EXHIBIT 4(a)
This Contract has been issued by The Variable Annuity Life Insurance Company
(VALIC) in consideration of the Application of the Contract Owner.
In return for Purchase Payment(s), VALIC will pay annuity and other benefits as
provided in this Contract.
PLEASE READ YOUR CONTRACT CAREFULLY
See Index on Page 1
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ Xxxxxxx Xxxxx /s/ Xxxx X. Xxxx
(Secretary) (President)
ANNUITY PAYMENTS AND ACCUMULATION VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT. IN ADDITION, THE INITIAL INTEREST RATE IS
GUARANTEED FOR A LIMITED PERIOD OF TIME AND THE NONFORFEITURE VALUES MAY
INCREASE OR DECREASE BASED ON THE MARKET VALUE ADJUSTMENT FORMULA SPECIFIED IN
THE CONTRACT.
GROUP FIXED AND VARIABLE UNALLOCATED ANNUITY CONTRACT
- NON-PARTICIPATING -
This Contract is issued only in connection with retirement plans which qualify
for favorable tax treatment under Section 401 or Section 3121 of the Internal
Revenue Code.
INDEX
CONTRACT SCHEDULE
SECTION 1 DEFINITIONS
SECTION 2 PURCHASE PAYMENTS
2.01 Purchase Payments
2.02 Net Purchase Payments
2.03 Allocation of Net Purchase Payments
SECTION 3 ACCUMULATION VALUE
3.01 Accumulation Value
SECTION 4 SEPARATE ACCOUNT
4.01 The Separate Account
4.02 Variable Investment Options
4.03 Changes to the Investment Funds of the Separate Account
4.04 Valuation of Assets
4.05 Change in Operation of the Separate Account
4.06 Transfers From the Variable Investment Options
4.07 Withdrawals From the Variable Investment Options
4.08 Separate Account Charge
4.09 Variable Accumulation Value
4.10 Accumulation Unit
4.11 Accumulation Unit Value
SECTION 5 GENERAL ACCOUNT
5.01 General Account
5.02 General Account Accumulation Value
5.03 Interest Credited
5.04 Deferral of Payments or Transfers From the General Account
5.05 Transfers From the General Account
5.06 Withdrawals From the General Account
SECTION 6 GENERAL PROVISIONS
6.01 The Contract
6.02 Assignment
6.03 Non-Participation in Surplus
6.04 Incontestability
6.05 Written Notices to Us
6.06 Modification of Contract
6.07 Reports
6.08 Suspension of Payments
6.09 Proof of Survival
6.10 Taxes
SECTION 7 ANNUITIES
7.01 Annuity Purchase
7.02 Form of Annuity
CONTRACT SCHEDULE
Contract Owner: [County Name]
Contract Number: [SP023456]
Date of Issue: [01/01/2001]
Separate Account Charge: Equal on an annual basis to [0 - 1.7] % of the daily
net asset value of the Separate Account
Separate Account: [Name of separate account]
General Account:
Minimum Guaranteed Interest Rate: 3%
Free Withdrawal Percentage: [20%]
Market Value Adjustment Factor: (1 + A)/5/ divided by (1 + B)/5/
Where A = the average 10 year Treasury Constant Maturity Series
rate computed as an average of such rates as of the last business
day of the last 60 complete calendar months or the number of
complete months since the Contract issue if less, determined as of
the time of the transaction.
Where B = the 10 year Treasury Constant Maturity Series rate
determined as of the last business day of the calendar month prior
to the transaction.
The market value adjustment may be either positive or negative. If the average
10 Year Treasury Constant Maturity Series interest rate (as defined above) is
higher at the time of surrender or withdrawal than such rate at the time of
issue, the adjustment will be downward. If the 10 Year Treasury Constant
Maturity Series interest rate is lower at the time of surrender than such rate
at issue, the adjustment will be upward. Any negative adjustment will be waived
to the extent it decreases the surrender value below the minimum guaranteed rate
of 3%.
Service Office:
VALIC
c/o [Name of Service Agent ]
[Address of agent]
[line two of address]
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SECTION 1 - DEFINITIONS
Accumulation Unit - An accounting unit of measure used to calculate the
Accumulation Value.
Accumulation Value - The dollar value of all amounts accumulated under this
Contract.
Annuity - A series of monthly payments to a Participant which continue for a
specified period of time or for the life of the Participant in accordance with
the Annuity Form elected by the Participant.
Business Day - Each day that the Company and the New York Stock Exchange are
open for business.
Code - The Internal Revenue Code of 1986, as amended.
Company Reference - "We," "Our," "Us," or "VALIC," means The Variable Annuity
Life Insurance Company.
Contract Owner - The employer or other entity that makes application for this
Contract. Any reference to "You" or "Your" means the Contract Owner or
designated administrator.
Contract Year - The twelve month period beginning on the Date of Issue (shown on
the Policy Schedule) and ending on the day before the same date in the next
calendar year; and each succeeding twelve month period.
General Account - The assets of VALIC other than those in the Separate Account
or any other segregated asset account.
Home Office - The principal office of VALIC.
Investment Fund - An investment portfolio which is the underlying investment
medium for a variable investment option available under this Contract.
Participant - A person who participates under this Contract pursuant to a Plan.
Plan - A plan adopted by an employer for its employees which qualifies for
favorable tax treatment under Section 401 of the Code for which this Contract is
issued.
Purchase Payment - An amount paid into this Contract.
Separate Account - A segregated asset account established under the Texas
Insurance Code which is designated on the Contract Schedule.
Service Office - The office of the Company to which Purchase Payments and
notices are sent.
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SECTION 2 - PURCHASE PAYMENTS
2.01 Purchase Payments - Purchase Payments may be made at any time to Our
Service Office while this Contract is in force. We require no payment
beyond the first. There is no penalty if any planned Purchase Payments
are omitted or stopped.
2.02 Net Purchase Payments - We may deduct amounts from Purchase Payments
for any applicable premium taxes. We then allocate Your Net Purchase
Payments in accordance with Section 2.03 below.
2.03 Allocation of Net Purchase Payments - The Contract Owner, or its
designated administrator, will advise Us at Our Service Office of the
allocation of the net Purchase Payments among the available Variable
Investment Options and/or Our General Account. Allocations must be in
whole percentages. Until such designation is made, net Purchase
Payments will be placed in the General Account.
SECTION 3 - ACCUMULATION VALUE
3.01 Accumulation Value - The Accumulation Value is the dollar value of all
amounts accumulated under this Contract. The Accumulation Value
reflects Purchase Payments, the investment experience of the selected
Variable Investment Options, the interest credited on that portion of
the Accumulation Value that is held in the General Account, the charges
deducted from the Separate Account, and any withdrawals made from the
Contract.
SECTION 4 - SEPARATE ACCOUNT
4.01 The Separate Account - The Separate Account is a separate investment
account of VALIC. It is shown on the Contract Schedule. That portion of
the assets of the Separate Account equal to the reserves of the
Separate Account shall not be chargeable with liabilities arising out
of any other business We may conduct. Income, gains and losses, whether
or not realized, from assets allocated to the Separate Account are
credited to or charged against such Account without regard to Our other
income, gains or losses.
4.02 Variable Investment Options - The Separate Account is divided into a
series of Variable Investment Options. Each Variable Investment Option
represents a different investment objective which can be selected by
the Contract Owner. Variable Investment Options are based upon the
Investment Funds available within the Separate Account. Investment
returns on Variable Investment Options may be positive or negative.
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4.03 Changes to the Investment Funds of the Separate Account - We may, from
time to time, add additional Variable Investment Options. You may be
permitted to transfer Your Accumulation Value to the additional
Variable Investment Option(s). However, the right to make any transfer
will be limited by any terms and conditions in effect at the time of
transfer.
If the shares of any of the Investment Funds become unavailable for
investment by the Separate Account, or We deem further investment in
these shares inappropriate, We may limit further purchase of such
shares or substitute shares of another investment option for shares
already purchased under this Contract.
4.04 Valuation of Assets - Assets of the Separate Account are valued at
their fair market value in accordance with our procedures.
4.05 Change in Operation of the Separate Account - We reserve the right to
modify the structure or operation of the Separate Account. In such an
event, We guarantee that such modification will not affect the value of
Your Contract.
4.06 Transfers From the Variable Investment Options - You may transfer all
or part of Your Accumulation Value in a Variable Investment Option to
another Variable Investment Option or to Our General Account without
the imposition of any fee or charge. All transfers are subject to the
following:
(a) Transfers will be effected at the end of the Business Day when
We receive a transfer request in good order at Our Service
Office.
(b) We are not liable for a transfer made in accordance with Your
instructions.
(c) Transfers do not change the allocation instructions for future
Purchase Payments unless You specifically inform Us.
(d) We reserve the rights to modify the transfer privilege to treat
transfer requests based on their separate components (a
redemption order with a request for purchase of another Variable
Investment Option). In such a case, the redemption order would
be processed at the source Variable Investment Option's next
determined Accumulation Unit. However, the purchase into the new
Variable Investment Option would be effective at the next
determined Accumulation Unit Value only after We receive
proceeds from the source Variable Investment Option, or We
otherwise receive cash on behalf of the source Variable
Investment Option.
(e) We reserve the right to require transfers to be at least 30 days
apart.
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(f) We reserve the right at any time and without prior notice to any
party to terminate, suspend or modify the transfer privilege.
4.07 Withdrawals From the Variable Investment Options - While this Contract
is in force, we will, upon written request to Our Service Office, by
the Contract Owner, allow the withdrawal of all or a portion of the
Accumulation Value without the imposition of any fee or charge.
Withdrawals will be made from the Variable Investment Options and the
General Account in accordance with Your direction.
4.08 Separate Account Charge - We deduct from the Separate Account each
Business Day a Separate Account Charge which is shown on the Contract
Schedule.
4.09 Variable Accumulation Value - Your Variable Accumulation Value is the
sum of Your Accumulation Values allocated to the Variable Investment
Options. The value in each Variable Investment Option is determined by
multiplying the number of Accumulation Units attributable to a Variable
Investment Option by the Accumulation Unit Value for the Variable
Investment Option.
4.10 Accumulation Unit - An Accumulation Unit is a measuring unit for
amounts allocated to a Variable Investment Option before annuity
payments begin. The value of an Accumulation Unit will vary with the
net investment return of the respective underlying Investment Fund.
Accumulation Units may be credited to the Contract due to a Purchase
Payment or a transfer from another Investment Option. The number of
Accumulation Units credited is determined by dividing the dollar amount
of the transaction by the Accumulation Unit Value for that Variable
Investment Option at the next computed value. Transfers out of and
withdrawals from an Investment Option will result in a reduction of
Accumulation Units.
4.11 Accumulation Unit Value - The Accumulation Unit Value is the value of
one Accumulation Unit of a Variable Investment Option. We will
calculate it each Business Day. The value of an Accumulation Unit of a
Variable Investment Option is the Accumulation Unit Value last
computed, multiplied by one plus the Investment Rate for the period.
The Investment Rate may be positive or negative.
The Investment Rate is the change in the value of the Investment Fund's
portfolio (capital gains and losses whether or not realized and
investment income) since the last computation, divided by the amount of
assets at the beginning of the period, less a factor for:
(a) the Separate Account Charge for the period shown on the Contract
Schedule, and
(b) any taxes attributable to the Separate Account or reserve held
for such taxes.
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SECTION 5 - GENERAL ACCOUNT
5.01 General Account - You can elect to have Purchase Payments allocated to
Our General Account. While this Contract is in force you can transfer
Accumulation Value from the Separate Account to the General Account,
subject to the provisions of the Contract.
5.02 General Account Accumulation Value - Your General Account Accumulation
Value at any time is equal to:
(a) the Purchase Payments allocated to the General Account; plus
(b) the Accumulation Value transferred to the General Account;
plus
(c) interest credited to Your Accumulation Value in the General
Account; less
(d) any withdrawal of Accumulation Value from the General Account
and less any reduction of Accumulation Value due to the
withdrawal; less
(e) any Accumulation Value transferred from the General Account to
the Separate Account; less
(f) any premium or other applicable taxes deducted from the
Accumulation Value held in the General Account.
5.03 Interest Credited - We will credit interest to Accumulation Value held
in the General Account as follows: periodically, but not less than
annually, We will declare interest rates that apply either to the
entire Accumulation Value held in the General Account, or separately to
amounts accumulated in separate time periods. We guarantee that the
interest to be credited will not be less than the Minimum Guaranteed
Interest Rate shown on the Contract Schedule. We may credit additional
interest at Our discretion.
5.04 Deferral of Payments or Transfers from the General Account - We reserve
the right to defer payment for a surrender or transfer from the General
Account for the period permitted by law but for not more than six
months.
5.05 Transfers From the General Account - While this Contract is in force,
We will upon written request to Our Service Office by the Contract
Owner, allow You to transfer all or part of Your Accumulation Value in
the General Account to a Variable Investment Option without the
imposition of any fee or charge. Any such transfers from the General
Account to a Variable Investment Option are subject to the conditions
set forth in Section 4.06.
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5.06 Withdrawals From the General Account - While this Contract is in force,
We will upon written request to Our Service Office by the Contract
Owner, allow the withdrawal from the Contract of all or a portion of
the Accumulation Value in the General Account. Such transactions are
subject to the following:
(a) For transactions made during the first Contract Year, You can
make withdrawals free from any charge or adjustment of value.
(b) For transactions made after the first Contract Year, You can
withdraw each Contract Year up to a total of the Free Withdrawal
Percentage shown on the Contract Schedule of the Accumulation
Value in the General Account as of the last Contract Anniversary,
free from any charge or adjustment of values.
(c) For all transactions above the Free Withdrawal Percentage
described in (b) above, a Market Value Adjustment will apply. The
Market Value Adjustment Factor is set forth on the Contract
Schedule. The amount requested to be withdrawn is multiplied by
the Market Value Adjustment Factor.
(d) In no event will a Market Value Adjustment apply to any
withdrawals of Accumulation Value in the General Account used to
buy Annuities under this Contract for Participants.
SECTION 6 - GENERAL PROVISIONS
6.01 The Contract - The entire Contract consists of this Contract and the
Application, a copy which is attached. This Contract is subject to the
provisions of the Plan.
6.02 Assignment - In no event may any rights under this Contract be sold,
assigned, discounted or pledged as collateral for a loan or as security
for the performance of any obligation or for any purpose to any person
other than to Us, or to a trustee or other person exercising ownership
rights solely by reason of the terms of the Plan under which this
Contract is issued. The benefits, value, and rights under this Contract
are not subject to any creditor claims to the fullest extent permitted
by law. To the extent permitted by the Code and applicable law, We will
make a withdrawal payable to a third party upon Your request.
6.03 Non-Participation in Surplus - This Contract will not share in any
distribution of profits or surplus of the Company.
6.04 Incontestability - This Contract is incontestable.
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6.05 Written Notices to Us - Except as specifically provided otherwise, any
notice of change, election, choice, option or other exercise of right
given under the Contract must be in writing on a form provided by Us,
or on a form and in a manner acceptable to Us. Such notice will be
effective when it is received at Our Service Office.
6.06 Modification of Contract - This Contract may not be changed by the
Company without the consent of the Contact Owner except as may be
required or deemed advisable to do so in order to conform the Contract
to applicable law. No agent has the authority to change this Contract
or waive any of its provisions. Only the President or a Vice President
of VALIC may change this Contract. Any such changes must be in writing.
6.07 Reports - We will furnish the Contract Owner with a report showing the
Contract Value at least once each calendar year.
6.08 Suspension of Payments - We reserve the right to suspend payments under
the Separate Account for any period when:
(a) the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
(b) when trading on the exchange is restricted; or
(c) when an emergency prevents disposal of securities held in the
Separate Account or it is not reasonably practicable to determine
the value of the Separate Account's net assets.
6.09 Proof of Survival - We reserve the right to require satisfactory proof
that the Participant and any payee is alive on the date any Annuity
Payment is due. If this proof is not received after requested in
writing, VALIC will have the right to make reduced payments or to
withhold payments entirely until such proof is received.
6.10 Taxes - Any taxes paid to any governmental entity will be charged
against the Contract Value. We will, in Our sole discretion, determine
when taxes have resulted from: the investment experience of the
Separate Account, receipt by Us of Purchase Payments or commencement of
Annuity Payments. We may, in Our sole discretion, pay taxes when due
and deduct that amount from the Accumulation Value at a later date.
Payment at an earlier date does not waive any right We may have to
deduct amounts at a later date.
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SECTION 7 - ANNUITIES
7.01 Annuity Purchase - At Your option, all or part of any amount payable
under this Contract or any amount available under the Plan, may be used
to buy Annuities under this Contract for Participants. Annuities may be
purchased in any form then offered by Us. We will use Our applicable
settlement option rates based on a 3% assumed interest rate and the
latest group annuity mortality table approved for use in the state
where the Contract is issued.
7.02 Forms of Annuity - We will issue a certificate to You for delivery to
the Participant. The certificate sets forth the terms of the Annuity to
which such Participant is entitled. If any fact pertaining to the
purchase of an Annuity is misstated, such Annuity may be adjusted by Us
to reflect the correct facts. We have no liability for any Annuity
payments for which we have not received the full premium due, based on
the correct facts.
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