-----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, QtmSd7wGOdmStQyh2C4xASj7R66Xes+p0g+CGvjcKm885cUrv2fGF5xKvh55JsMG AhKfC5MtIjpw2O7JU7RUyA== 0000005103-99-000049.txt : 19990628 0000005103-99-000049.hdr.sgml : 19990628 ACCESSION NUMBER: 0000005103-99-000049 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990625 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: 99652794 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, 1998 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, 1998 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 ........ 8 Notes to Financial Statements ..................................... 14 Schedules Item 27a - Schedule of Assets Held for Investment Purposes ........ 19 Item 27d - Schedule of Reportable Transactions .................... 20 Item 27b - Schedule of Loans or Fixed Income Obligations .......... 21 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, 1998 and 1997, 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, 1998 and 1997, 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 purposes as of December 31, 1998, reportable transactions, and loans or fixed income obligations for the year then ended are presented for purpose 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 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 Fund information 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 14, 1999 -1- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1998 In thousands, except share amounts Participant Directed Equity Stock Cash Index Fund Fund Fund Assets Investments American General Corporation common stock (1,686,717 shares)......... $97,955 $ - $ - American General Life & Accident Insurance Company deposit administration group annuity contract ........................ - 14,139 - American General Series Portfolio Company - Stock Index Fund (26,339 shares) ................. - - 991 Putnam OTC & Emerging Growth Fund (76,967 shares).................. - - - American General Series Portfolio Company - Growth Fund (53,398 shares) ................. - - - Templeton Foreign Fund (83,992 shares) ................. - - - Vanguard Fixed Income Securities Fund (36,716 shares) ................. - - - Participant notes ................. - - - Short-term investments ............ 353 22 13 Total investments ............... 98,308 14,161 1,004 Receivables Contributions ..................... - 10 8 Interfund transfers ............... - 161 6 Other ............................. 3 284 2 Total assets .................... 98,311 14,616 1,020 Liabilities Payables Forfeitures ....................... - 10 - Interfund transfers ............... 154 - - Other ............................. 171 - - Total liabilities ............... 325 10 - Net assets available for benefits ..... $97,986 $14,606 $1,020 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, 1998 In thousands, except share amounts Participant Directed Inter- Small-Cap Mid-Cap national Fund Fund Fund Assets Investments American General Corporation common stock (1,686,717 shares) ......... $ - $ - $ - American General Life & Accident Insurance Company deposit administration group annuity contract ......................... - - - American General Series Portfolio Company - Stock Index Fund (26,339 shares)................... - - - Putnam OTC & Emerging Growth Fund (76,967 shares)................... 1,328 - - American General Series Portfolio Company - Growth Fund (53,398 shares) .................. - 1,191 - Templeton Foreign Fund (83,992 shares) .................. - - 705 Vanguard Fixed Income Securities Fund (36,716 shares) .................. - - - Participant notes .................. - - - Short-term investments ............. 19 17 13 Total investments ................ 1,347 1,208 718 Receivables Contributions ...................... 12 10 6 Interfund transfers ................ - - - Other .............................. - - - Total assets ..................... 1,359 1,218 724 Liabilities Payables Forfeitures ........................ - - - Interfund transfers ................ 1 11 1 Other .............................. 17 15 9 Total liabilities ................ 18 26 10 Net assets available for benefits ...... $1,341 $1,192 $714 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, 1998 In thousands, except share amounts Non- Participant Participant Directed Directed Bond Participant Stock Fund Notes Fund Total Assets Investments American General Corporation common stock (1,686,717 shares) .......... $ - $ - $33,609 $131,564 American General Life & Accident Insurance Company deposit administration group annuity contract .................... - - - 14,139 American General Series Portfolio Company - Stock Index Fund (26,339 shares).............. - - - 991 Putnam OTC & Emerging Growth Fund (76,967 shares).............. - - - 1,328 American General Series Portfolio Company - Growth Fund (53,398 shares) ............. - - - 1,191 Templeton Foreign Fund (83,992 shares) ............. - - - 705 Vanguard Fixed Income Securities Fund(36,716 shares) ......... 341 - - 341 Participant notes ............. - 3,227 - 3,227 Short-term investments ........ 6 - 119 562 Total investments ........... 347 3,227 33,728 154,048 Receivables Contributions ................. 5 - - 51 Interfund transfers ........... - - - 167 Other ......................... - - 2 291 Total assets ................ 352 3,227 33,730 154,557 Liabilities Payables Forfeitures ................... - - 48 58 Interfund transfers ........... - - - 167 Other ......................... 5 - 304 521 Total liabilities ........... 5 - 352 746 Net assets available for benefits . $347 $3,227 $33,378 $153,811 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 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 - Interfund transfers ............... 224 - - Other ............................. 195 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. -5- 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 ........................ - - - 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. -6- 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 Participant Directed Directed Bond Participant Stock Fund Notes 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 - - 101 Participant notes ............. - 2,739 - 2,739 Short-term investments ........ 5 - 28 204 Total investments ........... 106 2,739 24,785 114,585 Receivables Contributions ................. 3 - - 76 Interfund transfers ........... - - - 236 Other ......................... 7 - 1 1,585 Total assets ................ 116 2,739 24,786 116,482 Liabilities Payables Forfeitures ................... - - 46 49 Interfund transfers ........... - - - 236 Other ......................... 2 - 21 277 Total liabilities ........... 2 - 67 562 Net assets available for benefits . $114 $2,739 $24,719 $115,920 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, 1998 In thousands, except share amounts Participant Directed Equity Stock Cash Index Fund Fund Fund Additions to net assets Investment income Dividends .......................... $ 1,924 $ - $ 12 Interest ........................... 11 884 1 Net appreciation (depreciation) in fair value of investments ...... 30,914 - 162 Total investment income (loss) ... 32,849 884 175 Contributions Company's .......................... - 271 - Participants' ...................... 5,659 749 350 Total contributions .............. 5,659 1,020 350 Total additions ................ 38,508 1,904 525 Deductions from net assets Benefits American General Corporation common stock (33,816 shares) ............ 1,580 - - Cash ............................... 7,979 3,130 56 Forfeitures .......................... - 281 - Participant loan origination fees .... 10 - - Total deductions ............... 9,569 3,411 56 Interfund transfers .................... (1,281) 259 133 Net increase (decrease) ........ 27,658 (1,248) 602 Net assets available for benefits Beginning of year .............. 70,328 15,854 418 End of year .................... $97,986 $14,606 $1,020 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, 1998 In thousands, except share amounts Participant Directed Inter- Small-Cap Mid-Cap national Fund Fund Fund Additions to net assets Investment income Dividends .......................... $ - $ 52 $ 17 Interest ........................... 1 1 1 Net appreciation (depreciation) in fair value of investments ......... 124 82 (63) Total investment income (loss) ... 125 135 (45) Contributions Company's .......................... - - - Participants' ...................... 613 506 382 Total contributions .............. 613 506 382 Total additions ................ 738 641 337 Deductions from net assets Benefits American General Corporation common stock (33,816 shares) ............ - - - Cash ............................... 75 64 81 Forfeitures .......................... - - - Participant loan origination fees .... 1 1 - Total deductions ............... 76 65 81 Interfund transfers .................... 5 34 (34) Net increase (decrease) ........ 667 610 222 Net assets available for benefits Beginning of year .............. 674 582 492 End of year .................... $1,341 $1,192 $714 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, 1998 In thousands, except share amounts Non- Participant Participant Directed Directed Bond Participant Stock Fund Notes Fund Total Additions to net assets Investment income Dividends ..................... $ 12 $ - $ 649 $ 2,666 Interest ...................... 1 169 4 1,073 Net appreciation (depreciation) in fair value of investments . 6 - 10,432 41,657 Total investment income (loss) .................... 19 169 11,085 45,396 Contributions Company's ..................... - - 972 1,243 Participants' ................. 143 - - 8,402 Total contributions ......... 143 - 972 9,645 Total additions ........... 162 169 12,057 55,041 Deductions from net assets Benefits American General Corporation common stock (33,816 shares). - - 533 2,113 Cash .......................... 30 464 2,693 14,572 Forfeitures ..................... - - 169 450 Participant loan origination fees - - 3 15 Total deductions .......... 30 464 3,398 17,150 Interfund transfers ............... 101 783 - - Net increase (decrease) ... 233 488 8,659 37,891 Net assets available for benefits Beginning of year ......... 114 2,739 24,719 115,920 End of year ............... $347 $3,227 $33,378 $153,811 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, 1997 In thousands, except share amounts Participant Directed Equity Stock Cash Index Fund Fund Fund Additions 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. -11- 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 Additions 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. -12- 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 Participant Directed Directed Bond Participant Stock Fund Notes Fund Total Additions to net assets Investment income Dividends ................. $ 3 $ - $ 650 $ 2,564 Interest .................. 1 79 4 329 Net appreciation (depreciation) in fair value of investments 3 - 6,082 23,471 Total investment income (loss) 7 79 6,736 26,364 Contributions Company's ................. - - 1,042 1,042 Participants' ............. 83 - - 6,422 Total contributions ..... 83 - 1,042 7,464 Merger of Home Beneficial Thrift Plan ...................... - - - 14,599 Total additions ....... 90 79 7,778 48,427 Deductions from net assets Benefits American General Corporation common stock (12,080 shares) - - 137 529 Cash ...................... 1 151 1,819 7,781 Forfeitures ................. - - 168 171 Participant loan origination fees - - - 27 Total deductions ...... 1 151 2,124 8,508 Interfund transfers ........... 25 2,811 - - Net increase .......... 114 2,739 5,654 39,919 Net assets available for benefits Beginning of year ..... - - 19,065 76,001 End of year ........... $114 $2,739 $24,719 $115,920 The accompanying notes are an integral part of these financial statements. -13- 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 (AGLA or the Company) 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 additions and deductions during the reporting periods. Actual results could differ from those estimates. 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. 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. -14- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued 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 Company's 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 contributions. 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 rate and investment election for future contributions, as well as transfer all or part of their employee account balances among funds, no more than once each month. All changes except transfers are effective on the first day of the first pay period of each month. Transfers are effective on the last business day of the month the request is received. Contribution Limitations For 1998 and 1997, the total amount of participant pretax contributions is limited to $10,000 and $9,500, respectively. 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 1998 and 1997, 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 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 1998 and 1997, 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. -15- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued 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 exceeded $5,000 in 1998 or $3,500 in 1997, 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. Participants Loans Receivable 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's 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, 1998, 2,852 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 1998 and 1997. 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 1998 and 1997 was 6.52% and 6.55%, respectively. -16- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued 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. 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 1998 1997 Net assets available for benefits per the financial statements ............................. $153,811 $115,920 Benefits payable to withdrawing participants ....... (2,075) (616) Net assets available for benefits per Form 5500 .. $151,736 $115,304 The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: In thousands Year Ended December 31, 1998 Benefits paid to participants per the financial statements American General Corporation common stock ...... $ 2,113 Cash ........................................... 14,572 Total benefits paid to participants per the financial statements ....................... 16,685 Benefits payable to withdrawing participants at year end ......................................... 2,075 Benefits payable to withdrawing participants at beginning of year ............................. (616) Benefits paid to participants per Form 5500 .. $18,144 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, and a new determination letter has been requested. The Plan's administrators anticipate a favorable reply and believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. -17- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE G--YEAR 2000 ISSUE (UNAUDITED) As of December 31, 1998, American General had completed Year 2000 readiness activities for substantially all of its critical systems, making them Year 2000 ready. American General will continue to test its systems throughout 1999 to maintain Year 2000 readiness. In addition, American General has developed a plan to assess and attempt to mitigate the risks associated with the potential failure of third parties to achieve Year 2000 readiness. As of April 30, 1999, American General had identified and assessed its critical third-party dependencies. Due to the various stages of Year 2000 readiness for critical third-party dependencies, American General's testing activities related to critical third parties will extend throughout 1999. American General has commenced contigency planning to reduce the risk of Year 2000-related business failures. As of April 30, 1999, American General had completed its contingency plans. These plans will be tested during the second and third quarters of 1999. Based on these activities and plans, American General believes that it will experience at most isolated and minor disruptions of business processes following the turn of the century. Such disruptions are not expected to have a material effect on the Plan's operations. NOTE H--SUBSEQUENT EVENT Effective January 1, 1999, the Plan's eligibility requirement was changed from the completion of one year of service to 30 days of service. -18- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1998 EIN: 74-0483432 PN: 002 In thousands, except share amounts Fair Issuer Description Cost Value American General 1,686,717 shares of $49,663 $131,564 Corporation* common stock American General Life & Deposit administration 14,139 14,139 Accident Insurance group annuity contract Company* American General Series 26,339 shares of AGSPC 804 991 Portfolio Company* Stock Index Fund Putnam 76,967 shares of Putnam OTC 1,212 1,328 & Emerging Growth Fund American General Series 53,398 shares of AGSPC 1,080 1,191 Portfolio Company* Growth Fund Templeton 83,992 shares of Templeton 852 705 Foreign Fund Vanguard 36,716 shares of Vanguard 339 341 Fixed Income Securities Fund Participant Notes* Loans issued at interest - 3,227 rates between 8.75% and 9.50% State Street Bank Short-term investments & Trust Company* in money-market fund 562 562 $68,651 $154,048 *Party in interest -19- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (A) FOR THE YEAR ENDED DECEMBER 31, 1998 EIN: 74-0483432 PN: 002 In thousands, except share amounts and transaction counts Amount of Party Involved Description Transaction Category (iii) - Series of transactions in excess of 5% of Plan assets State Street Bank Purchases of short-term investments in $18,587 & Trust Company 504 transactions State Street Bank Sales of short-term investments in 18,229 & Trust Company 438 transactions (B) Purchases of American General Life & 3,571 Accident Insurance Company deposit administration group annuity contract in 41 transactions (B) Sales of American General Life & 3,430 Accident Insurance Company deposit administration group annuity contract in 17 transactions (B) Purchases of 96,413 shares of American 6,214 General Corporation common stock in 30 transactions (B) Sales of 140,915 shares of American 9,231 General Corporation common stock in 15 transactions at a gain of $5,589 (B) Distributions of 33,816 shares of 2,188 American General Corporation common stock to various individuals who withdrew from or terminated participation in the Plan in 14 transactions at a gain of $1,299 (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. -20- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 EIN: 74-0483432 PN: 002 In whole dollars Original Amount Received Unpaid Identity Amount of during Reporting Year: Balance at of Obligor* Loan Principal Interest End of Year Carroll, Ida M. $7,000 - - $6,004 DeClue, Richard 4,000 - - 3,208 Evans, Terry 8,000 - - 8,000 Fields, Brandon 1,000 - - 1,000 Geitzen, Richard 6,534 - - 5,830 Jenkins, Lloyd 2,000 - - 1,778 Leshko, Lori 1,473 - - 1,181 Webb, Matthew 1,600 - - 1,267 Wiley, Gregory 2,958 - - 2,818 * Form 1099-R to be issued to terminated participants with loans in default -21- AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS FOR THE YEAR ENDED DECEMBER 31, 1998 EIN: 74-0483432 PN: 002 In whole dollars Loan Interest Amount Overdue: Issued Rate Defaulted Principal Interest 02/27/97 9.25% 03/31/98 $6,004 $139 01/31/97 9.25 03/31/98 3,208 74 10/30/97 9.50 02/28/98 8,000 190 09/29/97 9.50 02/28/98 1,000 24 01/31/97 9.25 12/31/97 5,830 135 05/29/97 9.50 01/31/98 1,778 41 01/31/97 9.25 11/30/97 1,181 27 03/28/97 9.25 12/31/97 1,267 29 06/27/97 9.50 02/28/98 2,818 67 * Form 1099-R to be issued to terminated participants with loans in default 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 25, 1999 ELIZABETH A. DOBBS Elizabeth A. Dobbs Vice President-Benefits and Payroll Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 33-39201 and 333-13401) pertaining to the American General Agents' and Managers' Thrift Plan of our report dated June 14, 1999, 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, 1998. ERNST & YOUNG LLP Houston, Texas June 23, 1999 -----END PRIVACY-ENHANCED MESSAGE-----