1
EXHIBIT 4(a)
The Variable Annuity Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
[VALIC LOGO] Houston, Texas 77019
-----------------------------
* An American General Company
In consideration of the application and the Purchase Payment(s) THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, "VALIC", agrees to:
* Allocate the Purchase Payment(s) under this Contract in
accordance with the Contract provisions;
* Apply the Accumulation Value of the Contract on the Annuity
Date, less any applicable charges, to provide a monthly income
to the Annuitant and/or Beneficiary;
* Provide the Contract Owner, the Annuitant and/or the
Beneficiary with the rights and benefits contained in this
Contract.
READ YOUR CONTRACT CAREFULLY
----------------------------
ALPHABETIC GUIDE TO YOUR CONTRACT
Page Page
---- ----
Annuitant . . . . . . . . . . . . 2 Date of Issue . . . . . . . . . . 1
Annuity Options . . . . . . . . . 6 Definitions . . . . . . . . . . . 2
Annuity Tables . . . . . . . . . 8 Incontestability . . . . . . . . 9
Assignment . . . . . . . . . . . 9 Misstatement of Age or Sex . . . 9
Beneficiary . . . . . . . . . . . 10 Surrender . . . . . . . . . . . . 4
This Contract is a legal agreement between the Contract Owner and the Company.
The conditions and provisions on this and the following pages are made a part
of this Contract. All conditions and provisions are subject to applicable state
laws. The Annuitant, Beneficiary and Owner are as stated in the application for
this Contract unless subsequently changed in accordance with the Contract
provisions.
EXECUTED AT THE HOME OFFICE OF VALIC ON THE DATE OF ISSUE.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ S. D. ▇▇▇▇▇▇
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT. VARIABLE PROVISIONS ARE DETAILED ON
PAGE 6.
THIS CONTRACT MAY BE RETURNED WITHIN TEN (10) DAYS TO THE HOME OFFICE OF VALIC
OR TO ANY AUTHORIZED AGENT OF VALIC FOR CANCELLATION AND REFUND OF PREMIUM IF
YOU ARE NOT SATISFIED FOR ANY REASON.
ANNUITANT:
CONTRACT NUMBER: DATE OF ISSUE:
FLEXIBLE PAYMENT
INDIVIDUAL FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
UIT-981 CI0IXST1
2
DEFINITIONS
ACCUMULATION PERIOD -- the period between the date of the first Purchase
Payment and the Annuity Date.
ACCUMULATION UNIT -- an interest of a Contract Owner in a Division of the
Separate Account before Annuity Payments begin. The value of an Accumulation
Unit will vary in accordance with the net investment return of the respective
Divisions of the Separate Account.
ACCUMULATION VALUE -- the Accumulation Value of a Contract on any given date is
equal to the sum of the General Account value and the Separate Account value
under the Contract.
ANNUITANT -- the person named in the application upon whose life Annuity
Payments are based or will be based and to whom Annuity Payments are or will be
made. If the death of the person named in the application occurs prior to the
Annuity Date, the Beneficiary may be treated as the Annuitant.
ANNUITY DATE -- the date on which Annuity Payments begin.
ANNUITY OPTION -- one of several forms in which Annuity Payments can be made.
ANNUITY PAYMENTS -- payments made by VALIC to an Annuitant at regular intervals
during the Annuity Period.
ANNUITY PERIOD -- the period during which Annuity Payments are made.
ANNUITY UNIT -- a measuring unit used in calculating the amount of Annuity
Payments. The value of an Annuity Unit for the Separate Account will change in
accordance with the net investment return of the Divisions selected, adjusted
for the Contract's 3 1/2% Assumed Investment Rate.
ASSUMED INVESTMENT RATE -- the rate used to determine the first monthly Annuity
Payment per thousand dollars of Accumulation Value. VALIC will permit each
Annuitant to select an Assumed Investment Rate permitted by state law or
regulations other than 3 1/2% as follows: 4 1/2%, 5% or 6%. Unless otherwise
selected, the Assumed Investment Rate shall equal 3 1/2% and the information
herein is based on that rate.
BENEFICIARY -- the person to whom benefits, if any, will be paid upon the death
of an Annuitant, including any contingent Beneficiary, i.e., one who stands in
the place of a Beneficiary in the event of the primary Beneficiary's death.
CONTRACT OWNER -- unless otherwise provided in the application the Annuitant
shall be the original owner of this Contract.
CONTRACT YEAR -- the 12 months beginning with the date of issue of a Contract,
or on any anniversary of that date.
DIVISIONS OF THE SEPARATE ACCOUNT -- the individual subaccounts into which the
Net Purchase Payments and accumulated value under a Variable Annuity Contract
may be allocated.
FIXED ANNUITY -- a series of Annuity Payments to the Annuitant made at regular
intervals which remain fixed throughout the Annuity Period and which do not
vary with investment experience.
FUND -- a mutual fund which is the underlying investment medium for Net
Purchase Payments credited to a Division of the Separate Account.
GENERAL ACCOUNT -- the assets of VALIC other than those in the Separate Account
or any other separate account. Reserves for any Fixed Annuity are maintained in
the General Account.
HOME OFFICE -- the home office of VALIC shall mean its main office located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
NET PURCHASE PAYMENT -- gross Purchase Payment less any applicable premium
taxes.
PURCHASE PAYMENT -- an amount paid to VALIC hereunder prior to any premium tax
or other deductions.
SEPARATE ACCOUNT -- the segregated asset account referred to as Separate
Account A which was established by VALIC under the Texas Insurance Code to
receive and invest the Net Purchase Payments made under Variable Annuity
Contracts.
SURRENDER CHARGE -- the contingent deferred sales charge assessed against
partial or total surrenders where Purchase Payments have been made during the
preceding thirty-six Contract months.
SURRENDER VALUE -- the Accumulation Value of a Contract less the Surrender
Charge, if any, which is the amount payable upon surrender of a Contract.
VARIABLE ANNUITY -- a series of Annuity Payments, the amounts of which will
increase or decrease to reflect the net investment experience of the Separate
Account.
VARIABLE ANNUITY CONTRACT -- a Contract providing for the payment of a Variable
Annuity.
Page 3
UIT-981 QI0IXST3
3
II
PURCHASE PAYMENTS AND THE ACCUMULATION PERIOD
SECTION 2.01 PURCHASE PAYMENT(S)
(a) During the Accumulation Period the Contract Owner may make
Purchase Payments from time to time on such dates and in such amounts as may be
determined pursuant to the retirement plan for which the Contract has been
purchased, or if there is no formal plan, then at the Contract Owner's
discretion. A Purchase Payment must be preceded or accompanied by a properly
completed application.
(b) When a Purchase Payment is received in the Home Office of
VALIC, each Net Purchase Payment for a Division of the Separate Account is
applied separately (on the basis of the allocation specified) to provide
Accumulation Units. The number of Accumulation Units provided in each Division
of the Separate Account is determined by dividing the Net Purchase Payment for
that Division by the dollar value of one Accumulation Unit for that Division
for the valuation period in which the Purchase Payment is received at VALIC's
Home Office. The number of Accumulation Units so determined will not be
affected by any subsequent change in the dollar value of Accumulation Units.
The value of the Accumulation Unit in each Division of the Separate Account may
vary from valuation period to valuation period.
SECTION 2.02 ALLOCATION OF PURCHASE PAYMENTS
Purchase Payments shall be allocated by the Contract Owner to the
General Account or the appropriate Separate Account Division(s), provided that
allocation of Purchase Payments must comply with the following conditions:
(a) initial and subsequent Purchase Payments when this Contract is
used on a flexible payment basis must be at least $30 per
Division of the Separate Account or the General Account;
(b) a single Purchase Payment for purchase of this Contract (i.e.,
if no subsequent Purchase Payments will be made past the
first) must be at least $1,000;
(c) this Contract may not participate in more than three Divisions
of the Separate Account, or in two Divisions of the Separate
Account and the General Account, at any one time.
SECTION 2.03 GENERAL ACCOUNT VALUE
(a) The General Account value of this Contract shall include:
(i) Purchase Payments allocated under this Contract to
the General Account;
(ii) amounts transferred to the General Account from the
Separate Account; and
(iii) interest earned and allocated on (i) and (ii) above.
(b) The General Account value of this Contract shall be reduced by
any transfers and withdrawals from or charges to the General Account.
(c) Prior to the Annuity Date the interest credited shall be at a
rate determined by VALIC. The interest rate shall be set in advance of the
period to which it relates and shall not be less than an effective rate of 4%
per year.
SECTION 2.04 SEPARATE ACCOUNT VALUE
(a) The Separate Account Contract value for any valuation period
is equal to the sum of the value of each Division of the Separate Account in
which this Contract is invested.
(b) The value of a Division of the Separate Account is determined
by multiplying the Accumulation Unit value for that Division on that date by
the number of Accumulation Units attributable to that Division.
(c) the current value of a variable Accumulation Unit applicable
to a Division of the Separate Account is determined by multiplying the value of
such unit for the immediately preceding valuation period by the applicable Net
Investment Factor for the current valuation period for such Division.
Net Investment Rate and Net Investment Factor -- The Net Investment
Rate for any valuation period for a Division of the Separate Account is equal
to the Gross Investment Rate for that Division of the Separate Account for the
valuation period less the daily charge computed for the period at the rate of
1% annually and less charges for any applicable capital gains or other taxes.
The Gross Investment Rate shall be computed on each day during which the New
York Stock Exchange is open for trading, not less frequently than once daily as
of the time of close of trading on such Exchange, and shall cover the valuation
period since the next prior computation. The Gross Investment Rate is equal to
(i) the investment income and capital gains and losses, both realized and
unrealized, on the assets of that Division of the Separate Account during said
period, divided by (ii) the amount of such assets at the beginning of said
period. The Gross Investment Rate may be either positive or negative. The Net
Investment Factor for a Division of the Separate Account is the sum of 1.000000
plus the Net Investment Rate for that Division.
Page 4
UIT-981 QI0XST4
4
SECTION 2.05 MINIMUM CONTRACT VALUE
If the total Accumulation Value for this Contract falls below $300
during the Accumulation Period, this Contract may be automatically surrendered
and the Surrender Value paid to the Contract Owner.
III
CHARGES UNDER THE CONTRACT
SECTION 3.01 CHARGE FOR PREMIUM TAXES
A deduction is made from each Purchase Payment to cover premium taxes,
when applicable. Any such deduction will be made either from Purchase Payments
when received, or from the amount applied to effect an annuity at the time
Annuity Payments commence, depending on applicable state law. If no amount for
premium tax was deducted, but tax is subsequently determined to be due, VALIC
reserves the right to reduce the number of Accumulation Units or Annuity Units
under a Contract by the amount of the tax due at the time such determination is
made. If an amount for any premium taxes was deducted but subsequently
determined not to be due, VALIC will apply the amount deducted to increase the
number of Accumulation Units or Annuity Units under the Contract at the time
such determination is made.
SECTION 3.02 CHARGE FOR PARTIAL AND TOTAL SURRENDERS
A total or partial surrender may be subject to a Surrender Charge
calculated as a percentage of the dollar amount of previous Purchase Payments
under the Contract which are withdrawn. It is always assumed that the most
recent Purchase Payments are withdrawn first, and no Surrender Charge is ever
imposed on any amount not actually withdrawn. Amounts transferred to this
Contract from other variable annuity contracts issued by VALIC will not be
considered Purchase Payments for purposes of calculating the Surrender Charge.
The Surrender Charge is equal to 5% of any Purchase Payment received
during the most recent 36 months prior to the receipt of the surrender request
by VALIC at its Home Office.
The first partial surrender per Contract Year of 10% or less of
Accumulation Value will not be subject to a Surrender Charge. However, if the
first partial surrender exceeds 10% of Accumulation Value, the Surrender Charge
will be applied to the amount in excess of 10%. The second or any subsequent
surrenders during a Contract Year will be subject to a Surrender Charge.
Once a Surrender Charge has been imposed on any Purchase Payment or
portion thereof, that Purchase Payment or portion will not thereafter be
considered as a Purchase Payment for purposes of calculating the Surrender
Charge.
The Surrender Charge is not imposed upon annuitization of the Contract
(except in limited cases where the Fifth Option is selected and the right to
surrender after annuitization is exercised) at the Annuity Date or upon any
payments received by an Annuitant or Beneficiary in lieu of Annuity Payments
during the Annuity Period. The Surrender Charge is not imposed on the payment
of benefits to a Beneficiary when an Annuitant dies during the Accumulation
Period.
SECTION 3.03 CHARGE FOR ANNUAL CONTRACT MAINTENANCE
An annual Contract maintenance charge of $30 will be assessed by VALIC
on the last day of the calendar quarter following receipt of the first Purchase
Payment and annually on that date thereafter during the Accumulation Period.
The Contract maintenance charge is not guaranteed and may, with prior
regulatory approval if required, be changed for future years.
VALIC will reduce the Accumulation Value of the Contract to cover this
charge.
SECTION 3.04 CHARGE TO THE SEPARATE ACCOUNT
To cover administrative expenses not covered by the Contract
maintenance charge discussed above, and to cover mortality risks under the
Contract, VALIC will assess the Separate Account a daily charge at an amount
of .00274%, which equals an annualized rate of 1% of the average daily net asset
value of the Separate Account attributable to the Contract. Of this charge,
VALIC estimates .07% is for administrative expense and .93% is for mortality
risk.
Page 5
UIT-981 Q101XST5
5
IV
TRANSFERS, SURRENDERS AND DISCONTINUANCE OF PURCHASE PAYMENTS
SECTION 4.01 TRANSFERS
a. During the Accumulation Period the Contract Owner may transfer
amounts held under this Contract among Divisions of the Separate Account or
from the Separate Account to the General Account at intervals of not less than
30 days. A transfer to the General Account during the Accumulation Period will
result in no further transfers from the General Account being allowed for 90
days.
b. During the Annuity Period the Annuitant may transfer amounts
held under this Contract among Divisions of the Separate Account or from the
Separate Account to the General Account at intervals of not less than 365 days.
No transfer from the General Account to the Separate Account is permitted
during the Annuity Period.
c. Transfers will be made only upon receipt by VALIC at its Home
Office of written instructions on a form furnished by VALIC.
d. Transfers shall be made at the Accumulation Unit value next
determined after receipt by VALIC of a valid, complete transfer request.
e. Transfers may not be made if the result, after the requested
transfer, is that the values under this Contract will be allocated to more than
three Divisions of the Separate Account, or two Divisions of the Separate
Account and the General Account.
SECTION 4.02 SURRENDERS
Partial or total surrenders of the Surrender Value of this Contract
may be made at any time during the Accumulation Period at the option of the
Contract Owner. The Accumulation Value for purposes of determining the
Surrender Value of the Contract is that next computed after the request for
surrender is received at VALIC's Home Office. This Contract must be returned to
and be received by VALIC before a total surrender will be effected.
SECTION 4.03 DISCONTINUANCE OF CONTRIBUTIONS
When this Contract is issued on a flexible payment basis, Purchase
Payments may be suspended at any time without penalty. In the event that
additional payments are not made, the Accumulation Value may be surrendered. If
the Accumulation Value is not surrendered, the number of Accumulation Units
outstanding under the Contract will remain constant, and the value of the
Accumulation Units will continue to vary. The Contract Owner's interest in the
General Account will continue to earn interest. However, the Accumulation Value
will continue to be subject to Contract charges during the period of
suspension. The Contract Owner may resume making Purchase Payments at any time
so long as all Accumulation Units have not been surrendered.
V
ANNUITY PAYMENTS AND THE ANNUITY PERIOD
SECTION 5.01 ANNUITY DATE
The Annuity Date shall be selected by the Contract Owner. Such date
may be the first day of any calendar month following the Annuitant's 50th
birthday but may not be later than the Annuitant's 75th birthday. In the
absence of an election by the Contract Owner, the Annuity Date shall be the
first day of the month during which the Annuitant attains age 75.
SECTION 5.02 ELECTION TO COMMENCE ANNUITY PAYMENTS
An election to commence Annuity Payments must be made in writing on a
form provided by VALIC. Said payments will commence on the first of the month
following 30 days after the election is received at VALIC's Home Office.
SECTION 5.03 ANNUITY UNIT VALUE
The value of the General Account annuity unit is fixed at $1.00. The
current value of a variable annuity unit applicable to this Contract is
determined by multiplying the value of such unit for the immediately preceding
valuation period by the product of (a) 0.999906 per day of the current
valuation period (if a 3 1/2% Assumed Investment Rate has been chosen) and (b)
the applicable Net Investment Factor for such valuation period for the Division
of the Separate Account in which the reserve for such annuity is invested. If
other than a 3 1/2% Rate has been chosen the 0.999906 factor in the previous
sentence will be adjusted to reflect such rate.
Page 6
UIT-981 Q101XST6
6
SECTION 5.04 ANNUITY OPTIONS
The Annuitant may elect to have payments made under any of the options
listed below. Payments may be received on either a fixed or a variable basis,
or a combination of fixed and variable bases.
FIRST OPTION -- LIFE ANNUITY -- An annuity payable monthly during the
lifetime of an Annuitant, ceasing with the last monthly payment due
prior to the death of the Annuitant.
SECOND OPTION -- LIFE ANNUITY WITH 60, 120, OR 180 MONTHLY PAYMENTS
GUARANTEED -- An annuity payable monthly during the lifetime of an
Annuitant, with a guarantee that if, at the death of the Annuitant,
payments have been made for less than the number of months selected,
annuity payments will be continued thereafter to a Beneficiary
designated by the Annuitant during the remainder of the certain
period.
THIRD OPTION -- UNIT REFUND LIFE ANNUITY -- An annuity payable monthly
during the lifetime of the Annuitant, ceasing with the last monthly
payment due prior to the death of the Annuitant. At the death of the
Annuitant, the Beneficiary may receive an additional payment. The
additional payment, if any, is equal to the then current value of any
Annuity Units credited to the Contract at the Annuity Date which have
not theretofore been paid out in the form of Annuity Payments. For the
purposes of this Option, the number of Annuity Units credited to the
Contract at the Annuity Date will be the total value applied to this
Option divided by the Annuity Unit value at the date used to calculate
the First Annuity Payment.
FOURTH OPTION -- JOINT AND LAST SURVIVOR ANNUITY -- An annuity payable
during the joint lifetime of the Annuitant and a designated second
person and continuing during the lifetime of the survivor.
FIFTH OPTION -- PAYMENTS FOR A DESIGNATED PERIOD -- Payments made
monthly for a selected number of years between three and fifteen. At
any time during such period the Annuitant may elect to receive in one
sum the present value of the remaining payments, calculated on the
basis of an Assumed Investment Rate equal to that rate used to
calculate the Annuitant's first Annuity Payment. If the election to
receive the present value of the Contract is made the Surrender Charge
will be applied to Purchase Payments received within 36 months of the
time of the election.
SECTION 5.05 AUTOMATIC ANNUITY OPTION
If the Annuitant does not specify one of the options prior to the
Annuity Date, Annuity Payments will be made in accordance with the Second
Option, with payments being guaranteed for a ten year period, unless said
Option is contrary to provisions in an applicable retirement plan.
SECTION 5.06 MINIMUM ANNUITY PAYMENT
No election of any option may be made unless an Annuity Payment of at
least $25 would be provided whether a Fixed or Variable Annuity is elected, and
$25 on each basis when a combination of Variable and Fixed Annuities is
elected. If, because of adverse investment performance, an Annuity Payment of
less than $25 would be provided, VALIC, at its election, may make a lump sum
payment of the then-current value of the Contract to the Annuitant.
SECTION 5.07 BETTERMENT OF RATES
If it would produce greater benefits for Fixed Annuities, the amount
of the Annuitant's monthly payment will be the monthly payment produced by a
then currently issued immediate annuity. The immediate annuity shall be of the
same form. It shall have a single stipulated payment equal to the Accumulation
Value being applied under this Contract. Any commuted values allowed under the
settlement provisions will be determined on the basis of the interest rate used
to determine the net single premium for such annuities.
SECTION 5.08 ALLOCATION OF VARIABLE AND FIXED ANNUITIES
In the absence of any notification to the contrary, when a retirement
annuity is effected, General Account accumulations will be used to provide a
Fixed Annuity and Separate Account Accumulation Units will provide a Variable
Annuity, (Annuity Units in the Separate Account) based on the Division(s) of
the Separate Account in which the Contract was invested immediately prior
thereto.
(a) Variable Annuity -- A Variable Annuity is an annuity with
payments varying in accordance with the net investment return
of the Divisions of the Separate Account as selected. After
the first monthly payment has been determined, a number of
Separate Account Annuity Units is determined by dividing that
first monthly payment by the Separate Account Annuity Unit
value as of the tenth day preceding the date Annuity Payments
commence.
Page 7
UIT-981 Q101XST7
7
Once variable payments have begun, the number of Annuity Units per
payment remains fixed. However, subsequent transfers among the
Divisions of the Separate Account or to the General Account after
Annuity Payments commence will result in a recalculation of the number
of Annuity Units.
The dollar amount of the second and subsequent variable Annuity
Payments is not predetermined and may change from month to month. The
actual amount of each variable Annuity Payment after the first is
determined by multiplying the number of Separate Account Annuity Units
by the Separate Account Annuity Unit value determined ten days prior to
the date the payment is due.
VALIC guarantees that the dollar amount of each Annuity Payment after
the first shall not be adversely affected by actual expenses or
variations in mortality experience from the expense and mortality
assumptions on which the first payment is based.
(b) Fixed Annuity -- A Fixed Annuity is an annuity with payments which
remain fixed as to dollar amount throughout the payment period.
Payments after the first payment will never be less than the first
monthly payment and may be increased at the discretion of VALIC.
SECTION 5.09 TERMINATION OF ANNUITY OPTION
(a) Where Annuity Payments are being received under the Fifth Option, the
Annuitant can elect at any time to terminate such Option, and receive
the current value of all remaining Annuity Payments owed under the
Contract, discounted to present value (at the Assumed Investment Rate
previously selected) based on the Annuity Unit value next determined
after the request for such payment is received at VALIC's Home Office.
(Under the federal tax laws, the election of this Option may be
treated in the same manner as a surrender of the Contract. If the
Contract is surrendered, usually the full amount received would be
includible in income for that year, and, to the extent so included,
would be taxed at ordinary rates, subject to possible benefits of the
income averaging provisions of the Code.) In addition, if the Option
is terminated the Surrender Charge will be applied to Purchase
Payments received within 36 months of termination.
(b) If an Annuitant dies during the Annuity Period, a Beneficiary may be
entitled to receive payment under the Contract. If so, the Beneficiary
may, within 60 days after amounts would be payable elect one of three
alternatives described in section 7.08(b) hereof.
(c) Except as described in (a) and (b) above an Annuity Option may not be
terminated once Annuity Payments have commenced.
SECTION 5.10 ANNUITY TABLES
The following tables show the amount required to purchase a first
monthly payment of $1.00. The Tables are based on the Progressive Annuity Table
with interest at the rate of 3 1/2% per year and assume births in the year
1900. The amount applied to effect an annuity will be the Accumulation Value on
the tenth day immediately preceding the date the first payment is due. The
amount of each payment will depend upon the Annuitant's sex and the Annuitant's
adjusted age at the time the first payment is due. Adjusted age shall be
determined in accordance with the following:
Calendar Year of Birth Before 1916 1916-1935 1936-1955 After 1955
Adjusted Age is Actual Age minus 0 minus 1 minus 2 minus 3
Actual Age, as used above, shall mean the age at the nearest birthday at the
time the first payment is due.
Page 8
UIT-981 Q101XST8
8
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
Options 1, 2, AND 3 -- Single Life Annuities
Adjusted Age Monthly Payments Guaranteed
------------ ----------------------------------- -----------
Male Female None 60 120 180 Unit Refund
50 54 $210.85 $211.36 $213.06 $216.23 $220.90
51 55 206.73 207.30 209.18 212.68 217.38
52 56 202.54 203.17 205.26 209.12 213.91
53 57 198.27 198.97 201.28 205.55 210.30
54 58 193.93 194.70 197.26 201.96 206.62
55 59 189.51 190.37 193.20 198.39 202.99
56 60 185.03 185.98 189.11 194.82 199.23
57 61 180.48 181.54 185.00 191.28 195.40
58 82 175.87 177.04 180.87 187.77 191.64
59 63 171.21 172.50 176.73 184.31 187.75
60 64 166.49 167.93 172.59 180.91 183.78
61 65 161.73 163.32 168.47 177.58 179.90
62 66 156.93 158.69 164.37 174.34 175.90
63 67 152.09 154.05 160.30 171.19 171.81
64 68 147.23 149.40 156.28 168.16 167.86
65 69 142.35 144.75 152.31 165.25 163.76
66 70 137.46 140.11 148.42 162.48 159.58
67 71 132.57 135.50 144.62 159.86 155.59
68 72 127.67 130.91 140.92 157.40 151.42
69 73 122.79 126.37 137.32 155.12 147.16
70 74 117.93 121.89 133.86 153.01 143.19
71 75 113.11 117.47 130.54 151.09 138.97
72 76 108.32 113.13 127.37 149.36 134.66
73 77 103.57 108.88 124.37 147.82 130.74
74 78 98.89 104.73 121.55 146.46 126.52
75 79 94.27 100.69 118.92 145.29 122.18
Option 4 - Joint and Last Survivor Annuity
Adjusted Age of
Secondary Annuitant Adjusted Age of Annuitant
-----------------------------------------------------------
M-51 M-56 M-58 M-61 M-63 M-66 M-71
Male Female F-55 F-60 F-62 F-65 F-67 F-70 F-75
-------------------------------------------------------------------------------
50 54 $237.79 $229.86 $227.15 $223.59 $221.57 $218.92 $215.73
55 59 229.05 218.34 214.55 209.38 206.35 202.42 197.39
57 61 225.97 214.14 209.85 204.01 200.50 195.93 190.01
60 64 221.91 208.43 203.38 196.39 192.18 186.50 179.02
62 66 219.55 204.99 199.50 191.72 186.96 180.56 171.88
65 69 216.52 200.49 194.31 185.42 179.85 172.21 161.64
70 74 212.71 194.65 187.42 176.84 170.06 160.43 146.43
Option 5 - Payment for a Designated Period
Years of Payment Years of Payment
---------------- ----------------
3 $34.26 10 $101.73
4 44.90 11 110.01
5 55.19 12 118.20
6 65.15 13 125.94
7 74.74 14 133.51
8 84.03 15 140.85
9 93.02
FREQUENCY OF PAYMENTS. Annuity Payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, VALIC reserves
the right to make less frequent payments. If at any time the annual rate of
payment to any payee is less than $100, VALIC may make a lump sum payment of
the Accumulation Value to the payee.
Page 9
UIT-981 Q101XST9
9
IV
PROVISIONS FOR RETIREMENT PLAN CONTRACTS
SECTION 6.01 SPECIAL PROVISIONS APPLICABLE
The respective provisions of this Article VI apply over contrary
Contract provisions if the application for this Contract indicates that it will
be issued pursuant to one of the following tax deferred retirement programs.
SECTION 6.02 QUALIFIED RETIREMENT PLANS (INCLUDING H.R. 10 PLANS)
(a) The Annuitant of the Contract shall always be the employee for
whose benefit the Contract has been purchased.
(b) Nothing in this Contract shall prevent the transfer of the
Contract from the trustee of a plan to an individual as an
alternative in whole or in part for a cash lump sum
distribution from the plan.
(c) If the Annuitant does not specify one of the Annuity Options
prior to the Annuity Date and is at least age 55 as of the
Annuity Date and has been married for at least a one year
period prior to that date Annuity Payments will be made in
accordance with the Fourth Option.
(d) A person other than the Annuitant's spouse may not be the
designated second person under the Fourth Option unless, as of
the annuity commencement date the actuarially determined
present value of the payments to be made to the Annuitant is
more than 50% of the actuarially determined present value of
the aggregate payments to be made to the Annuitant and the
survivor or unless it is agreed that payments to the
designated second person will not extend beyond the life of
the Annuitant's spouse.
SECTION 6.03 INDIVIDUAL RETIREMENT ACCOUNT
The Owner of this Contract is the Annuitant. The maximum Purchase
Payments per year will be as provided by federal income tax law. The Annuity
Date shall be no later than the end of the calendar year in which the Annuitant
attains age 70 1/2.
SECTION 6.04 NON-QUALIFIED AND UNFUNDED DEFERRED COMPENSATION PLANS
No Annuitant shall have any rights under this Contract prior to the
Annuity Date.
VII
GENERAL PROVISIONS
SECTION 7.01 THE CONTRACT
This Contract and the application therefore shall constitute the
entire Contract between the parties. All statements made by or on behalf of
the Annuitant shall be deemed representations. Such statements shall not be
deemed warranties. Only the President or a Vice President of VALIC has the
authority to change this Contract. Any such changes shall be effective only if
in writing.
SECTION 7.02 INCONTESTABILITY
This Contract shall be incontestable after two years from the Date of
Issue.
SECTION 7.03 MISSTATEMENT OF AGE OR SEX
If the Annuitant's age or sex has been misstated, or that of any
Beneficiary under a settlement option which conditions payment upon the
Beneficiary's survival, any amount payable by VALIC shall be such as would have
been provided on the basis of the correct information. If a correction of age
or sex is made while payments are being made hereunder, the amount of any
underpayment by VALIC shall be paid in full with the next payment due the
payee. The amount of any overpayment by VALIC shall be deducted from amounts
otherwise payable thereafter to the payee.
If any Annuity Payment(s) is(are) conditioned upon a payee's survival,
VALIC will require proof of the payee's age. No payments shall be due until due
proof is received by VALIC at its Home Office.
SECTION 7.04 ASSIGNMENT
In no event can this Contract or the rights hereunder be sold,
assigned, discounted or pledged as collateral for a loan or as security for the
performance of an obligation or otherwise transferred to any person other than
VALIC.
SECTION 7.05 NON-PARTICIPATING
This Contract is non-participating and does not share in the profits
or surplus of VALIC.
Page 10
UIT-981 Q101XSTA
10
SECTION 7.06 CHANGE OF CONTRACT BY MUTUAL AGREEMENT
A. Notwithstanding any of the terms of this Contract, the
Contract Owner and VALIC, by an agreement in writing on any date agreed upon
may change, from time to time, any or all terms of this Contract if it is
deemed advisable to do so in order to conform the Contract to requirements of
applicable tax laws or rulings.
B. Consent of the Beneficiary shall not be required for any
change in this Contract, except where an irrevocable Beneficiary has been
designated.
SECTION 7.07 BENEFICIARY
The Annuitant may change any Beneficiary designation during the
Annuitant's life. An irrevocably designated Beneficiary can be changed only
with that Beneficiary's written consent. Any new designation must be filed in
writing with VALIC at its Home Office. Upon receipt, the notice shall take
effect as of its signature date. It shall be subject to any action taken by
VALIC prior to receipt.
Unless otherwise provided, proceeds will be distributed in accordance
with the following provisions. Two or more Beneficiaries living at the
Annuitant's death shall share the proceeds equally. If any of two or more
Beneficiaries die before the Annuitant, all proceeds shall be payable to any
surviving Beneficiary(ies). If no named Beneficiary is living at the
Annuitant's death, the proceeds shall be payable to the Annuitant's estate. If
the Beneficiary dies at the same time as the Annuitant, rights to the proceeds
shall be determined as though he or she died before the Annuitant. The
Beneficiary's death shall be deemed at the same time as the Annuitant's if it
occurs within 15 days of the Annuitant's death. Proof of survival for that
period may be required by VALIC from any person entitled to payment. If the
Beneficiary dies while receiving payments under the Second or Fifth Options the
value of remaining payments, if any, shall be paid to the estate of said
Beneficiary.
SECTION 7.08 DEATH PAYMENT PROVISIONS
(a) Death of the Annuitant Prior to the Annuity Date
If an Annuitant under a Contract dies during the Accumulation Period,
there will be an amount payable to the Beneficiary equal to the
greater of (a) the Accumulation Value of the Contract on the date
VALIC receives a certified copy of the death certificate or (b) 100%
of Purchase Payments reduced by the amount deducted in connection with
any partial surrenders.
The Beneficiary may elect within 60 days after amounts would be
payable to receive the death payment as a lump sum settlement or in
the form of any of the Annuity Options provided in the Contract. The
Beneficiary will thereafter be entitled to exercise all of the
investment options and other rights which a Contract Owner would have
during the Annuity Period, subject to the same terms and conditions.
(b) Death of Annuitant During Annuity Period
If an Annuitant dies during the Annuity Period, a Beneficiary may be
entitled to receive payment under the Contract. If so, the Beneficiary
may, within 60 days after amounts would be payable, elect one of the
following three alternatives. These alternatives are not available if
the Annuitant had been receiving payments under the Fourth Option.
(1) elect to receive in a lump sum the present value, discounted
at the Assumed Investment Rate, of any remaining Annuity
Payments owed under the Contract based on the then current
Annuity Unit value;
(2) elect to continue receiving Annuity Payments under the terms
of the Contract, in which case the Beneficiary would be
entitled at any time thereafter to receive the present value
of remaining Annuity Payments, discounted at the Assumed
Investment Rate, based on the Annuity Unit value next
determined after request for such payment is received at
VALIC's Home Office; or
(3) elect to have the value of any Annuity Payments owed on the
Contract, based on the then current Annuity Unit value,
applied to any of the five Annuity Options, either on a fixed
or variable basis or a combination thereof. If the Beneficiary
elects either to continue receiving Annuity Payments under the
Contract, or to receive the value of such payments under one
of the five Annuity Options, the Beneficiary is entitled to
exercise all the investment options and other rights under the
Contract.
SECTION 7.09 SUSPENSION OF PAYMENTS
VALIC reserves the right to suspend or postpone payments hereunder for
any period when: (1) the New York Stock Exchange is closed (other than
customary weekend and holiday closings); (2) when trading on the Exchange is
restricted; (3) when an emergency exists as a result of which disposal of
securities held in the Separate Account is not reasonably practicable or it is
not reasonably practicable to determine the value of the Separate Account's net
assets; or (4) during
Page 11
UIT-981 Q101XSTB
11
any other period when the Securities and Exchange Commission, by order, so
permits for the protection of security holders; provided that applicable rules
and regulations of the Securities and Exchange Commission shall govern as to
whether the conditions described in (2) and (3) exist.
SECTION 7.10 REPORTS TO CONTRACT OWNERS
If this Contract participates in the investment experience of the
Separate Account, VALIC will mail to the Contract Owner not less than
semi-annually each Contract Year after the first, during the Accumulation
Period, a statement reporting as of a date not more than 2 months previous to
the date of mailing: (a) the number of Accumulation Units credited to this
Contract in a Separate Account Division and the dollar value of an Accumulation
Unit; or (b) the Separate Account Contract value. VALIC will also mail to the
Contract Owner during the Accumulation Period, and to the payee(s) during the
Annuity Period, if this Contract participates during the Annuity Period in the
investment experience of the Separate Account, at least once in each Contract
Year after the first, a statement of the investments held in the Separate
Account.
SECTION 7.11 VOTING RIGHTS
VALIC will vote Fund shares held in a Division of the Separate Account
which correspond to this Contract's interest in such Division of the Separate
Account in accordance with instructions received from the individual having the
voting rights under this Contract. If this Contract participates in the
investment experience of the Separate Account, the Contract Owner will have the
voting rights under this Contract before: (a) total withdrawal; (b) the Annuity
Date; or (c) the death of the Annuitant, whichever first occurs. If after the
Annuity Date, this Contract participates in the investment experience of the
Separate Account, the payee(s) shall have the voting rights.
SECTION 7.12 SUBSTITUTION OF FUND SHARES
If shares of a Fund should not be available for purchase for
allocation to a particular Separate Account Division, or if, in the judgment of
VALIC, further investment in such shares is no longer appropriate in view of
the purposes of the Separate Account, shares of another registered, open-end
investment company may be substituted for Fund shares held in the Separate
Account or to be purchased by future Purchase Payments or transfers under this
Contract. If deemed by VALIC to be in the best interest of persons having
voting rights under Contracts having interest in the Separate Account, the
Separate Account may be operated as a management company under the Investment
Company Act or it may be deregistered under such Act in the event such
registration is no longer required. In the event any substitution or change
occurs, VALIC will notify the Contract Owner within five days and will issue an
endorsement to the Contract reflecting such changes.
Page 12
UIT-981 Q101XSTC
12
The Variable Annuity Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
[VALIC LOGO] Houston, Texas 77019
-----------------------------
* An American General Company
INDIVIDUAL FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
UIT-981 Q101XSTD