effective date of the 1933 Act
Registration for the sub-account.

14
<PAGE>
PERFORMANCE DATA

From time to time the Variable Annuity Account may publish advertisements
containing performance data relating to its sub-accounts. In the case of the
Money Market Sub-Account, the Variable Annuity Account will publish yield or
effective yield quotations for a seven-day or other specified period. In the
case of the other sub-accounts, performance data will consist of average annual
total return quotations for a one-year period and for the period since the sub-
account became available pursuant to the Variable Annuity Account's registration
statement, and may also include cumulative total return quotations for the
period since the sub-account became available pursuant to such registration
statement. The Money Market sub-account may also quote such average annual and
cumulative total return figures. Performance figures used by the Variable
Annuity Account are based on historical information of the sub-accounts for
specified periods, and the figures are not intended to suggest that such
performance will continue in the future. Performance figures of the Variable
Annuity Account will reflect only charges made against the net asset value of
the Variable Annuity Account pursuant to the terms of the contracts offered by
this Prospectus. The various performance figures used in Variable Annuity
Account advertisements relating to the contracts described in this Prospectus
are summarized below. More detailed information on the computations is set forth
in the Statement of Additional Information.

MONEY MARKET SUB-ACCOUNT YIELD. Yield quotations for the Money Market
Sub-Account are based on the income generated by an investment in the
sub-account over a specified period, usually seven days. The figures are
"annualized," that is, the amount of income generated by the investment during
the period is assumed to be generated over a 52-week period and is shown as a
percentage of the investment. Effective yield quotations are calculated
similarly, but when annualized the income earned by an investment in the sub-
account is assumed to be reinvested. Effective yield quotations will be slightly
higher than yield quotations because of the compounding effect of this assumed
reinvestment. Yield and effective yield figures quoted by the Sub-Account will
not reflect the deduction of any applicable deferred sales charges.

TOTAL RETURN FIGURES. Cumulative total return figures may also be quoted for
all Sub-Accounts. Cumulative total return is based on a hypothetical $1,000
investment in the Sub-Account at the beginning of the advertised period, and is
equal to the percentage change between the $1,000 net asset value of that
investment at the beginning of the period and the net asset value of that
investment at the end of the period. Cumulative total return figures quoted by
the Sub-Account will not reflect the deduction of any applicable deferred sales
charges.

Prior to May 3, 1993, several of the Advantus Sub-Accounts were known by
different names. The Growth Sub-Account was the Stock Sub-Account, the Asset
Allocation Sub-Account was the Managed Sub-Account, the Index 500 Sub-Account
was the Index Sub-Account and the Capital Appreciation Sub-Account was the
Aggressive Growth Sub-Account.

All cumulative total return figures published for Sub-Accounts will be
accompanied by average annual total return figures for a one-year period,
five-year period and for the period since the Sub-Account became available
pursuant to the Variable Annuity Account's registration statement. Average
annual total return figures will show for the specified period the average
annual rate of return required for an initial investment of $1,000 to equal the
surrender value of that investment at the end of the period. The surrender value
will reflect the deduction of the deferred sales charge applicable to the
contract and to the length of the period advertised. Such average annual total
return figures may also be accompanied by average annual total return figures,
for the same or other periods, which do not reflect the deduction of any
applicable deferred sales charges.

PREDICTABILITY OF RETURN. For each of the Maturing Government Bond
Sub-Accounts, Minnesota Mutual will calculate an anticipated growth rate (AGR)
on each day that the underlying Portfolio of the Fund is valued. Minnesota
Mutual may also calculate an anticipated value at maturity (AVM) on any such
day. Daily calculations for each are necessary because (i) the AGR and AVM
calculations assume, among other things, an expense ratio and portfolio
composition that remains unchanged for the life of each such Sub-Account to the
target date at maturity, and (ii) such calculations are therefore meaningful as
a measure of predictable return with respect to particular units only if such
units are held to the applicable target maturity date and only with respect to
units purchased on the date of such calculations (the AGR and AVM applicable to

15
<PAGE>
units purchased on any other date may be materially different). Those
assumptions can only be hypothetical given that owners of contracts have the
option to purchase or redeem units on any business day through contract
activity, and will receive dividend and capital gain distributions through the
receipt of additional shares to their unit values. A number of factors in
addition to contract owner activity can cause a Maturing Government Bond Sub-
Account's AGR and AVM to change from day to day. These include the adviser's
efforts to improve total return through market opportunities, transaction costs,
interest rate changes and other events that affect the market value of the
investments held in each Maturing Government Bond Portfolio in the Fund. Despite
these factors, it is anticipated that if specific units of a Maturing Government
Bond Sub-Account are held to the applicable target maturity date, then the AGR
and AVM applicable to such units (i.e., calculated as of the date of purchase of
such units) will vary from the actual return experienced by such units within a
narrow range.

- ------------------------------------------------------------------------
GENERAL DESCRIPTIONS

A. THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY

We are a mutual life insurance company organized in 1880 under the laws of
Minnesota. Our home office is at 400 Robert Street North, St. Paul, Minnesota
55101-2098, telephone: (612) 665-3500. We are licensed to do a life insurance
business in all states of the United States (except New York where we are an
authorized reinsurer), the District of Columbia, Canada, Puerto Rico, and Guam.

B. VARIABLE ANNUITY ACCOUNT
A separate account called the Minnesota Mutual Variable Annuity Account was
established on September 10, 1984, by our Board of Trustees in accordance with
certain provisions of the Minnesota insurance law. The separate account is
registered as a "unit investment trust" with the Securities and Exchange
Commission under the Investment Company Act of 1940, but such registration does
not signify that the Securities and Exchange Commission supervises the
management, or the investment practices or policies, of the Variable Annuity
Account. The separate account meets the definition of a "separate account" under
the federal securities laws.
The Minnesota law under which the Variable Annuity Account was established
provides that the assets of the Variable Annuity Account shall not be chargeable
with liabilities arising out of any other business which we may conduct, but
shall be held and applied exclusively to the benefit of the holders of those
variable annuity contracts for which the separate account was established. The
investment performance of the Variable Annuity Account is entirely independent
of both the investment performance of our General Account and of any other
separate account which we may have established or may later establish. All
obligations under the contracts are general corporate obligations of Minnesota
Mutual.

The Variable Annuity Account currently has twenty-one sub-accounts to which
contract owners may allocate purchase payments. Each sub-account invests in
shares of a corresponding Portfolio of the Funds. Additional sub-accounts may be
added at our discretion.

C. ADVANTUS SERIES FUND, INC.

The Variable Annuity Account currently invests in Advantus Series Fund, Inc.
(the "Series Fund"), a mutual fund of the series type which is advised by
Advantus Capital Management, Inc. Prior to May 1, 1997, the name of the Series
Fund was "MIMLIC Series Fund, Inc." On January 14, 1997, the Series Fund's Board
of Directors approved an amendment of the Series Fund's Articles of
Incorporation for the purpose of changing the name of the Series Fund to
"Advantus Series Fund, Inc." effective May 1, 1997. The purpose of the name
change is to provide the Series Fund with a more distinctive name which may
provide greater visibility and name recognition, which reflects the name of its
adviser, and which may provide additional marketing opportunities for variable
contracts investing in shares of the Series Fund. The change in the Series
Fund's name will not result in any change in investment objectives, policies or
practices for the Series Fund or any of its portfolios. The Series Fund is
registered with the Securities and Exchange Commission as a diversified,
open-end management investment company, but such registration does not signify
that the Commission supervises the management, or the investment practices or
policies, of the Series Fund. The Series Fund issues its shares, continually and
without sales charge, only to us and our separate accounts, which currently
include the Variable Annuity

16
<PAGE>

Account, Variable Fund D, the Variable Life Account, the Group Variable Annuity
Account and the Variable Universal Life Account. The Series Fund may also be
used as the underlying investment medium for separate accounts of the Northstar
Life Insurance Company, a wholly-owned life insurance subsidiary of Minnesota
Mutual which is domiciled in New York. Shares are sold and redeemed at net asset
value. In the case of a newly issued contract, purchases of shares of the
Portfolios of the Series Fund in connection with the first purchase payment will
be based on the values next determined after issuance of the contract by us.
Redemptions of shares of the Portfolios of the Series Fund are made at the net
asset value next determined following the day we receive a request for transfer,
partial withdrawal or surrender at our home office. In the case of outstanding
contracts, purchases of shares of the Portfolio of the Series Fund for the
Variable Annuity Account are made at the net asset value of such shares next
determined after receipt by us of contract purchase payments.

The Series Fund's investment adviser is Advantus Capital Management, Inc.
("Advantus Capital"). Advantus Capital is a wholly-owned subsidiary of MIMLIC
Asset Management Company ("MIMLIC Management") which prior to May 1, 1997,
served as investment adviser to the Series Fund. MIMLIC Management is a
wholly-owned subsidiary of Minnesota Mutual. The same portfolio managers and
other personnel who previously provided investment advisory services to the
Series Fund through MIMLIC Management continue to provide the same services
through Advantus Capital. It acts as an investment adviser to the Fund pursuant
to an advisory agreement.

Advantus Capital acts as investment adviser for the Fund and its Portfolios.
Winslow Capital Management, Inc., a Minnesota corporation with principal offices
at 4720 IDS Tower, 80 South Eighth Street, Minneapolis, Minnesota 55402, has
been retained under an investment sub-advisory agreement with Advantus Capital
Management, Inc. to provide investment advice and, in general, conduct the
management and investment program of the Capital Appreciation Portfolio.
Similarly, Templeton Investment Counsel, Inc., a Florida corporation with
principal offices in Fort Lauderdale, Florida, has been retained under an
investment sub-advisory agreement to provide investment advice to the
International Stock Portfolio of the Fund. J.P. Morgan Investment Management
Inc., a Delaware corporation with principal offices in New York, New York, has
been retained under an investment sub-advisory agreement to provide investment
advice for the Macro-Cap Value Portfolio of the Fund. Keystone Investment
Management Company, a Delaware corporation with principal offices in Boston,
Massachusetts, has been retained under an investment sub-advisory agreement to
provide investment advice for the Micro-Cap Value Portfolio of the Fund. Wall
Street Associates, a California corporation with principal offices in La Jolla,
California, as been retained under an investment sub-advisory agreement to
provide investment advice for the Micro-Cap Growth Portfolio of the Fund. Julius
Baer Investment Management, Inc., a Delaware corporation with principal offices
in New York, New York, has been retained under an investment sub-advisory
agreement to provide investment advice for the International Bond Portfolio of
the Fund.

A prospectus for the Fund is attached to this Prospectus. A person should
carefully read the Fund's prospectus before investing in the contracts.

D. TEMPLETON VARIABLE PRODUCTS SERIES FUND

In addition to the investments in the Fund, the Variable Annuity Account invests
in the Templeton Developing Markets Fund, a diversified portfolio of the
Templeton Variable Products Series Fund, a mutual fund of the series type.

The investment objectives and certain policies of the Templeton Developing
Markets Fund available under the Contract are as follows:

The Templeton Developing Markets fund seeks long-term capital appreciation.
It pursues this objective by investing primarily in equity securities of
issuers in countries having developing markets. Countries generally
considered to have developing markets are all countries that are considered
to be developing or emerging countries by the International Bank for
Reconstruction and Development (more commonly referred to as the World Bank)
or the International Finance Corporation, as well as countries that are
classified by the United Nations or otherwise regarded by their authorities
as developing.

Class 2 of the Templeton Developing Markets Fund pays 0.25% of the average
daily net assets

17
<PAGE>

annually under a distribution plan adopted under Rule 12b-1 of the Investment
Company Act of 1940. Amounts paid under the 12b-1 plan to Minnesota Mutual may
be used for certain contract owner services or distribution activities.

The investment adviser of Templeton Developing Markets Fund is Templeton Asset
Management Ltd., a Singapore corporation. It is an indirect wholly-owned
subsidiary of Franklin Resources, Inc. ("Franklin"). Through its subsidiaries,
Franklin is engaged in the financial services industry. The Templeton
organization has been investing globally since 1940 and, with its affiliates,
provides investment management and advisory services to a worldwide client base.
The investment adviser and its affiliates have offices worldwide.

E. ADDITIONS, DELETIONS OR SUBSTITUTIONS

We retain the right, subject to any applicable law, to make substitutions with
respect to the investments of the sub-accounts of the Variable Annuity Account.
If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund for a sub-account. Substitution may be with respect to existing
accumulation values, future purchase payments and future annuity payments.
We may also establish additional sub-accounts in the Variable Annuity Account
and we reserve the right to add, combine or remove any sub-accounts of the
Variable Annuity Account. Each additional sub-account will purchase shares in a
new portfolio or mutual fund. Such sub-accounts may be established when, in our
sole discretion, marketing, tax, investment or other conditions warrant such
action. Similar considerations will be used by us should there be a
determination to eliminate one or more of the sub-accounts of the Variable
Annuity Account. The addition of any investment option will be made available to
existing contract owners on such basis as may be determined by us.
We also reserve the right, when permitted by law, to de-register the Variable
Annuity Account under the Investment Company Act of 1940, to restrict or
eliminate any voting rights of the contract owners, and to combine the Variable
Annuity Contract with one or more of our other separate accounts.

Shares of the Portfolios of the Funds are also sold to other separate
accounts, which are used to receive and invest premiums paid under variable life
policies. It is conceivable that in the future it may be disadvantageous for
variable life insurance separate accounts and variable annuity separate accounts
to invest in the Fund simultaneously. Although neither Minnesota Mutual nor the
Funds currently foresees any such disadvantages either to variable life
insurance policy owners or to variable annuity contract owners, the Fund's Board
of Directors intends to monitor events in order to identify any material
conflicts between such policy owners and contract owners and to determine what
action, if any, should be taken in response thereto. Such action could include
the sale of Fund shares by one or more of the separate accounts, which could
have adverse consequences. Material conflicts could result from, for example,
(1) changes in state insurance laws, (2) changes in Federal income tax laws, (3)
changes in the investment management of any of the Portfolios of the Fund, or
(4) differences in voting instructions between those given by policy owners and
those given by contract owners.

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CONTRACT CHARGES

A. SALES CHARGES
No sales charge is deducted from the purchase payments for these contracts.
However, when a contract's accumulation value is reduced by a withdrawal,
surrender or applied to provide an annuity, a deferred sales charge may be
deducted for expenses relating to the sale of the contracts.

No deferred sales charge is deducted from the accumulation value withdrawn if:
(a) the withdrawal occurs after a contract has been in force for at least ten
contract years, (b) withdrawals during the first calendar year are equal to or
less than 10% of the purchase payments and, if in subsequent calendar years they
are equal to or less than 10% of the accumulation value at the end of the
previous calendar year, (c) the withdrawal is on account of the annuitant's
death, or (d) the withdrawal is for the purpose of providing annuity payments
under an option where payments are expected to continue for at least five years.
If withdrawals in a calendar year exceed 10% of those purchase payments or
accumulation value, the sales charge applies to the amount of the excess
withdrawal. In addition, we will waive the sales charge on that portion of a
contract's accumulation value which is applied to the

18
<PAGE>

purchase of an Adjustable Income Annuity, which is an immediate variable annuity
contract, issued by us.

The sales charge is deducted from the remaining accumulation value of the
contract except in the case of a surrender, where it reduces the amount
distributed. We will deduct the sales charge proportionally from the fixed and
variable accumulation value of the contract.
The amount of the deferred sales charge, expressed as a percentage of the
accumulation value withdrawn, is shown in the following table. Percentages are
shown as of the contract date and the end of each of the first ten contract
years. The percentages decrease uniformly each month for 120 months from the
contract date. In no event will the sum of the deferred sales charges exceed 9%
of the purchase payments made under a contract.

<TABLE>
<CAPTION>
DEFERRED SALES CHARGE
-------------------------------
FLEXIBLE
PAYMENT SINGLE PAYMENT
VARIABLE VARIABLE
BEGINNING OF ANNUITY ANNUITY
CONTRACT YEAR CONTRACT CONTRACT
- -------------------- ----------- --------------
<S> <C> <C>
1 9.0% 6.0%
2 8.1 5.4
3 7.2 4.8
4 6.3 4.2
5 5.4 3.6
6 4.5 3.0
7 3.6 2.4
8 2.7 1.8
9 1.8 1.2
10 0.9 0.6
11 -0- -0-
</TABLE>

Deduction for any applicable state premium taxes may be made from each purchase
payment or at the commencement of annuity payments. (Currently, such taxes range
from 0.5% to 3.5%, depending on the applicable law.) Any amount withdrawn from
the contract may be reduced by any premium taxes not previously deducted from
purchase payments.

As a percentage of purchase payments paid to the contracts, MIMLIC Sales
Corporation ("MIMLIC Sales"), the principal underwriter, may pay up to 4.5% of
the amount of those purchase payments to broker-dealers responsible for the
sales of the contracts. In addition, MIMLIC Sales or Minnesota Mutual will pay,
based uniformly on the sale of variable annuity contracts by such
broker-dealers, credits which allow registered representatives who are
responsible for sales of variable annuity contracts to attend conventions and
other meetings sponsored by Minnesota Mutual or its affiliates for the purpose
of promoting the sale of the insurance and/or investment products offered by
Minnesota Mutual and its affiliates. Such credits may cover the registered
representatives' transportation, hotel accommodations, meals, registration fees
and the like. Minnesota Mutual may also pay those registered representatives
amounts based upon their production and the persistency of life insurance and
annuity business placed with Minnesota Mutual.

B. MORTALITY AND EXPENSE RISK CHARGES
We assume the mortality risk under the contracts by our obligation to continue
to make monthly annuity payments, determined in accordance with the annuity rate
tables and other provisions contained in the contracts, to each annuitant
regardless of how long that annuitant lives or all annuitants as a group live.
This assures an annuitant that neither the annuitant's own longevity nor an
improvement in life expectancy generally will have an adverse effect on the
monthly annuity payments received under the contract.
We assume an expense risk by assuming the risk that deductions provided for in
the contracts for the sales and administrative expenses will be adequate to
cover the expenses incurred.

For assuming these risks, we currently make a deduction from the Variable
Annuity Account at the annual rate of .80% for the mortality risk and .45% for
the expense risk. We reserve the right to increase the charge for the assumption
of expense risks to not more than .60%. If this charge is increased to this
maximum amount, then the total of the mortality risk and expense risk charge
would be 1.40% on an annual basis.

For a discussion of how these charges are applied in the calculation of the
accumulation unit value, please see the discussion entitled "Purchase Payments,
Value of the Contract and Transfers" on page 23.
If these deductions prove to be insufficient to cover the actual cost of the
expense and mortality risks assumed by us, then we will absorb the resulting
losses and make sufficient transfers to the Variable Annuity Account from our
general account, where appropriate. Conversely, if these deductions prove to be
more than sufficient after the establishment of any contingency reserves deemed
prudent or required by law, any excess will be profit (or "surplus") to us. Some
or all of such profit may be used to cover any distribution costs not recovered
through the deferred sales charge.

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<PAGE>
EXCHANGE OFFER

Persons owning or having an interest in certain of our fixed and variable
annuities may exchange those interests for the contracts described herein and
transfer current accumulation values into the contracts.
The persons eligible for the exchange include: owners of individual fixed
annuities issued by Minnesota Mutual and The Ministers Life Insurance Company
except for those contracts known as SPDA 3 and SecureOption III; participants
under Minnesota Mutual group annuities offering fixed benefits in situations
other than where the contract is issued in connection with a stock bonus,
pension or profit sharing plan which meets the requirements for qualification
under section 401 of the Internal Revenue Code and variable annuity contracts
issued by Minnesota Mutual Variable Fund D with a contingent deferred sales
charge.
Persons who own combination fixed and variable annuity contracts, where any
general account assets are beyond the period where a withdrawal charge is
applicable, may also be eligible for such contract exchanges. For these
contracts, allocations as between fixed and variable accumulations may not be
altered at the time of the exchange. In addition, for contracts with interests
in Minnesota Mutual Variable Fund D, other than those with a contingent deferred
sales load, the contract or participation must be of at least ten year's
duration. No charge is made to this transfer. For contracts described in this
Prospectus, where the contract type is to be exchanged, for example from a
single payment contract to a flexible payment contract, we will allow such an
exchange only during the original contract's first contract year and if there
have been no transfers or withdrawals. In some circumstances where multiple
contracts are being exchanged for the convenience of the contractholder, a
charge of $50 to cover administrative expense may be imposed.
For exchanges from annuities where a sales charge is deducted from each
purchase payment received from the owner, accumulation values credited to a
contract at the time of transfer will not be subject to a deferred sales charge
at any time. However, purchase payments subsequently made to the contract may be
subject to a deferred sales charge if such amounts are then withdrawn,
surrendered or applied to provide an annuity. The deferred sales charge will be
applied so that the contract year of the contract will be determined as of the
contract date of the annuity from which the accumulation value was transferred.
For exchanges from annuities where a deferred sales charge may be made on
withdrawals, surrenders or when amounts are applied to provide an annuity, no
deferred sales charge will be made at the time of transfer. However, a deferred
sales charge may be deducted from the accumulation value of the contract on such
a basis so that the contract year of the contract will be determined as of the
contract date of the annuity from which the accumulation value was transferred
or, if transfer is of participation in a group annuity, from the first day of
the month in which contributions were first received from the individual under
the group annuity contract on behalf of that individual.
In considering an exchange, you should review the provisions of the contract
you now own and the contracts described in the Prospectus. To effect such an
exchange, your completed application, Annuity Exchange Authorization and
existing annuity contracts should be returned to us.

Inquiries regarding the contracts mentioned above or the contracts described
in this Prospectus may be directed to us at: Minnesota Mutual Life Center, 400
Robert Street North, St. Paul, Minnesota 55101-2098; or by calling us at (612)
665-3500.

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VOTING RIGHTS

The Fund shares held in the Variable Annuity Account will be voted by us at the
regular and special meetings of the Funds. Shares attributable to contracts will
be voted by us in accordance with instructions received from contract owners
with voting interests in each sub-account of the Variable Annuity Account. In
the event no instructions are received from a contract owner with respect to
shares of a Portfolio held by a sub-account, we will vote such shares of the
Portfolio and shares not attributable to contracts in the same proportion as
shares of the Portfolio held by such sub-account for which instructions have
been received. The number of votes which are available to a contract owner will
be calculated separately for each sub-account of the Variable Annuity Account.
If, however, the Investment Company Act of 1940 or any regulation under that Act
should change so that we may be

20
<PAGE>
allowed to vote shares in our own right, then we may elect to do so.
During the accumulation period of each contract, the contract owner holds the
voting interest in each contract. The number of votes will be determined by
dividing the accumulation value of the contract attributable to each sub-account
by the net asset value per share of the underlying Fund shares held by that sub-
account.
During the annuity period of each contract, the annuitant holds the voting
interest in each contract. The number of votes will be determined by dividing
the reserve for each contract allocated to each sub-account by the net asset
value per share of the underlying Fund shares held by that sub-account. After an
annuity begins, the votes attributable to any particular contract will decrease
as the reserves decrease. In determining any voting interest, fractional shares
will be recognized.
We shall notify each contract owner or annuitant of a Fund shareholders'
meeting if the shares held for the contract owner's contract may be voted at
such meeting. We will also send proxy materials and a form of instruction so
that you can instruct us with respect to voting.

- ------------------------------------------------------------------------------
DESCRIPTION OF THE CONTRACTS

A. GENERAL PROVISIONS

1. TYPES OF CONTRACTS OFFERED

(a) Single Payment Variable Annuity Contract

This type of contract may be used in connection with a pension or
profit-sharing plan under which plan contributions have been accumulating.
It may be used in connection with a plan which has previously been funded
with insurance or annuity contracts. It may be used under state deferred
compensation plans or individual retirement annuity programs. It may also be
purchased by individuals not as a part of any qualified plan. The contract
provides for a fixed or variable annuity to begin at some future date with
the purchase payment made either in a lump sum or in a series of payments in
a single contract year.

(b) Flexible Payment Variable Annuity Contract

This type of contract may be used in connection with all types of plans,
state deferred compensation plans or individual retirement annuities adopted
by or on behalf of individuals. It may also be purchased by individuals not
as a part of any plan. The contract provides for a variable annuity or a
fixed annuity to begin at some future date with the purchase payments for
the contract to be paid prior to the annuity commencement date in a series
of payments flexible in respect to the date and amount of payment.

2. ISSUANCE OF CONTRACTS
The contracts are issued to you, the contract owner named in the application.
The owner of the contract may be the annuitant or someone else.

3. MODIFICATION OF THE CONTRACTS
A contract may be modified at any time by written agreement between you and us.
However, no such modification will adversely affect the rights of an annuitant
under the contract unless the modification is made to comply with a law or
government regulation. You will have the right to accept or reject the
modification. This right of acceptance or rejection is limited for contracts
used as individual retirement annuities.

4. ASSIGNMENT
If the contract is sold in connection with a tax-qualified program, (including
employer sponsored employee pension benefit plans, tax-sheltered annuities and
individual retirement annuities,) your or the annuitant's interest may not be
assigned, sold, transferred, discounted or pledged as collateral for a loan or
as security for the performance of an obligation or for any other purpose, and
to the maximum extent permitted by law, benefits payable under the contract
shall be exempt from the claims of creditors.
If the contract is not issued in connection with a tax-qualified program, the
interest of any person in the contract may be assigned during the lifetime of
the annuitant. We will not be bound by any assignment until we have recorded
written notice of it at our home office. We are not responsible for the validity
of any assignment. An assignment will not apply to any payment or action made by
us before it was recorded. Any proceeds which become payable to an assignee will
be payable in a single sum. Any claim made by an assignee will be subject to
proof of the assignee's interest and the extent of the assignment.

21
<PAGE>
5. LIMITATIONS ON PURCHASE PAYMENTS
For the single payment variable annuity contract, the single payment will be
deemed to include all purchase payments made within 12 months of the contract
date. The amount of an initial purchase payment must be at least $5,000. The
amount of any subsequent payment during that 12 month period must be at least
$1,000. Some states, for example, New Jersey, will limit these contracts to a
single purchase payment and contracts issued there are so limited.
You choose when to make purchase payments under a flexible payment variable
annuity contract. There is no minimum purchase payment amount and there is no
minimum amount which must be allocated to any sub-account of the Variable
Annuity Account or to the General Account.
Total purchase payments under either contract may not exceed $1,000,000,
except with our consent.
We may cancel a flexible payment contract, in our discretion, if no purchase
payments are made for a period of two or more full contract years and both (a)
the total purchase payments made, less any withdrawals and associated charges,
and (b) the accumulation value of the entire contract, are less than $2,000. If
such a cancellation takes place, we will pay you the accumulation value of your
contract and we will notify you, in advance, of our intent to exercise this
right in our annual report which advises contract owners of the status of their
contracts. We will act to cancel the contract ninety days after the contract
anniversary unless an additional purchase payment is received before the end of
that ninety day period. Contracts issued in some states, for example, New
Jersey, do not permit such a cancellation and contracts issued there do not
contain this provision.
There may be limits on the maximum contributions to retirement plans that
qualify for special tax treatment.

6. DEFERMENT OF PAYMENT
Whenever any payment under a contract is to be made in a single sum, payment
will be made within seven days after the date such payment is called for by the
terms of the contract, except as payment may be subject for postponement for:

(a) any period during which the New York Stock Exchange is closed other than
customary weekend and holiday closings, or during which trading on the
New York Stock Exchange is restricted, as determined by the Securities
and Exchange Commission;

(b) any period during which an emergency exists as determined by the
Commission as a result of which it is not reasonably practical to
dispose of securities in the Fund or to fairly determine the value of
the assets of the Fund; or

7. PARTICIPATION IN DIVISIBLE SURPLUS
The contracts participate in our divisible surplus, according to the annual
determination of our Board of Trustees as to the portion, if any, of our
divisible surplus which has accrued on the contracts.
No assurance can be given as to the amount of divisible surplus, if any, that
will be distributable under these contracts in the future. Such amount may arise
if mortality and expense experience is more favorable than assumed. When any
distribution of divisible surplus is made, it may take the form of additional
payments to annuitants or the crediting of additional accumulation units.

B. ANNUITY PAYMENTS AND OPTIONS

1. ANNUITY PAYMENTS

Variable annuity payments are determined on the basis of (a) the mortality table
specified in the contract, which reflects the age of the annuitant, (b) the type
of annuity payment option selected, and (c) the investment performance of the
Fund Portfolios selected by the contract owner. The amount of the variable
annuity payments will not be affected by adverse mortality experience or by an
increase in our expenses in excess of the expense deductions provided for in the
contract. The annuitant will receive the value of a fixed number of annuity
units each month. The value of such units, and thus the amounts of the monthly
annuity payments will, however, reflect investment gains and losses and
investment income of the Funds, and thus the annuity payments will vary with the
investment experience of the assets of the Portfolio of the Fund selected by the
contract owner.

2. ELECTING THE RETIREMENT DATE AND FORM OF ANNUITY
The contracts provide for four optional annuity forms, any one of which may be
elected if permitted by law. Each annuity option may be

22
<PAGE>
elected on either a variable annuity or a fixed annuity basis, or a combination
of the two. Other annuity options may be available from us on request.

While the contracts require that notice of election to begin annuity payments
must be received by us at least 30 days prior to the annuity commencement date,
we are currently waiving that requirement for such variable annuity elections
received at least three valuation days prior to the 15th of the month. We
reserve the right to enforce the 30 day notice requirement at our option at any
time in the future.

Each contract permits an annuity payment to begin on the first day of any
month. Under the contracts payment must begin before the later of the 85th
birthday of the annuitant, or five years after the date of issue of the
contracts. A variable annuity will be provided and the annuity option shall be
Option 2A, a life annuity with a period of 120 months. The minimum first monthly
annuity payment on either a variable or fixed dollar basis is $20. If such first
monthly payment would be less than $20, we may fulfill our obligation by paying
in a single sum the surrender value of the contract which would otherwise have
been applied to provide annuity payments.
Once annuity payments have commenced, you cannot surrender an annuity benefit
and receive a single sum settlement in lieu thereof.
Benefits under retirement plans that qualify for special tax treatment
generally must commence no later than the April 1 following the year in which
the participant reaches age 70 1/2 and are subject to other conditions and
restrictions.

3. OPTIONAL ANNUITY FORMS

OPTION 1--LIFE ANNUITY
This is an annuity payable monthly during the lifetime of the annuitant and
terminating with the last monthly payment preceding the death of the annuitant.
This option offers the maximum monthly payment since there is no guarantee of a
minimum number of payments or provision for a death benefit for beneficiaries.
It would be possible under this option for the annuitant to receive only one
annuity payment if he died prior to the due date of the second annuity payment,
two if he died before the due date of the third annuity payment, etc.

OPTION 2--LIFE ANNUITY WITH A PERIOD CERTAIN OF 120 MONTHS (OPTION 2A), 180
MONTHS (OPTION 2B), OR 240 MONTHS (OPTION 2C)
This is an annuity payable monthly during the lifetime of the annuitant, with
the guarantee that if the annuitant dies before payments have been made for the
period certain elected, payments will continue to the beneficiary during the
remainder of the period certain. If the beneficiary so elects at any time during
the remainder of the period certain, the present value of the remaining
guaranteed number of payments, based on the then current dollar amount of one
such payment and using the same interest rate which served as a basis for the
annuity shall be paid in a single sum to the beneficiary.

OPTION 3--JOINT AND LAST SURVIVOR ANNUITY
This is an annuity payable monthly during the joint lifetime of the annuitant
and a designated joint annuitant and continuing thereafter during the remaining
lifetime of the survivor. Under this option there is no guarantee of a minimum
number of payments or provision for a death benefit for beneficiaries. If this
option is elected, the contract and payments shall then be the joint property of
the annuitant and the designated joint annuitant. It would be possible under
this option for both annuitants to receive only one annuity payment if they both
died prior to the due date of the second annuity payment, two if they died
before the due date of the third annuity payment, etc.

OPTION 4--PERIOD CERTAIN ANNUITY
This is an annuity payable monthly for a period certain of from 5 to 20 years,
as elected. If the annuitant dies before payments have been made for the period
certain elected, payments will continue during the remainder of the fixed period
to the beneficiary. Contracts issued prior to May of 1993, or such later date as
we receive regulatory approval to issue these new contracts in a state and are
administratively able to do so, may allow the election of a period certain
option of less than five years. In the event of the death of the annuitant, the
beneficiary may elect that (1) the present value of the remaining guaranteed
number of payments, based on the then current dollar amount of one such payment
and using the same interest rate which served as a basis for the annuity, shall
be paid in a single sum, or (2) such commuted amount shall be applied to effect
a life annuity under Option 1 or Option 2.

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<PAGE>
4. DETERMINATION OF AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT
Under the contracts described in this Prospectus, the first monthly annuity
payment is determined by the available value of the contract when an annuity
begins. In addition, a number of states do impose a premium tax on the amount
used to purchase an annuity benefit, depending on the type of plan involved.
Where applicable, these taxes currently range from 0.0% to 3.5% and are deducted
from the contract value applied to provide annuity payments. We reserve the
right to make such deductions from purchase payments as they are received.
The amount of the first monthly payment depends on the optional annuity form
elected and the adjusted age of the annuitant. A formula for determining the
adjusted age is contained in the contract.
The contracts contain tables indicating the dollar amount of the first fixed
monthly payment under each optional annuity form for each $1,000 of value
applied. The tables are determined from the Progressive Annuity Table with
interest at the rate of 3% per annum, assuming births in the year 1900 and an
age setback of six years. Also, for contracts issued after 1993 or such later
date as we may be able to issue this contract in a jurisdiction, the contract
contains a provision that applies a contract fee of $200 when a fixed annuity is
elected. If, when annuity payments are elected, we are using tables of annuity
rates for these contracts which result in larger annuity payments, we will use
those tables instead.
The dollar amount of the first monthly variable annuity payment is determined
by applying the available value (after deduction of any premium taxes not
previously deducted) to a rate per $1,000 which is based on the Progressive
Annuity Table with interest at the rate of 4.5% per annum, assuming births in
the year 1900 and with an age setback of six years. The amount of the first
payment depends upon the annuity payment option selected and the adjusted age of
the annuity and any joint annuitant. A number of annuity units is then
determined by dividing this dollar amount by the then current annuity unit
value. Thereafter, the number of annuity units remains unchanged during the
period of annuity payments. This determination is made separately for each sub-
account of the separate account. The number of annuity units is based upon the
available value in each sub-account as of the date annuity payments are to
begin.
The dollar amount determined for each sub-account will then be aggregated for
purposes of making payment.
The 4.5% interest rate assumed in the variable annuity determination would
produce level annuity payments if the net investment rate remained constant at
4.5% per year. Subsequent payments will decrease, remain the same or increase
depending upon whether the actual net investment rate is less than, equal to, or
greater than 4.5%. A higher interest rate means a higher initial payment, but a
more slowly rising (or more rapidly falling) series of subsequent payments. A
lower assumption has the opposite effect. For contracts issued prior to May of
1993, or such later date as when we receive regulatory approval to issue these
new contracts in a state and are administratively able to do so, which utilized
such a lower rate, the payments will differ from these contracts in the manner
described.
Annuity payments are always made as of the first day of a month. The contracts
require that notice of election to begin annuity payments must be received by us
at least thirty days prior to the annuity commencement date. However, Minnesota
Mutual currently waives this requirement, and at the same time reserves the
right to enforce the thirty day notice at its option in the future.
Money will be transferred to the General Account for the purpose of electing
fixed annuity payments, or to the appropriate variable sub-accounts for variable
annuity payments, on the valuation date coincident with the first valuation date
following the fourteenth day of the month preceding the date on which the
annuity is to begin.
If a request for a fixed annuity is received between the first valuation date
following the fourteenth day of the month and the second to last valuation date
of the month prior to commencement, the transfer will occur on the valuation
date coincident with or next following the date on which the request is
received. If a fixed annuity request is received after the third to the last
valuation day of the month prior to commencement, it will be treated as a
request received the following month, and the commencement date will be changed
to the first of the month following the requested commencement date. The account
value used to determine fixed annuity payments will be the value as of the last
valuation date of the month preceding the date the fixed annuity is to begin.
If a variable annuity request is received after the third valuation date
preceding the first

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valuation date following the fourteenth day of the month prior to the
commencement date, it will be treated as a request received the following month,
and the commencement date will be changed to the first of the month following
the requested commencement date. The account value used to determine the initial
variable annuity payment will be the value as of the first valuation date
following the fourteenth day of the month prior to the variable annuity begin
date.

5. AMOUNT OF SECOND AND SUBSEQUENT MONTHLY ANNUITY PAYMENTS
The dollar amount of the second and later variable annuity payments is equal to
the number of annuity units determined for each sub-account times the annuity
unit value for that sub-account as of the due date of the payment. This amount
may increase or decrease from month to month.

6. VALUE OF THE ANNUITY UNIT
The value of an annuity unit for a sub-account is determined monthly as of the
first day of each month by multiplying the value on the first day of the
preceding month by the product of (a) .996338, and (b) the ratio of the value of
the accumulation unit for that sub-account for the valuation date next following
the fourteenth day of the preceding month to the value of the accumulation unit
for the valuation date next following the fourteenth day of the second preceding
month (.996338 is a factor to neutralize the assumed net investment rate,
discussed in Section 3 above, of 4.5% per annum built into the first payment
calculation which is not applicable because the actual net investment rate is
credited instead). The value of an annuity unit for a sub-account as of any date
other than the first day of a month is equal to its value as of the first day of
the next succeeding month.

7. TRANSFER OF ANNUITY RESERVES
Amounts held as annuity reserves may be transferred among the variable annuity
sub-accounts during the annuity period. Annuity reserves may also be transferred
from a variable annuity to a fixed annuity during this time. The change must be
made by a written request. The annuitant and joint annuitant, if any, must make
such an election.
There are restrictions to such a transfer. The transfer of an annuity reserve
amount from any sub-account must be at least equal to $5,000 or the entire
amount of the reserve remaining in that sub-account. In addition, annuity
payments must have been in effect for a period of 12 months before a change may
be made. Such transfers can be made only once every 12 months. The written
request for an annuity transfer must be received by us more than 30 days in
advance of the due date of the annuity payment subject to the transfer. Upon
request, we will make available to you annuity reserve amount sub-account
information.
A transfer will be made on the basis of annuity unit values. The number of
annuity units from the sub-account being transferred will be converted to a
number of annuity units in the new sub-account. The annuity payment option will
remain the same and cannot be changed. After this conversion, a number of
annuity units in the new sub-account will be payable under the elected option.
The first payment after conversion will be of the same amount as it would have
been without the transfer. The number of annuity units will be set at that
number of units which are needed to pay that same amount on the transfer date.
When we receive a request for the transfer of variable annuity reserves, it
will be effective for future annuity payments. The transfer will be effective
and funds actually transferred in the middle of the month prior to the next
annuity payment affected by your request. We will use the same valuation
procedures to determine your variable annuity payment that we used initially.
However, if your annuity is based upon annuity units in a sub-account which
matures on a date other than the stated annuity valuation date, then your
annuity units will be adjusted to reflect sub-account performance in the
maturing sub-account and the sub-account to which reserves are transferred for
the period between annuity valuation dates.
Amounts held as reserves to pay a variable annuity may also be transferred to
a fixed annuity during the annuity period. However, the restrictions which apply
to annuity sub-account transfers will apply in this case as well. The amount
transferred will then be applied to provide a fixed annuity amount. This amount
will be based upon the adjusted age of the annuitant and any joint annuitant at
the time of the transfer. The annuity payment option will remain the same.
Amounts paid as a fixed annuity may not be transferred to a variable annuity.
When we receive a request to make such a transfer to a fixed annuity, it will
be effective for future annuity payments. The transfer will be effective and
funds actually transferred in the middle of the month prior to the next annuity

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payment. We will use the same fixed annuity pricing at the time of transfer that
we use to determine an initial fixed annuity payment.
Contracts with this transfer feature may not be available in all states.

C. DEATH BENEFITS
The contracts provide that in the event of the death of the owner before annuity
payments begin, the amount payable at death will be the contract accumulation
value determined as of the valuation date coincident with or next following the
date due proof of death is received by us at our home office. Death proceeds
will be paid in a single sum to the beneficiary designated unless an annuity
option is elected. Payment will be made within seven days after we receive due
proof of death. Except as noted below, the entire interest in the contract must
be distributed within five years of the owner's death.
The single payment variable annuity contract has a guaranteed death benefit if
you die before annuity payments have started. The death benefit shall be equal
to the greater of: (1) the amount of the accumulation value payable at death; or
(2) the amount of the total purchase payments paid to us during the first twelve
months as consideration for this contract, less all contract withdrawals. As a
matter of company practice, we use this method except that total purchase
payments will include all contributions, even those made after twelve months to
determine the death benefit for all contracts offered by this Prospectus.
If the owner dies on or before the date on which annuity payments begin we
will pay the greater of the accumulated value or the guaranteed death benefit to
the designated beneficiary. If the designated beneficiary is a person other than
the owner's spouse, that beneficiary may elect an annuity option measured by a
period not longer than that beneficiary's life expectancy only so long as
annuity payments begin not later than one year after the owner's death. If there
is no designated beneficiary, then the entire interest in a contract must be
distributed within five years after the owner's death. If the annuitant dies
after annuity payments have begun, any payments received by a non-spouse
beneficiary must be distributed at least as rapidly as under the method elected
by the annuitant as of the date of death.
If any portion of the contract interest is payable to the owner's designated
beneficiary who is also the surviving spouse of the owner, that spouse shall be
treated as the contract owner for purposes of: (1) when payments must begin, and
(2) the time of distribution in the event of that spouse's death. Payments must
be made in substantially equal installments.
If the owner of this contract is other than a natural person, such as a trust
or other similar entity, we will pay a death benefit of the accumulation value
to the named beneficiary on the death of the annuitant, if death occurs prior to
the date for annuity payments to begin.

D. PURCHASE PAYMENTS, VALUE OF THE CONTRACT AND TRANSFERS

1. CREDITING ACCUMULATION UNITS
During the accumulation period--the period before annuity payments begin--each
purchase payment is credited on the valuation date coincident with or next
following the date such purchase payment is received by us at our home office.
When the contracts are originally issued, application forms are completed by the
applicant and forwarded to our home office. We will review each application form
submitted to us for compliance with our issue criteria and, if it is accepted, a
contract will be issued.
If the initial purchase payment is accompanied by an incomplete application,
that purchase payment will not be credited until the valuation date coincident
with or next following the date a completed application is received. We will
offer to return the initial purchase payment accompanying an incomplete
application if it appears that the application cannot be completed within five
business days.
Purchase payments will be credited to the contract in the form of accumulation
units. The number of accumulation units credited with respect to each purchase
payment is determined by dividing the portion of the purchase payment allocated
to each sub-account by the then current accumulation unit value for that
sub-account.

The number of accumulation units so determined shall not be changed by any
subsequent change in the value of an accumulation unit, but the value of an
accumulation unit will vary from valuation date to valuation date to reflect the
investment experience of the Funds.

We will determine the value of accumulation units on each day on which the
Funds are valued. The net asset value of the Funds'

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shares shall be computed once daily, and, in the case of Money Market Portfolio,
after the declaration of the daily dividend, as of the primary closing time for
business on the New York Stock Exchange (as of the date hereof the primary close
of trading is 3:00 p.m. (Central Time), but this time may be changed) on each
day, Monday through Friday, except (i) days on which changes in the value of
such Fund's portfolio securities will not materially affect the current net
asset value of such Fund's shares, (ii) days during which no such Fund's shares
are tendered for redemption and no order to purchase or sell such Fund's shares
is received by such Fund and (iii) customary national business holidays on which
the New York Stock Exchange is closed for trading (as of the date hereof, New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day). Accordingly, the value of accumulation
units so determined will be applicable to all purchase payments received by us
at our home office on that day prior to the close of business of the Exchange.
The value of accumulation units applicable to purchase payments received after
the close of business of the Exchange will be the value determined on the next
valuation date.
In addition to providing for the allocation of purchase payments to the
sub-accounts of the Variable Annuity Account, the contracts also provide for
allocation of purchase payments to our General Account for accumulation at a
guaranteed interest rate. Applications received without instructions as to
allocation will be treated as incomplete. Upon your written request, values
under the contract may be transferred between our General Account and the
Variable Annuity Account or among the sub-accounts of the Variable Annuity
Account. We will make the transfer on the basis of accumulation unit values on
the valuation date coincident with or next following the day we receive the
request at our home office. No deferred sales charge will be imposed on such
transfers. There is no dollar amount limitation which is applied to transfers.
The contracts permit us to limit the frequency and amount of transfers from our
General Account to the Variable Annuity Account.
Currently, except as provided below, we limit such transfers to a single such
transfer during any calendar year and to any amount which is no more than 20% of
the General Account accumulation value at the time of the transfer.
There is one situation which is an exception to the above restriction. That
situation is where the contract owner has established a systematic transfer
arrangement with us. The contract owner may transfer General Account current
interest earnings or a specified amount from the General Account on a monthly,
quarterly, semi-annual or annual basis. For transfers of a specified amount from
the General Account the maximum initial amount that may be transferred may not
exceed 10% of the current General Account accumulation value at the time of the
first transfer. For contracts where the General Account accumulation value is
increased during the year because of transfers into the General Account or
additional purchase payments, made after the program is established, systematic
transfers are allowed to the extent of the greater of the current transfer
amount or 10% of the then current General Account accumulation value. Even with
respect to systematic transfer plans, we reserve the right to alter the terms of
such programs once established where funds are being transferred out of the
General Account. Our alteration of existing systematic transfer programs will be
effective only upon our written notice to contract owners of changes affecting
their election.

Systematic transfer arrangements are limited to the use of a maximum of twenty
sub-accounts.

Transfer arrangements may be established to begin on the 10th or 20th of any
month and if a transfer cannot be completed it will be made on the next
available transfer date. In the absence of specific instructions, transfers will
be made on a monthly basis and will remain active until the appropriate General
Account accumulation value or sub-account is depleted.
Also, you or persons authorized by you may effect transfers, or a change in
the allocation of future premiums, by means of a telephone call. Transfers or
requests made pursuant to such a call are subject to the same conditions and
procedures as are outlined above for written transfer requests. During periods
of marked economic or market changes, contract owners may experience difficulty
in implementing a telephone transfer due to a heavy volume of telephone calls.
In such a circumstance, contract owners should consider submitting a written
transfer request while continuing to attempt a telephone redemption. We reserve
the right to restrict the frequency of--or

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<PAGE>
otherwise modify, condition, terminate or impose charges upon--telephone
transfer privileges. For more information on telephone transfers, contact
Minnesota Mutual.
While for some contract owners we have used a form to pre-authorize telephone
transactions, we now make this service automatically available to all contract
owners. We will employ reasonable procedures to satisfy ourselves that
instructions received from contract owners are genuine and, to the extent that
we do not, we may be liable for any losses due to unauthorized or fraudulent
instructions. We require contract owners or a person authorized by you to
personally identify themselves in those telephone conversations through contract
numbers, social security numbers and such other information as we may deem to be
reasonable. We record telephone transfer instruction conversations and we
provide the contract owners with a written confirmation of the telephone
transfer.
The interests of contract owners arising from the allocation of purchase
payments or the transfer of contract values to our General Account are not
registered under the Securities Act of 1933. We are not registered as an
investment company under the Investment Company Act of 1940. Accordingly, such
interests are not subject to the provisions of those acts that would apply if
registration under such acts were required.

2. VALUE OF THE CONTRACT
The Accumulation Value of the contract at any time prior to the commencement of
annuity payments can be determined by multiplying the total number of
accumulation units credited to the contract by the current value of an
accumulation unit. There is no assurance that such value will equal or exceed
the purchase payments made. The contract owner will be advised periodically of
the number of accumulation units credited to the contract, the current value of
an accumulation unit, and the total value of the contract.

3. ACCUMULATION UNIT VALUE
The value of an accumulation unit for each sub-account of the Variable Annuity
Account was set at $1.000000 on the first valuation date of the Variable Annuity
Account. The value of an accumulation unit on any subsequent valuation date is
determined by multiplying the value of an accumulation unit on the immediately
preceding valuation date by the net investment factor for the applicable
sub-account (described below) for the valuation period just ended. The value of
an accumulation unit as of any date other than a valuation date is equal to its
value on the next succeeding valuation date.

4. NET INVESTMENT FACTOR FOR EACH VALUATION PERIOD
The net investment factor is an index used to measure the investment performance
of a sub-account from one valuation period to the next. For any sub-account, the
net investment factor for a valuation period is the gross investment rate for
such sub-account for the valuation period, less a deduction for the mortality
and expense risk charge at the current rate of 1.25% per annum.
The gross investment rate is equal to: (1) the net asset value per share of a
Portfolio share held in a sub-account of the Variable Annuity Account determined
at the end of the current valuation period, plus (2) the per share amount of any
dividend or capital gain distribution by the Portfolio if the "ex-dividend" date
occurs during the current valuation period, divided by (3) the net asset value
per share of that Portfolio share determined at the end of the preceding
valuation period. The gross investment rate may be positive or negative.

E. REDEMPTIONS

1. PARTIAL WITHDRAWALS AND SURRENDER

Under both contracts, the contracts provide that prior to the date annuity
payments begin partial withdrawals may be made by you from the contract for cash
amounts of at least $250. You must make a written request for any withdrawal. In
this event, the accumulation value will be reduced by the amount of the
withdrawal and any applicable deferred sales charge. In the absence of
instructions to the contrary, withdrawals will be made from the General Account
accumulation value and from the Variable Annuity Account accumulation value in
the same proportion. In the absence of instructions, withdrawals will be made
from the sub-accounts on a pro rata basis. We will waive the applicable dollar
amount limitation on withdrawals where a systematic withdrawal program is in
place and such a smaller amount satisfies the minimum distribution requirements
of the Code. In the absence of instructions to the contrary, systematic
withdrawals will be made from the sub-accounts on a pro rata basis if
accumulation values are in no more than twenty sub-accounts. If more than twenty
sub-accounts have accumulation values, we will need instructions as to those
sub-accounts from

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which systematic withdrawals are to be made. For systematic withdrawals, the
maximum number of sub-accounts which may be used is twenty.

The contracts provide that prior to the commencement of annuity payments, you
may elect to surrender the contract for its surrender value. You will receive in
a single cash sum the accumulation value computed as of the valuation date
coincident with or next following the date of surrender, reduced by any
applicable deferred sales charge and the administrative charge, or you may elect
an annuity.
For more information on the application of the deferred sales charge, see
"Sales Charges" on pages 15-16.
Once annuity payments have commenced for an annuitant, the annuitant cannot
surrender his annuity benefit and receive a single sum settlement in lieu
thereof. For a discussion of commutation rights of annuitants and beneficiaries
subsequent to the annuity commencement date, see "Optional Annuity Forms" on
pages 20-21.

Contract owners may also submit their signed written withdrawal or surrender
requests to Minnesota Mutual by facsimile (FAX) transmission. Our FAX number is
(612) 665-7942. Transfer instructions or changes as to future allocations of
premium payments may be communicated to us by the same means. Payment of a
partial withdrawal or surrender will be made to you within 7 days after we
receive your completed request.

2. RIGHT OF CANCELLATION
You should read the contract carefully as soon as it is received. You may cancel
the purchase of a contract within ten days after its delivery, for any reason,
by giving us written notice at 400 Robert Street North, St. Paul, Minnesota
55101-2098, of an intention to cancel. If the contract is cancelled and
returned, we will refund to you the greater of (a) the accumulation value of the
contract, or (b) the amount of purchase payments paid under the contract.
Payment of the requested refund will be made to you within seven days after we
receive notice of cancellation.
In some states, such as California, the free look period may be extended. In
California, the free look period is extended to thirty days' time for contracts
issued or delivered to owners that are sixty years of age or older at the time
of delivery. Those rights are subject to change and may vary among the states.
The liability of the Variable Annuity Account under the foregoing is limited
to the accumulation value of the contract at the time it is returned for
cancellation. Any additional amounts necessary to make our refund to you equal
to the purchase payments will be made by us.

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FEDERAL TAX STATUS

INTRODUCTION
The discussion contained herein is general in nature and is not intended as tax
advice. Each person concerned should consult a competent tax adviser. No attempt
is made to consider any applicable state or other tax laws. In addition, this
discussion is based on our understanding of federal income tax laws as they are
currently interpreted. No representation is made regarding the likelihood of
continuation of current income tax laws or the current interpretations of the
Internal Revenue Service.
We are taxed as a "life insurance company" under the Internal Revenue Code.
The operations of the Variable Annuity Account form a part of, and are taxed
with, our other business activities. Currently, no federal income tax is payable
by us on income dividends received by the Variable Annuity Account or on capital
gains arising from the Variable Annuity Account's activities. The Variable
Annuity Account is not taxed as a "regulated investment company" under the Code
and it does not anticipate any change in that tax status.

TAXATION OF ANNUITY CONTRACTS IN GENERAL
Section 72 of the Code governs taxation of nonqualified annuities in general and
some aspects of qualified programs. No taxes are imposed on increases in the
value of a contract until distribution occurs, either in the form of a payment
in a single sum or as annuity payments under the annuity option elected. As a
general rule, deferred annuity contracts held by a corporation, trust or other
similar entity, as opposed to a natural person, are not treated as annuity
contracts for federal tax purposes. The investment income on such contracts is
taxed as ordinary income that is received or accrued by the owner of the
contract during the taxable year.
For payments made in the event of a full surrender of an annuity, the taxable
portion is generally the amount in excess of the cost basis

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(i.e., purchase payments) of the contract. Amounts withdrawn from the variable
annuity contracts not part of a qualified program are treated first as taxable
income to the extent of the excess of the contract value over the purchase
payments made under the contract. Such taxable portion is taxed at ordinary
income tax rates.
In the case of a withdrawal under an annuity that is part of a qualified
program, a portion of the amount received is taxable based on the ratio of the
"investment in the contract" to the individual's balance in the retirement plan,
generally the value of the annuity. The "investment in the contract" generally
equals the portion of any deposits made by or on behalf of an individual under
an annuity which was not excluded from the gross income of the individual. For
annuities issued in connection with qualified plans, the "investment in the
contract" can be zero.
For annuity payments, the taxable portion is generally determined by a formula
that establishes the ratio that the cost basis of the contract bears to the
expected return under the contract. Such taxable part is taxed at ordinary
income rates.

If a taxable distribution is made under the variable annuity contracts, a
penalty tax of 10% of the amount of the taxable distribution may apply. This
additional tax does not apply where the taxpayer is 59 1/2 or older, where
payment is made on account of the taxpayer's disability, or where payment is
made by reason of the death of the owner, and in certain other circumstances.

The Code also provides an exception to the penalty tax for distributions, in
periodic payments, of substantially equal installments, be made for the life (or
life expectancy) of the taxpayer or the joint lives (or joint life expectancies)
of the taxpayer and beneficiary.
For some types of qualified plans, other tax penalties may apply to certain
distributions.
A transfer of ownership of a contract, the designation of an annuitant or
other payee who is not also the contract owner, or the assignment of the
contract may result in certain income or gift tax consequences to the contract
owner that are beyond the scope of this discussion. A contract owner who is
contemplating any such transfer, designation or assignment should consult a
competent tax adviser with respect to the potential tax effects of that
transaction.
For purposes of determining a contract owner's gross income, the Code provides
that all nonqualified deferred annuity contracts issued by the same company (or
its affiliates) to the same contract owner during any calendar year shall be
treated as one annuity contract. Additional rules may be promulgated under this
provision to prevent avoidance of its effect through serial contracts or
otherwise. For further information on these rules, see your tax adviser.

DIVERSIFICATION REQUIREMENTS
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Variable Annuity Account to
be "adequately diversified" in order for the contract to be treated as an
annuity contract for Federal tax purposes. The Variable Annuity Account, through
the Fund, intends to comply with the diversification requirements prescribed in
Regulations Section 1.817-5, which affect how the Fund's assets may be invested.
Although the investment adviser is an affiliate of Minnesota Mutual, Minnesota
Mutual does not have control over the Fund or its investments. Nonetheless,
Minnesota Mutual believes that each Portfolio of the Fund in which the Variable
Annuity Account owns shares will be operated in compliance with the requirements
prescribed by the Treasury.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances, income
and gains from the separate account assets would be includable in the variable
annuity contract owner's gross income. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
contract owner), rather than the insurance company, to be treated as the owner
of the assets in the account." This announcement also states that guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their

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investments to particular subaccounts without being treated as owners of the
underlying assets." As of the date of this Prospectus, no such guidance has been
issued.
The ownership rights under the contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of a contract has the choice of several sub-accounts in which
to allocate net purchase payments and contract values, and may be able to
transfer among sub-accounts more frequently than in such rulings. These
differences could result in a contract owner being treated as the owner of the
assets of the Variable Annuity Account. In addition, Minnesota Mutual does not
know what standards will be set forth, if any, in the regulations or rulings
which the Treasury Department has stated it expects to issue. Minnesota Mutual
therefore reserves the right to modify the contract as necessary to attempt to
prevent a contract owner from being considered the owner of a pro rata share of
the assets of the Variable Annuity Account.

REQUIRED DISTRIBUTIONS
In order to be treated as an annuity contract for federal income tax purposes,
Section 72(s) of the Code requires any nonqualified contract issued after
January 18, 1985 to provide that (a) if an owner dies on or after the annuity
starting date but prior to the time the entire interest in the contract has been
distributed, the remaining portion of such interest will be distributed at least
as rapidly as under the method of distribution being used as of the date of that
owner's death; and (b) if an owner dies prior to the annuity starting date, the
entire interest in the contract must be distributed within five years after the
date of the owner's death. These requirements shall be considered satisfied if
any portion of the owner's interest which is payable to or for the benefit of a
"designated beneficiary" is distributed over the life of such beneficiary or
over a period not extending beyond the life expectancy of that beneficiary and
such distributions begin within one year of that owner's death. The owner's
"designated beneficiary" is the person designated by such owner as a beneficiary
and to whom ownership of the contract passes by reason of death. It must be a
natural person. However, if the owner's "designated beneficiary" is the
surviving spouse of the owner, the contract may be continued with the surviving
spouse as the new owner.
Nonqualified contracts issued after January 18, 1985 contain provisions which
are intended to comply with the requirements of Section 72(s) of the Code,
although no regulations interpreting these requirements have yet been issued.
Minnesota Mutual intends to review such provisions and modify them if necessary
to assure that they comply with the requirements of Code Section 72(s) when
clarified by regulation or otherwise.
Other rules may apply to qualified contracts.

TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a contract because of the death of the owner.
Generally, such amounts are includable in the income of the recipient as
follows: (1) if distributed in a lump sum, they are taxed in the same manner as
a full surrender of the contract, as described above, or (2) if distributed
under an annuity option, they are taxed in the same manner as annuity payments,
as described above.

POSSIBLE CHANGES IN TAXATION
In the past years, legislation has been proposed that would have adversely
modified the federal taxation of certain annuities. For example, one such
proposal would have changed the tax treatment of nonqualified annuities that did
not have "substantial life contingencies" by taxing income as it is credited to
the annuity. Although as of the date of this Prospectus Congress is not actively
considering any legislation regarding the taxation of annuities, there is always
the possibility that the tax treatment of annuities could change by legislation
or other means (such as IRS regulations, revenue rulings, judicial decisions,
etc.). Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).

TAX QUALIFIED PROGRAMS
The annuity is designed for use with several types of retirement plans that
qualify for special tax treatment. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and the
terms and conditions of the plan. Special favorable tax treatment may be
available for certain types of contributions and distributions. Adverse tax
consequences may result from contributions in excess of specified limits;
distributions prior to age 59 1/2 (subject to certain exceptions); distributions
that do not conform to specified minimum distribution rules; aggregate

31
<PAGE>
distributions in excess of a specified annual amount; and in other specified
circumstances.
We make no attempt to provide more than general information about use of
annuities with the various types of retirement plans. Owners and participants
under retirement plans as well as annuitants and beneficiaries are cautioned
that the rights of any person to any benefits under annuities purchased in
connection with these plans may be subject to the terms and conditions of the
plans themselves, regardless of the terms and conditions of the annuity issued
in connection with such a plan. Some retirement plans are subject to transfer
restrictions, distribution and other requirements that are not incorporated into
the annuity or our annuity administration procedures. Owners, participants and
beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the annuities comply with applicable law.
Purchasers of annuities for use with any retirement plan should consult their
legal counsel and tax adviser regarding the suitability of the contract.

PUBLIC SCHOOL SYSTEMS AND CERTAIN TAX EXEMPT ORGANIZATIONS
Under Code Section 403(b), payments made by public school systems and certain
tax exempt organizations to purchase annuity contracts for their employees are
excludable from the gross income of the employee, subject to certain
limitations. However, these payments may be subject to FICA (Social Security)
taxes.
Code Section 403(b)(11) restricts the distribution under Code Section 403(b)
annuity contracts of: (1) elective contributions made in years beginning after
December 31, 1988; (2) earnings on those contributions; and (3) earnings in such
years on amounts held as of the last year beginning before January 1, 1989.
Distribution of those amounts may only occur upon death of the employee,
attainment of age 59 1/2, separation from service, disability, or financial
hardship. In addition, income attributable to elective contributions may not be
distributed in the case of hardship.

INDIVIDUAL RETIREMENT ANNUITIES
Code Sections 219 and 408 permit individuals or their employers to contribute to
an individual retirement program known as an "Individual Retirement Annuity" or
"IRA". Individual Retirement Annuities are subject to limitations on the amount
which may be contributed and deducted and the time when distributions may
commence. In addition, distributions from certain other types of retirement
plans may be placed into an Individual Retirement Annuity on a tax deferred
basis. Employers may establish Simplified Employee Pension (SEP) Plans for
making IRA contributions on behalf of their employees.

SIMPLE RETIREMENT ACCOUNTS

Beginning January 1, 1997, certain small employers may establish Simple
Retirement Accounts as provided by Section 408(p) of the Code, under which
employees may elect to defer up to $6,000 (as increased for cost of living
adjustments) as a percentage of compensation. The sponsoring employer is
required to make a matching contribution on behalf of contributing employees.
Distributions from a Simple Retirement Account are subject to the same
restrictions that apply to IRA distributions and are taxed as ordinary income.
Subject to certain exceptions, premature distributions prior to age 59 1/2 are
subject to a 10% penalty tax, which is increased to 25% if the distribution
occurs within the first two years after the commencement of the employee's
participation in the plan. The failure of the Simple Retirement Account to meet
Code requirements may result in adverse tax consequences.

CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS
Code Section 401(a) permits employers to establish various types of retirement
plans for employees, and permits self-employed individuals to establish
retirement plans for themselves and their employees. These retirement plans may
permit the purchase of the contracts to accumulate retirement savings under the
plans. Adverse tax or other legal consequences to the plan, to the participant
or to both may result if this annuity is assigned or transferred to any
individual as a means to provide benefit payments, unless the plan complies with
all legal requirements applicable to such benefits prior to transfer of the
annuity.

DEFERRED COMPENSATION PLANS

Code Section 457 provides for certain deferred compensation plans. These plans
may be offered with respect to service for state governments, local governments,
political subdivisions, agencies, instrumentalities and certain affiliates of
such entities, and tax exempt organizations. The plans may permit participants
to specify the form of investment for their deferred compensation account. With
respect to non-governmental Section 457

32
<PAGE>

plans, investments are owned by the sponsoring employer and are subject to the
claims of the general creditors of the employer and depending on the terms of
the particular plan, the employer may be entitled to draw on deferred amounts
for purposes unrelated to its Section 457 plan obligations. In general, all
amounts received under a Section 457 plan are taxable and are subject to federal
income tax withholding as wages.

WITHHOLDING
In general, distributions from annuities are subject to federal income tax
withholding unless the recipient elects not to have tax withheld. Different
rules may apply to payments delivered outside the United States. Some states
have enacted similar rules.
Recent changes to the Code allow the rollover of most distributions from
tax-qualified plans and Section 403(b) annuities directly to other tax-qualified
plans that will accept such distributions and to individual retirement accounts
and individual retirement annuities. Distributions which may not be rolled over
are those which are: (1) one of a series of substantially equal annual (or more
frequent) payments made (a) over the life or life expectancy of the employee,
(b) the joint lives or joint expectancies of the employee and the employee's
designated beneficiary, or (c) for a specified period of ten years or more; (2)
a required minimum distribution; or (3) the non-taxable portion of a
distribution.
Any distribution eligible for rollover, which may include payment to an
employee, an employee's surviving spouse or an ex-spouse who is an alternate
payee, will be subject to federal tax withholding at a 20% rate unless the
distribution is made as a direct rollover to a tax-qualified plan or to an
individual retirement account or annuity. It may be noted that amounts received
by individuals which are eligible for rollover may still be placed in another
tax-qualified plan or individual retirement account or individual retirement
annuity if the transaction is completed within 60 days after the distribution
has been received. Such a taxpayer must replace withheld amounts with other
funds to avoid taxation on the amount previously withheld.
SEE YOUR OWN TAX ADVISER
It should be understood that the foregoing description of the federal income tax
consequences under these contracts is not exhaustive and that special rules are
provided with respect to situations not discussed herein. It should also be
understood that should a plan lose its qualified status, employees will lose
some of the tax benefits described. Statutory changes in the Internal Revenue
Code with varying effective dates, and regulations adopted thereunder may also
alter the tax consequences of specific factual situations. Due to the complexity
of the applicable laws, tax advice may be needed by a person contemplating the
purchase of a variable annuity contract or exercising elections under such a
contract. For further information a qualified tax adviser should be consulted.

- ------------------------------------------------------------------------
RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

Section 36.105, Title 110B of the Texas Revised Civil Statutes, consistent with
prior interpretations of the Attorney General of the State of Texas, permits
participants in the Texas Optional Retirement Program (ORP) to redeem their
interests in a variable annuity contract issued under the ORP only upon (1)
termination of employment in all institutions of higher education as defined in
Texas law, (2) retirement, or (3) death. Accordingly, participants in the ORP
will be required to obtain certifications from their employers of their status
with respect to ORP employers before they may redeem their contract or transfer
contract values to another carrier qualified to participate in ORP.

- ------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
A Statement of Additional Information, which contains additional information
including financial statements, is available from the offices of Minnesota
Mutual at your request. The Table of Contents for that Statement of Additional
Information is as follows:
Trustees and Principal Management Officers of Minnesota Mutual
Distribution of Contracts
Performance Data
Auditors
Registration Statement
Financial Statements

33
<PAGE>
APPENDIX A--ILLUSTRATION OF VARIABLE ANNUITY VALUES

The illustration included in this appendix shows the effect of investment
performance on the monthly variable annuity income. The illustration assumes a
gross investment return, after tax, of: 0%, 6.54% and 12.00%.

For illustration purposes, an average annual expense equal to 2.04% of the
average daily net assets is deducted from the gross investment return to
determine the net investment return. The net investment return is then used to
project the monthly variable annuity incomes. The expense charge of 2.04%
includes: 1.25% for mortality and expense risk, and an average of .79% for
investment management and other fund expenses. These expenses are listed for
each portfolio in the table following.

The gross and net investment rates are for illustrative purposes only and are
not a reflection of past or future performance. Actual variable annuity income
will be more or less than shown if the actual returns are different than those
illustrated.
The illustration assumes 100% of the assets are invested in sub-account(s) of
the Variable Annuity Account. For comparison purposes, a current fixed annuity
income, available through the general account is also provided. The illustration
assumes an initial interest rate, used to determine the first variable payment
of 4.50%. After the first variable annuity payment, future payments will
increase if the annualized net rate of return exceeds the initial interest rate,
and will decrease if the annualized net rate of return is less than the initial
interest rate.
The illustration provided is for a male, age 65, selecting a life and 10 year
certain annuity option with $100,000 of non-qualified funds, residing in the
State of Minnesota. Upon request, we will provide a comparable illustration
based upon the proposed annuitant's date of birth, sex, annuity option, state of
residence, type of funds, value of funds, and selected gross annual rate of
return (not to exceed 12%).

ACTUAL 1996 VARIABLE ANNUITY SEPARATE ACCOUNT CHARGES
AND FUND EXPENSES

<TABLE>
<CAPTION>
FUND OTHER
SEPARATE ACCOUNT MORTALITY & MANAGEMENT SERIES FUND DISTRIBUTION
SUB-ACCOUNT NAME EXPENSE RISK FEE EXPENSES EXPENSES TOTAL
- ------------------------------ ------------- ----------- ------------ ------------ ------
<S> <C> <C> <C> <C> <C>
Growth........................ 1.25% .50% .09% -- 1.84%
Bond.......................... 1.25% .50% .06% -- 1.81%
Money Market.................. 1.25% .50% .10% -- 1.85%
Asset Allocation.............. 1.25% .50% .04% -- 1.79%
Mortgage Securities........... 1.25% .50% .08% -- 1.83%
Index 500..................... 1.25% .40% .05% -- 1.70%
Capital Appreciation.......... 1.25% .75% .10% -- 2.10%
International Stock........... 1.25% .74% .32% -- 2.31%
Small Company................. 1.25% .75% .06% -- 2.06%
Value Stock................... 1.25% .75% .08% -- 2.08%
Maturing Government Bond
1998......................... 1.25% .05% .15% -- 1.45%
Maturing Government Bond
2002......................... 1.25% .05% .15% -- 1.45%
Maturing Government Bond
2006......................... 1.25% .25% .15% -- 1.65%
Maturing Government Bond
2010......................... 1.25% .25% .15% -- 1.65%
Small Company................. 1.25% .75% .15% -- 2.15%
International Bond............ 1.25% .60% 1.00% -- 2.85%
Index 400 Mid-Cap............. 1.25% .40% .15% -- 1.80%
Micro-Cap Value............... 1.25% 1.25% .15% -- 2.65%
Macro-Cap Value............... 1.25% .70% .15% -- 2.10%
Micro-Cap Growth.............. 1.25% 1.10% .15% -- 2.50%
Templeton Developing Markets
Class 2...................... 1.25% 1.25% .53% .25%* 3.28%
--
--- --- --- ------
Average............... 1.25% .60% .18% .01% 2.04%
</TABLE>

*For the purpose of this illustration, the term "Other Fund Expenses" includes a
distribution fee in this fund of .25%.

34
<PAGE>
VARIABLE ANNUITY PAYOUT ILLUSTRATION

PREPARED FOR: Prospect

PREPARED BY: Minnesota Mutual

SEX: Male DATE OF BIRTH: 05/01/32

STATE: MN

LIFE EXPECTANCY: 20.0 (IRS) 17.3 (MML)

ANNUITIZATION OPTION: 10 Year Certain with Life Contingency

QUOTATION DATE: 05/01/97

COMMENCEMENT DATE: 06/01/97

SINGLE PAYMENT RECEIVED: $100,000.00
FUNDS: Non-Qualified

INITIAL MONTHLY INCOME: $678

The monthly variable annuity income amount shown below assumes a constant
annual investment return. The initial interest rate of 4.50% is the assumed rate
used to calculate the first monthly payment. Thereafter, monthly payments will
increase or decrease

based upon the relationship between the initial interest rate and the
performance of the sub-account(s) selected. The investment returns shown are
hypothetical and not a representation of future results.

<TABLE>
<CAPTION>
ANNUAL RATE OF RETURN
-----------------------------------------------------------
0% GROSS 6.54% GROSS 12.00% GROSS
DATE AGE (-2.04% NET) (4.50% NET) (9.96% NET)
- ------------------------------------------------------- --------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
June 1, 1997........................................... 65 678 678 678
June 1, 1998........................................... 66 636 678 714
June 1, 1999........................................... 67 596 678 751
June 1, 2000........................................... 68 559 678 790
June 1, 2001........................................... 69 524 678 832
June 1, 2006........................................... 74 379 678 1,073
June 1, 2011........................................... 79 274 678 1,384
June 1, 2016........................................... 84 199 678 1,785
June 1, 2021........................................... 89 144 678 2,303
June 1, 2026........................................... 94 104 678 2,971
June 1, 2031........................................... 99 75 678 3,832
June 1, 2032........................................... 100 71 678 4,032
</TABLE>

IF 100% OF YOUR PURCHASE WAS APPLIED TO PROVIDE A FIXED ANNUITY ON THE
QUOTATION DATE OF THIS ILLUSTRATION, THE FIXED ANNUITY INCOME AMOUNT WOULD BE
$742.

Net rates of return reflect expenses totaling 2.04%, which consist of the
1.25% Variable Annuity Account mortality and expense risk charge and .79% for
the Fund management fee and other Fund expenses (this is an average with the
actual varying from .20% to 2.03%).

Minnesota Mutual MultiOption variable annuities are available through
registered representatives of MIMLIC Sales Corporation.

This is an illustration only and not a contract.

35
<PAGE>

F.33505 Rev. 5-1997

<PAGE>

PART B

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

Minnesota Mutual Variable Annuity Account

Cross Reference Sheet to Statement of Additional Information

Form N-4

Item Number Caption in Statement of Additional Information

15. Cover Page

16. Cover Page

17. Trustees and Principal Management Officers of Minnesota
Mutual

18. Not Applicable

19. Not Applicable

20. Distribution of Contracts

21. Performance Data

22. Not Applicable

23. Financial Statements

<PAGE>

Minnesota Mutual Variable Annuity Account
("Variable Annuity Account"), a Separate Account of

The Minnesota Mutual Life Insurance Company
("Minnesota Mutual")
400 Robert Street North
St. Paul, Minnesota 55101-2098

Telephone: (612) 665-3500

Statement of Additional Information

The date of this document and the Prospectus is: May 1, 1997

This Statement of Additional Information is not a prospectus. Much of the
information contained in this Statement of Additional Information expands upon
subjects discussed in the Prospectus. Therefore, this Statement should be read
in conjunction with the Fund's current Prospectus, bearing the same date, which
may be obtained by calling The Minnesota Mutual Life Insurance Company at (612)
665-3500, or writing to Minnesota Mutual at Minnesota Mutual Life Center, 400
Robert Street North, St. Paul, Minnesota 55101-2098.

Trustees and Principal Management Officers of Minnesota Mutual
Distribution of Contracts
Performance Data
Auditors
Registration Statement
Financial Statements

<PAGE>

TRUSTEES AND PRINCIPAL MANAGEMENT OFFICERS OF MINNESOTA MUTUAL

Trustees Principal Occupation

Giulio Agostini Senior Vice President, Finance and Administrative
Services, Minnesota Mining and Manufacturing
Company, Maplewood, Minnesota

Anthony L. Andersen Chair-Board of Directors, H. B. Fuller Company,
St. Paul, Minnesota, since June 1995, prior
thereto for more than five years President and
Chief Executive Officer, H. B. Fuller Company
(Adhesive Products)

John F. Grundhofer Chairman of the Board, President and Chief
Executive Officer, First Bank System, Inc.,
Minneapolis, Minnesota (Banking)

Harold V. Haverty Retired since May 1995, prior thereto, for more
than five years Chairman of the Board, President
and Chief Executive Officer, Deluxe Corporation,
Shoreview, Minnesota (Check Printing)

David S. Kidwell, Ph.D. Dean and Professor of Finance, The Curtis L.
Carlson School of Management, University of
Minnesota

Reatha C. King, Ph.D. President and Executive Director, General Mills
Foundation, Minneapolis, Minnesota

Thomas E. Rohricht Member, Doherty, Rumble & Butler Professional
Association, St. Paul, Minnesota (Attorneys)

Terry Tinson Saario, Ph.D. Prior to March 1996, and for more than five
years, President, Northwest Area Foundation,
St. Paul, Minnesota (Private Regional
Foundation)

Robert L. Senkler Chairman of the Board, President and Chief
Executive Officer, The Minnesota Mutual Life
Insurance Company, since August 1995; prior
thereto for more than five years Vice President
and Actuary, The Minnesota Mutual Life Insurance
Company

Michael E. Shannon Chairman, Chief Financial and Administrative
Officer, Ecolab, Inc., St. Paul, Minnesota, since
August 1992, prior thereto President, Residential
Services Group, Ecolab, Inc., St. Paul, Minnesota
from October 1990 to July 1992 (Develops and
Markets Cleaning and Sanitizing Products)

Frederick T. Weyerhaeuser Chairman, Clearwater Investment Trust, since
May 1996, prior thereto for more than five years,
Chairman, Clearwater Management Company, St. Paul,
Minnesota (Financial Management)

2
<PAGE>

Principal Officers (other than Trustees)

Name Position

John F. Bruder Senior Vice President

Keith M. Campbell Vice President

Paul H. Gooding Vice President and Treasurer

Robert E. Hunstad Executive Vice President

James E. Johnson Senior Vice President and Actuary

Richard D. Lee Vice President

Joel W. Mahle Vice President

Dennis E. Prohofsky Senior Vice President, General Counsel
and Secretary

Gregory S. Strong Vice President and Actuary

Terrence S. Sullivan Senior Vice President

Randy F. Wallake Senior Vice President

All Trustees who are not also officers of Minnesota Mutual have had the
principal occupation (or employers) shown for at least five years with the
exception of Messrs Agostini, Andersen and Shannon and Dr. Kidwell, whose
prior employment is as indicated above. All officers of Minnesota Mutual
have been employed by Minnesota Mutual for at least five years.

DISTRIBUTION OF CONTRACTS

The contracts will be sold in a continuous offering by our life insurance
agents who are also registered representatives of MIMLIC Sales Corporation
("MIMLIC Sales") or other broker-dealers who have entered into selling
agreements with MIMLIC Sales. MIMLIC Sales acts as principal underwriter of
the contracts. MIMLIC Sales is a wholly-owned subsidiary of MIMLIC Asset
Management Company, which in turn is a wholly-owned subsidiary of Minnesota
Mutual Life. MIMLIC Asset Management Company is also the sole owner of the
shares of Advantus Capital Management Inc., a registered investment adviser
and the investment adviser to the Advantus Series Fund, Inc. MIMLIC Sales is
registered as a broker-dealer under the Securities Exchange Act of 1934 and is
a member of the National Association of Securities Dealers, Inc. Amounts paid
by Minnesota Mutual to the underwriter for 1996, 1995, and 1994 were
$13,034,146, $7,203,781 and $7,363,105, respectively, for payments to associated
dealers on the sale of the contracts, which include other contracts issued
through the Variable Annuity Account. Agents of Minnesota Mutual who are also
registered representatives of MIMLIC Sales are compensated directly by
Minnesota Mutual.

3
<PAGE>

PERFORMANCE DATA

CURRENT YIELD FIGURES FOR MONEY MARKET SUB-ACCOUNT

Current annualized yield quotations for the Money Market Sub-Account are based
on the Sub-Account's net investment income for a seven-day or other specified
period and exclude any realized or unrealized gains or losses on sub-account
securities. Current annualized yield is computed by determining the net change
(exclusive of realized gains and losses from the sale of securities and
unrealized appreciation and depreciation) in the value of a hypothetical account
having a balance of one accumulation unit at the beginning of the specified
period, dividing such net change in account value by the value of the account at
the beginning of the period, and annualizing this quotient on a 365-day basis.
The Variable Annuity Account may also quote the effective yield of the Money
Market Sub-Account for a seven-day or other specified period for which the
current annualized yield is computed by expressing the unannualized return on a
compounded, annualized basis. The yield and effective yield of the Money Market
Sub-Account for the seven-day period ended December 31, 1996 were 3.51% and
3.57%, respectively. Yield figures quoted by the Money Market Sub-Account
will not reflect the deduction of any applicable deferred sales charges (the
deferred sales charges, as a percentage of the accumulation value withdrawn,
begin as of the contract date at 9% for the flexible payment contract and at
6% for the single payment contract, and decrease uniformly each month for 120
months).

TOTAL RETURN FIGURES FOR ALL SUB-ACCOUNTS

Cumulative total return quotations for Sub-Accounts represent the total return
for the period since the Sub-Account became available pursuant to the Variable
Annuity Account's registration statement. Cumulative total return is equal to
the percentage change between the net asset value of a hypothetical $1,000
investment at the beginning of the period and the net asset value of that same
investment at the end of the period. Such quotations of cumulative total return
will not reflect the deduction of any applicable deferred sales charges.

Prior to May 3, 1993, several of the Sub-Accounts were known by different names.
The Growth Sub-Account was the Stock Sub-Account, the Asset Allocation Sub-
Account was the Managed Sub-Account, the Index 500 Sub-Account was the Index
Sub-Account and the Capital Appreciation Sub-Account was the Aggressive Growth
Sub-Account.

The cumulative total return figures published by the Variable Annuity Account
relating to the contracts described in the Prospectus will reflect Minnesota
Mutual's voluntary absorption of certain Fund expenses described below. The
cumulative total returns for the Sub-Accounts for the specified periods ended
December 31, 1996 are shown in the table below. The figures in parentheses show
what the cumulative total returns would have been had Minnesota Mutual not
absorbed Fund expenses as described.

<PAGE>

From Inception Date of
to 12/31/96 Inception
-------------- ---------
<S> <C> <C>
Growth Sub-Account 191.18% (188.83%) 12/3/85

Bond Sub-Account 116.57% (115.50%) 12/3/85

Money Market Sub-Account 55.81% (53.49%) 12/3/85

Asset Allocation Sub-Account 169.03% (168.48%) 12/3/85

Mortgage Securities Sub-Account 100.93% (100.58%) 6/1/87

Index 500 Sub-Account 191.54% (190.76%) 6/1/87

Capital Appreciation Sub-Account 193.98% (191.13%) 6/1/87

International Stock Sub-Account 72.80% (72.77%) 5/1/92

Small Company Sub-Account 67.23% (67.22%) 5/3/93

Maturing Government Bond
1998 Sub-Account 16.89% (16.60%) 5/2/94

Maturing Government Bond
2002 Sub-Account 23.35% (22.71%) 5/2/94

Maturing Government Bond
2006 Sub-Account 28.89% (27.84%) 5/2/94

Maturing Government Bond
2010 Sub-Account 31.52% (29.35%) 5/2/94

Value Stock Sub-Account 77.79% (77.54%) 5/2/94
</TABLE>

Cumulative total return quotations for Sub-Accounts will be accompanied by
average annual total return figures for a one-year period, five-year period
and ten-year period or for the period since the Sub-Account became available
pursuant to the Variable Annuity Account's registration statement if less
than ten years. Average annual total return figures are the average annual
compounded rates of return required for an initial investment of $1,000 to
equal the surrender value of that same investment at the end of the period.
The surrender value will reflect the deduction of the deferred sales charge
applicable to the contract (flexible premium/single premium) and to the
length of the period advertised. The average annual total return figures
published by the Variable Annuity Account will reflect Minnesota Mutual's
voluntary absorption of certain Fund expenses. Prior to January 1, 1986, the
Fund incurred no expenses. During 1986 and from January 1 to March 8, 1987
Minnesota Mutual voluntarily absorbed all fees

<PAGE>

and expenses of any Fund portfolio that exceeded .75% of the average daily net
assets of such Fund portfolio. For the period subsequent to March 9, 1987,
Minnesota Mutual is voluntarily absorbing the fees and expenses that exceed .65%
of the average daily net assets of the Growth, Bond, Money Market, Asset
Allocation and Mortgage Securities Portfolios of the Fund, .55% of the average
daily net assets of the Index 500 Portfolios of the Fund, .90% of the average
daily net assets of the Capital Appreciation and Small Company Portfolios of the
Funds and expenses that exceed 1.00% of the average daily net assets of the
International Stock Portfolios of the Fund exclusive of the advisory fee. And,
for the period subsequent to May 2, 1994, Minnesota Mutual has voluntarily
absorbed fees and expenses that exceed .90% of the average daily net assets of
the Value Stock Portfolios and fees and expenses that exceed .40% of the average
daily net assets of the Maturing Government Bond Portfolios. It should be noted
that for the Maturing Government Bond Portfolios maturing in 1998 and 2002,
Minnesota Mutual will voluntarily absorb fees and expenses that exceed .20% of
average daily net assets of those Portfolios until April 30, 1998.

For the period subsequent to October 1, 1997, Minnesota Mutual has
voluntarily agreed to absorb fees and expenses that exceed .55% of the
average daily net assets of the Index 400 Mid-Cap Portfolio, .90% of the
average daily net assets of the Small Company Value Portfolio, 1.40% of the
average daily net assets of the Mid-Cap Value Portfolio, 1.25% of the average
daily net assets of the Micro-Cap Growth Portfolio, .85% of the average daily
net assets of the Macro-Cap Value Portfolio and expenses that exceed 1.00% of
the average daily net assets of the International Bond Portfolio of the Fund
exclusive of the advisory fee. There is no specified or minimum period of
time during which Minnesota Mutual has agreed to continue its voluntary
absorption of these expenses, and Minnesota Mutual may in its discretion
cease its absorption of expenses at any time. Should Minnesota Mutual cease
absorbing expenses the effect would be to increase substantially Fund
expenses and thereby reduce investment return.

<PAGE>

The average annual rates of return for the Sub-Accounts, in connection with both
the flexible premium and single premium contracts described in the Prospectus,
for the specified periods ended December 31, 1996 are shown in the tables below.
The figures in parentheses show what the average annual rates of return would
have been had Minnesota Mutual not absorbed Fund expenses as described above.

<TABLE>
<CAPTION>
FLEXIBLE PREMIUM CONTRACT

Year Ended Five Years Ten Years From Inception Date of
12/31/96 Ended 12/31/96 Ended 12/31/96 to 12/31/96 Inception
-------- -------------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Growth Sub-Account 7.26% (7.26%) 7.73% (7.73%) 11.22% (11.10%) N/A (N/A) 12/3/85

Bond Sub-Account -5.73% (-5.73%) 4.52% (4.49%) 6.54% (6.45%) N/A (N/A) 12/3/85

Money Market Sub-Account -3.90% (-3.90%) 1.85% (1.63%) 4.06% (3.72%) N/A (N/A) 12/3/85

Asset Allocation Sub-Account 3.00% (3.00%) 7.37% (7.37%) 9.76% (9.73%) N/A (N/A) 12/3/85

Mortgage Securities Sub-Account -3.63% (-3.63%) 4.68% (4.66%) N/A (N/A) 7.52% (7.49%) 6/1/87

Index 500 Sub-Account 11.37% (11.37%) 12.32% (12.30%) N/A (N/A) 11.77% (11.73%) 6/1/87

Capital Appreciation Sub-Account 7.69% (7.69%) 9.07% (9.05%) N/A (N/A) 11.87% (11.72%) 6/1/87

International Stock Sub-Account 9.68% (9.68%) N/A (N/A) N/A (N/A) 11.37% (11.36%) 5/1/92

Small Company Sub-Account -2.54% (-2.54%) N/A (N/A) N/A (N/A) 13.42% (13.42%) 5/3/93

Maturing Government Bond
1998 Sub-Account -4.66% (-5.18%) N/A (N/A) N/A (N/A) 3.62% (3.06%) 5/2/94

7
<PAGE>

Maturing Government Bond
2002 Sub-Account -6.86% (-7.67%) N/A (N/A) N/A (N/A) 5.73% (4.82%) 5/2/94

Maturing Government Bond
2006 Sub-Account -9.55% (-10.55%) N/A (N/A) N/A (N/A) 7.48% (6.26%) 5/2/94

Maturing Government Bond
2010 Sub-Account -11.57% (13.35%) N/A (N/A) N/A (N/A) 8.30% (6.01%) 5/2/94

Value Stock Sub-Account 19.89% (19.89%) N/A (N/A) N/A (N/A) 20.82% (20.71%) 5/2/94
</TABLE>

<TABLE>
<CAPTION>
SINGLE PREMIUM CONTRACT

Year Ended Five Years Ten Years From Inception Date of
12/31/96 Ended 12/31/96 Ended 12/31/96 to 12/31/96 Inception
-------- -------------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Growth Sub-Account 10.07% (10.07%) 8.03% (8.03%) 11.22% (11.22%) N/A (N/A) 12/3/85

Bond Sub-Account -3.26% (-3.26%) 4.81% (4.78%) 6.54% (6.45%) N/A (N/A) 12/3/85

Money Market Sub-Account -1.38% (-1.38%) 2.13% (1.91%) 4.06% (3.72%) N/A (N/A) 12/3/85

Asset Allocation Sub-Account 5.70% (5.70%) 7.67% (7.67%) 9.76% (9.73%) N/A (N/A) 12/3/85

Mortgage Securities Sub-Account -1.10% (-1.10%) 4.97% (4.95%) N/A (N/A) 7.53% (7.50%) 6/1/87

Index 500 Sub-Account 14.29% (14.29%) 12.64% (12.62%) N/A (N/A) 11.78% (11.74%) 6/1/87

Capital Appreciation Sub-Account 10.51% (10.51%) 9.38% (9.36%) N/A (N/A) 11.88% (11.73%) 6/1/87

8
<PAGE>

International Stock Sub-Account 12.55% (12.55%) N/A (N/A) N/A (N/A) 11.73% (11.72%) 5/1/92

Small Company Sub-Account .01% (.01%) N/A (N/A) N/A (N/A) 13.97% (13.97%) 5/3/93

Maturing Government Bond
1998 Sub-Account -2.16% (-2.68%) N/A (N/A) N/A (N/A) 4.43% (3.87%) 5/2/94

Maturing Government Bond
2002 Sub-Account -4.42% (-5.23%) N/A (N/A) N/A (N/A) 6.56% (5.65%) 5/2/94

Maturing Government Bond
2006 Sub-Account -7.18% (-8.18%) N/A (N/A) N/A (N/A) 8.33% (7.11%) 5/2/94

Maturing Government Bond
2010 Sub-Account -9.25% (11.03%) N/A (N/A) N/A (N/A) 9.15% (6.86%) 5/2/94

Value Stock Sub-Account 23.04% (23.04%) N/A (N/A) N/A (N/A) 21.76% (21.65%) 5/2/94
</TABLE>

The average annual total return figures described above may be accompanied by
other average annual total return quotations which do not reflect the deduction
of any deferred sales charges. Such other average annual total return figures
will be calculated as described above, except that the initial $1,000 investment
will be equated to that same investment's net asset value, rather than its
surrender value, at the end of the period. The average annual rates of return,
as thus calculated, for the Sub-Accounts of the contracts described in the
Prospectus for the specified periods ended December 31, 1996 are shown in the
table below. Inasmuch as no deferred sales charges are reflected in these
figures, they are the same for both the flexible premium and the single premium
contracts. The figures in parentheses show what the average annual rates of
return, without the application of applicable deferred sales charges, would have
been had Minnesota Mutual not absorbed Fund expenses as described above.

<PAGE>

<TABLE>
<CAPTION>
Year Ended Five Years Ten Years From Inception Date of
12/31/96 Ended 12/31/96 Ended 12/31/96 to 12/31/96 Inception
-------- -------------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Growth Sub-Account 15.70% (15.70%) 8.62% (8.62%) 11.22% (11.22%) N/A (N/A) 12/3/85

Bond Sub-Account 1.68% (1.68%) 5.39% (5.36%) 6.54% (6.45%) N/A (N/A) 12/3/85

Money Market Sub-Account 3.65% (3.65%) 2.69% (2.47%) 4.06% (3.72%) N/A (N/A) 12/3/85

Asset Allocation Sub-Account 11.10% (11.10%) 8.26% (8.26%) 9.76% (9.73%) N/A (N/A) 12/3/85

Mortgage Securities Sub-Account 3.95% (3.95%) 5.55% (5.53%) N/A (N/A) 7.56% (7.53%) 6/1/87

Index 500 Sub-Account 20.13% (20.13%) 13.26% (13.24%) N/A (N/A) 11.81% (11.77%) 6/1/87

Capital Appreciation Sub-Account 16.15% (16.15%) 9.98% (9.96%) N/A (N/A) 11.91% (11.76%) 6/1/87

International Stock Sub-Account 18.30% (18.30%) N/A (N/A) N/A (N/A) 12.43% (12.42%) 5/1/92

Small Company Sub-Account 5.12% (5.12%) N/A (N/A) N/A (N/A) 15.06% (15.06%) 5/3/93

Maturing Government Bond
1998 Sub-Account 2.84% (2.32%) N/A (N/A) N/A (N/A) 6.02% (5.46%) 5/2/94

Maturing Government Bond
2002 Sub-Account .46% (-.35%) N/A (N/A) N/A (N/A) 8.18% (7.27%) 5/2/94

Maturing Government Bond
2006 Sub-Account -2.44% (-3.44%) N/A (N/A) N/A (N/A) 9.98% (8.76%) 5/2/94

10
<PAGE>

Maturing Government Bond
2010 Sub-Account -4.62% (-6.40%) N/A (N/A) N/A (N/A) 10.81% (8.52%) 5/2/94

Value Stock Sub-Account 29.32% (29.32%) N/A (N/A) N/A (N/A) 23.62% (23.51%) 5/2/94
</TABLE>

11
<PAGE>

PREDICTABILITY OF RETURN

ANTICIPATED VALUE AT MATURITY. The maturity values of zero-coupon bonds are
specified at the time the bonds are issued, and this feature, combined with the
ability to calculate yield to maturity, has made these instruments popular
investment vehicles for investors seeking reliable investments to meet long-term
financial goals.

Each Maturing Government Bond Portfolio of the Fund consists primarily of zero-
coupon bonds but is actively managed to accommodate contract owner activity and
to take advantage of perceived market opportunities. Because of this active
management approach, there is no guarantee that a certain price per share of a
Maturing Government Bond Portfolio, or a certain price per unit of the
corresponding Sub-Account, will be attained by the time a Portfolio is
liquidated. Instead, the Fund attempts to track the price behavior of a
directly held zero-coupon bond by:

(1) Maintaining a weighted average maturity within each Maturing
Government Bond Portfolio's target maturity year;

(2) Investing at least 90% of assets in securities that mature within one
year of that Portfolio's target maturity year;

(3) Investing a substantial portion of assets in Treasury STRIPS (the most
liquid Treasury zero);

(4) Under normal conditions, maintaining a nominal cash balance;

(5) Executing portfolio transactions necessary to accommodate net contract
owner purchases or redemptions on a daily basis; and

(6) Whenever feasible, contacting several U.S. government securities
dealers for each intended transaction in an effort to obtain the best
price on each transaction.

These measures enable the Company to calculate an anticipated value at maturity
(AVM) for each unit of a Maturing Government Bond Sub-Account, calculated as of
the date of purchase of such unit, that approximates the price per unit that
such unit will achieve by the weighted average maturity date of the underlying
Portfolio. The AVM calculation for each Maturing Government Bond Sub-Account is
as follows:

AVM = P(1 + AGR/2) to the power of 2T

where P = the Sub-Account's current price per unit; T = the Sub-Account's
weighted average term to maturity in years; and AGR = the anticipated growth
rate.

This calculation assumes an expense ratio and a portfolio composition for the
underlying Maturing Government Bond Portfolio that remain constant for the life
of such Portfolio. Because the Portfolio's expenses and composition do not
remain constant, however, the Company may

-12-

<PAGE>

calculate AVM for each Maturing Government Bond Sub-Account on any day on which
the underlying Maturing Government Bond Portfolio is valued. Such an AVM is
applicable only to units purchased on that date.

In addition to the measures described above, which the adviser believes are
adequate to assure close correspondence between the price behavior of each
Portfolio and the price behavior of directly held zero-coupon bonds with
comparable maturities, the Fund expects that each Portfolio will invest at least
90% of its net assets in zero-coupon bonds until it is within four years of its
target maturity year and at least 80% of its net assets in zero-coupon
securities within two to four years of its target maturity year. This
expectation may be altered if the market supply of zero-coupon securities
diminishes unexpectedly.

ANTICIPATED GROWTH RATE. The Company calculates an anticipated growth rate
(AGR) for each Maturing Government Bond Sub-Account on each day on which the
underlying Portfolio is valued. AGR is a calculation of the anticipated
annualized rate of growth for a Sub-Account unit, calculated from the date of
purchase of such unit to the Sub-Account's target maturity date. As is the case
with calculations of AVM, the AGR calculation assumes that each underlying
Maturing Government Bond Portfolio expense ratio and portfolio composition will
remain constant. Each Maturing Government Bond Sub-Account AGR changes from day
to day (i.e., a particular AGR calculation is applicable only to units purchased
on that date), due primarily to changes in interest rates and, to a lesser
extent, to changes in portfolio composition and other factors that affect the
value of the underlying Portfolio.

The Company expects that a contract owner who holds specific units until the
underlying Portfolio's weighted average maturity date will realize an investment
return and maturity value on those units that do not differ substantially from
the AGR and AVM calculated on the day such units were purchased. The AGR and
AVM calculated with respect to units purchased any other date, however, may be
materially different.

AUDITORS

The financial statements of Minnesota Mutual and the Minnesota Mutual Variable
Annuity Account included herein have been audited by KPMG Peat Marwick LLP, 4200
Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota 55402,
independent auditors, whose reports thereon appear elsewhere herein, and have
been so included in reliance upon the reports of KPMG Peat Marwick LLP and upon
the authority of said firm as experts in accounting and auditing.

REGISTRATION STATEMENT

We have filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended, with respect to the
contracts offered hereby. This Prospectus does not contain all the information
set forth in the registration statement and amendments thereto and the exhibits
filed as a part thereof, to all of which reference is hereby made for further
information concerning the Variable Annuity Account, Minnesota Mutual, and the
contracts. Statements contained in this Prospectus as to the contents of
contracts and other legal instruments are summaries, and reference is made to
such instruments as filed.

-13-

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Trustees of The Minnesota Mutual Life Insurance Company
and Contract Owners of Minnesota Mutual Variable Annuity Account:

We have audited the accompanying statements of assets and liabilities of the
Growth, Bond, Money Market, Asset Allocation, Mortgage Securities, Index 500,
Capital Appreciation, International Stock, Small Company, Maturing Government
Bond 1998, Maturing Government Bond 2002, Maturing Government Bond 2006,
Maturing Government Bond 2010 and Value Stock Segregated Sub-Accounts of
Minnesota Mutual Variable Annuity Account (the Account) (class of contracts
offered for combination Fixed and Variable Annuity Contracts for Personal
Retirement Plans) as of December 31, 1996 and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended and the financial highlights
for the periods in footnote (6). These financial statements and the financial
highlights are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investments owned at December 31, 1996 were verified by examination
of the underlying portfolios of MIMLIC Series Fund, Inc. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Growth, Bond, Money Market,
Asset Allocation, Mortgage Securities, Index 500, Capital Appreciation,
International Stock, Small Company, Maturing Government Bond 1998, Maturing
Government Bond 2002, Maturing Government Bond 2006, Maturing Government Bond
2010 and Value Stock Segregated Sub-Accounts of Minnesota Mutual Variable
Annuity Account at December 31, 1996 and the results of their operations,
changes in their net assets and the financial highlights for the periods stated
in the first paragraph above, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Minneapolis, Minnesota
February 14, 1997

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

NOTES TO FINANCIAL STATEMENTS

(1) ORGANIZATION AND BASIS OF PRESENTATION

The Minnesota Mutual Variable Annuity Account (the Account) was established
on September 10, 1984 as a segregated asset account of The Minnesota Mutual
Life Insurance Company (Minnesota Mutual) under Minnesota law and is
registered as a unit investment trust under the Investment Company Act of
1940 (as amended). There are currently four types of contracts each
consisting of one to fourteen segregated sub-accounts. The financial
statements presented herein include only the segregated sub-accounts
offered in connection with the sale of the Combination Fixed and Variable
Annuity Contracts for Personal Retirement Plans (Multi-option Annuity) and
Multi-Option Select.

The assets of each segregated sub-account are held for the exclusive
benefit of the variable annuity contract owners and are not chargeable with
liabilities arising out of the business conducted by any other account or
by Minnesota Mutual. Contract owners allocate their variable annuity
purchase payments to one or more of the fourteen segregated sub-accounts.
Such payments are then invested in shares of MIMLIC Series Fund, Inc. (the
Fund) which was organized by Minnesota Mutual as the investment vehicle for
its variable annuity contracts and variable life policies. The Fund is
registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. Payments allocated to
the Growth, Bond, Money Market, Asset Allocation, Mortgage Securities,
Index 500, Capital Appreciation, International Stock, Small Company,
Maturing Government Bond 1998, Maturing Government Bond 2002, Maturing
Government Bond 2006, Maturing Government Bond 2010 and Value Stock
segregated sub-accounts are invested in shares of the Growth, Bond, Money
Market, Asset Allocation, Mortgage Securities, Index 500, Capital
Appreciation, International Stock, Small Company, Maturing Government Bond
1998, Maturing Government Bond 2002, Maturing Government Bond 2006,
Maturing Government Bond 2010 and Value Stock Portfolios of the Fund,
respectively.

MIMLIC Sales Corporation acts as the underwriter for the Account. MIMLIC
Asset Management Company acts as the investment adviser for the Fund.
MIMLIC Sales Corporation is a wholly-owned subsidiary of MIMLIC Asset
Management Company. MIMLIC Asset Management Company is a wholly-owned
subsidiary of Minnesota Mutual.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets resulting from operations during the period. Actual results
could differ from those estimates.

INVESTMENTS IN MIMLIC SERIES FUND, INC.

Investments in shares of the Fund portfolios are stated at market value
which is the net asset value per share as determined daily by the Fund.
Investment transactions are accounted for on the date the shares are
purchased or sold. The cost of investments sold is determined on the
average cost method. All dividend distributions received from the Fund are
reinvested in additional shares of the Fund and are recorded by the
segregated sub-accounts on the ex-dividend date.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

FEDERAL INCOME TAXES

The Account is treated as part of Minnesota Mutual for federal income tax
purposes. Under current interpretations of existing federal income tax
law, no income taxes are payable on investment income or capital gain
distributions received by the Account from the Fund.

CONTRACTS IN ANNUITY PAYMENT PERIOD

Annuity reserves are computed for currently payable contracts according to
the Progressive Annuity Mortality Table, using an assumed interest rate of
3.5 percent. Charges to annuity reserves for mortality and risk expense
are reimbursed to Minnesota Mutual if the reserves required are less than
originally estimated. If additional reserves are required, Minnesota
Mutual reimburses the Account.

(3) MORTALITY AND EXPENSE AND SALES CHARGES

The mortality and expense charge paid to Minnesota Mutual is computed daily
and is equal, on an annual basis, to 1.25 percent of the average daily net
assets of the Account. Under certain conditions, the charge may be
increased to 1.40 percent of the average daily net assets of the Account.

A contingent deferred sales charge may be imposed on a Multi-Option Annuity
or Multi-Option Select contract owner during the first ten years or first
seven years, respectively, if a contract's accumulation value is reduced by
a withdrawal or surrender. Total sales charges deducted from redemption
proceeds for the years ended December 31, 1996 and 1995 amounted to
$1,677,688 and $1,494,935, respectively.

(4) INVESTMENT TRANSACTIONS

The Account's purchases of Fund shares, including reinvestment of dividend
distributions, were as follows during the year ended December 31, 1996:

Growth Portfolio . . . . . . . . . . . . . . . . . . . . $31,788,337
Bond Portfolio . . . . . . . . . . . . . . . . . . . . . 32,577,482
Money Market Portfolio . . . . . . . . . . . . . . . . . 54,328,470
Asset Allocation Portfolio . . . . . . . . . . . . . . . 80,470,624
Mortgage Securities Portfolio. . . . . . . . . . . . . . 18,816,086
Index 500 Portfolio . . . . . . . . . . . . . . . . . . 42,961,140
Capital Appreciation Portfolio . . . . . . . . . . . . . 35,714,951
International Stock Portfolio. . . . . . . . . . . . . . 49,173,177
Small Company Portfolio . . . . . . . . . . . . . . . . 48,123,909
Maturing Government Bond 1998 Portfolio. . . . . . . . . 1,504,768
Maturing Government Bond 2002 Portfolio. . . . . . . . . 1,059,764
Maturing Government Bond 2006 Portfolio. . . . . . . . . 909,411
Maturing Government Bond 2010 Portfolio. . . . . . . . . 1,809,636
Value Stock Portfolio. . . . . . . . . . . . . . . . . . 51,166,419

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(5) UNIT ACTIVITY FROM CONTRACT TRANSACTIONS

Transactions in units for each segregated sub-account for the years ended
December 31, 1996 and 1995 were as follows:

SEGREGATED SUB-ACCOUNTS
--------------------------------------------------------
MONEY ASSET
GROWTH BOND MARKET ALLOCATION
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Units outstanding at
December 31, 1994 . . . . . . . . . . . . . . . . . 33,090,790 23,798,963 11,720,778 109,044,286
Contract purchase payments. . . . . . . . . . . . 7,192,753 8,612,934 18,164,557 16,964,209
Deductions for contract terminations
and withdrawal payments . . . . . . . . . . . . (4,474,203) (4,342,656) (15,075,820) (15,033,018)
----------- ----------- ----------- -----------
Units outstanding at
December 31, 1995 . . . . . . . . . . . . . . . . . 35,809,340 28,069,241 14,809,515 110,975,477
Contract purchase payments. . . . . . . . . . . . 7,959,321 13,440,580 34,210,814 20,938,882
Deductions for contract terminations
and withdrawal payments . . . . . . . . . . . . (5,320,209) (4,777,759) (26,090,695) (15,702,709)
----------- ----------- ----------- -----------
Units outstanding at
December 31, 1996 . . . . . . . . . . . . . . . . . 38,448,452 36,732,062 22,929,634 116,211,650
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

SEGREGATED SUB-ACCOUNTS
-----------------------------------------------------------------------
MORTGAGE INDEX CAPITAL INTERNATIONAL SMALL
SECURITIES 500 APPRECIATION STOCK COMPANY
------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1994 . . . . . . . . . . 31,542,405 29,639,298 40,739,415 61,474,893 29,723,609
Contract purchase
payments . . . . . . . . . . . . 5,175,401 8,862,249 10,017,490 19,829,803 17,368,989
Deductions for contract
terminations and
withdrawal payments . . . . . . . (5,439,872) (3,229,523) (4,792,437) (12,579,513) (3,857,882)
----------- ----------- ----------- ----------- -----------
Units outstanding at
December 31, 1995 . . . . . . . . . . 31,277,934 35,272,024 45,964,468 68,725,183 43,234,716
Contract purchase
payments. . . . . . . . . . . . . 7,656,512 15,526,087 11,655,640 27,327,499 23,161,740
Deductions for contract
terminations and
withdrawal payments . . . . . . . (6,406,491) (4,700,558) (6,596,109) (9,531,418) (7,101,183)
----------- ----------- ----------- ----------- -----------
Units outstanding at
December 31, 1996 . . . . . . . . . . 32,527,955 46,097,553 51,023,999 86,521,264 59,295,273
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(5) UNIT ACTIVITY FROM CONTRACT TRANSACTIONS - CONTINUED

SEGREGATED SUB-ACCOUNTS
------------------------------------------------------------------------
MATURING MATURING MATURING MATURING
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT VALUE
BOND 1998 BOND 2002 BOND 2006 BOND 2010 STOCK
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1994 . . . . . . . . . . 2,578,506 2,528,509 1,808,705 913,358 7,178,675
Contract purchase
payments . . . . . . . . . . . . 2,297,675 784,333 460,903 888,273 12,757,957
Deductions for contract
terminations and
withdrawal payments . . . . . . . (1,545,409) (895,019) (390,877) (876,950) (1,191,730)
----------- ----------- ----------- ----------- -----------
Units outstanding at
December 31, 1995 . . . . . . . . . . 3,330,772 2,417,823 1,878,731 924,681 18,744,902
Contract purchase
payments. . . . . . . . . . . . . 1,322,226 736,594 611,384 1,477,104 29,156,933
Deductions for contract
terminations and
withdrawal payments . . . . . . . (741,886) (218,557) (156,006) (324,661) (4,105,312)
----------- ----------- ----------- ----------- -----------
Units outstanding at
December 31, 1996 . . . . . . . . . . 3,911,112 2,935,860 2,334,109 2,077,124 43,796,523
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>

SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MONEY
ASSETS GROWTH BOND MARKET
------------- ------------- -------------
<S> <C> <C> <C>
Investments in shares of MIMLIC Series Fund, Inc.:
Growth Portfolio, 50,156,918 shares at net asset
value of $2.343 per share (cost $96,272,317) . . . . . . . . . . . . . $ 117,531,708 - -
Bond Portfolio, 63,035,908 shares at net asset
value of $1.283 per share (cost $77,678,207) . . . . . . . . . . . . . - 80,892,883 -
Money Market Portfolio, 36,601,424 shares at net
asset value of $1.000 per share (cost $36,601,424) . . . . . . . . . . - - 36,601,424
Asset Allocation Portfolio, 173,295,897 shares
at net asset value of $1.865 per share (cost $271,469,123). . . . . . - - -
Mortgage Securities Portfolio, 55,490,821 shares
at net asset value of $1.187 per share (cost $63,809,744) . . . . . . - - -
Index 500 Portfolio, 56,185,560 shares at net
asset value of $2.409 per share (cost $96,535,954) . . . . . . . . . . - - -
Capital Appreciation Portfolio, 60,868,073
shares at net asset value of $2.471 per share (cost $112,719,241). . . - - -
------------- ------------- -------------
117,531,708 80,892,883 36,601,424

Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . . 41,514 26,278 22,953
Receivable from Minnesota Mutual for contract purchase payments. . . . . . 80,136 241,899 1,134,459
Dividends receivable from MIMLIC Series Fund, Inc. . . . . . . . . . . . . - - 20
------------- ------------- -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,653,358 81,161,060 37,758,856
------------- ------------- -------------

LIABILITIES

Payable to MIMLIC Series Fund, Inc. for investments purchased. . . . . . . 80,136 241,899 1,134,459
Payable to Minnesota Mutual for contract terminations and mortality and
expense charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,514 26,278 22,953
------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 121,650 268,177 1,157,412
------------- ------------- -------------
Net assets applicable to annuity contract owners . . . . . . . . . . $ 117,531,708 80,892,883 36,601,444
------------- ------------- -------------
------------- ------------- -------------

CONTRACT OWNERS' EQUITY

Contracts in accumulation period, accumulation units outstanding of
38,448,452 for Growth; 36,732,062 for Bond; 22,929,634 for
Money Market; 116,211,650 for Asset Allocation; 32,527,955 for
Mortgage Securities; 46,097,553 for Index 500 and 51,023,999
for Capital Appreciation . . . . . . . . . . . . . . . . . . . . . . . $ 116,970,041 80,422,303 36,010,963
Contracts in annuity payment period (note 2) . . . . . . . . . . . . . . . 561,667 470,580 590,481
------------- ------------- -------------

Total contract owners' equity . . . . . . . . . . . . . . . . . . . . $ 117,531,708 80,892,883 36,601,444
------------- ------------- -------------
------------- ------------- -------------

NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . . . . . . . $ 3.043 2.189 1.570
------------- ------------- -------------
------------- ------------- -------------

<CAPTION>
SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
ASSET MORTGAGE INDEX CAPITAL
ASSETS ALLOCATION SECURITIES 500 APPRECIATION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments in shares of MIMLIC Series Fund, Inc.:
Growth Portfolio, 50,156,918 shares at net asset
value of $2.343 per share (cost $96,272,317) . . . . . . . . . . . - - - -
Bond Portfolio, 63,035,908 shares at net asset
value of $1.283 per share (cost $77,678,207) . . . . . . . . . . . - - - -
Money Market Portfolio, 36,601,424 shares at net
asset value of $1.000 per share (cost $36,601,424) . . . . . . . . . - - - -
Asset Allocation Portfolio, 173,295,897 shares
at net asset value of $1.865 per share (cost $271,469,123). . . . . 323,180,479 - - -
Mortgage Securities Portfolio, 55,490,821 shares
at net asset value of $1.187 per share (cost $63,809,744) . . . . . - 65,845,545 - -
Index 500 Portfolio, 56,185,560 shares at net
asset value of $2.409 per share (cost $96,535,954) . . . . . . . . . - - 135,334,726 -
Capital Appreciation Portfolio, 60,868,073
shares at net asset value of $2.471 per share (cost $112,719,241). . - - - 150,431,644
------------- ------------- ------------- -------------
323,180,479 65,845,545 135,334,726 150,431,644

Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . . 106,584 30,871 33,464 44,461
Receivable from Minnesota Mutual for contract purchase payments. . . . . 205,397 193,011 119,042 59,698
Dividends receivable from MIMLIC Series Fund, Inc. . . . . . . . . . . . - - - -
------------- ------------- ------------- -------------

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 323,492,460 66,069,427 135,487,232 150,535,803
------------- ------------- ------------- -------------
LIABILITIES

Payable to MIMLIC Series Fund, Inc. for investments purchased. . . . . . 205,397 193,011 119,042 59,698
Payable to Minnesota Mutual for contract terminations and mortality and
expense charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,584 30,871 33,464 44,461
------------- ------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 311,981 223,882 152,506 104,159
------------- ------------- ------------- -------------

Net assets applicable to annuity contract owners . . . . . . . . . 323,180,479 65,845,545 135,334,726 150,431,644
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

CONTRACT OWNERS' EQUITY

Contracts in accumulation period, accumulation units outstanding of
38,448,452 for Growth; 36,732,062 for Bond; 22,929,634 for
Money Market; 116,211,650 for Asset Allocation; 32,527,955 for
Mortgage Securities; 46,097,553 for Index 500 and 51,023,999
for Capital Appreciation . . . . . . . . . . . . . . . . . . . . . . 321,058,362 65,396,887 134,294,656 149,610,997
Contracts in annuity payment period (note 2) . . . . . . . . . . . . . . 2,122,117 448,658 1,040,070 820,647
------------- ------------- ------------- -------------

Total contract owners' equity . . . . . . . . . . . . . . . . . . . 323,180,479 65,845,545 135,334,726 150,431,644
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . . . . . . 2.762 2.010 2.913 2.932
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1996

SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MATURING MATURING
INTERNATIONAL SMALL GOVERNMENT GOVERNMENT
ASSETS STOCK COMPANY BOND 1998 BOND 2002
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investments in shares of MIMLIC Series Fund, Inc.:
International Stock Portfolio, 94,266,211 shares at net asset value
of $1.597 per share (cost $123,613,089). . . . . . . . . . . . . . $ 150,564,285 - - -
Small Company Portfolio, 65,253,909 shares at net asset value of
$1.535 per share (cost $91,962,096) . . . . . . . . . . . . . . . - 100,154,435 - -
Maturing Government Bond 1998 Portfolio, 4,186,461 shares at
net asset value of $1.080 share (cost $4,278,404) . . . . . . . . - - 4,520,878 -
Maturing Government Bond 2002 Portfolio, 3,398,126 shares at
net asset value of $1.049 per share (cost $3,494,110) . . . . . . - - - 3,564,303
Maturing Government Bond 2006 Portfolio, 2,690,353 shares at
net asset value of $1.094 per share (cost $2,819,520) . . . . . . - - - -
Maturing Government Bond 2010 Portfolio, 2,242,466 shares at
net asset value of $1.172 per share (cost $2,477,360) . . . . . . - - - -
Value Stock Portfolio, 49,328,087 shares at net asset value
of $1.591 per share (cost $68,377,558) . . . . . . . . . . . . . - - - -
------------- ------------- ------------- -------------
150,564,285 100,154,435 4,520,878 3,564,303

Receivable from MIMLIC Series Fund, Inc. for investments sold . . . . 41,237 25,603 1,283 683
Receivable from Minnesota Mutual for contract purchase payments. . . . 154,873 119,110 5 979
------------- ------------- ------------- -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . 150,760,395 100,299,148 4,522,166 3,565,965
------------- ------------- ------------- -------------
LIABILITIES

Payable to MIMLIC Series Fund, Inc. for investments purchased. . . . . 154,873 119,110 5 979
Payable to Minnesota Mutual for contract terminations and
mortality and expense charges. . . . . . . . . . . . . . . . . . . . 41,237 25,603 1,283 683
------------- ------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . 196,110 144,713 1,288 1,662
------------- ------------- ------------- -------------

Net assets applicable to annuity contract owners . . . . . . . . $ 150,564,285 100,154,435 4,520,878 3,564,303
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

CONTRACT OWNERS' EQUITY

Contracts in accumulation period, accumulation units outstanding
86,521,264 for International Stock; 59,295,273 for Small Company;
3,911,112 for Maturing Government Bond 1998; 2,935,860 for Maturing
Government Bond 2002; 2,334,109 for Maturing Government Bond 2006;
2,077,124 for Maturing Government Bond 2010 and 43,796,523 for
Value Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 149,642,437 99,170,276 4,520,878 3,538,965
Contacts in annuity payment period (note 2) . . . . . . . . . . . . . 921,848 984,159 - 25,338
------------- ------------- ------------- -------------
Total contract owners' equity . . . . . . . . . . . . . . . . . . $ 150,564,285 100,154,435 4,520,878 3,564,303
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . . . . . $ 1.730 1.673 1.156 1.205
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MATURING MATURING
GOVERNMENT GOVERNMENT VALUE
ASSETS BOND 2006 BOND 2010 STOCK
------------- ------------- -------------
<S> <C> <C> <C>
Investments in shares of MIMLIC Series Fund, Inc.:
International Stock Portfolio, 94,266,211 shares at net asset value
of $1.597 per share (cost $123,613,089). . . . . . . . . . . . . . - - -
Small Company Portfolio, 65,253,909 shares at net asset value of
$1.535 per share (cost $91,962,096) . . . . . . . . . . . . . . . - - -
Maturing Government Bond 1998 Portfolio, 4,186,461 shares at
net asset value of $1.080 share (cost $4,278,404) . . . . . . . . - - -
Maturing Government Bond 2002 Portfolio, 3,398,126 shares at
net asset value of $1.049 per share (cost $3,494,110). . . . . . - - -
Maturing Government Bond 2006 Portfolio, 2,690,353 shares at
net asset value of $1.094 per share (cost $2,819,520) . . . . . . 2,943,403 - -
Maturing Government Bond 2010 Portfolio, 2,242,466 shares at
net asset value of $1.172 per share (cost $2,477,360) . . . . . . - 2,627,061 -
Value Stock Portfolio, 49,328,087 shares at net asset value
of $1.591 per share (cost $68,377,558) . . . . . . . . . . . . . - - 78,462,099
------------- ------------- -------------
2,943,403 2,627,061 78,462,099

Receivable from MIMLIC Series Fund, Inc. for investments sold. . . . . 1,759 5,553 23,097
Receivable from Minnesota Mutual for contract purchase payments. . . . 1,307 6 159,640
------------- ------------- -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . 2,946,469 2,632,620 78,644,836
------------- ------------- -------------

LIABILITIES
Payable to MIMLIC Series Fund, Inc. for investments purchased. . . . . 1,307 6 159,640
Payable to Minnesota Mutual for contract terminations and
mortality and expense charges. . . . . . . . . . . . . . . . . . . . 1,759 5,553 23,097
------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . 3,066 5,559 182,737
------------- ------------- -------------

Net assets applicable to annuity contract owners. . . . . . . . . 2,943,403 2,627,061 78,462,099
------------- ------------- -------------
------------- ------------- -------------

CONTRACT OWNERS' EQUITY

Total contract owners' equity . . . . . . . . . . . . . . . . . . 2,943,403 2,627,061 78,462,099
------------- ------------- -------------
------------- ------------- -------------

NET ASSET VALUE PER ACCUMULATION UNIT . . . . . . . . . . . . . . . . 1.250 1.265 1.778
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MONEY ASSET
GROWTH BOND MARKET ALLOCATION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment income (loss):
Investment income distributions from underlying mutual fund. . $ 875,449 3,489,096 1,468,988 9,151,379
Mortality and expense charges (note 3) . . . . . . . . . . . . (1,315,044) (868,779) (382,125) (3,746,894)
------------- ------------- ------------- -------------
Investment income (loss) - net . . . . . . . . . . . . . . (439,595) 2,620,317 1,086,863 5,404,485
------------- ------------- ------------- -------------

Realized and unrealized gains (losses) on investments - net:
Realized gain distributions from underlying mutual fund. . . . 8,226,602 628,966 - 16,755,857
------------- ------------- ------------- -------------
Realized gains on sales of investments (note 4):
Proceeds from sales . . . . . . . . . . . . . . . . . . . . 16,289,438 11,085,435 40,165,964 44,263,762
Cost of investments sold . . . . . . . . . . . . . . . . . (13,519,660) (10,863,618) (40,165,964) (38,041,256)
------------- ------------- ------------- -------------
2,769,778 221,817 - 6,222,506
------------- ------------- ------------- -------------
Net realized gains on investments . . . . . . . . . . . . . 10,996,380 850,783 - 22,978,363
------------- ------------- ------------- -------------
Net change in unrealized appreciation or depreciation
of investments. . . . . . . . . . . . . . . . . . . . . . 4,627,723 (1,797,465) - 3,391,254
------------- ------------- ------------- -------------

Net gains (losses) on investments . . . . . . . . . . . . . 15,624,103 (946,682) - 26,369,617
------------- ------------- ------------- -------------

Net increase in net assets resulting from operations . . . . . . $ 15,184,508 1,673,635 1,086,863 31,774,102
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

<CAPTION>
SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MORTGAGE INDEX CAPITAL
SECURITIES 500 APPRECIATION
------------- ------------- -------------
<S> <C> <C> <C>
Investment income (loss):
Investment income distributions from underlying mutual fund. . 3,951,650 1,354,495 -
Mortality and expense charges (note 3) . . . . . . . . . . . . (773,507) (1,367,650) (1,690,612)
------------- ------------- -------------
Investment income (loss) - net . . . . . . . . . . . . . . 3,178,143 (13,155) (1,690,612)
------------- ------------- -------------
Realized and unrealized gains (losses) on investments - net:
Realized gain distributions from underlying mutual fund. . . . - 701,159 3,355,808
------------- ------------- -------------
Realized gains on sales of investments (note 4):
Proceeds from sales . . . . . . . . . . . . . . . . . . . . 13,390,362 13,500,891 19,677,859
Cost of investments sold . . . . . . . . . . . . . . . . . (13,284,230) (9,957,554) (14,970,457)
------------- ------------- -------------
106,132 3,543,337 4,707,402
------------- ------------- -------------

Net realized gains on investments . . . . . . . . . . . . . 106,132 4,244,496 8,063,210
------------- ------------- -------------

Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . . (863,049) 16,185,492 13,204,750
------------- ------------- -------------

Net gains (losses) on investments . . . . . . . . . . . . . (756,917) 20,429,988 21,267,960
------------- ------------- -------------

Net increase in net assets resulting from operations . . . . . . 2,421,226 20,416,833 19,577,348
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996

Realized and unrealized gains (losses) on investments - net:
Realized gain distributions from underlying mutual fund . . . . . 3,259,963 9,395,869 - -
------------- ------------- ------------- -------------

Realized gains on sales of investments (note 4):
Proceeds from sales . . . . . . . . . . . . . . . . . . . . . 16,173,191 12,520,887 886,766 275,865
Cost of investments sold . . . . . . . . . . . . . . . . . . . (14,115,088) (10,196,111) (855,369) (260,619)
------------- ------------- ------------- -------------

2,058,103 2,324,776 31,397 15,246
------------- ------------- ------------- -------------

Net realized gains on investments . . . . . . . . . . . . . . 5,318,066 11,720,645 31,397 15,246
------------- ------------- ------------- -------------

Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . . . . 14,598,427 (7,159,671) 127,703 (135,902)
------------- ------------- ------------- -------------
Net gains (losses) on investments . . . . . . . . . . . . . . 19,916,493 4,560,974 159,100 (120,656)
------------- ------------- ------------- -------------

Net increase (decreases) in net assets resulting from operations. . $ 21,350,335 3,688,278 112,947 35,353
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

<CAPTION>
SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MATURING MATURING
GOVERNMENT GOVERNMENT
BOND BOND VALUE
2006 2010 STOCK
------------- ------------- -------------
<S> <C> <C> <C>
Investment income (loss):
Investment income distributions from underlying mutual fund 163,096 948 617,684
Mortality and expense charges (note 3). . . . . . . . . . . . . . (31,583) (20,970) (609,577)
------------- ------------- -------------
Investment income (loss) - net . . . . . . . . . . . . . . . . 131,513 (20,022) 8,107
------------- ------------- -------------

Realized and unrealized gains (losses) on investments - net:
Realized gain distributions from underlying mutual fund . . . . . 4,030 - 4,738,174
------------- ------------- -------------

Realized gains on sales of investments (note 4):
Proceeds from sales . . . . . . . . . . . . . . . . . . . . . 199,514 405,961 6,800,945
Cost of investments sold . . . . . . . . . . . . . . . . . . . (184,298) (401,440) (5,822,204)
------------- ------------- -------------

15,216 4,521 978,741
------------- ------------- -------------

Net realized gains on investments . . . . . . . . . . . . . . 19,246 4,521 5,716,915
------------- ------------- -------------
Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . . . . (188,675) (7,215) 7,186,237
------------- ------------- -------------
Net gains (losses) on investments . . . . . . . . . . . . . . (169,429) (2,694) 12,903,152
------------- ------------- -------------

Net increase (decreases) in net assets resulting from operations. . (37,916) (22,716) 12,911,259
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MONEY ASSET
GROWTH BOND MARKET ALLOCATION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . $ (439,595) 2,620,317 1,086,863 5,404,485
Net realized gains on investments . . . . . . . . . . . . 10,996,380 850,783 - 22,978,363
Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . 4,627,723 (1,797,465) - 3,391,254
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations . . . . 15,184,508 1,673,635 1,086,863 31,774,102
------------- ------------- ------------- -------------
Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 22,686,286 28,459,419 52,853,330 54,563,388
Contract terminations and withdrawal payments . . . . . . (14,919,406) (10,171,421) (39,767,006) (40,381,655)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . 5,969 9,564 56,007 24,449
Annuity benefit payments . . . . . . . . . . . . . . . . . (60,957) (54,798) (72,840) (159,662)
------------- ------------- ------------- -------------
Increase in net assets from contract transactions . . . . . 7,711,892 18,242,764 13,069,491 14,046,520
------------- ------------- ------------- -------------
Increase in net assets . . . . . . . . . . . . . . . . . . . 22,896,400 19,916,399 14,156,354 45,820,622

Net assets at the beginning of year . . . . . . . . . . . . 94,635,308 60,976,484 22,445,090 277,359,857
------------- ------------- ------------- -------------
Net assets at the end of year . . . . . . . . . . . . . . . $ 117,531,708 80,892,883 36,601,444 323,180,479
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MORTGAGE INDEX CAPITAL
SECURITIES 500 APPRECIATION
------------- ------------- -------------
<S> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . 3,178,143 (13,155) (1,690,612)
Net realized gains on investments . . . . . . . . . . . . 106,132 4,244,496 8,063,210
Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . (863,049) 16,185,492 13,204,750
------------- ------------- -------------
Net increase in net assets resulting from operations . . . . 2,421,226 20,416,833 19,577,348
------------- ------------- -------------
Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 14,864,436 40,905,486 32,359,143
Contract terminations and withdrawal payments . . . . . . (12,572,781) (12,092,904) (17,945,477)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . 2,662 32,413 30,374
Annuity benefit payments . . . . . . . . . . . . . . . . . (46,736) (72,750) (72,144)
------------- ------------- -------------
Increase in net assets from contract transactions . . . . . 2,247,581 28,772,245 14,371,896
------------- ------------- -------------
Increase in net assets . . . . . . . . . . . . . . . . . . . 4,668,807 49,189,078 33,949,244

Net assets at the beginning of year . . . . . . . . . . . . 61,176,738 86,145,648 116,482,400
------------- ------------- -------------
Net assets at the end of year . . . . . . . . . . . . . . . 65,845,545 135,334,726 150,431,644
------------- ------------- -------------
------------- ------------- -------------

</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1996

SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MATURING MATURING
GOVERNMENT GOVERNMENT
INTERNATIONAL SMALL BOND BOND
STOCK COMPANY 1998 2002
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . $ 1,433,842 (872,696) (46,153) 156,009
Net realized gains on investments . . . . . . . . . . . . 5,318,066 11,720,645 31,397 15,246
Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . 14,598,427 (7,159,671) 127,703 (135,902)
------------- ------------- ------------- -------------

Net increase (decrease) in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . 21,350,335 3,688,278 112,947 35,353
------------- ------------- ------------- -------------

Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 42,935,430 38,517,725 1,501,980 864,195
Contract terminations and withdrawal payments . . . . . . (14,587,080) (11,390,236) (837,825) (237,287)
Actuarial adjustments for mortality experience
on annuities in payment period . . . . . . . . . . . 26,969 36,861 - 3,006
Annuity benefit payments . . . . . . . . . . . . . . . . . (69,138) (84,501) - (2,024)
------------- ------------- ------------- -------------

Increase in net assets from contract transactions . . . . . 28,306,181 27,079,849 664,155 627,890
------------- ------------- ------------- -------------

Increase in net assets . . . . . . . . . . . . . . . . . . . 49,656,516 30,768,127 777,102 663,243

Net assets at the beginning of year. . . . . . . . . . . . . 100,907,769 69,386,308 3,743,776 2,901,060
------------- ------------- ------------- -------------

Net assets at the end of year . . . . . . . . . . . . . . . $ 150,564,285 100,154,435 4,520,878 3,564,303
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

Net increase (decrease) in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . (37,916) (22,716) 12,911,259
------------- ------------- -------------

Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 742,285 1,808,688 45,810,561
Contract terminations and withdrawal payments . . . . . . (169,160) (384,991) (6,189,324)
Actuarial adjustments for mortality experience
on annuities in payment period. . . . . . . . . . . . . 3,303 - 25,380
Annuity benefit payments . . . . . . . . . . . . . . . . . (2,074) - (27,424)
------------- ------------- -------------

Increase in net assets from contract transactions . . . . . 574,354 1,423,697 39,619,193
------------- ------------- -------------

Increase in net assets . . . . . . . . . . . . . . . . . . . 536,438 1,400,981 52,530,452

Net assets at the beginning of year. . . . . . . . . . . . . 2,406,965 1,226,080 25,931,647
------------- ------------- -------------

Net assets at the end of year . . . . . . . . . . . . . . . 2,943,403 2,627,061 78,462,099
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
YEAR ENDED DECEMBER 31, 1995

SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MONEY ASSET
GROWTH BOND MARKET ALLOCATION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . $ (291,957) 1,114,029 769,167 3,888,695
Net realized gains (losses) on investments . . . . . . . . 4,339,338 89,210 - 6,207,397
Net change in unrealized appreciation or depreciation
of investments . . . . . . . . . . . . . . . . . . . . 12,794,298 7,212,393 - 41,592,552
------------- ------------- ------------- -------------

Net increase in net assets resulting from operations . . . . 16,841,679 8,415,632 769,167 51,688,644
------------- ------------- ------------- -------------

Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 17,363,970 17,296,925 26,977,987 38,493,764
Contract terminations and withdrawal payments . . . . . . (10,796,321) (8,512,323) (22,361,870) (33,554,259)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . . 3,960 4,532 - 5,210
Annuity benefit payments . . . . . . . . . . . . . . . . . (41,358) (39,570) - (120,922)
------------- ------------- ------------- -------------
Increase (decrease) in net assets from contract
transactions . . . . . . . . . . . . . . . . . . . . . . 6,530,251 8,749,564 4,616,117 4,823,793
------------- ------------- ------------- -------------
Increase in net assets . . . . . . . . . . . . . . . . . . . 23,371,930 17,165,196 5,385,284 56,512,437

Net assets at the beginning of year . . . . . . . . . . . . 71,263,378 43,811,288 17,059,806 220,847,420
------------- ------------- ------------- -------------

Net assets at the end of year . . . . . . . . . . . . . . . $ 94,635,308 60,976,484 22,445,090 277,359,857
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 9,481,967 19,277,060 23,567,255
Contract terminations and withdrawal payments . . . . . . (9,747,738) (6,802,839) (11,285,041)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . . 97 10,002 2,885
Annuity benefit payments . . . . . . . . . . . . . . . . . (49,422) (37,065) (45,434)
------------- ------------- -------------
Increase (decrease) in net assets from contract
transactions . . . . . . . . . . . . . . . . . . . . . . . (315,096) 12,447,158 12,239,665
------------- ------------- -------------

Increase in net assets . . . . . . . . . . . . . . . . . . . 8,187,211 32,651,582 31,314,572

Net assets at the beginning of year. . . . . . . . . . . . . 52,989,527 53,494,066 85,167,828
------------- ------------- -------------

Net assets at the end of year. . . . . . . . . . . . . . . . 61,176,738 86,145,648 116,482,400
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS - CONTINUED
YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
SEGREGATED SUB-ACCOUNTS
----------------------------------------------------------
MATURING MATURING
GOVERNMENT GOVERNMENT
INTERNATIONAL SMALL BOND BOND
STOCK COMPANY 1998 2002
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . $ (1,117,692) (571,081) 159,883 145,542
Net realized gains on investments . . . . . . . . . . . . 1,227,434 1,626,888 9,237 75,537
Net change in unrealized appreciation or
depreciation of investments . . . . . . . . . . . . . . 10,596,958 12,812,480 246,388 357,420
------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . 10,706,700 13,868,287 415,508 578,499
------------- ------------- ------------- -------------
Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 27,249,522 24,201,389 2,388,058 855,808
Contract terminations and withdrawal payments . . . . . . (17,218,586) (5,289,049) (1,589,727) (990,459)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . 1,418 (7,859) - -
Annuity benefit payments . . . . . . . . . . . . . . . . . (46,552) (50,186) - -
------------- ------------- ------------- -------------
Increase (decrease) in net assets from contract
transactions . . . . . . . . . . . . . . . . . . . . . . . 9,985,802 18,854,295 798,331 (134,651)
------------- ------------- ------------- -------------
Increase in net assets . . . . . . . . . . . . . . . . . . . 20,692,502 32,722,582 1,213,839 443,848

Net assets at the beginning of year . . . . . . . . . . . . 80,215,267 36,663,726 2,529,937 2,457,212
------------- ------------- ------------- -------------
Net assets at the end of year. . . . . . . . . . . . . . . . $ 100,907,769 69,386,308 3,743,776 2,901,060
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------

<CAPTION>
SEGREGATED SUB-ACCOUNTS
-------------------------------------------
MATURING MATURING
GOVERNMENT GOVERNMENT
BOND BOND VALUE
2006 2010 STOCK
------------- ------------- -------------
<S> <C> <C> <C>
Operations:
Investment income (loss) - net . . . . . . . . . . . . . . 108,269 55,069 (4,550)
Net realized gains on investments . . . . . . . . . . . . 40,348 38,710 1,282,060
Net change in unrealized appreciation or
depreciation of investments . . . . . . . . . . . . . . 434,493 217,235 2,829,110
------------- ------------- -------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . . . 583,110 311,014 4,106,620
------------- ------------- -------------
Contract transactions (notes 2, 3, 4 and 5):
Contract purchase payments . . . . . . . . . . . . . . . . 523,251 972,498 15,700,757
Contract terminations and withdrawal payments . . . . . . (441,073) (925,805) (1,443,541)
Actuarial adjustments for mortality experience on
annuities in payment period . . . . . . . . . . . . . . - - 4,017
Annuity benefit payments . . . . . . . . . . . . . . . . . - - (7,925)
------------- ------------- -------------
Increase (decrease) in net assets from contract
transactions . . . . . . . . . . . . . . . . . . . . . . . 82,178 46,693 14,253,308
------------- ------------- -------------
Increase in net assets . . . . . . . . . . . . . . . . . . . 665,288 357,707 18,359,928

Net assets at the beginning of year . . . . . . . . . . . . 1,741,677 868,373 7,571,719
------------- ------------- -------------

Net assets at the end of year. . . . . . . . . . . . . . . . 2,406,965 1,226,080 25,931,647
------------- ------------- -------------
------------- ------------- -------------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS

The following tables for each segregated sub-account show certain data for
an accumulation unit outstanding during the periods indicated:

GROWTH
<TABLE>
<CAPTION>

Net investment income (loss) . . . . . . (.012) (.008) (.006) (.001) .001
Net gains or losses on securities
(both realized and unrealized) . . . .425 .495 (.003) .069 .071
-------- -------- -------- -------- --------

Total from investment operations . . .413 .487 (.009) .068 .072
-------- -------- -------- -------- --------

Unit value, end of year . . . . . . . . . . $ 3.043 2.630 2.143 2.152 2.084
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

BOND

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year . . . . . . . $ 2.153 1.820 1.931 1.773 1.683
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income . . . . . . . . . .081 .044 .051 .044 .051
Net gains or losses on securities
(both realized and unrealized) . . . (.045) .289 (.162) .114 .039
-------- -------- -------- -------- --------
Total from investment operations . . .036 .333 (.111) .158 .090
-------- -------- -------- -------- --------
Unit value, end of year . . . . . . . . . . $ 2.189 2.153 1.820 1.931 1.773
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MONEY MARKET
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year . . . . . . . $ 1.515 1.455 1.421 1.402 1.375
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income . . . . . . . . . .055 .060 .034 .019 .027
-------- -------- -------- -------- --------

Total from investment operations . . .055 .060 .034 .019 .027
-------- -------- -------- -------- --------

Unit value, end of year . . . . . . . . . . $ 1.570 1.515 1.455 1.421 1.402
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

ASSET ALLOCATION

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year . . . . . . . $ 2.486 2.014 2.068 1.967 1.858
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income . . . . . . . . . .047 .036 .017 .014 .013
Net gains or losses on securities
(both realized and unrealized) . . . .229 .436 (.071) .087 .096
-------- -------- -------- -------- --------
Total from investment operations . . .276 .472 (.054) .101 .109
-------- -------- -------- -------- --------
Unit value, end of year . . . . . . . . . . $ 2.762 2.486 2.014 2.068 1.967
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MORTGAGE SECURITIES
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year . . . . . . . $ 1.934 1.660 1.739 1.612 1.535
-------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income . . . . . . . . . .101 .097 .058 .038 .036
Net gains or losses on securities
(both realized and unrealized) . . . (.025) .177 (.137) .089 .041
-------- -------- -------- -------- --------
Total from investment operations . . .076 .274 (.079) .127 .077
-------- -------- -------- -------- --------

Unit value, end of year . . . . . . . . . . $ 2.010 1.934 1.660 1.739 1.612
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

INDEX 500
<TABLE>
<CAPTION>

Total from investment operations . . .488 .631 (.002) .139 .094
-------- -------- -------- -------- --------

Unit value, end of year . . . . . . . . . . $ 2.913 2.425 1.794 1.796 1.657
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

CAPITAL APPRECIATION
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year . . . . . . . $ 2.524 2.082 2.062 1.891 1.823
-------- -------- -------- -------- --------
Income from investment operations:
Net investment loss . . . . . . . . . . (.035) (.030) (.023) (.019) (.016)
Net gains on securities
(both realized and unrealized) . . . .443 .472 .043 .190 .084
-------- -------- -------- -------- --------
Total from investment operations . . .408 .442 .020 .171 .068
-------- -------- -------- -------- --------
Unit value, end of year . . . . . . . . . . $ 2.932 2.524 2.082 2.062 1.891
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

INTERNATIONAL STOCK
<TABLE>
<CAPTION>

PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 1, 1992*
------------------------------------------------------- TO DECEMBER
1996 1995 1994 1993 31, 1992
-------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of period . . . . . . $ 1.462 1.296 1.317 .925 1.000
-------- -------- -------- -------- --------
Income (loss) from investment operations:

Net investment income (loss) . . . . . . .017 (.018) .012 (.005) .007
Net gains or losses on securities
(both realized and unrealized) . . . .251 .184 (.033) .397 (.082)
-------- -------- -------- -------- --------

Total from investment operations . . .268 .166 (.021) .392 (.075)
-------- -------- -------- -------- --------

Unit value, end of period . . . . . . . . . $ 1.730 1.462 1.296 1.317 .925
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.
<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

SMALL COMPANY
<TABLE>
<CAPTION>

PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 3, 1993*
---------------------------------------- TO DECEMBER
1996 1995 1994 31, 1993
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Unit value, beginning of period . . . . . . $ 1.591 1.220 1.164 1.000
-------- -------- -------- --------
Income from investment operations:. . . . .

Net investment loss . . . . . . . . . . (.018) (.017) (.014) (.010)
Net gains on securities
(both realized and unrealized) . . . .100 .388 .070 .174
-------- -------- -------- --------
Total from investment operations . . .082 .371 .056 .164
-------- -------- -------- --------

Unit value, end of period . . . . . . . . . $ 1.673 1.591 1.220 1.164
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MATURING GOVERNMENT BOND 1998

PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 2, 1994*
------------------------- TO DECEMBER
1996 1995 31, 1994
--------- -------- -----------
<S> <C> <C> <C>
Unit value, beginning of period . . . . . . $ 1.124 .981 1.000
-------- -------- --------
Income (loss) from investment operations:

Net investment income (loss) . . . . . . (.014) .053 .030
Net gains or losses on securities
(both realized and unrealized) . . . .046 .090 (.049)
-------- -------- --------
Total from investment operations . . .032 .143 (.019)
-------- -------- --------
Unit value, end of period . . . . . . . . . $ 1.156 1.124 .981
-------- -------- --------
-------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MATURING GOVERNMENT BOND 2002
<TABLE>
<CAPTION>

PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 2, 1994*
------------------------- TO DECEMBER
1996 1995 31, 1994
-------- -------- -----------
<S> <C> <C> <C>
Unit value, beginning of period . . . . . . $ 1.200 .972 1.000
-------- -------- --------
Income (loss) from investment operations:
Net investment income . . . . . . . . . .057 .058 .038

Net gains or losses on securities
(both realized and unrealized) . . . (.052) .170 (.066)
-------- -------- --------
Total from investment operations . . .005 .228 (.028)
-------- -------- --------
Unit value, end of period . . . . . . . . . $ 1.205 1.200 .972
-------- -------- --------
-------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MATURING GOVERNMENT BOND 2006
<TABLE>
<CAPTION>

Net investment income . . . . . . . . . .062 .059 .038
Net gains or losses on securities
(both realized and unrealized) . . . (.093) .259 (.075)
-------- -------- --------
Total from investment operations . . (.031) .318 (.037)
-------- -------- --------
Unit value, end of period . . . . . . . . . $ 1.250 1.281 .963
-------- -------- --------
-------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

MATURING GOVERNMENT BOND 2010
<TABLE>
<CAPTION>

Net investment income (loss) . . . . . . (.015) .063 .036
Net gains or losses on securities
(both realized and unrealized) . . . (.046) .312 (.085)
-------- -------- --------
Total from investment operations . . (.061) .375 (.049)
-------- -------- --------

Unit value, end of period . . . . . . . . . $ 1.265 1.326 .951
-------- -------- --------
-------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT

(6) FINANCIAL HIGHLIGHTS - CONTINUED

VALUE STOCK

PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 2, 1994*
------------------------- TO DECEMBER
1996 1995 31, 1994
-------- -------- -----------
<S> <C> <C> <C>
Unit value, beginning of period . . . . . . $ 1.375 1.047 1.000
-------- -------- --------
Income from investment operations:
Net investment income . . . . . . . . . - - .004
Net gains on securities
(both realized and unrealized) . . . .403 .328 .043
-------- -------- --------

Total from investment operations . . .403 .328 .047
-------- -------- --------

Unit value, end of period . . . . . . . . . $ 1.778 1.375 1.047
-------- -------- --------
-------- -------- --------
</TABLE>

* Commencement of the segregated sub-account's operations.

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Trustees

The Minnesota Mutual Life Insurance Company

We have audited the accompanying consolidated balance sheets of The Minnesota
Mutual Life Insurance Company and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations and policyowners'
surplus and cash flows for each of the years in the three-year period ended
December 31, 1996. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The
Minnesota Mutual Life Insurance Company and subsidiaries as of December 31,
1996 and 1995, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1996 in
conformity with generally accepted accounting principles. As discussed in Note
2 to the consolidated financial statements, the Company adopted Statement of
Financial Accounting Standards No. 120, "Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain Long-
Duration Participating Contracts," in 1996.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included
in the accompanying schedules is presented for purposes of additional analysis
and is not a required part of the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.

KPMG Peat Marwick LLP
Minneapolis, Minnesota

February 10, 1997

53
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 1996 AND 1995

ASSETS

<TABLE>
<CAPTION>
1996 1995
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Fixed maturity securities:
Available-for-sale, at fair value (amortized cost
$4,558,975 and $4,525,352) $ 4,674,082 $ 4,761,561
Held-to-maturity, at amortized cost (fair value
$1,179,112 and $1,281,523) 1,125,638 1,180,654
Equity securities, at fair value (cost $429,509 and
$277,554) 549,797 384,882
Mortgage loans, net 608,808 608,537
Real estate, net 43,082 47,256
Policy loans 204,178 198,716
Short-term investments 122,772 72,841
Other invested assets 98,247 91,530
----------- -----------
Total investments 7,426,604 7,345,977
Cash 57,140 48,358
Finance receivables, net 259,192 226,720
Deferred policy acquisition costs 589,517 539,732
Accrued investment income 90,996 98,373
Premiums receivable 77,140 85,247
Property and equipment, net 55,050 50,809
Reinsurance recoverables 126,629 102,198
Other assets 54,798 46,530
Separate account assets 3,706,256 2,609,460
----------- -----------
Total assets $12,443,322 $11,153,404
=========== ===========

LIABILITIES AND POLICYOWNERS' SURPLUS

Liabilities:
Policy and contract account balances $ 4,310,015 $ 4,287,083
Future policy and contract benefits 1,638,720 1,554,898
Pending policy and contract claims 70,577 55,812
Other policyowner funds 396,848 371,537
Policyowner dividends payable 49,899 50,450
Unearned premiums and fees 207,111 210,494
Federal income tax liability:
Current 25,643 39,516
Deferred 149,665 173,905
Other liabilities 286,042 320,607
Notes payable 319,000 279,967
Separate account liabilities 3,691,374 2,596,285
----------- -----------
Total liabilities 11,144,894 9,940,554
Policyowners' surplus:
Unassigned surplus 1,190,116 1,059,598
Net unrealized investment gains 108,312 153,252
----------- -----------
Total policyowners' surplus 1,298,428 1,212,850
----------- -----------
Total liabilities and policyowners' surplus $12,443,322 $11,153,404
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

54
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND POLICYOWNERS' SURPLUS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues:
Premiums $ 612,359 $ 603,770 $ 562,018
Policy and contract fees 245,966 214,203 188,115
Net investment income 530,987 515,047 486,101
Net realized investment gains 59,546 66,643 25,769
Finance charge income 46,932 39,937 34,258
Other income 51,630 40,250 30,106
---------- ---------- ---------
Total revenues 1,547,420 1,479,850 1,326,367
---------- ---------- ---------
Benefits and expenses:
Policyowner benefits 541,520 517,771 498,424
Interest credited to policies and con-
tracts 288,967 297,145 283,626
General operating expenses 302,618 273,425 253,317
Commissions 103,370 93,465 87,631
Administrative and sponsorship fees 79,360 76,223 71,143
Dividends to policyowners 24,804 27,282 26,672
Interest on notes payable 22,798 11,128 7,295
Increase in deferred policy acquisition
costs (15,312) (29,822) (43,974)
---------- ---------- ---------
Total benefits and expenses 1,348,125 1,266,617 1,184,134
---------- ---------- ---------
Income from operations before taxes 199,295 213,233 142,233
Federal income tax expense:
Current 68,033 71,379 63,641
Deferred 744 11,995 (1,511)
---------- ---------- ---------
Total federal income tax expense 68,777 83,374 62,130
Net income $ 130,518 $ 129,859 $ 80,103
========== ========== =========

STATEMENTS OF POLICYOWNERS' SURPLUS

Policyowners' surplus, beginning of year $1,212,850 $ 874,577 $ 892,510
Net income 130,518 129,859 80,103
Change in net unrealized investment
gains and losses (44,940) 208,414 (98,036)
---------- ---------- ---------
Policyowners' surplus, end of year $1,298,428 $1,212,850 $ 874,577
========== ========== =========
</TABLE>

See accompanying notes to consolidated financial statements.

55
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 130,518 $ 129,859 $ 80,103
Adjustments to reconcile net income to net
cash provided by operating activities:
Interest credited to annuity and insur-
ance contracts 275,968 288,218 277,863
Fees deducted from policy and contract
balances (206,780) (201,575) (188,226)
Change in future policy benefits 84,389 100,025 63,328
Change in other policyowner liabilities 16,099 (4,762) (16,794)
Change in deferred policy acquisition
costs (15,312) (29,822) (43,974)
Change in premiums due and other receiv-
ables (26,142) (18,039) 38,166
Change in federal income tax liabilities (12,055) 18,376 17,854
Net realized investment gains (59,546) (66,643) (25,769)
Other, net 29,987 36,561 28,958
---------- ---------- ----------
Net cash provided by operating activi-
ties 217,126 252,198 231,509
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of:
Fixed maturity securities, available-
for-sale 877,682 1,349,348 653,498
Equity securities 352,901 203,493 88,645
Mortgage loans 15,567 4,315 20,912
Real estate 11,678 15,948 17,571
Other invested assets 12,280 10,775 28,305
Proceeds from maturities and repayments
of:
Fixed maturity securities, available-
for-sale 329,550 253,576 327,337
Fixed maturity securities, held-to-matu-
rity 114,222 127,617 75,648
Mortgage loans 94,703 104,730 126,134
Cost of purchases of:
Fixed maturity securities, available-
for-sale (1,228,048) (1,975,130) (1,123,125)
Fixed maturity securities, held-to-matu-
rity (60,612) (140,763) (131,820)
Equity securities (446,599) (212,142) (131,483)
Mortgage loans (108,691) (209,399) (145,964)
Real estate (3,786) (16,554) (10,985)
Other invested assets (29,271) (20,517) (12,732)
Finance receivable originations or pur-
chases (175,876) (167,298) (134,867)
Finance receivable principal payments 142,723 123,515 104,539
Other, net (43,662) (19,292) 15,309
---------- ---------- ----------
Net cash used for investing activities (145,239) (567,778) (233,078)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Deposits credited to annuity and insurance
contracts 657,405 710,525 647,237
Withdrawals from annuity and insurance
contracts (702,681) (563,569) (645,969)
Proceeds from issuance of surplus notes -- 124,967 --
Proceeds from issuance of debt by subsidi-
ary 60,000 50,000 30,000
Payments on debt by subsidiary (21,000) (10,000) (9,100)
Other, net (6,898) (3,801) (5,940)
---------- ---------- ----------
Net cash provided by (used for) fi-
nancing activities (13,174) 308,122 16,228
---------- ---------- ----------
Net increase (decrease) in cash and short-
term investments 58,713 (7,458) 14,659
Cash and short-term investments, beginning
of year 121,199 128,657 113,998
---------- ---------- ----------
Cash and short-term investments, end of
year $ 179,912 $ 121,199 $ 128,657
========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

56
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) NATURE OF OPERATIONS

The Minnesota Mutual Life Insurance Company (the Company), both directly and
through its subsidiaries, provides a diversified array of insurance and
financial products and services designed principally to protect and enhance the
long-term financial well-being of individuals and families.

The Company's strategy is to be successful in carefully selected niche
markets, primarily in the United States, while focusing on the retention of
existing business and the maintenance of profitability. To achieve this
objective, the Company has divided its businesses into four strategic business
units which focus on various markets: Individual, Financial Services, Group,
and Pension. Revenues reported in 1996 by these business units were
$780,250,000, $279,554,000, $213,461,000 and $104,059,000, respectively.
Additional revenues of $170,096,000 were reported by the Company's
subsidiaries.

At December 31, 1996, the Company was one of the 11 largest mutual life
insurance company groups in the United States, as measured by total assets. The
Company serves nearly seven million people through more than 4,000 associates
located at its St. Paul headquarters and in 81 general agencies and 43 regional
offices throughout the United States.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP), which vary in
certain respects from accounting practices prescribed or permitted by state
insurance regulatory authorities. The consolidated financial statements include
the accounts of The Minnesota Mutual Life Insurance Company and its
subsidiaries (collectively, "the Company"). All material intercompany
transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires
management to make certain estimates and assumptions that affect reported
assets and liabilities, including reporting or disclosure of contingent assets
and liabilities as of the balance sheet date and the reported amounts of
revenues and expenses during the reporting period. Actual results could vary
from management's estimates.

New Accounting Principles

In 1995 and prior years, the Company prepared its financial statements
according to statutory accounting practices prescribed or permitted by the
Commerce Department of the State of Minnesota (Department of Commerce), and
these accounting practices were considered GAAP for mutual life insurance
companies.

In April 1993, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 40 (the Interpretation), "Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises."
The Interpretation was supposed to become effective for fiscal years beginning
after December 15, 1994 and stated that financial statements prepared in
accordance with statutory accounting practices would no longer be considered to
be in conformity with GAAP. The Interpretation requires all mutual life
insurance companies that report their financial statements in conformity with
GAAP to apply all applicable authoritative GAAP pronouncements, with the
exception of Statements of Financial Accounting Standards (SFAS) No. 60,
"Accounting and Reporting by Insurance Enterprises," No. 97, "Accounting and
Reporting by Insurance Enterprises for Certain Long Duration Contracts and
Realized Gains and Losses from the Sale of Investments," and No. 113,
"Accounting for Reinsurance of Short-Duration and Long-Duration Contracts."

In January 1995, the FASB issued SFAS 120, "Accounting and Reporting by
Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long
Duration Participating Contracts." This statement deferred the implementation
of the Interpretation to fiscal years beginning after December 15, 1995 and
extended the requirements of SFAS Nos. 60, 97 and 113 to mutual life insurance
enterprises.

SFAS No. 120 also requires mutual life insurance enterprises to adopt
Statement of Position 95-1, "Accounting for Certain Insurance Activities of
Mutual Life Insurance Enterprises," which was issued by the American Institute
of Certified Public Accountants.

57
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The Company adopted SFAS No. 120 on January 1, 1996, and the accompanying
1994 and 1995 financial statements and related notes have been restated to
conform with the presentation of the 1996 GAAP financial statements.

The Company will continue to prepare financial statements according to
statutory accounting practices prescribed or permitted by the Department of
Commerce for purposes of filing with the Department of Commerce, the National
Association of Insurance Commissioners and states in which the Company is
licensed to do business. The significant differences between statutory and GAAP
financial results are presented in Note 12.

Insurance Revenues and Expenses

Premiums on traditional life products, which include individual whole life and
term insurance and immediate annuities, are credited to revenue when due. For
accident and health and group life products, premiums are credited to revenue
over the contract period as earned. Benefits and expenses are recognized in
relation to premiums over the contract period via a provision for future policy
benefits and the amortization of deferred policy acquisition costs.

Nontraditional life products include individual adjustable and variable life
insurance and group universal and variable life insurance. Revenue from
nontraditional life products and deferred annuities is comprised of policy and
contract fees charged for the cost of insurance, policy administration and
surrenders. Expenses include the portion of claims not covered by and interest
credited to the related policy and contract account balances. Policy
acquisition costs are amortized relative to gross margins.

Deferred Policy Acquisition Costs

The costs of acquiring new and renewal business, which vary with and are
primarily related to the production of new and renewal business, are generally
deferred to the extent recoverable from future premiums or expected gross
profits. Deferrable costs include commissions, underwriting expenses and
certain other selling and issue costs.

For traditional life, accident and health and group life products, deferred
acquisition costs are amortized over the premium paying period in proportion to
the ratio of annual premium revenues to ultimate anticipated premium revenues.
The ultimate premium revenues are estimated based upon the same assumptions
used to calculate the future policy benefits.

For nontraditional life products and deferred annuities, deferred acquisition
costs are amortized over the estimated lives of the contracts in relation to
the present value of estimated gross profits from surrender charges and
investment, mortality and expense margins.

Deferred acquisition costs amortized were $125,978,000, $104,940,000 and
$86,477,000 for the years ended December 31, 1996, 1995 and 1994, respectively.

Finance Charge Income and Receivables

Finance charge income represents fees and interest charged on consumer loans.
The Company uses the interest (actuarial) method of accounting for finance
charges and interest on finance receivables. Accrual of finance charges and
interest is suspended when a loan is contractually delinquent for more than 60
days and is subsequently recognized when received. Accrual is resumed when the
loan is contractually less than 60 days past due. An allowance for
uncollectible amounts is maintained by direct charges to operations at an
amount which management believes, based upon historical losses and economic
conditions, is adequate to absorb probable losses on existing receivables that
may become uncollectible. The reported receivables are net of this allowance.

Valuation of Investments

Fixed maturity securities (bonds) which the Company has the positive intent and
ability to hold to maturity are classified as held-to-maturity and are carried
at amortized cost, net of write-downs for other than temporary declines in
value. Premiums and discounts are amortized or accreted over the estimated
lives of the securities based on the interest yield method. Fixed maturity
securities which may be sold prior to maturity are classified as available-for-
sale and carried at fair value.

58
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Equity securities (common stocks and preferred stocks) are carried at fair
value. Equity securities also include initial contributions to affiliated
registered investment funds that are managed by a subsidiary of the Company.
These contributions are carried at the market value of the underlying net
assets of the funds.

Mortgage loans are carried at amortized cost less an allowance for
uncollectible amounts. Premiums and discounts are amortized or accreted over
the terms of the mortgage loans based on the interest yield method. A mortgage
loan is considered impaired if it is probable that contractual amounts due will
not be collected. Impaired mortgage loans are valued at the fair value of the
underlying collateral. Interest income on impaired mortgage loans is recorded
on an accrual basis. However, when the likelihood of collection is doubtful,
interest income is recognized when received.

Fair values of fixed maturity securities and equity securities are based on
quoted market prices, where available. If quoted market prices are not
available, fair values are estimated using values obtained from independent
pricing services which specialize in matrix pricing and modeling techniques for
estimating fair values. Fair values of mortgage loans are based upon discounted
cash flows, quoted market prices and matrix pricing.

Real estate is carried at cost less accumulated depreciation and an allowance
for estimated losses. Accumulated depreciation on real estate at December 31,
1996 and 1995, was $5,968,000 and $8,342,000, respectively.

Policy loans are carried at the unpaid principal balance.

Derivative Financial Instruments

The Company entered into equity swaps in 1996 as part of an overall risk
management strategy. The swaps are used to hedge exposure to market risk on
$400,000,000 of the Company's common stock portfolio. The swaps are based upon
certain stock indices, and settlement with the counterparties will take place
in January 1998. If, at the time of settlement for a particular swap, the
designated stock index has fallen below a specified level, the counterparty
will pay the Company an amount based upon the decline in the index and the
stock portfolio value protected by the swap. If, at the time of settlement, the
designated stock index has risen, the Company will pay the counterparty an
amount based upon the increase in the index and 25% of the stock portfolio
value protected by the swap.

The basic types of risks associated with derivatives are market risk (that
the value of the derivative will be adversely affected by changes in the
market) and credit risk (that the counterparty will not perform according to
the contract terms). To reduce credit risk, the swap contracts require that the
counterparties maintain sufficient credit ratings and provide collateral under
certain circumstances.

The swaps are carried at fair value, which is based upon dealer quotes.
Changes in fair value are recorded directly in policyowners' surplus. Upon
settlement of the swaps, gains or losses are recognized in income.

Capital Gains and Losses

Realized and unrealized capital gains and losses are determined on the specific
identification method. Write-downs of held-to-maturity securities and the
provision for credit losses on mortgage loans and real estate are recorded as
realized losses.

Changes in the fair value of fixed maturity securities available-for-sale and
equity securities are recorded as a separate component of policyowners'
surplus, net of taxes and related adjustments to deferred policy acquisition
costs and unearned policy and contract fees.

Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation of
$81,962,000 and $75,507,000 at December 31, 1996 and 1995, respectively.
Buildings are depreciated over 40 years and equipment is generally depreciated
over 5 to 10 years. Depreciation expense for the years ended December 31, 1996,
1995 and 1994, was $6,454,000, $5,941,000 and $8,136,000, respectively.

59
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Separate Accounts

Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the exclusive benefit of certain policyowners
and contractholders. The Company receives administrative and investment
advisory fees for services rendered on behalf of these funds. Separate account
assets and liabilities are carried at fair value, based upon the market value
of the investments held in the segregated funds.

The Company periodically invests money in its separate accounts. The market
value of such investments is included with separate account assets and amounted
to $14,882,000 and $13,175,000 as of December 31, 1996 and 1995, respectively.

Policyowner Liabilities

Policy and contract account balances represent the net accumulation of funds
associated with nontraditional life products and deferred annuities. Additions
to the account balances include premiums, deposits and interest credited by the
Company. Decreases in the account balances include surrenders, withdrawals,
benefit payments, and charges assessed for the cost of insurance, policy
administration and surrenders.

Future policy and contract benefits are comprised of reserves for traditional
life, group life, and accident and health products. The reserves were
calculated using the net level premium method based upon assumptions regarding
investment yield, mortality, morbidity, and withdrawal rates determined at the
date of issue, commensurate with the Company's experience. Provision has been
made in certain cases for adverse deviations from these assumptions.

Other policyowner funds are comprised of dividend accumulations, premium
deposit funds and supplementary contracts without life contingencies.

Participating Business

Substantially all of the Company's premium revenues are derived from
participating policies. Dividends and other discretionary payments are declared
by the Board of Trustees based upon actuarial determinations which take into
consideration current mortality, interest earnings, expense factors and federal
income taxes. Dividends are recognized as expenses consistent with the
recognition of premiums.

Income Taxes

Current income taxes are charged to operations based upon amounts estimated to
be payable as a result of taxable operations for the current year. Deferred
income tax assets and liabilities are recognized for the future tax
consequences attributable to the differences between financial statement
carrying amounts and income tax bases of assets and liabilities.

Reinsurance Recoverables

Insurance liabilities are reported before the effects of ceded reinsurance.
Reinsurance recoverables represent amounts due from reinsurers for paid and
unpaid benefits, expense reimbursements, prepaid premiums and future policy
benefits.

60
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(3) INVESTMENTS

Net investment income for the years ended December 31 was as follows:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Fixed maturity securities $433,985 $426,114 $417,698
Equity securities 14,275 8,883 4,485
Mortgage loans 63,865 58,943 49,676
Real estate (475) 497 648
Policy loans 13,828 12,821 11,800
Short-term investments 6,535 6,716 4,262
Other invested assets 4,901 5,168 3,212
-------- -------- --------
Gross investment income 536,914 519,142 491,781
Investment expenses (5,927) (4,095) (5,680)
-------- -------- --------
Total $530,987 $515,047 $486,101
======== ======== ========
</TABLE>

Net realized capital gains (losses) for the years ended December 31 were as
follows:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Fixed maturity securities $(6,536) $24,025 $(2,528)
Equity securities 57,770 36,374 11,268
Mortgage loans (721) (207) (82)
Real estate 7,088 2,436 3,915
Other invested assets 1,945 4,015 13,196
------- ------- -------
Total $59,546 $66,643 $25,769
======= ======= =======
</TABLE>

Gross realized gains (losses) on the sales of fixed maturity securities and
equity securities for the years ended December 31 were as follows:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Fixed maturity securities, available-for-sale:
Gross realized gains $ 19,750 $ 34,898 $ 13,375
Gross realized losses (26,286) (10,873) (15,903)
Equity securities:
Gross realized gains 79,982 52,670 21,538
Gross realized losses (22,212) (16,296) (10,270)
</TABLE>

Net unrealized gains (losses) included in policyowners' surplus at December
31 were as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Gross unrealized gains $314,576 $358,877
Gross unrealized losses (77,337) (13,713)
Adjustment to deferred policy acquisition costs (65,260) (99,732)
Adjustment to unearned policy and contract fees (8,192) (11,665)
Deferred federal income taxes (55,475) (80,515)
-------- --------
Net unrealized gains $108,312 $153,252
======== ========
</TABLE>

61
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(3)INVESTMENTS (CONTINUED)

The amortized cost and fair value of investments in marketable securities by
type of investment were as follows:

<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ---------------- FAIR
COST GAINS LOSSES VALUE
---------- -------- ------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
Available-for-sale:
United States government and gov-
ernment agencies and authorities $ 302,820 $ 2,397 $ 6,756 $ 298,461
States, municipalities, and polit-
ical subdivisions 11,296 759 -- 12,055
Foreign governments 1,926 -- 54 1,872
Corporate securities 2,450,126 115,846 19,554 2,546,418
Mortgage-backed securities 1,792,807 64,834 42,365 1,815,276
---------- -------- ------- ----------
Total fixed maturities 4,558,975 183,836 68,729 4,674,082
Equity securities--unaffiliated 353,983 107,172 5,168 455,987
Equity securities--affiliated 75,526 18,284 -- 93,810
---------- -------- ------- ----------
Total equity securities 429,509 125,456 5,168 549,797
---------- -------- ------- ----------
Total available-for-sale 4,988,484 309,292 73,897 5,223,879
Held-to-maturity:
Corporate securities 904,994 50,187 3,130 952,051
Mortgage-backed securities 220,644 7,833 1,416 227,061
---------- -------- ------- ----------
Total held-to-maturity 1,125,638 58,020 4,546 1,179,112
---------- -------- ------- ----------
Total $6,114,122 $367,312 $78,443 $6,402,991
========== ======== ======= ==========
DECEMBER 31, 1995
Available-for-sale:
United States government and gov-
ernment agencies and authorities $ 261,669 $ 10,911 $ 440 $ 272,140
States, municipalities, and polit-
ical subdivisions 26,317 3,262 -- 29,579
Foreign governments 1,704 223 -- 1,927
Corporate securities 2,523,889 169,329 6,098 2,687,120
Mortgage-backed securities 1,711,773 62,510 3,488 1,770,795
---------- -------- ------- ----------
Total fixed maturities 4,525,352 246,235 10,026 4,761,561
Equity securities--unaffiliated 196,355 91,269 1,590 286,034
Equity securities--affiliated 81,199 17,649 -- 98,848
---------- -------- ------- ----------
Total equity securities 277,554 108,918 1,590 384,882
---------- -------- ------- ----------
Total available-for-sale 4,802,906 355,153 11,616 5,146,443
Held-to-maturity:
United States government and gov-
ernment agencies and authorities 250 3 -- 253
States, municipalities, and polit-
ical subdivisions 525 6 -- 531
Corporate securities 953,511 89,962 525 1,042,948
Mortgage-backed securities 226,368 11,540 117 237,791
---------- -------- ------- ----------
Total held-to-maturity 1,180,654 101,511 642 1,281,523
---------- -------- ------- ----------
Total $5,983,560 $456,664 $12,258 $6,427,966
========== ======== ======= ==========
</TABLE>

62
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(3)INVESTMENTS (CONTINUED)

The amortized cost and estimated fair value of fixed maturity securities at
December 31, 1996, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.

<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE HELD-TO-MATURITY
--------------------- ---------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Due in one year or less $ 33,390 $ 33,429 $ 4,889 $ 4,948
Due after one year through five
years 435,040 459,870 163,206 168,527
Due after five years through ten
years 1,383,954 1,429,460 223,848 235,754
Due after ten years 913,784 936,047 513,051 542,822
---------- ---------- ---------- ----------
2,766,168 2,858,806 904,994 952,051
Mortgage-backed securities 1,792,807 1,815,276 220,644 227,061
---------- ---------- ---------- ----------
Total $4,558,975 $4,674,082 $1,125,638 $1,179,112
========== ========== ========== ==========
</TABLE>

At December 31, 1996 and 1995, bonds and certificates of deposit with a
carrying value of $12,934,000 and $15,296,000, respectively, were on deposit
with various regulatory authorities as required by law.

Allowances for credit losses on investments are reflected on the consolidated
balance sheets as a reduction of the related assets and were as follows:

<TABLE>
<CAPTION>
1996 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Mortgage loans $ 1,895 $ 1,711
Foreclosed real estate 535 400
Investment real estate 2,529 2,565
------- -------
Total $ 4,959 $ 4,676
======= =======
</TABLE>

At December 31, 1996, the recorded investment in mortgage loans that were
considered to be impaired was $6,518,000 before allowance for credit losses.
Included in this amount is $2,225,000 of impaired loans, for which the related
allowance for credit losses is $395,000, and $4,293,000 of impaired loans that,
as a result of adequate fair market value of underlying collateral, do not have
an allowance for credit losses.

At December 31, 1995, the recorded investment in mortgage loans that were
considered to be impaired was $12,232,000 before allowance for credit losses.
Included in this amount is $3,256,000 of impaired loans, for which the related
allowance for credit losses is $211,000, and $8,976,000 of impaired loans that,
as a result of adequate fair market value of underlying collateral, do not have
an allowance for credit losses.

In addition to the allowance for credit losses on impaired mortgage loans, a
general allowance for credit losses was established for potential impairments
in the remainder of the mortgage loan portfolio. The general allowance was
$1,500,000 at December 31, 1996, 1995 and 1994.

Changes in the allowance for credit losses on mortgage loans were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year $1,711 $2,449 $2,412
Provision for credit losses 381 127 622
Charge-offs (197) (865) (585)
------ ------ ------
Balance at end of year $1,895 $1,711 $2,449
====== ====== ======
</TABLE>

63
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(3)INVESTMENTS (CONTINUED)

Below is a summary of interest income on impaired mortgage loans.

<TABLE>
<CAPTION>
1996 1995 1994
------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Average impaired mortgage loans $9,375 $15,845 $20,236
Interest income on impaired mortgage loans--contractual 1,796 1,590 2,103
Interest income on impaired mortgage loans--collected 1,742 1,515 1,963
</TABLE>

(4) NET FINANCE RECEIVABLES

Finance receivables as of December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Direct installment loans $204,038 $178,262
Retail installment notes 30,843 32,345
Retail revolving credit 24,863 14,864
Credit card receivables 3,541 4,479
Accrued interest 3,404 3,147
-------- --------
Gross receivables 266,689 233,097
Allowance for uncollectible amounts (7,497) (6,377)
-------- --------
Finance receivables, net $259,192 $226,720
======== ========
</TABLE>

Direct installment loans at December 31, 1996 consisted of $93,127,000 of
discount basis loans (net of unearned finance charges) and $110,911,000 of
interest-bearing loans. As of December 31, 1995, discount basis loans amounted
to $92,351,000 and interest-bearing loans amounted to $85,911,000. Direct
installment loans generally have a maximum term of 84 months. Retail
installment notes are principally discount basis, arise from the sale of
household appliances, furniture, and sundry services, and generally have a
maximum term of 48 months. Experience has shown that a substantial portion of
finance receivables will be renewed, converted or paid in full prior to
maturity.

Principal cash collections of direct installment loans amounted to
$92,438,000, $75,865,000 and $70,941,000, and the percentage of these cash
collections to average net balances was 48%, 47% and 55% for the years ended
December 31, 1996, 1995 and 1994, respectively.

Changes in the allowance for uncollectible amounts for the years ended
December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year $ 6,377 $5,360 $4,801
Provision for credit losses 10,086 6,140 4,652
Charge-offs (11,036) (6,585) (5,305)
Recoveries 2,070 1,462 1,212
------- ------ ------
Balance at end of year $ 7,497 $6,377 $5,360
======= ====== ======
</TABLE>

64
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5) INCOME TAXES

Income tax expense varies from the amount computed by applying the federal
income tax rate of 35% to income from operations before taxes. The significant
components of this difference were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Computed tax expense $69,753 $74,631 $49,781
Differences between
computed and actual tax
expense:
Dividends received
deduction (2,534) (1,710) (1,293)
Special tax on mutual
life insurance
companies 2,760 10,134 9,880
Tax credits (3,475) (1,840) (1,150)
Expense adjustments and
other 2,273 2,159 4,912
------- ------- -------
Total tax expense $68,777 $83,374 $62,130
======= ======= =======
</TABLE>

The tax effects of temporary differences that give rise to the Company's net
deferred federal tax liability were as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Deferred tax assets:
Policyowner liabilities $ 15,854 $ 22,151
Unearned fee income 43,232 43,576
Pension and post-retirement benefits 21,815 20,187
Tax deferred policy acquisition costs 58,732 47,228
Net realized capital losses 8,275 7,881
Other 19,229 17,997
-------- --------
Gross deferred tax assets 167,137 159,020
Deferred tax liabilities:
Deferred policy acquisition costs 206,331 188,906
Real estate and property and equipment depreciation 10,089 9,049
Basis difference on investments 8,605 7,402
Net unrealized capital gains 81,339 119,604
Other 10,438 7,964
-------- --------
Gross deferred tax liabilities 316,802 332,925
-------- --------
Net deferred tax liability $149,665 $173,905
======== ========
</TABLE>

A valuation allowance for deferred tax assets was not considered necessary as
of December 31, 1996 and 1995, because the Company believes that it is more
likely than not that the deferred tax assets will be realized through future
reversals of existing taxable temporary differences and future taxable income.

Income taxes paid for the years ended December 31, 1996, 1995 and 1994, were
$79,026,000, $64,390,000 and $45,268,000, respectively.

65
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(6) LIABILITY FOR UNPAID ACCIDENT AND HEALTH CLAIMS AND CLAIM ADJUSTMENT
EXPENSES

Activity in the liability for unpaid accident and health claims and claim
adjustment expenses is summarized as follows:

<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at January 1 $377,302 $349,311 $323,304
Less: reinsurance recoverable 80,333 61,624 51,549
-------- -------- --------
Net balance at January 1 296,969 287,687 271,755
-------- -------- --------
Incurred related to:
Current year 134,727 129,896 129,028
Prior years 4,821 (4,014) 860
-------- -------- --------
Total incurred 139,548 125,882 129,888
-------- -------- --------
Paid related to:
Current year 51,695 47,620 46,270
Prior years 70,073 68,980 67,686
-------- -------- --------
Total paid 121,768 116,600 113,956
-------- -------- --------
Net balance at December 31 314,749 296,969 287,687
Plus: reinsurance recoverable 102,161 80,333 61,624
-------- -------- --------
Balance at December 31 $416,910 $377,302 $349,311
======== ======== ========
</TABLE>

The liability for unpaid accident and health claims and claim adjustment
expenses is included in future policy and contract benefits and pending policy
and contract claims on the consolidated balance sheets.

Incurred claims related to prior years are due to the differences between
actual and estimated claims incurred as of the end of the prior year and
interest credited to future policy and contract benefits.

(7) EMPLOYEE BENEFIT PLANS

Pension Plans

The Company has noncontributory defined benefit retirement plans covering
substantially all employees and certain agents. Benefits are based upon years
of participation and the employee's average monthly compensation or the agent's
adjusted annual compensation. Plan assets are comprised of mostly stocks and
bonds which are held in the general and separate accounts of the Company and
administered under group annuity contracts issued by the Company. The Company's
funding policy is to contribute annually the minimum amount required by
applicable regulations. The Company also has an unfunded noncontributory
defined benefit retirement plan which provides certain employees with benefits
in excess of limits for qualified retirement plans.

Net periodic pension cost for the years ended December 31 included the
following components:

<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost--benefits earned during the period $ 6,019 $ 5,294 $ 4,880
Interest accrued on projected benefit obligation 8,541 7,935 7,382
Actual return on plan assets (12,619) (18,061) (1,331)
Net amortization and deferral 4,698 11,811 (5,094)
-------- -------- -------
Net periodic pension cost $ 6,639 $ 6,979 $ 5,837
======== ======== =======
</TABLE>

66
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) EMPLOYEE BENEFIT PLANS (CONTINUED)

The funded status for the Company's plans as of December 31 was calculated as
follows:

<TABLE>
<CAPTION>
FUNDED PLANS UNFUNDED PLAN
------------------ ----------------
1996 1995 1996 1995
-------- -------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Actuarial present value of benefit ob-
ligations:
Vested benefit obligation $ 61,328 $ 56,428 $ -- $ --
Non-vested benefit obligation 19,119 16,599 5,912 4,539
-------- -------- ------- -------
Accumulated benefit obligation $ 80,447 $ 73,027 $ 5,912 $ 4,539
======== ======== ======= =======
Pension liability included in other li-
abilities:
Projected benefit obligation $117,836 $105,180 $12,576 $10,430
Plan assets at fair value 115,107 102,594 -- --
-------- -------- ------- -------
Plan assets less than projected bene-
fit obligation 2,729 2,586 12,576 10,430
Unrecognized net gain (loss) 3,633 2,095 (2,332) (1,187)
Unrecognized prior service cost (364) (213) -- --
Unamortized transition asset (obliga-
tion) 2,422 2,643 (8,451) (9,219)
Additional minimum liability -- -- 4,119 4,515
-------- -------- ------- -------
Net pension liability $ 8,420 $ 7,111 $ 5,912 $ 4,539
======== ======== ======= =======
</TABLE>

A weighted average discount rate of 7.5% and a weighted average rate of
increase in future compensation levels of 5.8% were used in determining the
actuarial present value of the projected benefit obligation at December 31,
1996 and 1995. The assumed long-term rate of return on plan assets was either
7.5% or 8.5%, depending on the plan.

Profit Sharing Plans

The Company also has profit sharing plans covering substantially all employees
and agents. The Company's contribution rate to the employee plan is determined
annually by the trustees of the Company and is applied to each participant's
prior year earnings. The Company's contribution to the agent plan is made as a
certain percentage, based upon years of service, applied to each agent's total
annual compensation. The Company recognized contributions to the plans during
1996, 1995 and 1994 of $6,092,000, $6,595,000 and $6,866,000, respectively.
Participants may elect to receive a portion of their contributions in cash.

Postretirement Benefits Other than Pensions

The Company also has unfunded postretirement plans that provide certain health
care and life insurance benefits to substantially all retired employees and
agents. Eligibility is determined by age at retirement and years of service
after age 30. Health care premiums are shared with retirees, and other cost-
sharing features include deductibles and co-payments.

Components of net periodic postretirement benefit cost for the years ended
December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost--benefits earned during the period $1,011 $1,276 $1,760
Interest accrued on projected benefit obligation 2,041 2,452 2,298
Amortization of prior service cost (513) (513) (223)
Amortization of net gain (177) -- --
------ ------ ------
Net periodic postretirement benefit cost $2,362 $3,215 $3,835
====== ====== ======
</TABLE>

67
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(7) EMPLOYEE BENEFIT PLANS (CONTINUED)

The accumulated postretirement benefit obligation and the accrued
postretirement benefit liability for the years ended December 31 were as
follows:

<TABLE>
<CAPTION>
1996 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $10,238 $11,875
Other fully eligible plan participants 4,594 5,535
Other active plan participants 9,514 9,809
------- -------
Total accumulated postretirement benefit obligation 24,346 27,219
Unrecognized prior service cost 4,107 4,620
Unrecognized net gain 9,880 4,743
------- -------
Accrued postretirement benefit liability $38,333 $36,582
======= =======
</TABLE>

The discount rate used in determining the accumulated postretirement benefit
obligation for 1996 and 1995 was 7.5%. The 1996 net health care cost trend rate
was 9.0%, graded to 5.5% over 7 years, and the 1995 rate was 11.0%, graded to
5.5% over 11 years.

The assumptions presented herein are based on pertinent information available
to management as of December 31, 1996 and 1995. Actual results could differ
from those estimates and assumptions. For example, increasing the assumed
health care cost trend rates by one percentage point in each year would
increase the postretirement benefit obligation as of December 31, 1996 by
$4,262,000 and the estimated eligibility cost and interest cost components of
net periodic postretirement benefit costs for 1996 by $583,000.

(8) REINSURANCE

In the normal course of business, the Company seeks to limit its exposure to
loss on any single insured and to recover a portion of benefits paid by ceding
reinsurance to other insurance companies. To the extent that a reinsurer is
unable to meet its obligations under the reinsurance agreement, the Company
remains liable. The Company evaluates the financial condition of its reinsurers
and monitors concentrations of credit risk to minimize its exposure to
significant losses from reinsurer insolvencies.

Reinsurance is accounted for over the life of the underlying reinsured
policies using assumptions consistent with those used to account for the
underlying policies.

The effect of reinsurance on premiums for the years ended December 31 was as
follows:

<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Direct premiums $615,098 $600,841 $558,066
Reinsurance assumed 64,489 64,792 60,939
Reinsurance ceded (67,228) (61,863) (56,987)
-------- -------- --------
Net premiums $612,359 $603,770 $562,018
======== ======== ========
</TABLE>

Reinsurance recoveries on ceded reinsurance contracts were $72,330,000,
$58,338,000 and $60,970,000 during 1996, 1995 and 1994, respectively.

68
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(9) FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments has been
determined using available market information as of December 31, 1996 and 1995.
Although management is not aware of any factors that would significantly affect
the estimated fair values, such amounts have not been comprehensively revalued
since those dates. Therefore, estimates of fair value subsequent to the
valuation dates may differ significantly from the amounts presented herein.
Considerable judgment is required to interpret market data to develop the
estimates of fair value. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.

Please refer to Note 2 for additional fair value disclosures concerning fixed
maturity securities, equity securities, mortgages and derivatives. The carrying
amounts for policy loans, cash, short term investments and finance receivables
approximate the assets' fair values.

The interest rates on the finance receivables outstanding as of December 31,
1996 and 1995, are consistent with the rates at which loans would currently be
made to borrowers of similar credit quality and for the same maturity; as such,
the carrying value of the finance receivables outstanding as of December 31,
1996 and 1995, approximate the fair value for those respective dates.

The fair values of deferred annuities, annuity certain contracts, and other
fund deposits, which have guaranteed interest rates and surrender charges, are
estimated to be the amount payable on demand as of December 31, 1996 and 1995.
The amount payable on demand equates to the account balance less applicable
surrender charges. Contracts without guaranteed interest rates and surrender
charges have fair values equal to their accumulation values plus applicable
market value adjustments. The fair values of guaranteed investment contracts
and supplementary contracts without life contingencies are calculated using
discounted cash flows, based on interest rates currently offered for similar
products with maturities consistent with those remaining for the contracts
being valued.

Rates currently available to the Company for debt with similar terms and
remaining maturities are used to estimate the fair value of notes payable.

The carrying amounts and fair values of the Company's financial instruments
which were classified as assets as of December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995
--------------------- ---------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Fixed maturity securities:
Available-for-sale $4,674,082 $4,674,082 $4,761,561 $4,761,561
Held-to-maturity 1,125,638 1,179,112 1,180,654 1,281,523
Equity securities 549,797 549,797 384,882 384,882
Mortgage loans:
Commercial 432,198 445,976 373,897 391,089
Residential 176,610 180,736 234,640 239,723
Policy loans 204,178 204,178 198,716 198,716
Short-term investments 122,772 122,772 72,841 72,841
Cash 57,140 57,140 48,358 48,358
Finance receivables, net 259,192 259,192 226,720 226,720
Derivatives 1,197 1,197 -- --
---------- ---------- ---------- ----------
Total financial assets $7,602,804 $7,674,182 $7,482,269 $7,605,413
========== ========== ========== ==========
</TABLE>

69
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(9) FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The carrying amounts and fair values of the Company's financial instruments
which were classified as liabilities as of December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995
--------------------- ---------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Deferred annuities $2,178,355 $2,152,636 $2,178,223 $2,156,886
Annuity certain contracts 52,636 53,962 48,492 50,732
Other fund deposits 808,592 805,709 856,535 847,975
Guaranteed investment contracts 18,770 18,866 47,426 47,987
Supplementary contracts without
life contingencies 47,966 47,536 41,431 39,962
Notes payable 319,000 325,974 279,967 294,103
---------- ---------- ---------- ----------
Total financial liabilities $3,425,319 $3,404,683 $3,452,074 $3,437,645
========== ========== ========== ==========
</TABLE>

(10) NOTES PAYABLE

In September 1995, the Company issued surplus notes with a face value of
$125,000,000, at 8.25%, due in 2025. The surplus notes are subordinate to all
current and future policyowners' interests, including claims, and indebtedness
of the Company. All payments of interest and principal on the notes are subject
to the approval of the Department of Commerce. The approved accrued interest
was $3,008,000 as of December 31, 1996 and 1995. The issuance costs of
$1,403,000 are deferred and amortized over 30 years on a straight-line basis.

Notes payable as of December 31 were as follows:

<TABLE>
<CAPTION>
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Corporate--surplus notes, 8.25%, 2025 $125,000 $124,967
Consumer finance subsidiary--senior, 6.53%--8.77%, through
2003 194,000 155,000
-------- --------
Total notes payable $319,000 $279,967
======== ========
</TABLE>

At December 31, 1996, the aggregate minimum annual notes payable maturities
for the next five years were as follows: 1997, $21,000,000; 1998, $31,000,000;
1999, $49,000,000; 2000, $33,000,000; 2001, $26,000,000.

Long-term borrowing agreements involving the consumer finance subsidiary
include provisions with respect to borrowing limitations, payment of cash
dividends on or purchases of common stock, and maintenance of liquid net worth.
As of December 31, 1996, the consumer finance subsidiary was required to have a
minimum liquid net worth of $41,354,000. Liquid net worth at that date was
$51,803,000.

Interest paid on debt for the years ended December 31, 1996, 1995 and 1994,
was $21,849,000, $6,504,000 and $5,378,000, respectively.

(11) COMMITMENTS AND CONTINGENCIES

The Company is involved in various pending or threatened legal proceedings
arising out of the normal course of business. In the opinion of management, the
ultimate resolution of such litigation will not have a material adverse effect
on operations or the financial position of the Company.

The Company has issued certain participating group annuity and life insurance
contracts jointly with another life insurance company. The joint contract
issuer has liabilities related to these contracts of

70
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(11) COMMITMENTS AND CONTINGENCIES (CONTINUED)

$328,346,000 as of December 31, 1996. To the extent the joint contract issuer
is unable to meet its obligation under the agreement, the Company remains
liable.

The Company has long-term commitments to fund venture capital and real estate
investments totaling $142,469,000 as of December 31, 1996. The Company
estimates that $35,000,000 of these commitments will be invested in 1997, with
the remaining $107,469,000 invested over the next four years.

As of December 31, 1996, the Company had committed to purchase bonds and
mortgage loans totaling $74,123,000 but had not completed the purchase
transactions.

At December 31, 1996, the Company had guaranteed the payment of $68,700,000
in policyowner dividends and discretionary amounts payable in 1997. The Company
has pledged bonds, valued at $70,336,000, to secure this guarantee.

The Company is contingently liable under state regulatory requirements for
possible assessments pertaining to future insolvencies and impairments of
unaffiliated insurance companies. The Company records a liability for future
guaranty fund assessments based upon known insolvencies, according to data
received from the National Organization of Life and Health Insurance Guaranty
Associations. An asset is held for the amount of guaranty fund assessments paid
which can be recovered through future premium tax credits.

(12) STATUTORY FINANCIAL DATA

Statutory accounting is primarily focused on solvency and surplus adequacy.
Therefore, fundamental differences exist between statutory and GAAP accounting,
and their effects on income and policyowners' surplus are illustrated below:

<TABLE>
<CAPTION>
POLICYOWNERS' SURPLUS NET INCOME
---------------------- ----------------------------
1996 1995 1996 1995 1994
---------- ---------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Statutory basis $ 682,886 $ 601,565 $115,797 $ 88,706 $ 65,123
Adjustments:
Deferred policy acquisi-
tion costs 589,517 539,732 15,312 29,822 43,974
Net unrealized invest-
ment gains 111,575 235,143 -- -- --
Statutory asset valua-
tion reserve 240,474 201,721 -- -- --
Statutory interest main-
tenance reserve 24,707 32,899 (8,192) 12,976 (4,426)
Premiums and fees de-
ferred or receivable (75,716) (77,444) 1,587 497 (2,310)
Change in reserve basis 98,406 77,464 20,114 12,382 (1,444)
Separate accounts (40,755) (36,010) (6,304) (854) (5,837)
Unearned policy and con-
tract fees (121,843) (122,786) (2,530) (4,410) (10,406)
Surplus notes (125,000) (124,967) -- -- --
Net deferred taxes (149,665) (173,905) 744 (11,995) 1,511
Nonadmitted assets 31,531 28,211 -- -- --
Policyowner dividends 57,765 57,263 502 4,660 2,446
Other (25,454) (26,036) (6,512) (1,925) (8,528)
---------- ---------- -------- -------- --------
As reported in the
accompanying
consolidated
financial statements $1,298,428 $1,212,850 $130,518 $129,859 $ 80,103
========== ========== ======== ======== ========
</TABLE>

71
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE I

SUMMARY OF INVESTMENTS--OTHER THAN INVESTMENTS IN RELATED PARTIES

DECEMBER 31, 1996

<TABLE>
<CAPTION>
AS SHOWN
MARKET ON THE BALANCE
TYPE OF INVESTMENT COST(3) VALUE SHEET(1)
- ------------------ ---------- ---------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Bonds:
United States government and government
agencies and authorities $ 302,820 $ 298,461 $ 298,461
States, municipalities and political
subdivisions 11,296 12,055 12,055
Foreign governments 1,926 1,872 1,872
Public utilities 547,228 590,445 573,030
Mortgage-backed securities 2,013,451 2,042,337 2,035,920
All other corporate bonds 2,807,892 2,908,024 2,878,382
---------- ---------- ----------
Total bonds 5,684,613 5,853,194 5,799,720
---------- ---------- ----------
Equity securities:
Common stocks:
Public utilities 510 611 611
Banks, trusts and insurance companies 12,824 21,484 21,484
Industrial, miscellaneous and all
other 329,792 422,401 422,401
Nonredeemable preferred stocks 10,857 11,491 11,491
---------- ---------- ----------
Total equity securities 353,983 455,987 455,987
---------- ---------- ----------
Mortgage loans on real estate 608,808 xxxxxx 608,808
Real estate (2) 43,082 xxxxxx 43,082
Policy loans 204,178 xxxxxx 204,178
Other long-term investments 98,247 xxxxxx 98,247
Short-term investments 122,772 xxxxxx 122,772
---------- ----------
Total $1,077,087 xxxxxx $1,077,087
---------- ----------
Total investments $7,115,683 xxxxxx $7,332,794
========== ==========
</TABLE>
- -------

(1) Amortized cost for bonds classified as held-to-maturity and fair value for
common stocks and bonds classified as available-for-sale.

(2) The carrying value of real estate acquired in satisfaction of indebtedness
is $1,810,000.

(3) Original cost for equity securities and original cost reduced by repayments
and adjusted for amortization of premiums or accrual of discounts for bonds
and other investments.

72
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION

(IN THOUSANDS)

<TABLE>
<CAPTION>
AS OF DECEMBER 31, FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------- ------------------------------------------------------------
FUTURE POLICY AMORTIZATION
DEFERRED BENEFITS OTHER POLICY BENEFITS, OF DEFERRED
POLICY LOSSES, CLAIMS CLAIMS AND NET CLAIMS, LOSSES POLICY OTHER
ACQUISITION AND SETTLEMENT UNEARNED BENEFITS PREMIUM INVESTMENT AND SETTLEMENT ACQUISITION OPERATING
SEGMENT COSTS EXPENSES(1) PREMIUMS(2) PAYABLE REVENUE(3) INCOME EXPENSES COSTS EXPENSES
- ------- ----------- -------------- ----------- ------------ ---------- ---------- -------------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996:
Life insurance $456,461 $2,123,148 $149,152 $51,772 $568,874 $223,762 $478,228 $ 97,386 $290,525
Accident and
health insurance 62,407 437,118 33,770 18,774 160,097 34,202 96,743 14,017 87,222
Annuity 70,649 3,360,614 -- 31 79,245 267,473 243,387 14,575 111,366
Property and
liability
insurance -- 27,855 24,189 -- 50,109 5,550 36,933 -- 19,033
-------- ---------- -------- ------- -------- -------- -------- -------- --------
$589,517 $5,948,735 $207,111 $70,577 $858,325 $530,987 $855,291 $125,978 $508,146
======== ========== ======== ======= ======== ======== ======== ======== ========
1995:
Life insurance $430,829 $2,009,154 $151,864 $41,212 $540,353 $203,487 $454,299 $ 80,896 $266,090
Accident and
health insurance 55,888 400,950 34,847 14,567 153,505 33,358 93,482 11,448 83,345
Annuity 53,015 3,401,760 -- 33 74,899 272,499 260,854 12,596 86,716
Property and
liability
insurance -- 30,117 23,783 -- 49,216 5,703 33,563 -- 18,090
-------- ---------- -------- ------- -------- -------- -------- -------- --------
$539,732 $5,841,981 $210,494 $55,812 $817,973 $515,047 $842,198 $104,940 $454,241
======== ========== ======== ======= ======== ======== ======== ======== ========
1994:
Life insurance $510,117 $1,867,170 $133,221 $47,099 $505,300 $192,141 $443,233 $ 59,351 $245,791
Accident and
health insurance 46,506 352,955 36,529 17,142 136,619 30,119 93,359 12,401 75,380
Annuity 92,664 3,263,042 -- 12 60,479 258,196 238,301 14,725 79,498
Property and
liability
insurance -- 32,807 21,865 -- 47,735 5,645 33,829 -- 18,717
-------- ---------- -------- ------- -------- -------- -------- -------- --------
$649,287 $5,515,974 $191,615 $64,253 $750,133 $486,101 $808,722 $ 86,477 $419,386
======== ========== ======== ======= ======== ======== ======== ======== ========
<CAPTION>

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
PREMIUMS
SEGMENT WRITTEN(4)
- ------- ----------
(IN THOUSANDS)
<S> <C>
1996:
Life insurance
Accident and
health insurance
Annuity
Property and
liability
insurance 50,515
-------
$50,515
=======
1995:
Life insurance
Accident and
health insurance
Annuity
Property and
liability
insurance 51,133
-------
$51,133
=======
1994:
Life insurance
Accident and
health insurance
Annuity
Property and
liability
insurance 47,073
-------
$47,073
=======

</TABLE>
- -----

(1) Includes policy and contract account balances

(2) Includes unearned policy and contract fees

(3) Includes policy and contract fees

(4) Applies only to property and liability insurance

73
<PAGE>

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE IV

REINSURANCE

FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
PERCENTAGE
CEDED TO ASSUMED OF AMOUNT
OTHER FROM OTHER NET ASSUMED TO
GROSS AMOUNT COMPANIES COMPANIES AMOUNT NET
------------ ----------- ----------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
1996:
Life insurance in force $116,445,975 $15,164,764 $22,957,287 $124,238,498 18.5%
============ =========== =========== ============
Premiums:
Life insurance $ 347,056 $ 45,988 $ 63,044 $ 364,112 17.3%
Accident and health
insurance 174,219 15,511 1,389 160,097 0.9%
Annuity 38,041 -- -- 38,041 --
Property and liability
insurance 55,782 5,729 56 50,109 0.1%
------------ ----------- ----------- ------------
Total premiums $ 615,098 $ 67,228 $ 64,489 $ 612,359 10.5%
============ =========== =========== ============
1995:
Life insurance in force $106,228,277 $15,620,303 $24,289,241 $114,897,215 21.1%
============ =========== =========== ============
Premiums:
Life insurance $ 342,433 $ 44,778 $ 62,169 $ 359,824 17.3%
Accident and health
insurance 163,412 12,296 2,389 153,505 1.6%
Annuity 41,225 -- -- 41,225 --
Property and liability
insurance 53,771 4,789 234 49,216 0.5%
------------ ----------- ----------- ------------
Total premiums $ 600,841 $ 61,863 $ 64,792 $ 603,770 10.7%
============ =========== =========== ============
1994:
Life insurance in force $ 99,220,067 $13,570,369 $23,520,616 $109,170,314 21.5%
============ =========== =========== ============
Premiums:
Life insurance $ 322,799 $ 38,088 $ 59,064 $ 343,775 17.2%
Accident and health
insurance 145,333 10,007 1,293 136,619 0.9%
Annuity 33,889 -- -- 33,889 --
Property and liability
insurance 56,045 8,892 582 47,735 1.2%
------------ ----------- ----------- ------------
Total premiums $ 558,066 $ 56,987 $ 60,939 $ 562,018 10.8%
============ =========== =========== ============
</TABLE>

<PAGE>

PART C

OTHER INFORMATION

<PAGE>

Minnesota Mutual Variable Annuity Account

Cross Reference Sheet to Other Information

Form N-4

Item Number Caption in Other Information

24. Financial Statements and Exhibits

25. Directors and Officers of the Depositor

26. Persons Controlled by or Under Common Control with the
Depositor or Registrant

27. Number of Contract Owners

28. Indemnification

29. Principal Underwriters

30. Location of Accounts and Records

31. Management Services

32. Undertakings

<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Audited Financial Statements of Minnesota Mutual Variable Annuity
Account for the fiscal year ended December 31, 1996, are included in
Part B of this filing and consist of the following:

1. Independent Auditors' Report

2. Statements of Assets and Liabilities.

3. Statements of Operations.

4. Statements of Changes in Net Assets.

5. Notes to Financial Statements.

(b) Audited Financial Statements of the Depositor, The Minnesota Mutual
Life Insurance Company, for the fiscal year ended December 31, 1996 and
1995, are included in Part B of this filing and consist of the
following:

1. Independent Auditors' Report - The Minnesota Mutual Life Insurance
Company.

2. Balance Sheets - The Minnesota Mutual Life Insurance Company.

3. Statements of Operations and Policyowners' Surplus - The Minnesota
Mutual Life Insurance Company.

4. Statements of Cash Flows - The Minnesota Mutual Life Insurance
Company.

5. Notes to Financial Statements - The Minnesota Mutual Life Insurance
Company.

6. Summary of Investments-Other than Investments in Related Parties -
The Minnesota Mutual Life Insurance Company.

7. Supplementary Insurance Information - The Minnesota Mutual Life
Insurance Company.

8. Reinsurance - The Minnesota Mutual Life Insurance Company.

1. The Resolution of The Minnesota Mutual Life Insurance Company's
Executive Committee of its Board of Trustees establishing the
Variable Annuity Account.

2. Not applicable.

3. The Distribution Agreement between The Minnesota Mutual Life
Insurance Company and MIMLIC Sales Corporation.

<PAGE>

4. (a) The Flexible Payment Deferred Variable Annuity, form
84-9091

(b) The Single Payment Deferred Variable Annuity, form 84-9092

(d) The Individual Retirement Annuity Agreement, form 83-9058
Rev. 3-1997

(e) The Retirement Certificate, form 83-9060

(f) The Endorsement, form 86-9135

(g) The Endorsement, form 87-9171

(h) The Flexible Payment Deferred Variable Annuity Contract, form
84-9091 Rev. 1-88

(i) The Single Payment Deferred Variable Annuity Contract, form 84-
9092 Rev. 1-88

(j) Tax Sheltered Annuity Amendment, form 88-9213

(k) Rider, Texas Optional Retirement Program, form F. 22976 Rev. 9-
81

(l) The Flexible Payment Deferred Variable Annuity Contract, form
84-9091 Rev. 3-91

(m) Endorsement, form 91-9256

<PAGE>

(n) The Single Payment Deferred Variable Annuity Contract, form 84-
9092 Rev. 3-91

(o) Endorsement, form 91-9257

(p) Single Payment Deferred Variable Annuity Contract, form number
92-9284

(q) Flexible Payment Deferred Variable Annuity Contract, form
number 92-9283

5. (a) Application, form 84-9093 Rev. 2-94

(b) Amendment to the Application, Texas Optional Retirement
Program, form 81-9013

6. Certificate of Incorporation and Bylaws.

(a) The Articles of Re-Incorporation of the Depositor.

(b) The Bylaws of the Depositor

7. Not applicable.

8. Not applicable.

9. Opinion and consent of Donald F. Gruber, Esq.

10. Consent of KPMG Peat Marwick LLP.

11. Not applicable.

12. Not applicable.

13. Schedule for Computation of Performance Quotation

(a) Stock Segregated Sub-Account Performance Calculations

(b) Bond Segregated Sub-Account Performance Calculations

<PAGE>

(d) Managed Segregated Sub-Account Performance Calculations

(e) Mortgage Securities Segregated Sub-Account Performance
Calculations

(f) Index Segregated Sub-Account Performance Calculations

(g) Aggressive Growth Segregated Sub-Account Performance
Calculations

(h) International Stock Segregated Sub-Account Performance
Calculations

(i) Small Company Segregated Sub-Account Performance Calculations

(j) Value Stock Segregated Sub-Account Performance Calculation

(k) Maturing Government Bond - 1998 Segregated Sub-Account
Performance Calculation

(l) Maturing Government Bond - 2002 Segregated Sub-Account
Performance Calculation

(m) Maturing Government Bond - 2006 Segregated Sub-Account
Performance Calculation

(n) Maturing Government Bond - 2010 Segregated Sub-Account
Performance Calculation

<PAGE>

14. (a) Financial Data Schedule - MIMLIC Growth Sub-
Account

(b) Financial Data Schedule - MIMLIC Bond Sub-
Account

(d) Financial Data Schedule - MIMLIC Asset
Allocation Sub-Account

(e) Financial Data Schedule - MIMLIC Mortgage Sub-
Account

(f) Financial Data Schedule - MIMLIC Index 500 Sub-
Account

(g) Financial Data Schedule - MIMLIC Capital
Appreciation Sub-Account

(h) Financial Data Schedule - MIMLIC International
Stock Sub-Account

(i) Financial Data Schedule - MIMLIC Small Company
Sub-Account

(j) Financial Data Schedule - MIMLIC MGB 1998 Sub-
Account

(k) Financial Data Schedule - MIMLIC MGB 2002 Sub-
Account

(l) Financial Data Schedule - MIMLIC MGB 2006 Sub-
Account

(m) Financial Data Schedule - MIMLIC MGB 2010 Sub-
Account

(n) Financial Data Schedule - MIMLIC Value Stock
Sub-Account

15. The Minnesota Mutual Life Insurance Company Power of Attorney
To Sign Registration Statements, previously filed as this Exhibit
to Registrant's Form N-4, File Number 2-97564, Post-Effective
Amendment Number 13, is hereby incorporated by reference

<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and Principal Positions and Offices Positions and Offices
Business Address with Insurance Company with Registrant
- ------------------ ---------------------- ---------------------

Giulio Agostini Trustee None
3M
3M Center -
Executive 220-14W-08
St. Paul, MN 55144-1000

Anthony L. Andersen Trustee None
H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114

John F. Bruder Senior Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Keith M. Campbell Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Paul H. Gooding Vice President and None
The Minnesota Mutual Life Treasurer
Insurance Company
400 Robert Street North
St. Paul, MN 55101

John F. Grundhofer Trustee None
First Bank System, Inc.
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402

Harold V. Haverty Trustee None
Deluxe Corporation
401 Woodduck Lane
North Oaks, MN 55127

Robert E. Hunstad Executive Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

James E. Johnson Senior Vice President None
The Minnesota Mutual Life and Actuary
Insurance Company
400 Robert Street North
St. Paul, MN 55101

<PAGE>

David S. Kidwell, Ph.D. Trustee None
The Curtis L. Carlson
School of Management
University of Minnesota
271 19th Avenue South
Minneapolis, MN 55455

Reatha C. King, Ph.D. Trustee None
General Mills Foundation
P. O. Box 1113
Minneapolis, MN 55440

Richard D. Lee Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Joel W. Mahle Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Dennis E. Prohofsky Senior Vice President, None
The Minnesota Mutual Life General Counsel and
Insurance Company Secretary
400 Robert Street North
St. Paul, MN 55101

Thomas E. Rohricht Trustee None
Doherty, Rumble & Butler
Professional Association
2800 Minnesota World Trade Center
30 East Seventh Street
St. Paul, MN 55101-4999

Terry Tinson Saario, Ph.D. Trustee None
3141 Dean Court #1202
Minneapolis, MN 55416

Robert L. Senkler Chairman, President and None
The Minnesota Mutual Life Chief Executive Officer
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Michael E. Shannon Trustee None
Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102

Gregory S. Strong Vice President and None
The Minnesota Mutual Life Actuary
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Terrence M. Sullivan Senior Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Randy F. Wallake Senior Vice President None
The Minnesota Mutual Life
Insurance Company
400 Robert Street North
St. Paul, MN 55101

Frederick T. Weyerhaeuser Trustee None
Clearwater Investment Trust
332 Minnesota Street
Suite W-2090

<PAGE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT

Wholly-owned subsidiaries of The Minnesota Mutual Life Insurance
Company:

MIMLIC Asset Management Company
The Ministers Life Insurance Company
MIMLIC Corporation
Minnesota Fire and Casualty Company
Northstar Life Insurance Company (New York)
Robert Street Energy, Inc.

Open-end registered investment company offering shares solely to
separate accounts of The Minnesota Mutual Life Insurance Company
and Northstar Life Insurance Company:

Advantus Series Fund, Inc.

Wholly-owned subsidiaries of MIMLIC Asset Management Company:

MIMLIC Sales Corporation
Advantus Capital Management, Inc.

Wholly-owned subsidiaries of MIMLIC Corporation:

DataPlan Securities, Inc. (Ohio)
MIMLIC Imperial Corporation
MIMLIC Funding, Inc.
MIMLIC Venture Corporation
Personal Finance Company (Delaware)
Wedgewood Valley Golf, Inc.
Ministers Life Resources, Inc.
Enterprise Holding Corporation
HomePlus Insurance Agency, Inc.
MCM Funding 1997-1, Inc.

Wholly-owned subsidiaries of Enterprise Holding Corporation:

Oakleaf Service Corporation
Lafayette Litho, Inc.
Financial Ink Corporation
Concepts in Marketing Research Corporation
Concepts in Marketing Services Corporation

Wholly-owned subsidiary of Minnesota Fire and Casualty Company:

HomePlus Insurance Company

Majority-owned subsidiaries of MIMLIC Imperial Corporation:

J. H. Shoemaker Advisory Corporation (Tennessee)
Consolidated Capital Advisors, Inc. (Tennessee)

Majority-owned subsidiary of MIMLIC Sales Corporation:

MIMLIC Insurance Agency of Ohio, Inc. (Ohio)

Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:

C.R.I. Securities, Inc.

Majority-owned subsidiaries of The Minnesota Mutual Life
Insurance Company:

MIMLIC Life Insurance Company (Arizona)
MIMLIC Cash Fund, Inc.
Advantus Cornerstone Fund, Inc.

<PAGE>

Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.

Less than majority-owned, but greater than 25% owned,
subsidiaries of The Minnesota Mutual Life Insurance Company:

Advantus Horizon Fund, Inc.
Advantus Money Market Fund, Inc.

Less than 25% owned subsidiaries of The Minnesota Mutual Life
Insurance Company:

Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Bond Fund, Inc.

Unless indicated otherwise, parenthetically, each of
the above corporations is a Minnesota corporation.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of February 23, 1997, the number of holders of securities of the Registrant
were as follows:

Number of Record
Title of Class Holders
-------------- ----------------

Variable Annuity Contracts 43,620

ITEM 28. INDEMNIFICATION

The statement with respect to indemnification. Previously filed.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) The principal underwriter is MIMLIC Sales Corporation. MIMLIC
Sales Corporation is also the principal underwriter for eleven
(Advantus Horizon Fund, Inc.; Advantus Spectrum Fund, Inc.;
Advantus Money market Fund, Inc.; Advantus Mortgage Securities
Fund, Inc.; Advantus Bond Fund, Inc.,; Advantus Cornerstone Fund,
Inc.; Advantus Enterprise Fund, Inc.; Advantus International
Balanced Fund, Inc.; Advantus Venture Fund, Inc.; Advantus Index
500 Fund, Inc.; and the MIMLIC Cash Fund, Inc.) and for four
additional registered separate accounts of The Minnesota Mutual
Life Insurance Company, all of which offer annuity contracts and
life insurance policies on a variable basis.

<PAGE>

DIRECTORS AND OFFICERS OF UNDERWRITER

Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Depositor
- ------------------ --------------------- ---------------------
Robert E. Hunstad Chairman of the Board Executive Vice
400 Robert Street North and Director President
St. Paul, Minnesota 55101

George I. Connolly President, Chief Director, Broker-
400 Robert Street North Executive Officer and Dealer
St. Paul, Minnesota 55101 Director

Margaret Milosevich Vice President, Chief Manager
400 Robert Street North Operations Officer and
St. Paul, Minnesota 55101 Treasurer

Dennis E. Prohofsky Secretary and Director Senior Vice
400 Robert Street North President, General
St. Paul, Minnesota 55101 Counsel and
Secretary

Thomas L. Clark Assistant Treasurer Compliance Analyst
400 Robert Street North
St. Paul, Minnesota 55101

Margaret A. Berg Assistant Secretary Manager
400 Robert Street North
St. Paul, Minnesota 55101

(c) All commissions and other compensation received by each principal
underwriter, directly or indirectly, from the Registrant during the
Registrant's last fiscal year

Name of Net Underwriting Compensation on
Principal Discounts and Redemption or Brokerage Other
Underwriter Commissions Annuitization Commissions Compensation
- ----------- ---------------- ---------------- ----------- ------------

MIMLIC Sales, $13,034,146
Inc.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules promulgated thereunder are in the physical
possession of The Minnesota Mutual Life Insurance Company, St. Paul, Minnesota
55101-2098.

ITEM 31. MANAGEMENT SERVICES

None.

<PAGE>

Item 32. Undertakings

(a) The Registrant hereby undertakes to file a post-effective amendment to
this registration statement as frequently as is necessary to ensure
that the audited financial statements in the registration statement
are never more than 16 months old for so long as payments under the
Contracts may be accepted.

(b) The Registrant hereby undertakes to include as part of any application
to purchase a contract offered by the prospectus a space that an
applicant can check to request a Statement of Additional Information.

(c) The Registrant hereby undertakes to deliver any Statement of
Additional Information and any financial statement required to be made
available under this form promptly upon written or oral request.

(d) The Minnesota Mutual Life Insurance Company hereby represents that, as
to the variable annuity contract which is the subject of this
Registration Statement, File No. 2-97564, the fees and charges
deducted under the contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be
incurred and the risks assumed by The Minnesota Mutual Life Insurance
Company.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant, Minnesota Mutual Variable
Annuity Account certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Amendment to the Registration Statement
and has duly caused this amendment to the Registration Statement to be signed
on its behalf by the Undersigned, thereunto duly authorized, in the City of
Saint Paul, and State of Minnesota, on the 23rd day of April, 1997.

MINNESOTA MUTUAL VARIABLE ANNUITY ACCOUNT
(Registrant)

By: THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
(Depositor)

By _______________________________________________
Robert L. Senkler
Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, the Depositor,
The Minnesota Mutual Life Insurance Company, has duly caused this amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Saint Paul, and State of Minnesota,
on the 23rd day of April, 1997.

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY

By _______________________________________________
Robert L. Senkler
Chairman, President and Chief Executive Officer

<PAGE>

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in
their capacities with the Depositor and on the date indicated.

Signature Title Date
--------- ----- ----

* Chairman, President and
- ----------------------- Chief Executive Officer
Robert L. Senkler

* Trustee
- -----------------------
Giulio Agostini

* Trustee
- -----------------------
Anthony L. Andersen

* Trustee
- -----------------------
John F. Grundhofer

* Trustee
- -----------------------
Harold V. Haverty

* Trustee
- -----------------------
David S. Kidwell, Ph.D.

* Trustee
- ----------------------
Reatha C. King, Ph.D.

* Trustee
- ----------------------
Thomas E. Rohricht

* Trustee
- ----------------------
Terry N. Saario, Ph.D.

* Trustee
- ----------------------
Michael E. Shannon

* Trustee
- -------------------------
Frederick T. Weyerhaeuser

Vice President and Treasurer April 23, 1997
- ------------------------- (chief financial officer)
Paul H. Gooding

Vice President April 23, 1997
- ------------------------- (chief accounting officer)
Gregory S. Strong

*By Attorney-in-Fact April 23, 1997
- -------------------------
Dennis E. Prohofsky

* Pursuant to power of attorney dated February 12, 1996, previously filed
as Exhibit 15 to this Registration Statement.

<PAGE>
EXHIBIT INDEX

Exhibit Number Description of Exhibit
- -------------- ----------------------

1. The Resolution of The Minnesota Mutual Life Insurance
Company's Executive Committee of its Board of Trustees
establishing the Variable Annuity Account.

3. The Distribution Agreement between The Minnesota Mutual Life
Insurance Company and MIMLIC Sales Corporation.

4. (a) The Flexible Payment Deferred Variable Annuity, form
84-9091

(b) The Single Payment Deferred Variable Annuity, form 84-9092

(d) The Individual Retirement Annuity Agreement, form 83-9058
Rev. 3-1997

(e) The Retirement Certificate, form 83-9060

(f) The Endorsement, form 86-9135

(g) The Endorsement, form 87-9171

(h) The Flexible Payment Deferred Variable Annuity Contract,
form 84-9091 Rev. 1-88

(i) The Single Payment Deferred Variable Annuity Contract, form
84-9092 Rev. 1-88

(j) Tax Sheltered Annuity Amendment, form 88-9213

(k) Rider, Texas Optional Retirement Program, form F. 22976 Rev.
9-81

(l) The Flexible Payment Deferred Variable Annuity Contract,
form 84-9091 Rev. 3-91

(m) Endorsement, form 91-9256

(n) The Single Payment Deferred Variable Annuity Contract, form
84-9092 Rev. 3-91

(o) Endorsement, form 91-9257

(p) Single Payment Deferred Variable Annuity Contract, form
number 92-9284

(q) Flexible Payment Deferred Variable Annuity Contract, form
number 92-9283

5. (a) Application, form 84-9093 Rev. 2-94

(b) Amendment to the Application, Texas Optional Retirement
Program, form 81-9013

6. Certificate of Incorporation and Bylaws.

(a) The Articles of Re-Incorporation of the Depositor.

(b) The Bylaws of the Depositor

9. Opinion and consent of Donald F. Gruber, Esq.

10. Consent of KPMG Peat Marwick LLP.

13. Schedule for Computation of Performance Quotation

(a) Stock Segregated Sub-Account Performance Calculations

(b) Bond Segregated Sub-Account Performance Calculations

(d) Managed Segregated Sub-Account Performance Calculations

(e) Mortgage Securities Segregated Sub-Account Performance
Calculations

(f) Index Segregated Sub-Account Performance Calculations

(g) Aggressive Growth Segregated Sub-Account Performance
Calculations

(h) International Stock Segregated Sub-Account Performance
Calculations

(i) Small Company Segregated Sub-Account Performance
Calculations

(j) Value Stock Segregated Sub-Account Performance Calculation

(k) Maturing Government Bond - 1998 Segregated Sub-Account
Performance Calculation

(l) Maturing Government Bond - 2002 Segregated Sub-Account
Performance Calculation

(m) Maturing Government Bond - 2006 Segregated Sub-Account
Performance Calculation

(n) Maturing Government Bond - 2010 Segregated Sub-Account
Performance Calculation

14. (a) Financial Data Schedule - MIMLIC Growth Sub-Account

(b) Financial Data Schedule - MIMLIC Bond Sub-Account

(d) Financial Data Schedule - MIMLIC Asset Allocation Sub-
Account

(e) Financial Data Schedule - MIMLIC Mortgage Sub-Account

(f) Financial Data Schedule - MIMLIC Index 500 Sub-Account

(g) Financial Data Schedule - MIMLIC Capital Appreciation Sub-
Account

(h) Financial Data Schedule - MIMLIC International Stock Sub-
Account

(i) Financial Data Schedule - MIMLIC Small Company Sub-Account

(j) Financial Data Schedule - MIMLIC MGB 1998 Sub-Account

(k) Financial Data Schedule - MIMLIC MGB 2002 Sub-Account

(l) Financial Data Schedule - MIMLIC MGB 2006 Sub-Account

(m) Financial Data Schedule - MIMLIC MGB 2010 Sub-Account

(n) Financial Data Schedule - MIMLIC Value Stock Sub-Account

<PAGE>

CERTIFICATE OF SECRETARY

I, Robert J. Hasling, hereby certify that I am the Secretary of The
Minnesota Mutual Life Insurance Company, Saint Paul, Minnesota; that I have
charge, custody and control of the record books and corporate seal of said
Company; that the following is a true and correct copy of a resolution
adopted by the Executive Committee of said Company at a meeting held
September 10, 1984, at which meeting a quorum was present and acting
throughout; and that the meeting was duly called for the purpose of acting
upon the attached "Resolution - Separate Account H".

I hereby certify that the attached resolution has not been modified,
amended or rescinded and continues in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal of The Minnesota Mutual Life Insurance Company this first day
of May, 1985.

/s/ ROBERT J. HASLING
---------------------------------
Secretary

(Seal)

<PAGE>

RESOLUTION-SEPARATE ACCOUNT H

"RESOLVED, That the Company hereby establishes a separate account in
accordance with Subdivision 1 of Section 61A.14 of Minnesota Statutes 1967,
as amended, for the purpose of issuing contracts on a variable basis, which
account shall be known as Minnesota Mutual Variable Fund H, or by such other
name as the Chief Executive Officer may determine;

FURTHER RESOLVED, That such separate account be registered as unit investment
trust pursuant to the provisions of the Investment company Act of 1940, as
amended, and that application be made for such exemptions from that Act as
may be necessary or desirable;

FURTHER RESOLVED, That there be prepared and filed with the Securities and
Exchange Commission in accordance with the provisions, of the Securities Act
of 1933, as amended, a registration statement, and any amendments thereto,
relating to such contracts on a variable basis as may be offered to the
public;

FURTHER RESOLVED, That the chief executive officer of the Company or such
officer or officers as he may designate be, and they hereby are, authorized
to seek such exemptive or other relief as may be necessary or appropriate in
connection with the separate account or the offered contracts; and

FURTHER RESOLVED, That the chief executive officer of the Company or such
officer or officers as he may designate be, and they hereby are, authorized
and directed to take such further actions as may in their judgment be
necessary and desirable to implement the foregoing resolutions."

<PAGE>

DISTRIBUTION AGREEMENT

AGREEMENT made this_______day of ___________, 1985, between and among
The Minnesota Mutual Life Insurance Company, a Minnesota corporation
("Minnesota Mutual"), and MIMLIC Sales Corporation, a Minnesota corporation
("Distributor").

WITNESSETH:

WHEREAS, Minnesota Mutual is the depositor of Minnesota Mutual Variable
Annuity Account, (the "Account"); and

WHEREAS, Minnesota Mutual proposes to offer for sale certain variable
annuity contracts (the "contracts") which may be deemed to be securities
under the Securities Act of 1933 ("1933 Act") and the laws of some states; and

WHEREAS, the Distributor, a wholly-owned subsidiary of MIMLIC
Corporation, which is in turn a wholly-owned subsidiary of Minnesota Mutual,
is registered as a broker-dealer with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934 ("1934 Act") and is a
member of the National Association of Securities Dealers, Inc. ("NASD"); and

WHEREAS, the parties desire to have the Distributor act as principal
underwriter of the contracts and assume full responsibility for the
securities activities of each "person associated" (as that term is defined in
Section 3(a)(18) of the 1934 Act) with the Distributor and engaged directly
or indirectly in the sale of the contracts (the "associated persons"); and

WHEREAS, the parties desire to have Minnesota Mutual perform certain
services in connection with the sale of the contracts;

NOW, THEREFORE, in consideration of the covenants and mutual promises of
the parties made to each other, it is hereby covenanted and agreed as follows:

1. The Distributor will act as the exclusive principal underwriter of
the contracts and as such will assume full responsibility for the securities
activities of all the associated persons. The Distributor will train the
associated persons, use its best efforts to prepare them to complete
satisfactorily the applicable NASD and state examinations so that they may be
qualified, register the associated persons as its registered representatives
before they engage in securities activities, and supervise and control them
in the performance of such activities. Unless otherwise permitted by
applicable state law, all persons engaged in the sale of the contracts must
also be agents of Minnesota Mutual.

2. The Distributor will assume full responsibility for the continued
compliance by itself and the associated persons with the NASD Rules of Fair
Practice and Federal and state laws, to the extent applicable, in connection
with the sale of the contracts. The Distributor will make timely filings
with the SEC, NASD, and any other regulatory authorities of all reports and
any

<PAGE>

sales literature relating to the contracts required by law to be filed by the
Distributor. Minnesota Mutual will make available to the Distributor copies
of any agreements or plans intended for use in connection with the sale of
contracts in sufficient number and in adequate time for clearance by the
appropriate regulatory authorities before they are used, and it is agreed
that the parties will use their best efforts to obtain such clearance as
expeditiously as is reasonably possible.

3. With the consent of Minnesota Mutual, Distributor may enter into
agreements with other broker-dealers duly licensed under applicable Federal
and state laws for the sale and distribution of the contracts and may perform
such duties as may be provided for in such agreements.

4. Minnesota Mutual, with respect to the contracts, will prepare and
file all registration statements and prospectuses (including amendments) and
all reports required by law to be filed with Federal and state regulatory
authorities. Minnesota Mutual will bear the cost of printing and mailing all
notices, proxies, proxy statements, and periodic reports that are to be
transmitted to persons having voting rights under the contracts. Minnesota
Mutual will make prompt and reasonable efforts to effect and keep in effect,
at its expense, the registration or qualification of its contracts in such
jurisdictions as may be required by federal and state regulatory authorities.

5. Minnesota Mutual will (a) maintain and preserve in accordance with
Rules 17a-3 and 17a-4 under the 1934 Act all books and records required to be
maintained by it in connection with the offer and sale of the contracts,
which books and records shall be and remain the property of the Distributor
and shall at all times be subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act and by all other regulatory bodies having
jurisdiction, and (b) upon or prior to completion of each "transaction" as
that term is used in Rule 10b-10 of the 1934 Act, send a written confirmation
for each such transaction reflecting the facts of the transaction and showing
that it is being sent by Minnesota Mutual acting in the capacity of agent for
the Distributor.

6. All purchase payments and any other monies payable upon the sale,
distribution, renewal or other transaction involving the contracts shall be
paid or remitted directly to, and all checks shall be drawn to the order of,
Minnesota Mutual, and the Distributor shall not have or be deemed to have any
interest in such payments or monies. All such payments and monies received
by the Distributor shall be remitted daily by the Distributor to Minnnesota
Mutual for allocation to the Account in accordance with the contracts and any
prospectus with respect to the contracts.

7. Minnesota Mutual will, in connection with the sale of the contracts,
pay on behalf of the Distributor all amounts (including sales commissions)
due to the sales representatives of the Distributor or to broker-dealers who
have entered into sales agreements with the Distributor. The records in
respect of such payments shall be properly reflected on the books and records
maintained by the Minnesota Mutual.

8. As compensation for the Distributor's assuming the expenses and
performing the services to be assumed and performed by it pursuant to this
Agreement, the Distributor shall receive from Minnesota Mutual the following
amounts:

<PAGE>

(a) Upon receipt of proper evidence of expenditures, an amount
sufficient to reimburse the Distributor for its expenses incurred in carrying
out the terms of this Agreement, and

(b) such other amounts as may from time to time be agreed upon by the
Distributor and Minnesota Mutual.

9. As compensation for its services performed and expenses incurred
under this Agreement, Minnesota Mutual will receive all amounts deducted as
administrative, sales, mortality and expense risk charges under the
contracts, as specified in the contracts and in the prospectus or
prospectuses forming a part of any registration statement with respect to the
contracts filed with the SEC under the 1933 Act. It is understood that
Minnesota Mutual assumes the risk that the above compensation for its
services under the contracts may not prove sufficient to cover its actual
expenses in connection therewith and that its compensation for assuming such
risk shall be included in and limited to the foregoing charges described in
said prospectus(es).

10. Minnesota Mutual will, except as otherwise provided in this
Agreement, bear the cost of all services and expenses, including legal
services and expenses and registration, filing and other fees, in connection
with (a) registering and qualifying the contracts and (to the extent
requested by the Distributor) the associated persons with Federal and state
regulatory authorities and the NASD and (b) printing and distributing all
contracts and all registration statements and prospectuses (including
amendments), notices, periodic reports, sales literature and advertising
prepared, filed or distributed with respect to the contracts.

11. Each party hereto shall advise the others promptly of (a) any action
of the SEC or any authorities of any state or territory, of which it has
knowledge, affecting registration or qualification of the contracts, or the
right to offer the contracts for sale, and (b) the happening of any event
which makes untrue any statement, or which requires the making of any change,
in the registration statement or prospectus in order to make the statements
therein not misleading.

12. The services of the Distributor and Minnesota Mutual under this
Agreement are not deemed to be exclusive and the Distributor and Minnesota
Mutual shall be free to render similar services to others, including, without
implied limitation, such other separate accounts as are now or hereafter
established by Minnesota Mutual, so long as the services of the Distributor
and Minnesota Mutual hereunder are not impaired or interfered with thereby.

13. This Agreement shall upon execution become effective as of the date
first above written, and shall continue in effect indefinitely unless
terminated by either party on 60 days' written notice to the other.

14. This Agreement may be amended at any time by mutual consent of the
parties.

15. This Agreement shall be governed by and construed in accordance with
the laws of Minnesota.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.

THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY

Witness: ------------------------ By: ---------------------------------------
Secretary Chairman of the Board

MIMLIC SALES CORPORATION

Witness: ------------------------ By: ---------------------------------------
Vice President President

<PAGE>

READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT

We promise to pay, subject to the provisions of this contract, the benefits
described by this contract.

We make this promise and issue this contract in consideration of the application
for this contract and the payment of the purchase payments.

The owner and the beneficiary are as named in the application unless they are
changed as provided for in this contract.

You are a member of The Minnesota Mutual Life Insurance Company. Our annual
meetings are held at our home office on the first Tuesday in March of each year
at three o'clock in the afternoon.

Signed for The Minnesota Mutual Life Insurance Company at St. Paul, Minnesota,
on the contract date.

/s/ Coleman Bloomfield
President

/s/ Robert J. Hasling
Secretary
Registrar

NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS.

It is important to us that you are satisfied with this contract. If you are not
satisfied, you may return the contract to us or to your agent within 10 days of
its receipt. If you exercise this right, you will receive the greater of (a)
the Accumulation Value of this contract or (b) the amount of purchase payments
paid under this contract. We will pay this refund within 7 days after we
receive your notice of cancellation.

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT

The Minnesota Mutual Life Insurance Company FLEXIBLE PAYMENT DEFERRED
400 North Robert Street VARIABLE ANNUITY CONTRACT
St. Paul, Minnesota 55101-2098 FIXED OR VARIABLE ANNUITY
BENEFITS
MINNESOTA MUTUAL LIFE A PARTICIPATING CONTRACT

84-9091 Flexible Payment Deferred
Variable Annuity Contract-Multi-Option
<PAGE>

CONTRACT INDEX

Alphabetical Index to the Provisions of Your Contract

Page
----

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . .9

Allocation of Purchase Payments. . . . . . . . . . . . . . . . . . . . . .3

Amount payable at Death. . . . . . . . . . . . . . . . . . . . . . . . . .9

Annuity Payment Options. . . . . . . . . . . . . . . . . . . . . . . . . .7

Annuity Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Contract Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Misstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Purchase Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Withdrawal and Surrender . . . . . . . . . . . . . . . . . . . . . . . . .6

YOUR CONTRACT INFORMATION
- --------------------------------------------------------------------------------
ANNUITANT: JOHN DOE

DATE OF BIRTH: JANUARY 1, 1950

OWNER: JOHN DOE

JURISDICTION: YOUR STATE

84-9091 Minnesota Mutual Life 2
<PAGE>

CONTRACT NUMBER: 12345

CONTRACT DATE: JANUARY 1, 1985

ANNUITY COMMENCEMENT DATE: JANUARY 1, 2015

ANTICIPATED ANNUAL PURCHASE PAYMENT: $2000

FLEXIBLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT

FIXED OR VARIABLE ANNUITY BENEFITS
A PARTICIPATING CONTRACT

DEFINITIONS
- --------------------------------------------------------------------------------

When we use the following words, this is what we mean:

THE ANNUITANT
The person named on page 1 who may receive lifetime benefits under the contract.

YOU, YOUR
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person named in the application.

WE, OUR, US
The Minnesota Mutual Life Insurance Company

CONTRACT DATE
The effective date of this contract. It is also the date from which we
determine contract anniversaries and contract years.

CONTRACT ANNIVERSARY
The same day and month as the contract date for each succeeding year of this
contract.

CONTRACT YEAR
A period of one year beginning with the contract date or a contract anniversary.

FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.

VALUATION DATE
Any date on which a fund is valued.

84-9091 Minnesota Mutual Life 3
<PAGE>

VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.

ACCUMULATION VALUE
The sum of your values under this contract in the general account and/or the
separate account. In the general account, this is the general account
accumulation value. In the separate account, this is the separate account
accumulation value. The separate account portion is composed of your interest
in one or more sub-accounts of the separate account. Your interest in the sub-
accounts shall be valued separately. The total of those values will be the
separate account accumulation value.

SURRENDER VALUE
The surrender value of the separate account portion of this contract shall be
its withdrawal value.

The surrender value of the general account portion of this contract shall be the
greater of:
(a) its withdrawal value, or
(b) your total general account purchase payments, less any applicable state
annuity premium taxes and less any amounts previously withdrawn or
transferred to the separate account.

GENERAL ACCOUNT
All assets of Minnesota Mutual other than those in the Minnesota Mutual Variable
Annuity Account or in other separate accounts established by us.

SEPARATE ACCOUNT
A separate investment account titled Minnesota Mutual Variable Annuity Account.
This separate account was established by us for this class of contract under
Minnesota law. The separate account is composed of several sub-accounts. The
assets of the separate account are ours. Those assets are not subject to claims
arising out of any other business in which we engage..

1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.

WRITTEN REQUEST
A request in writing signed by you. In some cases, we may provide a form for
your use. We also may require that this contract be sent to our home office
with your written request.

84-9091 Minnesota Mutual Life 4
<PAGE>

PURCHASE PAYMENTS
Amounts paid to us as consideration for the benefits provided by this contract.

ANNUITY PAYMENTS
Payments made at regular intervals to the annuitant or any other payee. Annuity
payments will be due and payable only on the first day of a calendar month.

FIXED ANNUITY
Annuity payments of equal amounts during the payment period.

VARIABLE ANNUITY
Annuity payments which increase or decrease in amount to reflect the investment
experience of the separate account and its sub-accounts.

AGE
The age of a person at nearest birthday.

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

WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it contain the entire
contract between you and us. Any statements made in the application either by
you or the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement made either by you or
the annuitant will not be used to avoid this contract or defend against a claim
under this contract unless the statement is contained in the application.

No change or waiver of any of the provisions of this contract will be valid
unless made in writing by us. It must also be signed by our president, a vice
president, our secretary or an assistant secretary. No agent or other person
has the authority to change or waive any provision of this contract.

Any additional agreement attached to this contract will become a part of this
contract and will be subject to all the terms and conditions of this contract
unless we state otherwise in the agreement.

HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT?
You can exercise all the rights under this contract by making a written request
to us. You have these rights during the annuitant's lifetime and before annuity
payments begin. We will deal with you, unless this contract provides otherwise,
on the basis that you have full ownership and control of this contract.

HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
Each year we will send you a report. This report will summarize the year's
transaction and will show the current accumulation value and surrender value of
this contract. It will also show the current separate account accumulation unit
values. The report will be as of a date within two months of its mailing.

84-9091 Minnesota Mutual Life 5
<PAGE>

PURCHASE PAYMENTS
- --------------------------------------------------------------------------------

WHERE DO YOU MAKE PURCHASE PAYMENTS?
All purchase payments must be made at our home office. Our home office is at
400 North Robert Street, St. Paul, Minnesota 55101-2098.

When we receive a purchase payment from you at our home office, we will send you
a confirmation.

WHEN DO YOU MAKE PURCHASE PAYMENTS?
You may choose when to make purchase payments. Each purchase payment must be in
an amount of at least $25.

ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS?
Yes. It may be possible for you to arrange with your employer to make your
purchase payments by payroll deduction. Or, under some plans, your employer may
make purchase payments on your behalf. Also, your bank or other financial
institution may consent to have your purchase payments automatically withdrawn
from your account and paid directly to us.

WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS?
There are usually no deductions made from the purchase payments. However, we do
reserve the right to make a deduction from purchase payments for state premium
taxes, where applicable.

HOW ARE PURCHASE PAYMENTS ALLOCATED?
They are allocated either to the general account or to the separate account and
its sub-accounts. The allocation is made as you direct. Initially, you
indicate your allocation in the application. Later, you may change your
allocation for future purchase payments by giving us written notice. We will
allocate purchase payments received without allocation instructions to the
general account.

WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account currently is composed of the following sub-accounts:

Common Stock Account
Bond Account
Money Market Account
Managed Account

Purchase payments may be applied to one or more of these sub-accounts or any
other which may be established by us under the separate account for contracts of
this class. We reserve the right to add, combine or remove any sub-accounts of
the separate account.

84-9091 Minnesota Mutual Life 6
<PAGE>

If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund. Substitution may be with respect to existing accumulation values, future
purchase payments and future annuity payments.

IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE GENERAL ACCOUNT OR
SEPARATE ACCOUNT?
Yes. The minimum purchase payment to the general account or to any sub-account
of the separate account is also $25.

WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of contracts to which this contract
belongs, to another separate account. If this type of transfer is made, the
term "separate account", as used in this contract, shall then mean the separate
account to which the assets were transferred.

We reserve the right, when permitted by law, to:

(a) deregister the separate account under the Investment Company Act of 1940;
(b) restrict or eliminate any voting rights of contract owners or other persons
who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate accounts.

WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT?
Purchase payments are credited to the contract on the valuation date coincident
with or next following the day they are received in our home office. If they
are received on a day which is not a valuation date, those amounts will be
credited on the next valuation date.

MAY YOU STOP MAKING PURCHASE PAYMENTS?
Yes. You may stop making purchase payments at any time. If you stop making
purchase payments, the contract remains in force as a paid-up annuity according
to its terms. Its value may be applied to provide annuity payments at a later
date. You may make purchase payments again at any time before annuity payments
start unless the contract has been surrendered.

MAY WE CANCEL THE CONTRACT?
We may, in our discretion, cancel a contract if no purchase payments are made
for a period of two or more full contract years and both (a) the total purchase
payments made, less any withdrawals and associated charges, and (b) the
accumulation value of the contract, are less than $2,000. If such a
cancellation takes place, we will pay the accumulation value to you.

84-9091 Minnesota Mutual Life 7
<PAGE>

We will notify you of our intention to exercise these rights in our annual
report. We will act 90 days after the contract anniversary unless an additional
purchase payment is received before the end of that 90 day period.

CONTRACT CHARGES
- --------------------------------------------------------------------------------

WHAT CHARGES MAY BE MADE UNDER THIS CONTRACT?
An administrative charge and a deferred sales charge may be made under this
contract. Also, there are certain charges which are made directly to the
separate account.

WHAT IS THE ADMINISTRATIVE CHARGE?
The administrative charge is an annual charge which is deducted from the
accumulation value. This deduction will be made as of each contract anniversary
and on the surrender of the contract. The charge shall not exceed $30.00 or, if
less, 2% of the accumulation value. We may deduct it from the general account
accumulation value, the separate account accumulation value or partially from
each. They will be made in the same proportion that the value of your interest
in the general account and any sub-account bears to your total accumulation
value.

WHAT IS THE DEFERRED SALES CHARGE?
The deferred sales charge is the charge made on contract withdrawals or
surrenders during the first ten contract years. The amount withdrawn plus any
deferred sales charge is deducted from the accumulation value. In the separate
account, accumulation units will be cancelled of a value equal to the charge and
the withdrawal.

WHAT IS THE AMOUNT OF THE DEFERRED SALES CHARGE?
The charge is indicated in the table shown below. These percentages decrease
uniformly by .075% for each of the first 120 months from the contract date. Any
amounts withdrawn from the contract may also be reduced by any applicable state
premium taxes not previously deducted from purchase payments.

END OF
CONTRACT YEAR CHARGE
------------- ------
(Contract Date) 9.0%
1 8.1
2 7.2
3 6.3
4 5.4
5 4.5
6 3.6
7 2.7
8 1.8
9 0.9
10 -0-

84-9091 Minnesota Mutual Life 8
<PAGE>

In no event will the amount of deferred sales charge exceed 9% of the total
purchase payments made under this contract.

WHAT CHARGES ARE ASSOCIATED WITH THE SEPARATE ACCOUNT?
There are two charges associated with the separate account. They are the
expense risk charge and the mortality risk premium charge. Both of these
charges are deducted on each valuation date from the separate account. On an
annual basis, they may be as much as 1.40% of the net asset value of the
separate account.

WHAT IS THE MORTALITY RISK PREMIUM CHARGE?
This is a premium charge to compensate us for the mortality guarantees we make
under the contract. Actual mortality results incurred by us shall not adversely
affect any payments or values under this contract. On an annual basis, it
equals .80% of the net asset value of the separate account.

WHAT IS THE EXPENSE RISK CHARGE?
This is a charge to compensate us for guaranteeing that the contract
administrative charge and the deferred sales charge will not increase. It also
compensates us for the guarantee that the deductions provided in this contract
will be sufficient to cover our actual expenses. Actual expense results
incurred by us shall not adversely affect any payments or values under this
contract. On an annual basis it may be as much as .60% of the net asset value
of the separate account.

VALUATION
- --------------------------------------------------------------------------------

HOW IS YOUR ACCUMULATION VALUE DETERMINED?
It is determined separately for your accumulation value in the general account
and the separate account. The separate account value will include all sub-
accounts of the separate account.

For the general account, it is the sum of all purchase payments allocated to the
general account plus interest, dividends and transfers into the general account,
less deductions for the annual administrative charge, any transfers out of the
general account, the deferred sales charge and for any previous withdrawals.

For each sub-account of the separate account, it is your accumulation units
multiplied by the accumulation unit value.

84-9091 Minnesota Mutual Life 9
<PAGE>

in the accumulation unit value. However, the total number of accumulation units
under this contract will be affected by future contract transactions. In
addition, the units of each sub-account will be increased by subsequent purchase
payments and transfers to that sub-account. The units of each sub-account will
be decreased by deductions for the administrative charge, sales charge and for
transfers or withdrawals from that sub-account.

The accumulation unit value will increase or decrease on each valuation date.
The amount of any increase or decrease will depend on the net investment
experience of the sub-account of the separate account. The value of an
accumulation unit for each sub-account was originally set at $1.00 on the first
valuation date. For any subsequent valuation date, its value is equal to its
value on the preceding valuation date multiplied by the net investment factor
for that sub-account for the valuation period ending on the subsequent valuation
date.

WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the charges associated with the
separate account at a rate of not more than 1.40% per annum.

The gross investment rate is equal to:

(1) the net asset value per share of a fund share held in the sub-account of
the separate account determined at the end of the current valuation period;
plus

(2) the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period;
divided by

(3) the net asset value per share of that fund share held in the sub-account
determined at the of end of the preceding valuation period.

DOES THE CONTRACT CREDIT INTEREST ON THE GENERAL ACCOUNT?
Yes. This contract credits interest on the general account accumulation value
of this contract at a rate of at least 4% per year, compounded annually. We
guarantee this rate for the life of this contract and until an annuity begins.

MAY ADDITIONAL INTEREST BE CREDITED ON THE GENERAL ACCOUNT?
Yes. As conditions permit, we will credit additional amounts of interest to the
general account accumulation value.

DIVIDENDS
- --------------------------------------------------------------------------------

WILL THIS CONTRACT RECEIVE DIVIDENDS?
Each year we determine if this contract will share in our divisible surplus. We
call your share a dividend.

84-9091 Minnesota Mutual Life 10
<PAGE>

HOW WILL DIVIDENDS BE APPLIED?
Dividends, if received, may be added to the accumulation value or applied to
increase annuity payments or, if you so elect, they may be paid in cash.

TRANSFER PROVISIONS
- --------------------------------------------------------------------------------

WHAT IS A TRANSFER?
A transfer is a reallocation of funds under this contract between the general
account and the separate account or among the sub-accounts of the separate
account.

MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT?
Yes. These transfers may be made on your written request. We will make the
transfer on the basis of accumulation unit values on the valuation date
coincident with or next following the day we receive the request at our home
office.

DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS?
Yes. In every case, the amount to be transferred must be $250 or more.

DO ANY OTHER RESTRICTIONS APPLY?
Yes. We reserve the right to limit the amount and frequency of transfers from
the general account to the separate account. Transfers from the separate
account to the general account or among sub-accounts of the separate account may
be made at any time subject to the dollar amount limitation.

MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS?
No.

WITHDRAWAL AND SURRENDER
- --------------------------------------------------------------------------------

MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time before annuity payments begin, you may request a partial
withdrawal from the accumulation value. You must make a written request for any
withdrawal, and it must be for at least $250. In the event of a cash
withdrawal, the accumulation value will be reduced by the amount requested and
by the deferred sales charge, if any.

Unless instructed otherwise by you, withdrawals will be made from your interest
in the general account and each sub-account of the separate account in the same
proportion that the value of your interest in the general account and any sub-
account bears to your total accumulation value.

Systematic withdrawal plans of a fixed amount or over a fixed period are also
available.

84-9091 Minnesota Mutual Life 11
<PAGE>

However, if withdrawals in a calendar year are equal to or less than 10% of the
accumulation value at the end of the previous calendar year, the charges will
not apply. If withdrawals in a calendar year exceed 10%, the deferred sales
charges will apply to the amount of the excess.

MAY YOU SURRENDER THE CONTRACT?
Yes. At any time before annuity payments begin, you may surrender this contract
for its surrender value. The surrender value will be determined as of the
valuation date coincident with or next following the date your written request
is received at our home office.

(a) its withdrawal value, or
(b) your total general account purchase payments, less any applicable state
annuity premium taxes and less any amounts previously withdrawn or
transferred to the separate account.

HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID?
We will pay these benefits in a single sum. However, if this contract is
surrendered you may elect one of the annuity payment options, subject to the
provisions of this contract.

ANNUITY PROVISIONS
- --------------------------------------------------------------------------------

WHEN DO ANNUITY PAYMENTS BEGIN?
You must notify us in writing that annuity payments are to be made to the
annuitant, when these payments are to begin, the form of the annuity and what
annuity payment option has been selected. We must receive this notice at least
30 days in advance of the date annuity payments are to begin. This contract
permits annuity payments to begin on the first day of any month after the 50th
birthday and before the 75th birthday of the annuitant. However, the beginning
date for annuity payments must be consistent with any restrictions applicable to
the plan under which this contract may have been purchased.

WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS?
As of the date annuity payments are to begin, we will apply either the
accumulation value or the surrender value.

The accumulation value will be applied to provide annuity payments, subject to
these conditions:
(1) this contract must have been in force for at least five years from its
contract date; and
(2) the annuity payment option selected must provide for payments expected to
continue for a period of at least five years.

If these conditions are not met, the surrender value, instead of the
accumulation value, will be applied to provide the annuity payment form
selected.

84-9091 Minnesota Mutual Life 12
<PAGE>

WHAT TYPES OF ANNUITIES ARE AVAILABLE?
Both fixed and variable annuities are available under this contract.

ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS?
Yes. We require that the first monthly fixed or variable annuity payment must
be at least $20 unless a payment of a smaller minimum amount is required by law.
If the first monthly fixed or variable annuity payment would be less than that
amount, we reserve the right to pay you the surrender value in a lump sum. This
payment would be in lieu of all other rights under this contract.

WHAT INFORMATION MAY WE NEED?
We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant before payments begin.

We may also require proof that a person is alive before making any annuity
payment which is based on the survival of that person.

IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN?
If you do not elect another date, annuity payments will begin on the later of:
the first day of the month immediately following the 65th birthday of the
annuitant, or the first day of the month immediately following the fifth
contract anniversary.

IF YOU FAIL TO ELECT AN ANNUITY OPTION, UNDER WHAT OPTION WILL ANNUITY PAYMENTS
BE MADE?
If you do not elect an annuity payment option, we will make monthly payments on
the basis of Option 2A, a life annuity with a period certain of 120 months.

IF YOU FAIL TO ELECT AN ANNUITY FORM, HOW WILL ANNUITY PAYMENTS BE MADE?
If you do not elect an annuity payment form, we will make annuity payments in
the form of a variable annuity.

MUST AN ANNUITY OPTION BE ELECTED?
No. You may elect a lump sum payment instead. If you do so, you and the
annuitant shall have no further rights under this contract.

ANNUITY PAYMENT OPTIONS
- --------------------------------------------------------------------------------

WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
The following annuity payment options are available:

Option 1--Life Annuity--annuity payments payable monthly for the lifetime of the
annuitant, ending with the last payment due prior to the annuitant's death.

84-9091 Minnesota Mutual Life 13
<PAGE>

Option 2--Life Annuity with a Period Certain--annuity payments payable monthly
for the lifetime of the annuitant; provided, if the annuitant dies before
payments have been made for the entire period certain, those remaining certain
payments will be made to the beneficiary.

The period certain may be for 120 months (Option 2A); for 180 months (Option
2B); or for 240 months (Option 2C).

Option 3--Joint and Last Survivor Annuity--annuity payments payable monthly for
the joint lifetimes of the annuitant and a designated joint annuitant; ending
with the last payment due prior to the survivor's death.

Option 4--Fixed Period Annuity--annuity payments payable monthly for a fixed
period of from one to twenty years. If the annuitant dies before all payments
for the fixed period are received, payments will continue for the remainder of
the fixed period to the beneficiary.

ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE?
Yes. Other options may be available as agreed upon between you and us.

MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT INSTEAD OF THE REMAINING ANNUITY
PAYMENTS?
Yes. The beneficiary may elect to have the present value of the remaining
payments paid in a lump sum. This right exists under Options 2 and 4.

The lump sum payment will be the commuted value of the remaining payments. It
will be based on the then current dollar amount of one payment, using the same
interest rate which served as a basis for the annuity.

HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED?
The dollar amount of the first monthly variable annuity payment is determined by
applying the available value (after deduction of any premium taxes not
previously deducted) to the table below using the adjusted age of the annuitant
and any joint annuitant. A number of annuity units is then determined by
dividing this dollar amount by the then current annuity unit value. Thereafter,
the number of annuity units remains unchanged during the period of annuity
payments. This determination is made separately for each sub-account of the
separate account. The number of annuity units is based upon the available value
in each sub-account as of the date annuity payments are to begin.

The dollar amount determined for each sub-account will then be aggregated for
purposes of making payment.

The dollar amount of the second and later variable annuity payments is equal to
the number of annuity units determined for each sub-account times the annuity
unit value for that sub-account as of the due date of the payment. This amount
may increase or decrease from month to month.

84-9091 Minnesota Mutual Life 14
<PAGE>

The value of an annuity unit for a sub-account is determined each month as of
the first day of the month. The value is equal to the annuity unit value for
that sub-account as of the first day of the preceding month times the product of
(a) .997137, and (b) a sub-account investment factor. This investment factor is
the accumulation unit value for that sub-account on the valuation date next
following the fourteenth day of the preceding month divided by the accumulation
unit value for that sub-account on the valuation date next following the
fourteenth day of the second preceding month. For any date other than the first
of a month, the annuity unit value is that on the first day of the next month.

HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED?
The tables shown below are used to determine the amount of guaranteed monthly
fixed annuity payments. They show the dollar amount of each payment that can be
provided with each $1,000 of available value, after the deduction of any
applicable premium taxes not previously deducted. Amounts shown here are based
on the Progressive Annuity Table with interest at the rate of 3.5% per annum,
assuming births in the year 1900 and with an age setback of six years. The
amount of each payment depends upon the adjusted age of the annuitant and any
joint annuitant. The adjusted age is determined from the actual age nearest
birthday at the time the first payment is due in the following manner:

CALENDAR YEAR ADJUSTED AGE IS
OF BIRTH IS EQUAL TO--
------------- ---------------

Prior to 1900 Age Plus 1
1900-1919 Actual Age
1920-1939 Age Minus 1
1940-1959 Age Minus 2
1960 and Later Age Minus 3

DOLLAR AMOUNT OF THE FIRST MONTHLY PAYMENT WHICH IS PURCHASED
WITH EACH $1,000 OF VALUE APPLIED
(Rates shown for Options 1,2 and 3 are for an annuity with the first payment due
immediately. They must be adjusted for any applicable state premium taxes and
the policy fee.)

ADJUSTED AGE
OF ANNUITANT SINGLE LIFE ANNUITIES
------------ -----------------------------------------------------

OPTION 1 OPTION 2A OPTION 2B OPTION 2C
-------- --------- --------- ---------
50 $4.28 $4.26 $4.22 $4.18
51 4.34 4.32 4.28 4.23
52 4.42 4.39 4.35 4.28
53 4.49 4.46 4.41 4.34
54 4.57 4.53 4.48 4.40
55 4.65 4.61 4.55 4.46

84-9091 Minnesota Mutual Life 15
<PAGE>

ADJUSTED AGE
OF ANNUITANT SINGLE LIFE ANNUITIES
------------ -----------------------------------------------------
OPTION 1 OPTION 2A OPTION 2B OPTION 2C

56 4.74 4.69 4.62 4.52
57 4.84 4.78 4.70 4.58
58 4.94 4.87 4.78 4.65
59 5.04 4.97 4.87 4.71
60 5.16 5.07 4.95 4.78
61 5.28 5.18 5.04 4.85
62 5.40 5.29 5.13 4.91
63 5.54 5.41 5.23 4.98
64 5.69 5.53 5.33 5.05
65 5.84 5.66 5.43 5.11
66 6.01 5.79 5.53 5.18
67 6.18 5.94 5.63 5.24
68 6.37 6.08 5.74 5.30
69 6.57 6.24 5.84 5.36
70 6.79 6.40 5.95 5.41
71 7.02 6.57 6.05 5.46
72 7.27 6.74 6.15 5.51
73 7.54 6.91 6.26 5.55
74 7.83 7.10 6.35 5.59
75 8.14 7.28 6.45 5.62

OPTION 3-JOINT AND LAST SURVIVOR LIFE ANNUITY

ADJUSTED
AGE OF
JOINT
ANNUITANT* ADJUSTED AGE OF ANNUITANT*
---------- ---------------------------------------------------------------
55 60 62 65 67 70 75
-- -- -- -- -- -- --

54 $4.08 $4.21 $4.26 $4.32 $4.36 $4.41 $4.47
59 4.23 4.42 4.49 4.59 4.65 4.74 4.85
61 4.28 4.50 4.58 4.70 4.78 4.88 5.02
64 4.35 4.61 4.71 4.87 4.97 5.10 5.30
66 4.40 4.68 4.80 4.98 5.09 5.26 5.50
69 4.45 4.78 4.92 5.13 5.28 5.49 5.82
74 4.53 4.91 5.08 5.36 5.56 5.86 6.37

* Dollar amounts of the first monthly payments for ages not shown in this table
will be calculated on the same basis as those shown and may be obtained from us.

84-9091 Minnesota Mutual Life 16
<PAGE>

OPTION 4--FIXED PERIOD ANNUITY

FIXED PERIOD DOLLAR AMOUNT FIXED PERIOD DOLLAR AMOUNT
(YEARS) OF PAYMENT (YEARS) OF PAYMENT
------------- ------------- ------------ -------------
1 $84.65 11 $9.09
2 43.05 12 8.46
3 29.19 13 7.94
4 22.27 14 7.49
5 18.12 15 7.10
6 15.35 16 6.76
7 13.38 17 6.47
8 11.90 18 6.20
9 10.75 19 5.97
10 9.83 20 5.75

WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES?
Not necessarily. If, when fixed annuity payments are elected, we are using
tables of annuity purchase rates for this class of contract which would result
in larger annuity payments, we will use those tables instead.

AMOUNT PAYABLE AT DEATH
- --------------------------------------------------------------------------------

WHAT AMOUNT IS PAYABLE AT DEATH?
If you die before annuity payments have started, we will pay the accumulation
value. The accumulation value will be determined as of the valuation date
coincident with or next following the day we receive due proof of death at our
home office. If the annuitant dies after annuity payments have started, we will
pay whatever amount may be called for by the terms of the annuity payment option
selected.

The remaining interest in the contract must be distributed at least as rapidly
as under the option in effect at the annuitant's death.

TO WHOM WILL WE PAY THOSE BENEFITS?
When we receive due proof of death satisfactory to us, we will pay the amount
payable at death under this contract to the beneficiary or beneficiaries. The
beneficiary will be the person or persons named in the application for this
contract unless you subsequently change the beneficiary. In that event, we will
pay the amount payable at death to the beneficiary named in your last change of
beneficiary request as provided in this contract.

HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID?
We will pay that amount in a single sum unless another form of settlement has
been requested and agreed to by us. All payments by us are payable at our home
office. Proof of any claim under this contract must be submitted in writing to
us at our home office.

84-9091 Minnesota Mutual Life 17
<PAGE>

WHEN MUST DEATH BENEFITS BE PAID?
If you die on or before the date on which annuity payments begin and if the
designated beneficiary is a person other than your spouse, that beneficiary may
elect an annuity option measured by a period not longer than that beneficiary's
life expectancy only so long as annuity payments begin not later than one year
after your death. If there is no designated beneficiary, then the entire
interest in this contract must be distributed within five years after your
death. If the annuitant dies after annuity payments have begun, any payments
received by a non-spouse beneficiary must be distributed at least as rapidly as
under the method elected by the annuitant as of the date of death.

If any portion of the contract interest is payable to your designated
beneficiary who is your surviving spouse, that spouse shall be treated as the
contract owner for purposes of: (1) when payments must begin; and (2) the time
of distribution in the event of your spouse's death. Payments must be made in
substantially equal installments.

WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE?
If a beneficiary dies, that beneficiary's interest in this contract ends with
that beneficiary's death. Only those beneficiaries who survive will be eligible
to share in a death benefit. If no beneficiary survives you prior to the date
an annuity begins we will pay the accumulation value of this contract to the
executors or administrators of your estate.

If there is no beneficiary after the death of the annuitant, any remaining value
under the annuity option will be paid to the annuitant's estate.

CAN YOU CHANGE THE BENEFICIARY?
Yes. You can file a written request with us to change the beneficiary. Your
written request will not be effective until it is recorded in our home office
records. After it has been recorded, it will take effect as of the date you
signed the request. However, if the annuitant dies before the request has been
recorded, the request will not be effective as to those death proceeds we have
paid before the request was recorded in our home office records.

ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

CAN YOU ASSIGN THIS CONTRACT?
Unless this contract provides otherwise, you may assign all rights to this
contract during the lifetime of the annuitant. We will not be bound by any
assignment until we have recorded written notice of it at our home office. We
are not responsible for the validity of any assignment. An assignment will not
apply to any payment or action made by us before it was recorded. Any proceeds
which become payable to an assignee will be payable in a single sum. Any claim
made by an assignee will be subject to proof of the assignee's interest and the
extent of the assignment.

If this contract is issued pursuant to a retirement plan which receives
favorable tax treatment under the provisions of Section 401, 403, 404, 408 or
457 of the Internal Revenue Code, then, it

84-9091 Minnesota Mutual Life 18
<PAGE>

may not be assigned, pledged or otherwise transferred except under such
conditions as may be allowed under applicable law.

ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.

HOW WILL BENEFITS BE DETERMINED?
Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit
described by this contract shall be calculated as of the date the provisions of
the contract are exercised. Interest credited on purchase payments made to the
contract shall be calculated on contract amounts from the date of receipt to the
date of surrender or withdrawal.

WHAT IF A PERSON'S AGE IS MISSTATED?
If a person's age has been misstated, the amount payable under this contract as
an annuity will be that amount which would have been paid based upon that
person's correct age. In the case of an overpayment, we may either deduct the
required amount from that person's payments under this contract; or, we may
require you to pay us in cash; or we may do both until we are fully repaid. In
the case of an underpayment, we will pay the required amount with the next
payment.

WHAT INFORMATION MUST YOU PROVIDE?
You must provide any other information we need to administer this contract. If
you cannot do so, we may ask the person concerned for that information. We
shall not be liable for any payment based upon information given to us in error
or not given to us.

DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS?
Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation
values, and the paid-up annuity benefit described by this contract are not less
than the minimum benefits required by any statute of the state in which this
contract is delivered.

WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT?
Reserves held by us for annuity payments under this contract shall not be less
than those reserves required by the law in the state in which this contract is
delivered.

MAY THIS CONTRACT BE MODIFIED?
This contract may be modified at any time by written agreement between you and
us. However, no such modification will adversely affect the rights of an
annuitant under this contract unless the modification is made to comply with a
law or government regulation. Such modification will be in writing. You will
have the right to accept or reject such a modification.

HOW DOES THIS CONTRACT RELATE TO THE OWNERSHIP OF THE SEPARATE ACCOUNT?
We have exclusive and absolute ownership of the assets of both the general
account and the separate account.

84-9091 Minnesota Mutual Life 19
<PAGE>

DO YOU HAVE ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account accumulation or annuity units under this
contract you may direct us with respect to the voting rights of fund shares held
by us and attributable to this contract.

MINNESOTA MUTUAL LIFE

FLEXIBLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT

FIXED OR VARIABLE ANNUITY BENEFITS

A PARTICIPATING CONTRACT

84-9091 Minnesota Mutual Life 20

<PAGE>

READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT

We promise to pay, subject to the provisions of this contract, the benefits
described by this contract.

We make this promise and issue this contract in consideration of the application
for this contract and the payment of the purchase payment.

The owner and the beneficiary are as named in the application unless they are
changed as provided for in this contract.

You are a member of The Minnesota Mutual Life Insurance Company. Our annual
meetings are held at our home office on the first Tuesday in March of each year
at three o'clock in the afternoon.

Signed for The Minnesota Mutual Life Insurance Company at St. Paul, Minnesota,
on the contract date.

/s/ Coleman Bloomfield
President

/s/ Robert J. Hasling
Secretary
Registrar

NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS.
It is important to us that you are satisfied with this contract. If you are not
satisfied, you may return the contract to us or to your agent within 10 days of
its receipt. If you exercise this right, you will receive the greater of (a)
the Accumulation Value of this contract, or (b) the amount of purchase payments
paid under this contract. We will pay this refund within 7 days after we
receive your notice of cancellation.

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT

The Minnesota Mutual Life Insurance company SINGLE PAYMENT DEFERRED
400 North Robert Street VARIABLE ANNUITY CONTRACT
St. Paul, Minnesota 55101-2098 FIXED OR VARIABLE ANNUITY
BENEFITS
MINNESOTA MUTUAL LIFE A PARTICIPATING CONTRACT

84-9092 Single Payment Deferred Variable
Annuity Contract - Multi-Option

<PAGE>

CONTRACT INDEX

Alphabetical Index to the Provisions of Your Contract

Page
-----

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Allocation of Purchase Payment . . . . . . . . . . . . . . . . . . . . . . 3

Amount Payable at Death. . . . . . . . . . . . . . . . . . . . . . . . . . 9

Annuity Payment Options. . . . . . . . . . . . . . . . . . . . . . . . . . 6

Annuity Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Contract Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Misstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Purchase Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Transfer Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Withdrawal and Surrender . . . . . . . . . . . . . . . . . . . . . . . . . 5

84-9092 Minnesota Mutual Life 2

<PAGE>

YOUR CONTRACT INFORMATION

ANNUITANT: JOHN DOE

DATE OF BIRTH: JANUARY 1, 1950

OWNER: JOHN DOE

JURISDICTION: YOUR STATE

CONTRACT NUMBER: 12345

CONTRACT DATE: JANUARY 1, 1985

ANNUITY COMMENCEMENT DATE: JANUARY 1, 2015

ANTICIPATED PURCHASE PAYMENT: $50,000

SINGLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT
FIXED OR VARIABLE ANNUITY BENEFITS
A PARTICIPATING CONTRACT

DEFINITIONS
- -------------------------------------------------------------------------------

When we use the following words, this is what we mean:

THE ANNUITANT
The person named on page 1 who may receive lifetime benefits under the contract.

YOU, YOUR
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person named in the application.

WE, OUR, US
The Minnesota Mutual Life Insurance Company.

CONTRACT DATE
The effective date of this contract. It is also the date from which we
determine contract anniversaries and contract years.

CONTRACT ANNIVERSARY
The same day and month as the contract date for each succeeding year of this
contract.

84-9092 Minnesota Mutual Life 3

<PAGE>

CONTRACT YEAR
A period of one year beginning with the contract date or a contract anniversary.

FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.

VALUATION DATE
Any date on which a fund is valued.

VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.

SURRENDER VALUE
The surrender value of the separate account portion of this contract shall be
its withdrawal value.
The surrender value of the general account portion of this contract shall be the
greater of:
(a) its withdrawal value, or
(b) your total general account purchase payments, less any applicable state
annuity premium taxes and less any amounts previously withdrawn or transferred
to the separate account.

GENERAL ACCOUNT
All assets of Minnesota Mutual other than those in the Minnesota Mutual Variable
Annuity Account or in other separate accounts established by us.

84-9092 Minnesota Mutual Life 4

<PAGE>

1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.

WRITTEN REQUEST
A request in writing signed by you. In some cases, we may provide a form for
your use. We also may require that this contract be sent to our home office
with your written request.

PURCHASE PAYMENT
A single amount paid to us as consideration for the benefits provided by this
contract. The single amount will be deemed to include all purchase payments
made within 12 months of the contract date. The amount of any initial or
subsequent payment must be at least $5,000, and may not exceed $250,000 except
with our consent.

ANNUITY PAYMENTS
Payments made at regular intervals to the annuitant or any other payee. Annuity
payments will be due and payable only on the first day of a calendar month.

FIXED ANNUITY
Annuity payments of equal amounts during the payment period.

VARIABLE ANNUITY
Annuity payments which increase or decrease in amount to reflect the investment
experience of the separate account and its sub-accounts.

AGE
The age of a person at nearest birthday.

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

WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it contain the entire
contract between you and us. Any statements made in the application either by
you or the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement either made by you or
the annuitant will not be used to avoid this contract or defend against a claim
under this contract unless the statement is contained in the application.

Any additional agreement attached to this contract will become a part of this
contract and will be subject to all the terms and conditions of this contract
unless we state otherwise in the agreement.

84-9092 Minnesota Mutual Life 5

<PAGE>

HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
Each year we will send you a report. This report will summarize the year's
transactions and will show the current accumulation value and surrender value of
this contract. It will also show the current separate account accumulation unit
values. The report will be as of a date within two months of its mailing.

PURCHASE PAYMENT
- -------------------------------------------------------------------------------
WHERE DO YOU MAKE PURCHASE PAYMENTS?
All purchase payments must be made at our home office. Our home office is at
400 North Robert Street, St. Paul, Minnesota 55101-2098.

When we receive a purchase payment from you at our home office, we will send you
a confirmation.

WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS?
There are usually no deductions made from the purchase payment. However, we do
reserve the right to make a deduction from the purchase payment for state
premium taxes, where applicable.

HOW ARE PURCHASE PAYMENTS ALLOCATED?
They are allocated either to the general account or to the separate account and
its sub-accounts. The allocation is made as you direct. Initially, you
indicate your allocation in the application. You may change your allocation as
to remaining portions of the purchase payment by giving us written notice. we
will allocate purchase payments received without allocation instructions to the
general account.

WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account currently is composed of the following sub-accounts:

Common Stock Account
Bond Account
Money market Account
Managed Account

84-9092 Minnesota Mutual Life 6

<PAGE>

IS THERE A MINIMUM AMOUNT WHICH MAY BE ALLOCATED TO THE GENERAL ACCOUNT OR
SEPARATE ACCOUNT?
Yes. The minimum amount which may be allocated to the general account or to any
sub-account of the separate account is $25.

WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account, which we
determine to be associated with the class of contracts to which this contract
belongs, to another separate account. If this type of transfer is made, the
term "separate account", as used in this contract, shall then mean the separate
account to which the assets were transferred.

We also reserve the right, when permitted by law, to:
(a) deregister the separate account under the Investment Company Act of 1940;
(b) restrict or eliminate any voting rights of contract owners or other persons
who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate accounts.

CONTRACT CHARGES
- -------------------------------------------------------------------------------

WHAT IS THE ADMINISTRATIVE CHARGE?
The administrative charge is an annual charge which is deducted from the
accumulation value. This deduction will be made as of each contract anniversary
and on the surrender of the contract. The charge shall not exceed $20 or, if
less, 2% of the accumulation value. we may deduct it from the general account
accumulation value, the separate account accumulation value, or partially from
each. They will be made in the same proportion that the value of your interest
in the general account and any sub-account bears to your total accumulation
value.

84-9092 Minnesota Mutual Life 7

<PAGE>

WHAT IS THE AMOUNT OF THE DEFERRED SALES CHARGE?
The charge is indicated in the table shown below. These percentages decrease
uniformly by .05% for each of the first 120 months from the contract date. Any
amounts withdrawn from the contract may also be reduced by any applicable state
premium taxes not previously deducted from the purchase payment.

END OF
CONTRACT YEAR CHARGE
------------- -------

(Contract Date) 6.0%
1 5.4
2 4.8
3 4.2
4 3.6
5 3.0
6 2.4
7 1.8
8 1.2
9 0.6
10 -0-

In no event will the amount of deferred sales charge exceed 9% of the total
purchase payments made under this contract.

WHAT CHARGES ARE ASSOCIATED WITH THE SEPARATE ACCOUNT?
There are two charges associated with the separate account. These are the
expense risk charge and the mortality risk premium charge. Both of these
charges are deducted on each valuation date from the separate account. On an
annual basis, they may be as much as 1.40% of the net asset value of the
separate account.

84-9092 Minnesota Mutual Life 8

<PAGE>

VALUATION
- -------------------------------------------------------------------------------

For the general account, it is the purchase payment allocated to the general
account plus interest, dividends and transfers into the general account, less
deductions for the annual administrative charge, any transfers out of the
general account, the deferred sales charge and for any previous withdrawals.

For each sub-account of the separate account, it is your accumulation units
multiplied by the accumulation unit value.

WHAT IS AN ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED?
An accumulation unit is a measure of your interest in each sub-account of the
separate account. The number of accumulation units credited with respect to
each purchase payment is determined by dividing the portion of the purchase
payment allocated to each sub-account by the then current accumulation unit
value for that sub-account. This determination is made as of the valuation date
coincident with or next following the date on which we receive your purchase
payment at our home office. Once determined, the number of accumulation units
will not be affected by changes in the accumulation unit value. However, the
total number of accumulation units under this contract will be affected by
future contract transactions. In addition, the units of each sub-account will
be increased by subsequent purchase payments and transfers to that sub-account.
The units of each sub-account will be decreased by deductions for the
administrative charge, sales charge and for transfers or withdrawals from that
sub-account.

The accumulation unit value will increase or decrease on each valuation date.
The amount of any increase or decrease will depend on the net investment
experience of the sub-account of the separate account. The value of an
accumulation unit for each sub-account was originally set at $1.00 for the first
valuation date. For any subsequent valuation date, its value is equal to its
value on the preceding valuation date multiplied by the net investment factor
for that sub-account for the valuation period ending on the subsequent valuation
date.

84-9092 Minnesota Mutual Life 9

<PAGE>

The gross investment rate is equal to:
(1) the net asset value per share of a fund share held in the sub-account of
the separate account determined at the end of the current accumulation
period; plus
(2) the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period;
divided by
(3) the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.

MAY ADDITIONAL INTEREST BY CREDITED ON THE GENERAL ACCOUNT?
Yes. As conditions permit, we will credit additional amounts of interest to the
general account accumulation value.

DIVIDENDS
- -------------------------------------------------------------------------------

WILL THIS CONTRACT RECEIVE DIVIDENDS?
Each year we determine if this contract will share in our divisible surplus. We
call your share a dividend.

HOW WILL DIVIDENDS BE APPLIED?
Dividends, if received, may be added to the accumulation value or applied to
increase annuity payments or, if you so elect, they may be paid in cash.

TRANSFER PROVISIONS
- -------------------------------------------------------------------------------

WHAT IS A TRANSFER?
A transfer is a reallocation of funds under this contract between the general
account and the separate account or among the sub-accounts of the separate
account.

84-9092 Minnesota Mutual Life 10

<PAGE>

DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS?
Yes. In every case, an amount to be transferred must be $250 or more.

MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS?
No.

WITHDRAWAL AND SURRENDER
- -------------------------------------------------------------------------------

MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time before annuity payments begin, you may request a partial
withdrawal from the accumulation value. You must make a written request for
any withdrawal, and it must be for at least $250. In the event of a cash
withdrawal, the accumulation value will be reduced by the amount requested and
by the deferred sales charge, if any.

Systematic withdrawal plans of a fixed amount or over a fixed period are also
available.

HOW IS THE WITHDRAWAL VALUE DETERMINED?
The withdrawal value is determined with reference to the table of deferred sales
charges shown in this contract. The withdrawal value is the accumulation value
minus the deferred sales charge. However, if withdrawals in a calendar year are
equal to or less than 10% of the accumulation value at the end of the previous
calendar year, the charges will not apply. If withdrawals in a calendar year
exceed 10%, the deferred sales charges will apply to the amount of the excess.

HOW IS THE SURRENDER VALUE DETERMINED?
The surrender value of the separate account portion of this contract shall be
the withdrawal value. The surrender value of the general account portion of
this contract shall be the greater of:
(a) its withdrawal value; or
(b) your total general account purchase payments, less any applicable state
annuity premium taxes and less any amounts previously withdrawn or
transferred to the separate account.

84-9092 Minnesota Mutual Life 11

<PAGE>

ANNUITY PROVISIONS
- -------------------------------------------------------------------------------

WHEN DO ANNUITY PAYMENTS BEGIN?
You must notify us in writing that annuity payments are to be made to the
annuitant, when these payments are to begin, the form of the annuity and what
annuity payment option has been selected. We must receive this notice at least
30 days in advance of the date annuity payments are to begin. This contract
permits annuity payments to begin on the first day of any month after the 50th
birthday and before the 85th birthday of the annuitant. However, the beginning
date for annuity payments must be consistent with any restrictions applicable to
the plan under which this contract may have been purchased.

WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS?
As of the date annuity payments are to begin, we will apply either the
accumulation value or the surrender value.

If these conditions are not met, the surrender value, instead of the
accumulation value, will be applied to provide the annuity payment form
selected.

WHAT TYPES OF ANNUITIES ARE AVAILABLE?
Both fixed and variable annuities are available under this contract.

ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS?
Yes. we require that the first monthly fixed or variable annuity payment must
be at least $20 unless a payment of a smaller minimum amount is required by law.
If the first monthly fixed or variable annuity payment would be less than that
amount, we reserve the right to pay you the surrender value in a lump sum.
This payment would be in lieu of all other rights under this contract.

WHAT INFORMATION MAY WE NEED?
We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant before payments begin.

We may also require proof that a person is alive before making any annuity
payment which is based on the survival of that person.

84-9092 Minnesota Mutual Life 12

<PAGE>

IF YOU FAIL TO ELECT AN ANNUITY FORM, HOW WILL ANNUITY PAYMENTS BE MADE.
If you do not elect an annuity payment form, we will make annuity payments in
the form of a variable annuity.

MUST AN ANNUITY PAYMENT OPTION BE ELECTED?
No. You may elect a lump sum payment instead. If you do so, you and the
annuitant shall have no further rights under this contract.

ANNUITY PAYMENT OPTIONS
- -------------------------------------------------------------------------------

WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
The following annuity payment options are available:

Option 1--Life Annuity--annuity payments payable monthly for the lifetime of the
annuitant, ending with the last payment due prior to the annuitant's death.

The period certain may be for 120 months (Option 2A); for 180 months (Option
2B); or for 240 months (Option 2C).

Option 3-- Joints and Last Survivor Annuity-- annuity payments payable monthly
for the joint lifetimes of the annuitant and a designated joint annuitant;
ending with the last payment due prior to the survivor's death.

Option 4--Fixed Period Annuity-- annuity payments payable monthly for a fixed
period of from one to twenty years. If the annuitant dies before all payments
for the fixed period are received, payments will continue for the remainder of
the fixed period to the beneficiary.

ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE?
Yes. Other options may be available as agreed upon between you and us.

84-9092 Minnesota Mutual Life 13

<PAGE>

The lump sum payments will be the commuted value of the remaining payments. It
will be based on the then current dollar amount of one payment, using the same
interest rate which served as a basis for the annuity.

HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED?
The dollar amount of the first monthly variable annuity payment is determined by
applying the available value (after deduction of any premium taxes not
previously deducted) to the table below using the adjusted age of the annuitant
any joint annuitant. A number of annuity units is then determined by dividing
this dollar amount by the then current annuity unit value. Thereafter, the
number of annuity units remains unchanged during the period of annuity payments.
This determination is made separately for each sub-account of the separate
account. The number of annuity units is based upon the available value in each
sub-account as of the date annuity payments are to begin.

The dollar amount determined for each sub-account will then be aggregated for
purposes of making payment.

84-9092 Minnesota Mutual Life 14

<PAGE>

CALENDAR YEAR ADJUSTED AGE IS
OF BIRTH IS EQUAL TO----
------------- ----------------

Prior to 1900 Age Plus 1
1900-1919 Actual Age
1920-1939 Age Minus 1
1940-1959 Age Minus 2
1960 and Later Age Minus 3

ADJUSTED AGE
OF ANNUITANT SINGLE LIFE ANNUITIES
------------- ----------------------------------------------------
OPTION 1 OPTION 2A OPTION 2B OPTION 2C
-------- --------- --------- ---------

50 $4.28 $4.26 $4.22 $4.18
51 4.34 4.32 4.28 4.23
52 4.42 4.39 4.35 4.28
53 4.49 4.46 4.41 4.34
54 4.57 4.53 4.48 4.40
55 4.65 4.61 4.55 4.46
56 4.74 4.69 4.62 4.52
57 4.84 4.78 4.70 4.58
58 4.94 4.87 4.78 4.65
59 5.04 4.97 4.87 4.71
60 5.16 5.07 4.95 4.78
61 5.28 5.18 5.04 4.85
62 5.40 5.29 5.13 4.91
63 5.54 5.41 5.23 4.98
64 5.69 5.53 5.33 5.05
65 5.84 5.66 5.43 5.11
66 6.01 5.79 5.53 5.18
67 6.18 5.94 5.63 5.24
68 6.37 6.08 5.74 5.30
69 6.57 6.24 5.84 5.36
70 6.79 6.40 5.95 5.41
71 7.02 6.57 6.05 5.46
72 7.27 6.74 6.15 5.51
73 7.54 6.91 6.26 5.55

84-9092 Minnesota Mutual Life 15

<PAGE>

ADJUSTED AGE
OF ANNUITANT SINGLE LIFE ANNUITIES
------------- ----------------------------------------------------
OPTION 1 OPTION 2A OPTION 2B OPTION 2C
-------- --------- --------- ---------

74 7.83 7.10 6.35 5.59
75 8.14 7.28 6.45 5.62
76 8.48 7.47 6.54 5.65
77 8.84 7.66 6.62 5.68
78 9.23 7.85 6.70 5.70
79 9.66 8.04 6.77 5.71
80 10.11 8.23 6.83 5.72
81 10.61 8.41 6.88 5.73
82 11.15 8.58 6.93 5.74
83 11.73 8.75 6.97 5.75
84 12.36 8.91 7.00 5.75
85 13.05 9.06 7.03 5.75

OPTION 3-JOINT AND LAST SURVIVOR LIFE ANNUITY

ADJUSTED AGED OF
JOINT ANNUITANT* ADJUSTED AGE OF ANNUITANT*
- --------------- ------------------------------------------------------------------------------------

55 60 62 65 67 70 75 80 85
-- -- -- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
54 $4.08 $4.21 $4.26 $4.32 $4.36 $4.41 $4.47 $4.51 $4.54
59 4.23 4.42 4.49 4.59 4.65 4.74 4.85 4.93 4.98
61 4.28 4.50 4.58 4.70 4.78 4.88 5.02 5.12 5.19
64 4.35 4.61 4.71 4.87 4.97 5.10 5.30 5.45 5.55
66 4.40 4.68 4.80 4.98 5.09 5.26 5.50 5.69 5.83
69 4.45 4.78 4.92 5.13 5.28 5.49 5.82 6.09 6.29
74 4.53 4.91 5.08 5.36 5.56 5.86 6.37 6.84 7.22
79 4.58 5.01 5.21 5.54 5.78 6.18 6.91 7.65 8.34
85 4.62 5.08 5.31 5.69 5.97 6.46 7.43 8.58 9.81
</TABLE>

* Dollar amounts of the first monthly payments for ages not shown in this table
will be calculated on the same basis as those shown and may be obtained from us.

84-9092 Minnesota Mutual Life 16

<PAGE>

OPTION 4--FIXED PERIOD ANNUITY

FIXED PERIOD DOLLAR AMOUNT FIXED PERIOD DOLLAR AMOUNT
(YEARS) OF PAYMENT (YEARS) OF PAYMENT
------------ ------------- ------------ -------------

1 $84.65 11 $9.09
2 43.05 12 8.46
3 29.19 13 7.94
4 22.27 14 7.49
5 18.12 15 7.10
6 15.35 16 6.76
7 13.38 17 6.47
8 11.90 18 6.20
9 10.75 19 5.97
10 9.83 20 5.75

AMOUNT PAYABLE AT DEATH
- -------------------------------------------------------------------------------

The remaining interest in the contract must be distributed at least as rapidly
as under the option in effect at the annuitant's death.

84-9092 Minnesota Mutual Life 17

<PAGE>

If there is no beneficiary after the death of the annuitant, any remaining value
under the annuity option will be paid to the annuitant's estate.

ADDITIONAL INFORMATION
- -------------------------------------------------------------------------------

If this contract is issued pursuant to a retirement plan which receives
favorable tax treatment under the provisions of Section 401, 403, 404, 408 or
457 of the Internal Revenue Code, then, it

84-9092 Minnesota Mutual Life 18

<PAGE>

may not be assigned, pledged or otherwise transferred except under such
conditions as may be allowed under applicable law.

ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.

HOW DOES THIS CONTRACT RELATE TO THE OWNERSHIP OF THE SEPARATE ACCOUNT?
We have exclusive and absolute ownership of the assets of both the general
account and the separate account.

84-9092 Minnesota Mutual Life 19

<PAGE>

MINNESOTA MUTUAL LIFE

SINGLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT

FIXED OR VARIABLE ANNUITY BENEFITS

A PARTICIPATING CONTRACT

84-9092 Minnesota Mutual Life 20

<PAGE>

MINNESOTA MUTUAL LIFE QUALIFIED PLAN AGREEMENT

WHAT DOES THIS AGREEMENT PROVIDE?
This agreement modifies certain contract provisions. It is used in connection
with a tax-qualified plan under Section 401(a) of the Internal Revenue Code,
("Code") as amended.

WHEN MUST AN ANNUITY BEGIN?
The interest of an Annuitant must be distributed or annuity payments commence
not later than April 1 following the calendar year in which the later of the
following occurs: (a) he attains the age of 70 1/2 years; or (b) retires. For
persons who were or are 5% owners, distributions must take place or commence as
described in (a) above.

WHAT ANNUITY FORMS ARE AVAILABLE?
All of the options provided by this contract are available. However, under
Options 2 and 4 the period certain may not extend beyond the life expectancy of
the annuitant.

WHEN MUST DEATH BENEFITS BE PAID?
If you die before annuity payments have begun, certain rules apply. Your entire
contract interest must be distributed no later than 5 years after your death.
This rule of distribution will not apply if an election is made as described in
(a) or (b) below:

(a) If any portion of your interest is payable to a designated
beneficiary, payments must begin no later than one year after your
death. They may be paid over the life or life expectancy of the
designated beneficiary. Payments must be made in substantially equal
installments.

(b) If any portion of your contract interest is payable to a designated
beneficiary who is your surviving spouse, that spouse shall be treated
as the contract owner for purposes of: (1) when payments must begin;
and (2) the time of distribution in the event of that spouse's death.
Payments must be made in substantially equal installments.

MAY TAX PENALTIES APPLY TO A SURRENDER?
Yes. If there is a withdrawal or surrender prior to the Annuitant's age 59 1/2,
the Annuitant may be subject to tax penalties under the Code. These penalties
may not apply if: (a) the Annuitant is disabled as defined by the Internal
Revenue Code; or (b) the amount received by the Annuitant is the form of an
annuity extending over a period of at least 60 months.

Minnesota Mutual will not be liable for any tax penalties on amounts received or
paid by Minnesota Mutual under this contract.

84-9094 Qualified Plan Agrement

<PAGE>

This agreement is effective as of the original contract date of this contract
unless a different effective date is shown here.

/s/ Robert J. Hasling /s/ Coleman Bloomfield
Secretary President

84-9094 Qualified Plan Agrement 2

<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MINNESOTA MUTUAL INDIVIDUAL RETIREMENT ANNUITY
(IRA) AGREEMENT
- --------------------------------------------------------------------------------

WHAT DOES THIS AGREEMENT PROVIDE?

This agreement modifies the contract. Provisions are changed before issue. In
the event of a conflict between the provisions of this agreement and the
contract to which it is attached, the provisions of this agreement will control.
These changes will allow its use: (a) with a Simplified Employee Pension
(herein "SEP"); and/or (b) as an Individual Retirement Annuity under the
Employee Retirement Income Security Act of 1974, as amended (herein "IRA"), or
(c) with a Savings Incentive Match Plan for Employees (herein SIMPLE-IRA).

PURCHASE PAYMENTS
- --------------------------------------------------------------------------------

ARE IRA PURCHASE PAYMENTS LIMITED?

Yes. Where the annuitant has an IRA, purchase payments may be limited. An
annual cash purchase payment may not exceed the lesser of: (a) the amount of
compensation includible in gross income in any taxable year; or (b) $2,000, or
such other maximum amount as may be allowed by law.

Where an annuitant establishes an IRA along with a nonemployed spouse, purchase
payments may be limited. They are also limited if the annuitant is the
nonemployed spouse. The cash purchase payments for both annuities and accounts
must then be considered together. They may not exceed the lesser of: (a) the
amount of compensation includible in the working spouse's compensation
includible in gross income in any taxable year; or (b) $4,000, or such other
maximum amount as may be allowed by law. In no event may an annuitant's annual
purchase payment exceed the cash amount of: (a) $2,000; or (b) the maximum
annual contribution allowed for an IRA.

ARE SIMPLE-IRA PURCHASE PAYMENTS LIMITED?

Yes. Where the annuitant's employer establishes a SIMPLE-IRA, purchase payments
may be limited. The annual cash purchase payment must be the lesser of: (a) an
amount equal to 100% of the compensation included in gross income in any taxable
year; or (b) $6,000, or such other maximum amount as may be allowed by law.
Mandated employer purchase payments, in addition to your purchase payments, can
range from 0% to 3% or your annual compensation.

DO PURCHASE PAYMENT LIMITATIONS APPLY TO A ROLLOVER?

No. Limits on purchase payments to the contract do not apply with a rollover
contribution. A rollover contribution is one within the meaning of sections
408(d)(3), 402(c), 403(a)(4) or 403(b)(8) of the Internal Revenue Code (herein
"Code") or a purchase payment made in accordance with the terms of a Simplified
Employee Pension (SEP) as described in Section 408(k) of the Code. In that
case, a cash purchase payment may be the amount received by or on behalf of an
annuitant as all or any portion of a distribution which is a rollover
contribution. The distribution may be one from an individual retirement
account, annuity or bond plan; or an eligible rollover distribution from a tax-
exempt employee's trust, a qualified employee annuity plan or such other plan as
may be allowed by law. A rollover contribution must be received by us not later
than 60 days after the annuitant receives it. A direct rollover payment may be
made to us from the plan making the distribution. A purchase payment may not
include contributions to a tax-qualified plan made by the annuitant as an
employee.

MAY THE ANNUITANT ALWAYS MAKE PURCHASE PAYMENTS?

No. We will not accept purchase payments under this contract as of a date the
annuitant is not eligible for an IRA, or SIMPLE-IRA.

In addition, no additional cash contributions or rollover contributions may be
accepted under the contract if: (a) the owner dies before the distribution of
the entire interest in the contract; and (b) the beneficiary is not the
surviving spouse.

Purchase payments which exceed those allowed for an IRA may be returned. We
will send them to the annuitant. Return is without regard to the provisions of
this contract dealing with withdrawals. Excess purchase payments to a SEP or
SIMPLE-IRA may similarly be returned. We will send them to the payer.

DISTRIBUTION PROVISIONS
- --------------------------------------------------------------------------------

ARE THERE RULES FOR THE TIMING OF DISTRIBUTIONS?

Yes. The distribution of an annuitant's value shall be made in accordance with
the minimum distribution requirements of section 408(b)(3) of the Code and the
regulations thereunder, including the incidental death benefit provisions of
section 1.401(a)(9)-2 of the proposed regulations. All of these rules are
incorporated herein by reference.

The annuitant's accumulation value, or withdrawal value if applicable, must be
distributed or begin to be distributed, by the annuitant's required beginning
date. This is the April 1 following the calendar year in which the annuitant
reaches age 70 1/2. For each succeeding year, a distribution must be made on or
before December 31.

WHAT FORMS OF DISTRIBUTION ARE AVAILABLE?

By the required beginning date the annuitant may elect to have the accumulation
value, or withdrawal value if

83-9058 Rev. 3-1997 The Minnesota Mutual Life Insurance Company

<PAGE>

applicable, distributed. It must be in one of the following forms:

(a) a single sum payment;

(b) equal or substantially equal payments over the life of the annuitant;

(d) equal or substantially equal payments over a specified period that may
not be longer than the annuitant's life expectancy;

(e) equal or substantially equal payments over a specified period that may
not be longer than the joint life and last survivor expectancy of the
annuitant and spouse.

Options (b), (c), (d), and (e) can be satisfied by an annuity form elected by
the annuitant or by systematic withdrawal.

Payments must be made in periodic payments at intervals of no longer than one
year. In addition, payments must be either nonincreasing or they may increase
only as provided in Q&A F-3 of section 1.401(a)(9)-1 of the Proposed Income Tax
Regulations or such final regulations as adopted.

ARE THERE SPECIAL RULES IF THE ANNUITANT DIES BEFORE THE ENTIRE VALUE IN THE
CONTRACT IS DISTRIBUTED?

Yes. If the annuitant dies on or after the date distributions have begun, the
entire remaining value must be distributed at least as rapidly as under the
method of distribution being used as of the date of the annuitant's death. If
the annuitant dies before distributions have begun, the entire remaining value
must be distributed as elected by the annuitant or, if the annuitant has not so
elected, as elected by the beneficiary or beneficiaries, as follows:

(a) by December 31st of the year containing the fifth anniversary of the
annuitant's death; or

(b) in equal or substantially equal payments over the life or life
expectancy of the designated beneficiary or beneficiaries starting by
December 31st of the year following the year of the annuitant's death.
If, however, the beneficiary is the annuitant's surviving spouse, then
this distribution is not required to begin until later. It must begin
by December 31st of the year in which the annuitant would have turned
70 1/2.

ARE OTHER OPTIONS AVAILABLE TO A SPOUSE BENEFICIARY?

Yes. In addition to the options discussed above, the spouse beneficiary has
other options. He or she may elect to treat the annuitant's IRA as his or her
own. This is done by either: (a) not taking a distribution within the required
time period; or (b) making eligible IRA contributions to it.

If the beneficiary chooses one of these options then he or she is the contract
owner. He or she will assume all rights and privileges under the contract.
This right is available only to the spouse of the annuitant.

HOW ARE LIFE EXPECTANCIES FOR CALCULATING REQUIRED DISTRIBUTIONS DETERMINED?

Life expectancy is computed by use of the expected return multiples in Table V
and VI of section 1.72-9 of the Income Tax Regulations.

Unless otherwise elected by the annuitant prior to the commencement of
distributions or, if applicable, by the surviving spouse where the annuitant
dies before distributions have commenced, life expectancies of an annuitant or
spouse beneficiary shall be recalculated annually for purposes of required
distributions. An election not to recalculate shall be irrevocable and shall
apply to all subsequent years. The life expectancy of a nonspouse beneficiary
shall not be recalculated. Instead, life expectancy will be calculated using
the attained age of such beneficiary during the calendar year in which the
annuitant attains age 70 1/2, and payments for subsequent years shall be
calculated based on such life expectancy reduced by one for each calendar year
which has elapsed since the calendar year life expectancy was first calculated.
Instead, life expectancy will be calculated using the attained age of such
beneficiary during the calendar year in which the annuitant attains age 70 1/2,
and payments for subsequent years shall be calculated based on such life
expectancy reduced by one for each calendar year which has elapsed since the
calendar year life expectancy was first calculated.

MAY THE ANNUITANT SATISFY MINIMUM DISTRIBUTION REQUIREMENTS BY RECEIVING A
DISTRIBUTION FROM ANOTHER IRA?

Yes. An annuitant may satisfy the minimum distribution requirements under
sections 408(a)(6) and 408(b)(3) of the Code by receiving a distribution from
one IRA that is equal to the amount required to satisfy the minimum distribution
requirements for two or more IRAs. For this purpose, the owner of two or more
IRAs may use the "alternative method" described in Notice 88-38, to satisfy the
minimum distribution requirements described above.

WITHDRAWAL BENEFITS
- --------------------------------------------------------------------------------

ARE THERE LIMITS ON WITHDRAWALS?

Yes. These limits apply to a partial withdrawal or a surrender of the contract
before the annuitant's age 59 1/2. In that case, we must receive notice of the
intended disposition of the proceeds. This will not apply if the annuitant dies
or is disabled.

MAY TAX PENALTIES APPLY?

Yes. If a withdrawal or surrender occurs before the annuitant is age 59 1/2,
the annuitant may be subject to tax penalties. These penalties are imposed
under the Code. The annuitant may not be subject to tax penalties on amounts
received before age 59 1/2 if: (1) the annuitant becomes disabled as defined by
the Code; (2) the amount received is in excess of the allowed deduction and
returned to the annuitant before the required tax return filing date for that
year, together with any earned

2 Minnesota Mutual

<PAGE>

interest; or (3) if the entire amount in the contract is received and reinvested
in a similar plan entitled to similar tax treatment. Additional exceptions to
tax penalties may be available to the annuitant.

We will not be liable for any tax penalties under this contract. We are not
liable for penalties on amounts received or paid by us under this contract. Any
transaction treated by law as a contract distribution may be treated by us as a
complete contract surrender.

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

IS THE INTEREST OF THE ANNUITANT IN THIS CONTRACT NONFORFEITABLE?

Yes. The entire interest of the annuitant in this contract is nonforfeitable.
The annuitant shall possess the entire benefit provided by this contract. This
contract is established for the exclusive benefit of the annuitant and his or
her beneficiaries.

HOW WILL DIVIDENDS BE APPLIED?

Dividends, if received, must be added to the accumulation value or applied to
increase annuity payments.

HOW WILL A REFUND OF PREMIUMS BE APPLIED?

Any refund of premiums (other than those attributable to excess purchase
payments) will be applied, before the close of the calendar year following the
year of the refund, toward the payment of future premiums or the purchase of
additional benefits.

MAY THIS AGREEMENT BE AMENDED?

Yes. This contract may be amended as required to reflect any change in the
Code, regulations or published revenue rulings. The annuitant will be deemed to
have consented to any such amendment. We will promptly furnish any such
amendment to the annuitant.

This agreement is effective as of the original contract date unless a different
effective date is shown here.

/s/ Dennis E. Prohofsky
Secretary

/s/ Robert L. Senkler
President

83-9058 Rev. 3-1997 Minnesota Mutual 3

<PAGE>

MINNESOTA MUTUAL LIFE ANNUITY PAYMENT ENDORSEMENT

The Minnesota Mutual Life Insurance Company certifies that the Annuitant named
in the Schedule below is entitled to the Annuity Payments described in this
schedule. Payments are to commence on the Annuity Commencement Date. The
effective date of this endorsement shall be the Annuity Commencement Date.

ANNUITY PAYMENTS SCHEDULE

ANNUITANT_______________________________________________________________________

ANNUITANT'S DATE OF BIRTH_______________________________________________________

ANNUITY COMMENCEMENT DATE_______________________________________________________

FORM OF ANNUITY PAYMENT_________________________________________________________

FIXED ANNUITY PAYMENT $_________________________________________________________

NUMBER OF VARIABLE ANNUITY UNITS________________________________________________

INITIAL VARIABLE ANNUITY PAYMENT $______________________________________________

JOINT ANNUITANT_________________________________________________________________

JOINT ANNUITANT'S DATE OF BIRTH_________________________________________________

ANNUITANT'S BENEFICIARY_________________________________________________________

/s/ Robert J. Hasling /s/ Coleman Bloomfield
Secretary Registrar President

83-9060

<PAGE>

MINNESOTA MUTUAL LIFE ENDORSEMENT

We have made the following contract changes. They will take effect on the
Effective Date of your contract, or, if later, on July 1, 1986. These changes
are now part of your contract.

CONTRACT CHARGES
- --------------------------------------------------------------------------------

WHAT CHARGES MAY BE MADE UNDER THIS CONTRACT?
A deferred sales charge may be made. Also, there are certain charges which are
made directly to the separate account.

IS THERE AN ADMINISTRATIVE CHARGE?
No. Beginning July 1, 1986, there will be no deduction under the contract for
administrative charges.

ANNUITY PROVISIONS
- --------------------------------------------------------------------------------

WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS?
On the date annuity payments are to begin, we will apply either the accumulation
value or the surrender value.

The accumulation value will be applied to provide annuity payments, if:
(1) the annuity payment option selected provides for payments expected to
continue for a period of at least five years.

If this condition is not met, the surrender value, not the accumulation value,
will be applied to provide the annuity payment form selected.

/s/ Robert J. Hasling /s/ Coleman Bloomfield
Secretary Registrar President

86-9135

<PAGE>

MINNESOTA MUTUAL LIFE ENDORSEMENT
(MULTI-OPTION)