-----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, VCULvV6r9jdSjbDriOcHe674Tb9qzOLFoRAn3Qp5aBfcnvbLSxJXmkv9QK3RMt7T gC+TRv/uX5Vhtct5TKrkwg== 0000005103-98-000046.txt : 19980629 0000005103-98-000046.hdr.sgml : 19980629 ACCESSION NUMBER: 0000005103-98-000046 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL CORP /TX/ CENTRAL INDEX KEY: 0000005103 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [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: 98655119 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135221111 11-K 1 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, 1997 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: AMERICAN GENERAL 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 AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN AUDITED FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1997 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 ......... 6 Notes to Financial Statements ...................................... 10 Schedules Assets Held for Investment ......................................... 16 Reportable Transactions ............................................ 17 Loans in Default ................................................... 18 Report of Independent Auditors Administrative Board American General Agents' and Managers' Thrift Plan We have audited the accompanying statements of net assets available for benefits of the American General Agents' and Managers' Thrift Plan (the Plan) as of December 31, 1997 and 1996, 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 generally accepted auditing standards. 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, 1997 and 1996, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. 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 as of December 31, 1997, reportable transactions, and loans in default for the year then ended are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The specific fund information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and specific fund information have been subjected to the auditing procedures applied in our audit 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 19, 1998 - 1 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Equity Stock Cash Index Fund Fund Fund Assets Investments American General Corporation common stock (1,765,035 shares) ........ $70,665 $ - $ - American General Life & Accident Insurance Company deposit administration group annuity contract .. - 13,998 - American General Series Portfolio Company - Stock Index Fund (13,851 shares) ........................ - - 412 Putnam OTC & Emerging Growth Fund (42,377 shares) ........................ - - - American General Series Portfolio Company - Growth Fund (26,641 shares) .. - - - Templeton Foreign Fund (49,450 shares) ... - - - Vanguard Fixed Income Securities Fund (10,958 shares) ........................ - - - Participant notes ........................ - - - Short-term investments ................... 79 56 8 Total investments ...................... 70,744 14,054 420 Receivables Contributions ............................ - 54 5 Interfund transfers ...................... - 194 4 Other .................................... 3 1,569 - Total assets ........................... 70,747 15,871 429 Liabilities Payables Forfeitures .............................. - 3 - Loan origination fees .................... 8 - - Interfund transfers ...................... 224 - - Other .................................... 187 14 11 Total liabilities ...................... 419 17 11 Net assets available for benefits ............ $70,328 $15,854 $418 The accompanying notes are an integral part of these financial statements. - 2 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Inter- Small-Cap Mid-Cap national Fund Fund Fund Assets Investments American General Corporation common stock (1,765,035 shares) ........ $ - $ - $ - American General Life & Accident Insurance Company deposit administration group annuity contract .. - - - American General Series Portfolio Company - Stock Index Fund (13,851 shares) ........................ - - - Putnam OTC & Emerging Growth Fund (42,377 shares) ........................ 683 - - American General Series Portfolio Company - Growth Fund (26,641 shares) .. - 534 - Templeton Foreign Fund (49,450 shares) ... - - 492 Vanguard Fixed Income Securities Fund (10,958 shares) ........................ - - - Participant notes ........................ - - - Short-term investments ................... 10 9 9 Total investments ...................... 693 543 501 Receivables Contributions ............................ 5 5 4 Interfund transfers ...................... - 38 - Other .................................... - 5 - Total assets ........................... 698 591 505 Liabilities Payables Forfeitures .............................. - - - Loan origination fees .................... - - - Interfund transfers ...................... 11 - 1 Other .................................... 13 9 12 Total liabilities ...................... 24 9 13 Net assets available for benefits ............ $674 $582 $492 The accompanying notes are an integral part of these financial statements. - 3 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Bond Participant Fund Notes Assets Investments American General Corporation common stock (1,765,035 shares) ........ $ - $ - American General Life & Accident Insurance Company deposit administration group annuity contract .. - - American General Series Portfolio Company - Stock Index Fund (13,851 shares) ........................ - - Putnam OTC & Emerging Growth Fund (42,377 shares) ........................ - - American General Series Portfolio Company - Growth Fund (26,641 shares) .. - - Templeton Foreign Fund (49,450 shares) ... - - Vanguard Fixed Income Securities Fund (10,958 shares) ........................ 101 - Participant notes ........................ - 2,739 Short-term investments ................... 5 - Total investments ...................... 106 2,739 Receivables Contributions ............................ 3 - Interfund transfers ...................... - - Other .................................... 7 - Total assets ........................... 116 2,739 Liabilities Payables Forfeitures .............................. - - Loan origination fees .................... - - Interfund transfers ...................... - - Other .................................... 2 - Total liabilities ...................... 2 - Net assets available for benefits ............ $114 $2,739 The accompanying notes are an integral part of these financial statements. - 4 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Non-Participant Directed Stock Fund Total Assets Investments American General Corporation common stock (1,765,035 shares) ........ $24,757 $95,422 American General Life & Accident Insurance Company deposit administration group annuity contract .. - 13,998 American General Series Portfolio Company - Stock Index Fund (13,851 shares) ........................ - 412 Putnam OTC & Emerging Growth Fund (42,377 shares) ........................ - 683 American General Series Portfolio Company - Growth Fund (26,641 shares) .. - 534 Templeton Foreign Fund (49,450 shares) ... - 492 Vanguard Fixed Income Securities Fund (10,958 shares) ........................ - 101 Participant notes ........................ - 2,739 Short-term investments ................... 28 204 Total investments ...................... 24,785 114,585 Receivables Contributions ............................ - 76 Interfund transfers ...................... - 236 Other .................................... 1 1,585 Total assets ........................... 24,786 116,482 Liabilities Payables Forfeitures .............................. 46 49 Loan origination fees .................... - 8 Interfund transfers ...................... - 236 Other .................................... 21 269 Total liabilities ...................... 67 562 Net assets available for benefits ............ $24,719 $115,920 The accompanying notes are an integral part of these financial statements. - 5 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 In thousands, except share amounts Non- Participant Participant Directed Directed Stock Stock Fund Fund Total Assets Investments American General Corporation common stock (1,849,095 shares) ...... $56,587 $18,995 $75,582 American General Life & Accident Insurance Company deposit administration group annuity contract ............................. - - - American General Series Portfolio Company - Stock Index Fund ........... - - - Putnam OTC & Emerging Growth Fund ...... - - - American General Series Portfolio Company - Growth Fund ................ - - - Templeton Foreign Fund ................. - - - Vanguard Fixed Income Securities Fund .. - - - Participant notes ...................... - - - Short-term investments ................. 350 118 468 Total investments .................... 56,937 19,113 76,050 Receivables Contributions .......................... 3 1 4 Other .................................. 1 1 2 Total assets ......................... 56,941 19,115 76,056 Liabilities Payables Forfeitures ............................ - 48 48 Other .................................. 5 2 7 Total liabilities .................... 5 50 55 Net assets available for benefits .......... $56,936 $19,065 $76,001 The accompanying notes are an integral part of these financial statements. - 6 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Equity Stock Cash Index Fund Fund Fund Addition to net assets Investment income Dividends ........................ $ 1,855 $ - $ 5 Interest ......................... 13 227 1 Net appreciation (depreciation) in fair value of investments ... 17,363 - 26 Total investment income (loss).. 19,231 227 32 Contributions Company's ........................ - - - Participants' .................... 4,836 244 222 Total contributions ............ 4,836 244 222 Merger of Home Beneficial Thrift Plan ............................. - 14,599 - Total additions .............. 24,067 15,070 254 Deductions from net assets Benefits American General Corporation common stock (12,080 shares) ... 392 - - Cash ............................. 5,194 592 3 Forfeitures ........................ - 3 - Participant loan origination fees .. 27 - - Total deductions ............. 5,613 595 3 Interfund transfers .................. (5,062) 1,379 167 Net increase ................. 13,392 15,854 418 Net assets available for benefits Beginning of year ............ 56,936 - - End of year .................. $70,328 $15,854 $418 The accompanying notes are an integral part of these financial statements. - 7 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Inter- Small-Cap Mid-Cap national Fund Fund Fund Addition to net assets Investment income Dividends ........................ $ - $ 9 $ 42 Interest ......................... 2 1 1 Net appreciation (depreciation) in fair value of investments ... 26 28 (57) Total investment income (loss).. 28 38 (14) Contributions Company's ........................ - - - Participants' .................... 439 340 258 Total contributions ............ 439 340 258 Merger of Home Beneficial Thrift Plan ............................. - - - Total additions .............. 467 378 244 Deductions from net assets Benefits American General Corporation common stock (12,080 shares) ... - - - Cash ............................. 7 10 4 Forfeitures ........................ - - - Participant loan origination fees .. - - - Total deductions ............. 7 10 4 Interfund transfers .................. 214 214 252 Net increase ................. 674 582 492 Net assets available for benefits Beginning of year ............ - - - End of year .................. $674 $582 $492 The accompanying notes are an integral part of these financial statements. - 8 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed Bond Participant Fund Notes Addition to net assets Investment income Dividends ........................ $ 3 $ - Interest ......................... 1 79 Net appreciation (depreciation) in fair value of investments ... 3 - Total investment income (loss).. 7 79 Contributions Company's ........................ - - Participants' .................... 83 - Total contributions ............ 83 - Merger of Home Beneficial Thrift Plan ............................. - - Total additions .............. 90 79 Deductions from net assets Benefits American General Corporation common stock (12,080 shares) ... - - Cash ............................. 1 151 Forfeitures ........................ - - Participant loan origination fees .. - - Total deductions ............. 1 151 Interfund transfers .................. 25 2,811 Net increase ................. 114 2,739 Net assets available for benefits Beginning of year ............ - - End of year .................. $114 $2,739 The accompanying notes are an integral part of these financial statements. - 9 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Non-Participant Directed Stock Fund Total Addition to net assets Investment income Dividends ........................ $ 650 $ 2,564 Interest ......................... 4 329 Net appreciation (depreciation) in fair value of investments ... 6,082 23,471 Total investment income (loss).. 6,736 26,364 Contributions Company's ........................ 1,042 1,042 Participants' .................... - 6,422 Total contributions ............ 1,042 7,464 Merger of Home Beneficial Thrift Plan ............................. - 14,599 Total additions .............. 7,778 48,427 Deductions from net assets Benefits American General Corporation common stock (12,080 shares) ... 137 529 Cash ............................. 1,819 7,781 Forfeitures ........................ 168 171 Participant loan origination fees .. - 27 Total deductions ............. 2,124 8,508 Interfund transfers .................. - - Net increase ................. 5,654 39,919 Net assets available for benefits Beginning of year ............ 19,065 76,001 End of year .................. $24,719 $115,920 The accompanying notes are an integral part of these financial statements. - 10 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 In thousands, except share amounts Participant Non-Participant Directed Directed Stock Stock Fund Fund Total Addition to net assets Investment income Dividends .................. $ 1,827 $ 613 $2,440 Interest ............ 12 4 16 Net appreciation in fair value of investments .. 8,284 2,780 11,064 Total investment income ... 10,123 3,397 13,520 Contributions Company's ................... - 835 835 Participants' ............... 4,334 - 4,334 Total contributions ....... 4,334 835 5,169 Total additions ......... 14,457 4,232 18,689 Deductions from net assets Benefits American General Corporation common stock (60,182 shares) ........... 1,653 554 2,207 Cash ........................ 4,430 1,487 5,917 Forfeitures ................... - 192 192 Total deductions......... 6,083 2,233 8,316 Net increase ............ 8,374 1,999 10,373 Net assets available for benefits Beginning of year ....... 48,562 17,066 65,628 End of year ............. $56,936 $19,065 $76,001 The accompanying notes are an integral part of these financial statements. - 11 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS NOTE A--SIGNIFICANT ACCOUNTING POLICIES The American General Agents' and Managers' Thrift Plan (the Plan) financial statements are prepared in conformity with generally accepted accounting principles. 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) investment in American General Life and Accident Insurance Company (the Company or AGLA) deposit administration group annuity contract, at contract value (see Note C); 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. AGSPC is an open-end management investment company (mutual fund) whose investment adviser is The Variable Annuity Life Insurance Company (VALIC). VALIC and AGLA are wholly owned subsidiaries of American General. Participant notes are recorded as plan investments at amortized values. 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. Interfund transfers are recorded at the market value of the amount transferred. Benefits paid to participants are recorded upon distribution at the market value of the assets distributed. 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 revenues and expenses during the reporting periods. Actual results could differ from those estimates. 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. - 12 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued General The Plan, sponsored by American General, is a defined contribution plan currently offered to eligible agents and managers (sales employees) of AGLA, a wholly owned subsidiary of American General, who have completed one year of service. 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). The Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Substantially all of the costs of administering the Plan are paid by American General and the Company. The Plan's investments are held in a bank-administered trust fund. Investment Options Participants may direct their employee contributions in one of seven funds or a combination of each fund. These funds, designated on the financial statements as participant directed, invest in: 1) shares of American General common stock (Stock Fund); 2) a deposit administration group annuity contract issued by AGLA (Cash Fund); 3) shares of the AGSPC Stock Index Fund (Equity Index Fund); 4) shares of the Putnam OTC & Emerging Growth Fund (Small-Cap Fund); 5) shares of the AGSPC Growth Fund (Mid-Cap Fund); 6) shares of the Templeton Foreign Fund (International Fund); and 7) shares of the Vanguard Fixed Income Securities Fund (Bond Fund). The Companies' contributions are invested solely in the non-participant directed portion of 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 either the Stock, Cash, Equity Index, Small-Cap, Mid-Cap, International, or Bond Funds are temporarily invested in short-term investments. Income from these short- term investments is allocated to Plan participants based on current contribu- tions. Contributions Sales employees who elect to participate contribute on a pretax basis, a basic amount equal to three percent of base pay. Participants may also make additional pretax contributions in an amount ranging from one to thirteen percent of base pay, subject to the contribution limitations discussed below. The Company contributes an amount equal to one-third of the basic contribution. Participants may change their contribution percentage at any time during the year, effective on the first day of the first pay period of the month following the change. - 13 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued Contribution Limitations For 1997 and 1996, the total amount of participant pretax contributions is limited to $9,500. 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 1997 and 1996, the total amount of base pay that can be used in determining contributions under the Plan is $160,000 and $150,000, respectively. ERISA and the IRC provide that qualified plans cannot discriminate in favor of highly compensated individuals. Certain highly compensated individuals may be required to receive refunds of any contributions in excess of the IRC Sections 401(k) and (m) limits and all earnings attributable to such contributions. Highly compensated individuals are not allowed to make additional contributions if such contributions will adversely affect the Plan's nondiscrimination test under Sections 401(k) and (m). In 1997 and 1996, no refunds of contributions were necessary to comply with these laws. Participant Accounts Each participant's account is credited with the participant's and Company's contributions and an allocation of Plan earnings. Allocations of Plan earnings are 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 become 100 percent vested in the remainder of their account after five years of service (as defined in the Plan document). 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 exceeds $3,500 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. - 14 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued Participants Loans Receivable Beginning on January 1, 1997, 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 Company 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 future Company contributions. Participants who terminate and are reemployed with the 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. Plan Members At December 31, 1997, 3,288 active sales employees were contributing to the Plan. NOTE C--INVESTMENT CONTRACT WITH INSURANCE COMPANY The Plan maintains an investment contract with AGLA. The deposit administration group annuity 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 AGLA. The contract had a guaranteed minimum rate of 6.00% for the 1997 calendar year. 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 1997 was 6.55%. NOTE D--PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its 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. - 15 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE E--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 following is a reconciliation of net assets available for benefits per the financial statements to Form 5500: At December 31, In thousands 1997 1996 Net assets available for benefits per the financial statements ............................. $115,920 $76,001 Benefits payable to withdrawing participants ....... (616) (812) Net assets available for benefits per Form 5500 .. $115,304 $75,189 The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: In thousands Year Ended December 31, 1997 Benefits paid to participants per the financial statements American General Corporation common stock ...... $ 529 Cash ........................................... 7,781 Total benefits paid to participants per the financial statements ....................... 8,310 Benefits payable to withdrawing participants at year end ......................................... 616 Benefits payable to withdrawing participants at beginning of year ............................. (812) Benefits paid to participants per Form 5500 .. $8,114 - 16 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE F--FEDERAL INCOME TAXES Based on a favorable determination letter dated August 3, 1995, the Internal Revenue Service has ruled that the Plan, as restated and amended, is qualified under Section 401(a) of the IRC and, therefore, exempt under Section 501(a) from federal income taxes. The Plan has been amended since receiving the determination letter. However, the Plan's administrators believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. NOTE G--PLAN MERGER Effective October 1, 1997, the Home Beneficial Thrift Plan was split into two identical plans: one covering home office and field clerical employees and the other covering agents. The Home Beneficial Thrift Plan covering agents was merged into the Plan, and assets totaling approximately $14.6 million were transferred to the Plan's trust. This plan merger was the result of the acquisition of Home Beneficial Corporation, made by American General through one of its wholly owned subsidiaries on April 16, 1997. Participants of the Home Beneficial Thrift Plan became eligible to participate in the Plan on October 1, 1997. NOTE H--YEAR 2000 ISSUE (UNAUDITED) American General has developed a plan to modify its internal information technology to be ready for the year 2000 and has begun converting critical data processing systems. The project also includes determining whether third- party service providers have reasonable plans in place to become year 2000 compliant. American General currently expects the project to be substantially complete by December 31, 1998, and does not expect this project to have a significant effect on Plan operations. - 17 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN ASSETS HELD FOR INVESTMENT AT DECEMBER 31, 1997 In thousands, except share amounts Fair Issuer Description Cost Value American General 1,765,035 shares of $45,018 $95,422 Corporation* common stock American General Life & Deposit administration 13,998 13,998 Accident Insurance group annuity contract Company* American General Series 13,851 shares of AGSPC 385 412 Portfolio Company* Stock Index Fund Putnam 42,377 shares of Putnam OTC 657 683 & Emerging Growth Fund American General Series 26,641 shares of AGSPC 507 534 Portfolio Company* Growth Fund Templeton 49,450 shares of Templeton 549 492 Foreign Fund Vanguard 10,958 shares of Vanguard 99 101 Fixed Income Securities Fund Participant Notes* Loans issued at interest - 2,739 rates between 9.25% and 9.50% State Street Bank Short-term investments & Trust Company* in money-market fund 204 204 $61,417 $114,585 *Party in interest - 18 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN REPORTABLE TRANSACTIONS (A) FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts and transaction counts Amount of Party Involved Description Transaction Category (i) - Individual transaction in excess of 5% of Plan assets (B) Purchase of American General Life & $13,030 Accident Insurance Company deposit administration group annuity contract Category (iii) - Series of transactions in excess of 5% of Plan assets (B) Purchases of American General Life & 14,473 Accident Insurance Company deposit administration group annuity contract in 27 transactions (B) Sales of American General Life & 475 Accident Insurance Company deposit administration group annuity contract in 4 transactions State Street Bank Purchases of short-term investments in 12,105 & Trust Company 439 transactions State Street Bank Sales of short-term investments in 12,369 & Trust Company 221 transactions (B) Purchases of 80,424 shares of American 3,907 General Corporation common stock in 12 transactions (B) Sales of 152,404 shares of American 6,980 General Corporation common stock in 15 transactions at a gain of $3,399 (B) Distributions of 12,080 shares of 531 American General Corporation common stock to various individuals who withdrew from or terminated participation in the Plan in 12 transactions at a gain of $247 (A) Reportable transactions are transactions or series of transactions in excess of five percent of the current value of Plan assets at the beginning of the year and are defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations. (B) Parties involved are not presented, as permitted by Section 2520.103-6 (d)(1)(I) of the Department of Labor's Rules and Regulations. - 19 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN LOANS IN DEFAULT FOR THE YEAR ENDED DECEMBER 31, 1997 In whole dollars Original Amount Received Unpaid Indentity Amount of during Reporting Year: Balance at of Obligor* Loan Principal Interest End of Year Vest, John $ 2,381 - - $ 2,381 Duesenberry, S. 12,787 - - 12,787 Garcia, Jose 2,588 - - 2,588 *Tax statements to be issued to participants with loans in default. - 20 - AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN LOANS IN DEFAULT FOR THE YEAR ENDED DECEMBER 31, 1997 In whole dollars Loan Interest Amount Overdue: Issued Rate Defaulted Principal Interest 4/29/97 9.50% 8/16/97 $ 2,381 $ 57 2/27/97 9.25 6/07/97 12,787 296 7/30/97 9.50 11/29/97 2,588 61 - 21 - - 22 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the American General 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. AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN June 26, 1998 ELLEN H. MASTERSON Ellen H. Masterson, Member of the Administrative Board - 23 - Appendix - 24 - Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statements (Nos. 33-39201 and 333-13401) pertaining to the American General Agents' and Managers' Thrift Plan of our report dated June 19, 1998, with respect to the financial statements and schedules of the American General Agents' and Managers' Thrift Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. ERNST & YOUNG LLP Houston, Texas June 26, 1998 - 25 - -----END PRIVACY-ENHANCED MESSAGE-----