-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Opao7+HXer/oHGl6SDCa+eR5mT7iavJR7fybBi43V7w8LPtyu6zFbsfd3vtF9t57 a7z92XXr/aTB1ZbYUOFGZw== /in/edgar/work/20000627/0000005103-00-000046/0000005103-00-000046.txt : 20000920 0000005103-00-000046.hdr.sgml : 20000920 ACCESSION NUMBER: 0000005103-00-000046 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL CORP /TX/ CENTRAL INDEX KEY: 0000005103 STANDARD INDUSTRIAL CLASSIFICATION: [6311 ] IRS NUMBER: 740483432 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-07981 FILM NUMBER: 662035 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135221111 11-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________ FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 _____________________ [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _______ to ______ Commission file number 1-7981 Full title of the Plan: THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN Name of the issuer of the securities held pursuant to the Plan and the address of its principal executive office: AMERICAN GENERAL CORPORATION 2929 Allen Parkway Houston, Texas 77019 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN AUDITED FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1999 Audited Financial Statements Report of Independent Auditors . . . . . . . . . . . . . . . . . . . 1 Statements of Net Assets Available for Benefits . . . . . . . . . . . 2 Statements of Changes in Net Assets Available for Benefits . . . . . 3 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 4 Schedules Schedule H, Line 4 (i) - Schedule of Assets Held for Investment Purposes at End of Year . . . . . . . . . . . . . . . . . . . . . . 11 Schedule H, Line 4 (j) - Schedule of Reportable Transactions . . . . 12 Report of Independent Auditors Administrative Board The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan We have audited the accompanying statements of net assets available for benefits of the Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan (the Plan) as of December 31, 1999 and 1998, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 1999, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. ERNST & YOUNG LLP Houston, Texas June 22, 2000 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS In thousands December 31, 1999 1998 Assets Investments (See Note C) . . . . . . . . . . . $148,093 $152,097 Receivables Participant contributions . . . . . . . . . . 37 22 Interest . . . . . . . . . . . . . . . . . . 162 97 Total receivables . . . . . . . . . . . . . 199 119 Total assets . . . . . . . . . . . . . . 148,292 152,216 Liabilities Payables Forfeitures . . . . . . . . . . . . . . . . . 392 248 Excess contribution refunds . . . . . . . . . - 1,009 Other . . . . . . . . . . . . . . . . . . . . 43 - Total liabilities . . . . . . . . . . . . 435 1,257 Net assets available for benefits . . . . . . . $147,857 $150,959 The accompanying notes are an integral part of these financial statements. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN STATEMENTS OF CHANGES IN NET ASSET AVAILABLE FOR BENEFITS In thousands Years Ended December 31, 1999 1998 Additions to net assets Investment income Dividends . . . . . . . . . . . . . . . . $ 3,442 $ 2,983 Interest . . . . . . . . . . . . . . . . . 556 327 Net appreciation in fair value of investments (See Note C) . . . . . . . . 2,780 41,829 Total investment income . . . . . . . . 6,778 45,139 Contributions Companies' . . . . . . . . . . . . . . . . 3,978 3,045 Participants' . . . . . . . . . . . . . . 6,875 4,784 Total contributions . . . . . . . . . 10,853 7,829 Total additions . . . . . . . . . 17,631 52,968 Deductions from net assets Benefits American General Corporation common stock . . . . . . . . . . . . . . . . . 13,522 6,738 Cash . . . . . . . . . . . . . . . . . . . 7,062 2,503 Forfeitures . . . . . . . . . . . . . . . 144 217 Participant loan origination fees . . . . 5 7 Total deductions . . . . . . . . . . 20,733 9,465 Net increase(decrease) . . . . . . . (3,102) 43,503 Net assets available for benefits Beginning of year . . . . . . . . . 150,959 107,456 End of year . . . . . . . . . . . . $147,857 $150,959 The accompanying notes are an integral part of these financial statements. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS NOTE A--SIGNIFICANT ACCOUNTING POLICIES The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan (the Plan) financial statements are prepared in conformity with accounting principles generally accepted in the United States. Investments in American General Corporation (American General) common stock are reported at fair value based on published market prices. Fair values of other investments are reported as follows: 1) The Variable Annuity Life Insurance Company (VALIC, also referred to as the Company)group deposit administration contract, at contract value (see Note E); 2) investments in the American General Series Portfolio Company (AGSPC) Stock Index and Growth Funds, the Putnam OTC & Emerging Growth Fund, the Templeton Foreign Fund and the Vanguard Fixed Income Securities Fund, at net asset value; and 3) short- term investments, at cost which approximates fair value. The contract value of the group deposit administration contract approximates fair value because the interest crediting rate is reset annually. AGSPC is an open-end management investment company (mutual fund) whose investment advisor is VALIC. Participant loans are recorded as plan investments at their outstanding balance. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded as income on ex-dividend dates, and interest income is recorded using the accrual method of accounting. Contributions are recorded as additions to net assets on the date the contributions become payable to the Plan. Benefits paid to participants are recorded upon distribution at the market value of the assets distributed. Benefits payable to participants are not accrued as liabilities in the financial statements. The preparation of financial statements requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosures of contingent assets and liabilities, and (3) the reported amounts of additions and deductions during the reporting periods. Actual results could differ from those estimates. Statement of Position ("SOP") 99-3, effective for plan years ending after December 15, 1999, was adopted by the Plan's management in 1999. SOP 99-3 required various changes to the reporting of certain defined contribution benefit plan investments and other financial disclosure matters; therefore, certain prior year amounts have been reclassified to conform with current year presentation. NOTE B--DESCRIPTION OF THE PLAN The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued General The Plan, which is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA), is a defined contribution plan offered to eligible agents and managers of VALIC and VALIC Investment Services Company (the Companies). The Plan provides for participant elective salary deferrals (participant pretax contributions) in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended (IRC). Substantially all of the costs of administering the Plan are paid by VALIC. Investment Options Participants may direct their employee contributions in one of seven funds or a combination of each fund. These funds invest in: 1) shares of American General common stock (Stock Fund); 2) a group deposit administration contract issued by VALIC (Cash Fund); 3) shares of the AGSPC Stock Index Fund (Mutual Fund A); 4) shares of the Putnam OTC & Emerging Growth Fund (Small-Cap Fund); 5) shares of the AGSPC Growth Fund (Large-Cap Blend Fund, formally called Mid- Cap Fund); 6) shares of the Templeton Foreign Fund (Foreign Fund); and 7) shares of the Vanguard Fixed Income Securities Fund (Bond Fund). The Companies' contributions are invested solely in the Stock Fund; however, participants age 60 or older can direct the investment of their employer matching contributions into any of the available funds. Amounts which have not yet been used to purchase investments in the Stock Fund are temporarily invested in short-term investments. Income from these short- term investments is allocated to Plan participants based on current contributions. Contributions Employees who elect to participate may contribute, on a pretax basis, a basic amount ranging from one to six percent of base pay and an additional amount ranging from one to eight percent of base pay, subject to the contribution limitations discussed below. Prior to January 1, 1999, the Companies contributed an amount ranging from 50 percent to 100 percent of the employee's basic contribution as determined annually by the Board of Directors. The Companies contributed 75 percent of employee's basic contributions during 1998. Effective January 1, 1999, the Companies contribute an amount equal to 100 percent of the first three percent of the participant's basic contribution, plus 50 percent of the next three percent of the participant's basic contribution. These changes place the Plan under the safe harbor provisions of the IRC Section 401(k)(12). THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued Contribution Limitations For 1999 and 1998, the total amount of participant pretax contributions is limited to $10,000. Additionally, the total amount of annual participant and company contributions (including forfeitures) must not exceed the lesser of 25 percent of compensation or $30,000. During 1999 and 1998, the total amount of base pay that can be used in determining contributions under the Plan is $160,000. ERISA and the IRC provide that qualified plans, such as the Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan, cannot discriminate in favor of highly compensated individuals. Effective January 1, 1999 the nondiscrimination testing and refunds of excess contributions will no longer be required under the safe harbor provisions of the IRC Section 401(k)(12). For 1998, pre safe harbor, certain highly compensated individuals may be required to receive refunds of any contributions in excess of the IRC Sections 401(k)and 401(m) limits and all earnings attributable to such contributions. Amounts in excess of the limits discussed above are designated on the statement of net assets as "Payables - Excess contribution refunds" and were refunded within 2-1/2 months of the Plan's year end. "Payables - Excess contribution forfeitures" represent the nonvested excess contributions of the Companies and are available to reduce future company contributions. Participant Accounts Each participant's account is credited with the participant's and the Companies' contributions and an allocation of Plan earnings. Allocation of Plan earnings is based on participants' account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Vesting Participants are immediately vested in their contributions plus the earnings thereon. Participants obtain a vested interest in the Companies' contributions and the earnings thereon at the rate of twenty percent per year of service after three years of service. In addition, participants will become 100 percent vested in the Companies' contributions upon their retirement, attainment of age 65, total disability, or death. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued Effective January 1, 1999, the participants immediately become 100 percent vested in the Companies' contributions made in 1999 and subsequent years. Payment of Benefits Upon termination of service, and if consented to by the participant (required only if the total value, both vested and nonvested, of the account exceeded $5,000 and the participant is under age 65), a participant will receive a distribution equal to the vested value of his or her account. For years beginning after December 31, 1996, distributions must begin by April 1 of the calendar year following the later of either the calendar year in which the employee reaches age 70-1/2, or the calendar year in which the employee retires. Participant Loans Participants may borrow from their fund accounts, in a single loan, a minimum of $1,000 and up to a maximum equal to the lesser of $50,000 or 50% of the participant's vested account balance. Loan terms range from 12 to 58 months. Loans are secured by the vested balance in the participant's account and bear interest at a rate commensurate with prevailing rates as determined from time to time. Principal and interest are paid to the participant's account through payroll deductions. Early loan payoff is allowed. Forfeitures Participants terminating employment forfeit their nonvested interest in the Companies' contributions on the earlier of (1) the distribution of the entire nonforfeitable portion of their account or (2) upon incurring a period of severance equal to five consecutive one-year breaks in service. Forfeitures are available to reduce the Companies' future contributions. Participants who terminate and are reemployed with a participating company before incurring five consecutive one-year breaks in service are entitled to their nonvested or forfeited amounts, subject to certain provisions as stated in the Plan document. Due to the adoption of safe harbor provisions of IRC Section 401(k)(12), for years beginning after December 31, 1998, the Companies' contributions are immediately fully vested and nonforfeitable. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE C--INVESTMENTS The following presents investments that represent 5 percent or more of the Plan's net assets. In thousands December 31, 1999 1998 American General Corporation common stock . . . . . . . . . . . . . . . $114,504* $128,843* American General Series Portfolio Company Stock Index Fund. . . . . . . . . . . . . . 13,944 10,911 *Nonparticipant-directed (See Note D) The Plan's investments (including gains and losses on investments bought and sold as well as held during the years) appreciated (depreciated) in value as follows: In thousands Years Ended December 31, 1999 1998 Mutual funds . . . . . . . . . . . . . $5,743 $ 2,343 Common stock . . . . . . . . . . . . . (2,963) 39,486 $2,780 $41,829 NOTE D--NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investment is as follows: In thousands Years Ended December 31, 1999 1998 Net Assets AGC common stock fund . . . . . . . . . $114,896 $127,818 THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE D--NONPARTICIPANT-DIRECTED INVESTMENTS--Continued Years Ended December 31, 1999 1998 Changes in Net Assets Contributions . . . . . . . . . . . . . . . . $ 6,385 $ 4,465 Dividends and interest . . . . . . . . . . . 2,676 2,541 Net appreciation(depreciation) . . . . . . . (2,963) 39,486 Benefits paid to participants . . . . . . . . . (17,900) (8,322) Interfund transfers . . . . . . . . . . . . . . (1,120) (2,369) $(12,922) $35,801 The Stock Fund contains both participant and nonparticipant-directed contributions with earnings not separately determinable; therefore, the Stock Fund is considered a total nonparticipant-directed investment option. NOTE E--INVESTMENT CONTRACT WITH INSURANCE COMPANY The Plan maintains an investment contract with VALIC, a wholly owned subsidiary of American General. The group deposit administration contract is valued at contract value, which approximates fair value, and represents contributions under the contract, plus interest at the contract rate, less funds used to pay benefits. The guaranteed minimum rate of the contract is reset annually by VALIC. The contract had a guaranteed minimum rate of 6.25% for 1999 and 1998. Any earnings in excess of the guaranteed minimum rate are credited to the participants. The effective earned yield is calculated based on the calendar year. The effective earned yield of the investment contract for 1999 and 1998 was 7.87% and 8.05%, respectively. NOTE F--PLAN TERMINATION Although they have not expressed any intent to do so, the Companies have the right under the Plan to discontinue their contributions at any time and to withdraw from the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. NOTE G--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 Benefits processed and approved for payment, but not paid as of December 31, are recorded on Form 5500 but not in the financial statements. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE G--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500--Continued The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500: In thousands December 31, 1999 1998 Net assets available for benefits per the financial statements . . . . . . . . . . $147,857 $150,959 Benefits payable to withdrawing participants . . . (155) (351) Net assets available for benefits per Form 5500 . $147,702 $150,608 The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: In thousands Year Ended December 31, 1999 Benefits paid to participants per the financial statements American General Corporation common stock . . . . $ 13,522 Cash . . . . . . . . . . . . . . . . . . . . . . 7,062 Total benefits paid to participants per the financial statements . . . . . . . . . . 20,584 Benefits payable to withdrawing participants at year end . . . . . . . . . . . . . . . . . . . . . 155 Benefits payable to withdrawing participants at beginning of year . . . . . . . . . . . . . . . . . (351) Benefits paid to participants per Form 5500 . . . . . . . . . . . . . . . . . $20,388 NOTE H--FEDERAL INCOME TAXES Based on a favorable determination letter dated December 8, 1995, the Internal Revenue Service (IRS) has ruled that the Plan, as restated and amended effective August 31, 1990, December 6, 1991, March 4, 1992, May 26, 1993, December 6,1993, and August 25, 1995, is qualified under Section 401(a)of the IRC and, therefore, exempt under Section 501(a) from federal income taxes. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN SCHEDULE H, Line 4 (i) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR AT DECEMBER 31, 1999 EIN: 74-1625348 PN: 018 In thousands, except share amounts Fair Issuer Description Cost Value American General 1,509,110 shares of $39,471 $114,504 Corporation* common stock American General Series 314,753 shares of AGSPC ** 13,944 Portfolio Company* Stock Index Fund Putnam 171,204 shares of Putnam OTC ** 6,336 & Emerging Growth Fund The Variable Annuity Deposit administration ** 4,694 Life Insurance Company* group annuity contract Participant Notes* Loans issued at interest ** 3,004 rates between 8.75% and 9.50% American General Series 110,805 shares of AGSPC ** 2,587 Portfolio Company* Growth Fund Templeton 164,974 shares of Templeton ** 1,851 Foreign Fund State Street Bank Short-term investments ** 827 & Trust Company* in money-market fund Vanguard 42,726 shares of Vanguard ** 346 Fixed Income Securities Fund $39,471 $148,093 *Party in interest **Cost not required for participant-directed investments THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN SCHEDULE H, LINE 4 (j) - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1999 EIN: 74-1625348 PN: 018 In thousands Current Value of Identity of Cost Asset on Net Party Purchase Selling of Transaction Gain Involved Description Price Price Asset Date (Loss) Category (i) - Individual non-participant directed transactions in excess of 5% of net assets available for benefits State Street S/T Investments $ 9,035 $ - $ 9,035 $ 9,035 $ - Bank & Trust Company State Street S/T Investments - 8,987 8,987 8,987 - Bank & Trust Company Category (iii) - Series of non-participant directed transactions in excess of 5% of net assets available for benefits State Street Bank & Trust S/T Investments $21,259 $ - $21,259 $21,259 $ - Company State Street Bank & Trust S/T Investments - 20,617 20,617 20,617 - Company (A) Company Stock 11,069 - 11,069 11,069 - (A) Company Stock - 25,633 13,512 25,633 12,121 (A) Parties involved are not presented, as permitted by Section 25250.103-6 (d)(1)(i) of the Department of Labor's Rules and Regulations. Note: Includes both participant-directed and nonparticipant-directed transactions. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan Administrative Board has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. June 22, 2000 ELIZABETH A. DOBBS Elizabeth A. Dobbs, Vice President - Benefits & Payroll Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-13395) pertaining to The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan of our report dated June 22, 2000, with respect to the financial statements and schedules of The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1999. ERNST & YOUNG LLP Houston, Texas June 22, 2000 -----END PRIVACY-ENHANCED MESSAGE-----