<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
American General Corporation
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(Name of Registrant as Specified in Its Charter)
Registrant
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:/1/
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(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filng party:
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(4) Date filed:
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/1/Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
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American General Corporation
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
You are invited to attend the 70th annual meeting of the shareholders
of American General Corporation on Thursday, April 25, 1996. The meet-
ing will be held at The Westin Oaks Hotel, 5011 Westheimer Road, Hous-
ton, Texas, at 9 a.m. CDT.
The meeting will be held for the following purposes:
.to elect ten directors for one-year terms;
. to ratify the appointment of Ernst & Young LLP as independent audi-
tors for calendar year 1996;
. to transact any other business that may properly come before the
meeting or any adjournment thereof.
YOUR VOTE IS IMPORTANT. Since many shareholders are not able to at-
tend the meeting, the board of directors solicits proxies so that each
shareholder has an opportunity to vote on the issues to be decided at
the meeting.
PLEASE RETURN THE ENCLOSED PROXY. We urge you to complete and return
your proxy as promptly as possible - even if you are planning to attend
the meeting. Prior to any vote taken at the meeting, you may change
your proxy or vote in person. RETURNING YOUR CARD PROMPTLY will save
the company the expense of a second mailing.
We hope you will be represented at the meeting, either in person or
by proxy. Thank you for your continued support.
For the board of directors,
[SIGNATURE OF JOHN A. ADKINS [SIGNATURE OF HAROLD S. HOOK
APPEARS HERE] APPEARS HERE]
John A. Adkins Harold S. Hook
Corporate Secretary Chairman and Chief Executive Officer
March 19, 1996
[LOGO OF AMERICAN GENERAL APPEARS HERE]
1996 PROXY STATEMENT
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<PAGE>
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1996 PROXY STATEMENT
________________________________________________________________________________
<TABLE>
<S> <C>
GENERAL INFORMATION......................................................... 1
ELECTION OF DIRECTORS (Item 1).............................................. 1
GOVERNANCE OF THE COMPANY................................................... 4
COMPENSATION OF EXECUTIVE OFFICERS.......................................... 5
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN................. 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS............................. 14
SECURITY OWNERSHIP OF MANAGEMENT............................................ 15
CERTAIN RELATIONSHIPS AND TRANSACTIONS...................................... 16
INDEPENDENT AUDITORS (Item 2)............................................... 16
OTHER BUSINESS.............................................................. 17
PROXY SOLICITATION.......................................................... 17
VOTING OF THRIFT PLAN HOLDINGS.............................................. 17
</TABLE>
Copies of this proxy statement, the Company's Annual Report to Shareholders,
and its Annual Report on Form 10-K are available to shareholders at no charge
upon request directed to:
American General Corporation
Investor Relations
P.O. Box 3247
Houston, TX 77253-3247
Telephone: (800) AGC-1111
Fax: (713) 523-8531
[LOGO OF AMERICAN GENERAL APPEARS HERE]
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AMERICAN GENERAL CORPORATION
<PAGE>
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GENERAL INFORMATION
The accompanying proxy is solicited by the board of directors of American
General Corporation (the "Company" or "American General") for use at the
Company's annual meeting of shareholders on Thursday, April 25, 1996. The 1995
Annual Report to Shareholders has been mailed to shareholders. This proxy
statement and the proxy card are being sent to shareholders beginning on March
19, 1996.
Shares represented by proxies that are properly executed and returned with
choices specified will be voted accordingly at the meeting or any adjournment
thereof. If a proxy is signed without choices specified, those shares will be
voted for the election of the director nominees named herein and for the rati-
fication of the appointment of the independent auditors for 1996.
A shareholder may revoke a proxy at any time before it is voted by executing
another proxy or voting in person. Shareholders who attend the meeting may
vote by ballot at the meeting, thereby cancelling any proxy previously given.
VOTING INFORMATION. Holders of record of common stock ("Common Stock") and
holders of record of 7% mandatorily convertible preferred stock ("Preferred
Stock") at the close of business on March 6, 1996 will be entitled to vote at
the meeting. On that date, 207,606,549 shares of Common Stock and 2,317,701
shares of Preferred Stock were issued and outstanding. Shareholders are enti-
tled to one vote for each share of Common Stock, and four-fifths of one vote
for each share of Preferred Stock, held by such shareholders. Holders of Com-
mon Stock and Preferred Stock will vote together as one class upon the matters
to come before the meeting.
Abstentions and broker non-votes (shares held by brokers and other nominees
or fiduciaries that are present at the meeting but not voted on a particular
matter) will be counted as present for purposes of determining a quorum at the
meeting; however, they will have the same legal effect as votes against a nom-
inee or proposal.
QUORUM. The bylaws of the Company require, for a quorum, the presence at the
meeting in person or by proxy of the holders of a majority of the shares enti-
tled to vote at the meeting. IN ORDER TO ENSURE THAT A QUORUM WILL BE PRESENT,
EACH SHAREHOLDER IS REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY
CARD.
ELECTION OF DIRECTORS
(Item 1 on proxy card)
By resolution of the board of directors, the number of directors of the Com-
pany has been fixed at ten as of the date of the meeting.
All ten director nominees are currently directors of the Company. All nomi-
nees have been nominated for one-year terms ending at the next annual meeting
when their successors assume office. The affirmative vote of a majority of the
votes cast by the holders of Common Stock and Preferred Stock present and en-
titled to vote at the meeting is required for the election of each nominee to
serve as a director of the Company for such term.
All directors to be elected at this meeting were elected at the annual meet-
ing in 1995 for a one-year term, with the exception of Jon P. Newton. Mr. New-
ton was elected as a director by the board of directors on October 26, 1995,
to replace James R. Tuerff.
Although the management of the Company has no reason to believe that any of
the nominees will be unable to serve, if such situation should arise prior to
the meeting, no replacement(s) will be named, and the number of directors to
be elected will be reduced accordingly.
In addition to serving on the boards of directors listed on succeeding pages,
Harold S. Hook, Robert M. Devlin, and Jon P. Newton serve as directors of
American General Finance, Inc. Messrs. Devlin and Newton also serve as direc-
tors of American General Finance Corporation. Each of these subsidiaries of
the Company has publicly issued debt securities outstanding.
On succeeding pages, information is presented about each nominee for direc-
tor, including name, age, principal occupation during the past five years,
certain other directorships, and the period during which the director has
served on the board.
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1996 PROXY STATEMENT 1
<PAGE>
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NOMINEES FOR ELECTION AS DIRECTOR
J. Evans Attwell, 64
[PHOTO] . Vinson & Elkins L.L.P. (attorneys), Of Counsel Director
. With that firm since 1956 since
. Director: Seagull Energy Corporation 1963
Brady F. Carruth, 38
[PHOTO] . Gulf Coast Capital Corporation (commercial Director
landscaping), President & CEO since 1986 since
. Director: Consolidated Graphics, Inc. and Carruth- 1990
Doggett Industries, Inc.
W. Lipscomb Davis Jr., 64
[PHOTO] . Hillsboro Enterprises (investments), Partner since Director
1985 since
. Director: Genesco, Inc., Thomas Nelson, Inc., and 1977
SunTrust Bank, Nashville, N.A.
Robert M. Devlin, 55
[PHOTO] . American General Corporation, President since 1995, Director
Vice Chairman, 1993 to 1995 since
. American General Life Insurance Company, President 1993
& CEO, 1986 to 1993
. Joined American General in 1977
Harold S. Hook, 64
[PHOTO] . American General Corporation, Chairman & CEO since Director
1978, President, 1975 to 1981 since
. Joined American General in 1970 as president of a 1972
subsidiary
. Director: Chemical Banking Corporation, Cooper
Industries, Inc., PanEnergy Corp, and Sprint
Corporation
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2 AMERICAN GENERAL CORPORATION
<PAGE>
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NOMINEES FOR ELECTION AS DIRECTOR (CONTINUED)
Larry D. Horner, 61
[PHOTO] . Pacific USA Holdings Corp. (real estate and thrift Director
operations), Chairman since 1994 since
. Arnhold and S. Bleichroeder, Inc., Managing 1991
Director, 1991 to 1994
. KPMG Peat Marwick LLP, 1956 to 1991, Chairman &
CEO, 1984 to 1990
. Director: Atlantis Plastics, Inc., First Eagle
International Fund, Inc., Laidlaw Holdings, Inc.,
Pacific Southwest Bank, and Phillips Petroleum
Company
Richard J. V. Johnson, 65
[PHOTO] . Houston Chronicle (newspaper publishing), Chairman Director
since 1990 and Publisher since 1987 since
. With that organization since 1956 1990
. Advisory Director: Texas Commerce Bank N.A.
Jon P. Newton, 54
[PHOTO] . American General Corporation, Vice Chairman & Director
General Counsel since 1995, Senior Vice President & since
General Counsel, 1993 to 1995 1995
. Joined American General in 1993
. Clark, Thomas, Winters & Newton (attorneys), 1979
to 1993
Robert E. Smittcamp, 54
[PHOTO] . Lyons-Magnus Co., Inc. (food processing), President Director
& CEO since 1971 since
. Wawona Frozen Foods, Inc., Co-Owner since 1987; 1990
Wawona Orchards, Co-Owner since 1960
. Director: Lyons Transportation Co. and Astec
TechnologyEngineering Co.
Anne M. Tatlock, 56
[PHOTO] . Fiduciary Trust Company International (investment Director
management), President since 1994, Executive Vice since
President, 1990 to 1994 1995
. Director: American Brands, Inc., Fiduciary Trust
Company International, and PHH Corporation
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1996 PROXY STATEMENT 3
<PAGE>
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GOVERNANCE OF THE COMPANY
In accordance with applicable Texas law, the business and affairs of the Com-
pany are managed under the direction of its board of directors.
During 1995, the board of directors held 9 meetings, and each director at-
tended at least 91% of the aggregate number of meetings of the board of direc-
tors and of committees on which such director served.
AUDIT COMMITTEE. The audit committee recommends to the board of directors the
independent auditors to be engaged by the Company and confers with the
independent auditors regarding their review of the annual financial state-
ments, their findings, and their recommendations.
The audit committee also reviews compliance with the Company's Policy on
Business Conduct; reviews the scope of the audit to be performed for the fol-
lowing year; and reviews with the independent auditors the accounting princi-
ples and policies of the Company.
The audit committee, the members of which are Messrs. Davis (chairman),
Attwell, and Carruth, held three meetings in 1995.
EXECUTIVE COMMITTEE. The executive committee is authorized to exercise the
authority of the board of directors between regular meetings of the board, ex-
cept when action of the full board is required by law.
The executive committee also is authorized by the board of directors to per-
form the functions of a nominating committee and in this capacity recommends
candidates for election to the board of directors and to the committees of the
board. Shareholders may also recommend board nominees, as described in the
section "Other Business - Shareholder Proposals and Nominations."
The executive committee, which is presently composed of Messrs. Hook (chair-
man), Davis, Devlin, and Horner, met concurrently with the board of directors
in February, 1995.
PERSONNEL COMMITTEE. The personnel committee reviews the contribution that
key officers and employees make to the Company's performance and prospects,
and the salary and other compensation of these individuals. The committee de-
termines the Company's matching contribution under the Employees' Thrift and
Incentive Plan, and the members of the committee administer the following
plans: the 1984 Stock and Incentive Plan (the "1984 Plan") and the 1994 Stock
and Incentive Plan (the "1994 Plan") (collectively hereinafter referred to as
the "Plans"); and the Supplemental Thrift Plan.
The personnel committee, composed of Messrs. Horner (chairman), Johnson,
Smittcamp, and Ms. Tatlock, held three meetings in 1995.
COMPENSATION OF DIRECTORS
Each non-employee member of the board of directors receives an annual re-
tainer of $32,000, plus a fee of $1,500 for attendance at each meeting of the
board or a committee thereof. Committee chairmen receive an additional $5,000
annual retainer. No such fees or retainers are paid to any director who is an
employee of the Company.
The Retirement Plan for Directors provides that any non-employee director who
retires from the board of directors at age 65 or older, after serving at least
six years, receives an annual sum equal to the annual board retainer at the
time of retirement. Payments commence in May following the director's seventi-
eth birthday and continue for a period of years equal to the director's years
of service or until death, whichever is earlier. Any director with at least
six years of service who ceases to be a director within two years of a Change
of Control of the Company shall be deemed to have satisfied the age 65 service
requirement. See "Change of Control and Other Arrangements - Change of Con-
trol" for the definition of "Change of Control."
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4 AMERICAN GENERAL CORPORATION
<PAGE>
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COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE PERSONNEL COMMITTEE
COMPENSATION POLICY. A central issue in executive compensation is whether to
make judgments of executive performance on a prospective or retrospective ba-
sis. It is the view of the personnel committee that the retrospective approach
permits a more objective evaluation, retains the incentive value of compen-
sation, and best serves the long-term interests of shareholders.
This view is based upon the idea that organizations such as American General
are large, complex, dynamic systems. And, in such systems, the control of in-
puts does not guarantee the control of outputs. Put another way, results of a
given year are seldom the direct effect of executive action in that year.
In this process, the committee exercises its judgment in establishing the ex-
ecutive officers' salaries and their variable compensation, consisting of cash
bonuses and three types of long-term incentive awards: options, performance
awards, and restricted stock.
The committee's judgment is based on the policy that compensation should be
adequate to attract and retain qualified employees, that compensation paid to
such employees should be based on their individual duties and responsibilities
and their relative contribution to overall results, and that compensation
should take into account the level of compensation for comparable positions
inside and outside the organization.
In administering this policy, the Company has, since 1975, used the perfor-
mance and salary review procedures of the Main Event Management(R) Salary Ad-
ministration Program. This program is licensed to the Company by Main Event
Management Corporation, a company solely owned by Mr. Hook. Since 1985, the
committee has retained KPMG Peat Marwick LLP, as independent executive compen-
sation consultants, to assist in evaluating the Company's compensation policy.
Each year, in the course of exercising its judgment with regard to compensa-
tion, the committee reviews the individual contribution and performance of
each of the key executive officers and any prior incentive awards granted to
them. In addition, the committee reviews overall corporate performance, in-
cluding the Company's growth in operating earnings per share, return on share-
holders' equity, cumulative total shareholder return, and other major accom-
plishments of the organization.
In March, 1996, the committee awarded to the CEO a discretionary cash bonus
based on 1995 performance. In connection with the execution of the 1994 Em-
ployment Agreement between the CEO and the Company described on page 13, Mr.
Hook was granted options in 1994 to purchase 400,000 shares of Common Stock.
In light of this award, Mr. Hook did not receive any options in 1995, and it
is the expectation of Mr. Hook and the Company that he will not be granted any
additional options during the remainder of the term of the Employment Agree-
ment.
All of the other named executive officers identified in the Summary Compensa-
tion Table received options to purchase shares of Common Stock and, except for
James R. Tuerff, discretionary cash performance bonuses. In arriving at these
awards, the committee took particular note of the Company's consistent profit-
ability and performance compared to peer companies and industry norms, asset
quality, and the rate and consistency of growth of earnings per share and as-
sets.
The results of the Company are compared to those of a group of peer companies
that compete in the Company's primary lines of business, most of which are se-
lected from the non-bank companies in the S&P Financial Index. The peer group
is selected annually by the independent executive compensation consultants re-
tained by the Company. Currently, there are 29 companies in this comparison
group, which is subject to change as the Company or its competitors change
their focus or as new competition emerges.
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1996 PROXY STATEMENT 5
<PAGE>
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The committee believes that the Company's most direct competitors for execu-
tive talent are not necessarily all of the companies that would be included in
a peer group established to compare shareholder return. Thus, the compensation
peer group is not the same as the peer group index in the Comparison of Five-
Year Cumulative Total Shareholder Return graph included on page 11 of the proxy
statement.
SALARIES. Base salaries of executive officers are reviewed individually on an
annual basis to determine if they should be increased, decreased, or left un-
changed. During the first quarter, the committee reviews the salaries of the
50 highest salaried employees. In determining the salaries of the executive
officers, the committee reviews the factors described under "Compensation Pol-
icy" above, and the overall growth and long-term progress of the organization.
In addition, the committee compares the CEO's base salary to that paid to
chief executive officers in other companies selected from the compensation
peer group described above. Subject to the 1994 Employment Agreement between
the Company and Mr. Hook described on page 13, the committee attempts to posi-
tion the CEO's salary in a middle range that reflects peer company practice.
Mr. Hook's base salary in 1995 was the same as in 1994.
The committee recommends to the board of directors for its approval salaries
for the 25 most highly salaried employees. The balance of the highest 50 sala-
ries is approved by the committee.
BONUSES. Employees with salaries placing them in the top 3% of all American
General employees are deemed to be in a position to make a significant impact
on the growth and profitability of the organization. Therefore, these individ-
uals are eligible for consideration for a cash bonus annually. During the
first quarter of each year, the committee reviews recommendations for bonuses
for eligible employees, excluding the chairman, president, and vice chairman.
After reviewing the factors described under "Compensation Policy" above, the
committee acts on those recommendations and also determines the cash bonuses,
if any, to be paid to the chairman, president, and vice chairman.
In March, 1996, the committee awarded bonuses based on 1995 performance to
313 employees, or approximately 66% of the eligible employees, totalling $6.3
million. Bonuses payable in March, 1996 to the 15 highest salaried employees
of the Company were subject to limitations contained in the Performance-Based
Plan for Executive Officers, which was approved by shareholders at the 1994
annual meeting of shareholders.
LONG-TERM INCENTIVE AWARDS. Incentive compensation at American General is in-
tended to promote long-term growth and profitability, since the Company's
businesses are long-term in nature. Awards under the Company's stock and in-
centive plans enable the Company to match long-term compensation with long-
term contribution and provide participants the opportunity to acquire stock in
the Company, thereby further aligning their personal interests with the inter-
ests of other long-term shareholders. In determining these awards, the commit-
tee follows the process and reviews factors described under "Compensation Pol-
icy" above.
Long-term incentive awards have been made under the Plans. No further awards
may be made under the 1984 Plan, which has been terminated except with respect
to awards that were outstanding under that plan as of February 8, 1994. Long-
term incentive awards are described as follows:
Stock Options. Stock options are granted with an exercise price equal to 100%
of the fair market value of Common Stock on the date of grant. Options become
exercisable six months after the date of grant, except that those granted to
the highest paid executives generally become exercisable in three equal annual
installments beginning on the first anniversary of the grant. The Company has
never followed the practice of cancelling existing options and replacing them
with new options exercisable at lower prices.
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6 AMERICAN GENERAL CORPORATION
<PAGE>
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In 1995, options were awarded to 168 employees for 690,700 shares of Common
Stock, of which 140,200 were awarded to the named executive officers. The
awards to the named executive officers represented three-tenths of one percent
(0.3%) of Common Stock outstanding at the end of 1995.
Performance Awards. Performance awards are contingent awards of shares of
Common Stock that are earned over a three-year performance period. The commit-
tee determines the percentage of the performance award that is actually
earned, which may range from zero to 100%, based upon overall corporate per-
formance during the three-year performance period. This decision is based upon
a review of key corporate performance measures, including growth of operating
earnings per share, total return on book value, return on shareholders' equi-
ty, and the overall growth and profitability of the Company, during the inter-
vening three-year period. In applying these factors, the committee relies upon
the judgment of its members rather than upon a mathematical formula.
In 1995, the committee determined that the performance awards granted in 1992
should vest at 100%. A total of 10 executive officers received vested perfor-
mance shares in 1995, valued at $1.49 million. This compares to a value of
$1.01 million when granted in 1992 and reflects the increase in the Common
Stock price over the three-year performance period.
In 1995, no performance awards were granted to any of the named executive of-
ficers. In 1996, the granting of performance shares has been resumed as a
means to further align the interests of the recipients with the interests of
long-term shareholders of the Company.
Restricted Stock. The 1994 Plan also authorizes the committee to make awards
of restricted stock. Restricted stock has never been granted to the CEO. No
restricted stock was awarded in 1995 to any of the named executive officers.
The 1994 Plan limits the aggregate number of shares of restricted stock that
may be awarded annually to one-tenth of one percent (0.1%) of the number of
shares of Common Stock outstanding as of the preceding December 31.
DEDUCTIBILITY OF COMPENSATION. Section 162(m) of the Internal Revenue Code
generally disallows a tax deduction to public companies for annual compensa-
tion over $1 million paid to their chief executive officers and to certain
other highly compensated executive officers. Mr. Hook has deferred a portion
of his 1994, 1995, and 1996 compensation until after his retirement. Addition-
ally, a deduction is permitted for compensation if it is paid on account of
attainment of one or more "performance-based" goals. Therefore, all compensa-
tion paid to such individuals by the Company should be deductible.
PERSONNEL COMMITTEE OF THE BOARD OF DIRECTORS:
LARRY D. HORNER, CHAIRMAN
RICHARD J.V. JOHNSON
ROBERT E. SMITTCAMP
ANNE M. TATLOCK*
* Ms. Tatlock was elected as a member of the Personnel Committee on June 8,
1995, and did not participate as a member of that committee prior to such
date.
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1996 PROXY STATEMENT 7
<PAGE>
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The following Summary Compensation Table sets forth compensation information
for the Company's CEO and each of the five other most highly compensated exec-
utive officers of the Company, including officers of certain subsidiaries (the
six being herein referred to as the "named executive officers") for services
performed in 1995, 1994, and 1993.
SUMMARY COMPENSATION TABLE
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<TABLE>
<CAPTION>
Long-Term Compensation/1/
-----------------------------------------
Annual Compensation Awards Payouts
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Long-Term
Restricted Securities Incentive All Other
Stock Underlying Plan Compen-
Name and Principal Position Year Salary($) Bonus($) Awards ($)/2/ Options (#) Payouts ($)/3/ sation ($)/4/
- --------------------------- ---- --------- -------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Harold S. Hook, Chairman & 1995 $980,000 $980,000 -0- -0- $719,872 $50,795
CEO of the Company 1994 980,000 980,000 -0- 505,000 624,400 50,444
1993 980,000 784,000 -0- 79,675 701,285 47,922
--------------------------------------------------------------------------------------
Robert M. Devlin, President 1995 461,077 400,000 -0- 35,000 128,000 23,488
of the Company 1994 373,155 300,000 -0- 15,000 112,000 19,376
1993 300,731 175,000 $515,625 32,000 134,378 14,998
--------------------------------------------------------------------------------------
Jon P. Newton, Vice 1995 333,077 200,000 -0- 22,600 -0- 17,728
Chairman & General 1994 291,539 150,000 170,250 12,000 -0- 15,709
Counsel of the Company 1993 247,404 125,000 119,000 6,000 -0- 10,728
--------------------------------------------------------------------------------------
James S. D'Agostino Jr., 1995 299,846 200,000 -0- 20,000 64,000 14,752
Chairman & CEO of American 1994 280,000 140,000 -0- 12,000 56,000 13,779
General Life and Accident 1993 286,616 112,000 426,000 17,500 41,943 12,437
Insurance Company
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Stephen D. Bickel, Chairman & 1995 333,077 150,000 -0- 22,600 128,000 18,906
CEO of The Variable Annuity 1994 300,000 150,000 -0- 12,000 112,000 18,341
Life Insurance Company 1993 300,000 105,000 -0- 12,000 139,974 15,013
--------------------------------------------------------------------------------------
James R. Tuerff, Former 1995 508,077 -0- -0- 40,000/5/ 128,000 25,603
President of the Company 1994 449,616 300,000 -0- 20,000 112,000 22,817
1993 380,000 200,000 610,000 32,000 134,378 16,570
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</TABLE>
/1/AWARDS UNDER THE PLANS. All long-term compensation awards were granted un-
der the Plans.
/2/RESTRICTED STOCK AWARDS. These amounts represent the value of the re-
stricted stock on the date of grant. At December 31, 1995, Messrs. Devlin,
Newton, D'Agostino, Bickel, and Tuerff held an aggregate of 25,000, 10,000,
14,000, 10,000, and 30,000 shares, respectively, with a value of $871,875,
$348,750, $488,250, $348,750, and $1,046,250, respectively. Mr. Hook holds
no restricted stock. Mr. Tuerff's restricted stock was forfeited on the ef-
fective date of his resignation from the Company in January, 1996. Divi-
dends are paid to holders with respect to restricted stock at the same rate
as is paid on all other Common Stock. Upon a Change of Control, all forfei-
ture restrictions with respect to all outstanding shares of restricted
stock immediately lapse. See "Change of Control and Other Arrangements -
Change of Control" for the definition of "Change of Control."
/3/LONG-TERM INCENTIVE PLAN PAYOUTS. These amounts represent the value of per-
formance awards on the date of vesting, following the three-year performance
period, regardless of whether the vested award was paid in cash, stock, or a
combination thereof.
/4/ALL OTHER COMPENSATION. These amounts include the Company's contributions to
the American General Employees' Thrift and Incentive Plan ("Thrift Plan")
and Supplemental Thrift Plan ("Supplemental Plan") and the taxable value of
Company-provided term life insurance ("Excess Life"). The Thrift Plan con-
tributions for 1995 were $6,750 for each of the named executive officers.
The Supplemental Plan contributions and the Excess Life taxable value for
1995 were, respectively, as follows: Mr. Hook, $37,350 and $6,695; Mr.
Devlin, $13,998 and $2,740; Mr. Newton, $8,238 and $2,740; Mr. D'Agostino,
$6,743 and $1,259; Mr. Bickel, $8,238 and $3,918; and Mr.Tuerff, $16,113 and
$2,740.
/5/CANCELLED OPTIONS. All 40,000 options were cancelled on the effective date
of Mr. Tuerff's resignation from the Company in January, 1996.
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8 AMERICAN GENERAL CORPORATION
<PAGE>
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The following table contains information concerning the grant of stock options
during 1995 to the named executive officers under the 1994 Plan.
STOCK OPTIONS GRANTED IN 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Stock Option Grants for Option Term/1/
----------------------------------------------------------------------
% of Total
Options Options Granted Exercise At 5% At 10%
Granted to Employees Price Expiration per annum per annum
Name (#)/2,3/ in 1995 ($/Sh) Date ($) ($)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harold S. Hook -0- -0- N/A N/A N/A N/A
Robert M. Devlin 35,000 5.1 $32.00 3-15-05 $704,362 $1,784,992
Jon P. Newton 22,600 3.3 32.00 3-15-05 454,817 1,152,595
James S. D'Agostino Jr. 20,000 2.9 32.00 3-15-05 402,493 1,019,995
Stephen D. Bickel 22,600 3.3 32.00 3-15-05 454,817 1,152,595
James R. Tuerff 40,000 5.8 32.00 1-17-96 N/A N/A
</TABLE>
- --------------------------------------------------------------------------------
/1/POTENTIAL REALIZABLE VALUE. These values are disclosed for illustration only
and should not be interpreted as projections of the future price of Common
Stock. To lend perspective to these illustrative values, if the price of Com-
mon Stock increased 5 percent per year for 10 years from March 15, 1995 (dis-
regarding dividends and assuming for purposes of the calculation a constant
number of shares outstanding), the total increase in value of all shares of
Common Stock outstanding would be $4.1 billion; and if the price of Common
Stock increased 10 percent per year over such period, the increase in value
would be $10.4 billion.
/2/OPTIONS. These consist solely of non-qualified stock options to acquire Com-
mon Stock, one-third of which become exercisable on each of the three succes-
sive anniversaries following the grant dates. Mr. Tuerff's 1995 stock option
grant expired and all 40,000 options were cancelled on the effective date of
his resignation from the Company in January, 1996.
/3/CHANGE OF CONTROL. Upon a Change of Control, the stock option agreements pro-
vide for the automatic surrender of options and a cash payment based on the
difference between the exercise price and a price intended to give the option
holder the benefit of the highest price paid for Common Stock in the change
of control transaction, or the highest fair market value of Common Stock dur-
ing the 60 days preceding the change of control date. See "Change of Control
and Other Arrangements - Change of Control" for the definition of "Change of
Control."
- --------------------------------------------------------------------------------
1996 PROXY STATEMENT 9
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The following table shows the exercise of options by the named executive of-
ficers during 1995 and unexercised options held by them as of December 31,
1995.
AGGREGATED OPTION EXERCISES IN 1995 AND
OPTION VALUES AT DECEMBER 31, 1995/1/
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Acquired on Value Options at 12/31/95 (#) at 12/31/95 ($)/2/
Name Exercise (#) Realized ($) ------------------------- -------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harold S. Hook 140,240 $2,374,308 678,095 196,558 $7,609,630 $1,481,422
Robert M. Devlin -0- -0- 46,334 55,667 349,680 185,875
Jon P. Newton -0- -0- 10,000 30,600 58,250 119,975
James S. D'Agostino Jr. -0- -0- 26,797 33,833 257,616 136,769
Stephen D. Bickel -0- -0- 97,756 34,600 1,471,731 136,475
James R. Tuerff 87,936 1,370,909 27,999 64,001/3/ 134,661 251,089/3/
- -------------------------------------------------------------------------------------------------------------
</TABLE>
/1/OPTIONS. The options reported in the table include both incentive stock op-
tions and non-qualified stock options to acquire Common Stock. All outstand-
ing options are subject to acceleration and cashout upon a Change of Control
of the Company. See footnote 3 to the table captioned "Stock Options Granted
in 1995."
/2/VALUE. "Value" is the difference between the fair market value of the under-
lying shares of Common Stock on December 31, 1995 and the exercise price.
/3/FORFEITURE. Mr. Tuerff's unexercisable options were forfeited on the effec-
tive date of his resignation from the Company in January, 1996.
LONG-TERM INCENTIVE PLAN AWARDS GRANTED IN 1995
There were no performance awards granted under the 1994 Plan to the named ex-
ecutive officers during the Company's fiscal year ending December 31, 1995.
Therefore, there is no table for "Long-Term Incentive Plan Awards Granted in
1995". See "Report of the Personnel Committee" on pages 5 through 7 for a dis-
cussion of the administration of the long-term incentive awards.
- -------------------------------------------------------------------------------
10 AMERICAN GENERAL CORPORATION
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The following graph shows the Company's total return on Common Stock compared
to the S&P 500 Composite Stock Price Index and the S&P Financial Index over
the five-year period beginning December 31, 1990.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
[PASTE UP CHART]
<TABLE>
<CAPTION>
5-YEAR ANNUALIZED
YEAR-END 1990 1991 1992 1993 1994 1995 TOTAL RETURN
<S> <C> <C> <C> <C> <C> <C> <C>
American General $100 $152 $204 $212 $218 $280 22.8%
- ----------------------------------------------------------------------
S&P 500 Index 100 130 140 155 157 215 16.6%
- ----------------------------------------------------------------------
S&P Financial Index 100 151 186 207 199 307 25.2%
</TABLE>
- -------------------------------------------------------------------------------
1996 PROXY STATEMENT 11
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PENSION PLANS
The table below shows the estimated annual retirement benefits payable to em-
ployees at the normal retirement age of 65 under the Company's qualified non-
contributory defined benefit retirement plan ("Retirement Plan"), as well as
its non-qualified, unfunded benefit plan ("Restoration Plan"). The Restoration
Plan provides benefits that employees would have been entitled to receive un-
der the Retirement Plan were it not for limitations imposed by the Internal
Revenue Code. The Retirement Plan provides that a participant will receive,
upon normal retirement, a lifetime pension based on the participant's compen-
sation and length of credited service. The annual pension benefits are based
on average annual compensation during the highest consecutive five of the last
ten years of service. Full vesting of benefits accrued under the Retirement
Plan and the Restoration Plan occurs after five years of service.
PENSION PLAN TABLE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Five-Year
Average
Annual
Compensation Years of Service
Covered by -----------------------------------------------------------------
the Plans 10 Yr. 15 Yr. 20 Yr. 25 Yr. 30 Yr. 35 Yr.
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 31,315 $ 46,973 $ 62,631 $ 78,289 $ 93,947 $ 98,947
500,000 80,815 121,223 161,631 202,039 242,447 254,947
800,000 130,315 195,473 260,631 325,789 390,947 410,947
1,100,000 179,815 269,723 359,631 449,539 539,447 566,947
1,400,000 229,315 343,973 458,631 573,289 687,947 722,947
1,700,000 278,815 418,223 557,631 697,039 836,447 878,947
2,000,000 328,315 492,473 656,631 820,789 984,947 1,034,947
</TABLE>
- -------------------------------------------------------------------------------
The table illustrates estimated retirement benefits payable on a straight-
life annuity basis to persons in specified annual compensation and years of
service classifications. The amounts in the table are not subject to offset
for amounts payable under Social Security. The amounts shown, however, are
subject to reduction in the event of early retirement.
The credited years of service under the Retirement Plan for Messrs. Hook,
Devlin, Newton, D'Agostino, Bickel, and Tuerff are 25, 18, 3, 10, 30, and 18,
respectively.
The compensation covered by the Retirement Plan and the Restoration Plan in-
cludes all amounts shown in the Summary Compensation Table under the columns
comprising "Annual Compensation."
In 1989, the board of directors approved a supplemental retirement agreement
for Mr. Hook. The combined effect of this agreement together with the
Retirement Plan and the Restoration Plan is to provide a benefit upon
retirement at or after age 62 of 55% of average monthly compensation as
defined in the Retirement Plan, with a surviving spousal benefit. In 1990, a
lump sum payment of the present value of the supplemental benefit payable at
age 60 was made to Mr. Hook. As a result, no further benefits are expected to
be payable to Mr. Hook under the supplemental retirement agreement.
CHANGE OF CONTROL AND OTHER ARRANGEMENTS
CHANGE OF CONTROL. All of the awards outstanding or to be granted under the
1984 Plan and the 1994 Plan are subject to the automatic acceleration of
vesting and cashout of the awards upon a Change of Control. See the applicable
footnotes to the preceding executive compensation tables for a description of
how a Change of Control would affect each type of award under the Plans. The
phrase "Change of Control" for all purposes used in this proxy statement is
generally defined as (i) the acquisition of 30% or more of the voting securi-
ties of the Company by a non-affiliate of the Company; (ii) the merger,
consolidation, or sale of substantially all of the assets of the Company, un-
less such transaction is with an affiliate of the Company; (iii) the adoption
of a plan of liquidation of the Company by its shareholders; or (iv) a change
in the constituency of the board of directors of the Company, where the cur-
rent directors (including future directors who are nominated or elected by 75%
of the then current directors) cease to constitute a majority of the board of
directors of the Company.
SEVERANCE AGREEMENTS. The Company has agreements providing for the payment of
severance bene-
- -------------------------------------------------------------------------------
12 AMERICAN GENERAL CORPORATION
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
fits to certain officers of the Company and its subsidiaries in the event of
voluntary or involuntary termination of employment within a period equal to
the lesser of the amount of time such officer was employed by the Company or
its subsidiaries prior to the Change of Control or three years following the
occurrence of a Change of Control. Involuntary termination includes any termi-
nation that results from resignation following any change in certain duties,
responsibilities, salary, or benefits. Voluntary termination includes any ter-
mination that is not involuntary. No payments are due for termination by rea-
son of death, disability, normal retirement, or termination for cause.
These agreements generally provide for severance payments equal to slightly
less than three times the officer's base annual salary, excluding bonuses and
special incentive payments, in the event of involuntary termination, and two
times salary in the event of voluntary termination. Any payment thereunder
will be increased by an additional amount to cover payment of any applicable
penalty tax and any federal or state income tax on all benefits received from
the Company as the result of a Change of Control in order to equal the amount
the officer would have received absent any such penalty tax. The agreements
also provide for the continuation of certain medical and dental benefits for a
maximum period of 30 months following termination.
The Company has such agreements with all of the named executive officers, ex-
cept Mr. Tuerff. All current agreements expire on March 31, 1998.
EMPLOYMENT AGREEMENT. In 1994, pursuant to an agreement for Mr. Hook to
serve beyond his previously anticipated retirement date, the Company entered
into an Employment Agreement providing for Mr. Hook's continued employment as
Chairman and CEO of the Company for a period that may expire as late as the
Company's annual meeting of shareholders in 1997, at a minimum annual base
salary equal to his 1994 annual base salary. Mr. Hook's minimum base salary
for this period was set at the same level at which it has remained since May,
1991. This action was in keeping with the Company's strategy of maintaining
stable base compensation and emphasizing variable reward opportunities. Mr.
Hook will continue to participate, on the same basis generally as other senior
executives, in the Company's benefit plans and programs, including the payment
of any annual bonus.
In connection with the Employment Agreement, Mr. Hook was granted options to
purchase 400,000 shares of Common Stock pursuant to the 1994 Plan at $25.97
per share, representing the fair market value of Common Stock on the date of
the grant. This grant was an inducement to Mr. Hook to extend his employment
beyond his previously anticipated retirement date, and was authorized by the
personnel committee after consultation with KPMG Peat Marwick LLP. It repre-
sented a one-time grant of options that Mr. Hook would otherwise likely have
received over the term of the Employment Agreement.
CONSULTING AGREEMENTS. In 1994, the Company entered into a Consulting Agree-
ment, pursuant to which, subject to certain conditions, Mr. Hook will provide
consulting services to the Company and the Company will make five annual pay-
ments of $250,000 to Mr. Hook following his retirement.
On October 26, 1995, Mr. Tuerff entered into a Consulting Agreement with the
Company. The agreement provides that Mr. Tuerff's employment would continue
until January 17, 1996, and that consulting services would be rendered there-
after for a period ending no later than October 31, 1996, for which consulting
services the Company would pay up to an aggregate of $393,750, payable over
the term of the agreement. The agreement also provides for the continuance of
certain life insurance and health benefits for a limited period.
- -------------------------------------------------------------------------------
1996 PROXY STATEMENT 13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Company does not know of any person that owns more than 5 percent of the
outstanding Common Stock or Preferred Stock, except for those listed below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Shares
Name & Address of Beneficially Percent of
Beneficial Owner Owned Class
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK
INVESCO PLC
11 Devonshire Square
London EC2M 4YR
England 16,225,970/1/ 7.8%
- -------------------------------------------------------------------------------
Fayez Sarofim & Co.
("Sarofim Co.") and
Fayez S. Sarofim
Two Houston Center
Suite 2907
Houston, TX 11,838,622/2/ 5.7%
- --------------------------------------------------------------------------------
</TABLE>
/1/INVESCO PLC and certain of its subsidiaries report shared voting and invest-
ment power with respect to all of the shares reported in the table.
/2/Mr. Sarofim is chairman, president, and principal shareholder of Sarofim Co.
He reports that through Sarofim Co., Sarofim Trust Co., and Sarofim Interna-
tional Management Company (each of which is a registered investment adviser)
and certain trusts of which Mr. Sarofim is trustee, he may be deemed to share
investment power with respect to all of the shares reported in the table. He
shares voting power with Sarofim Co., Sarofim Trust Co., and Sarofim Interna-
tional Management Company with respect to not more than 10,486,784 of such
shares. Such investment power, voting power, or both, also may be deemed to
be shared with trustees, other fiduciaries, clients, or others in many cases.
The shares reported in the table exclude 5,800 shares owned by family members
of Mr. Sarofim, but as to which Mr. Sarofim and Sarofim Co. disclaim benefi-
cial ownership.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares
Name & Address of Beneficially Percent of
Beneficial Owner Owned Class
- --------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK
The Lucy B. Gooding
1995 Living Trust
2970 St. Johns Avenue
Jacksonville, FL 753,422/1/ 32.5%
- --------------------------------------------------------------------------------
The Bryan Trust
One Independent Drive
Jacksonville, FL 479,236/2/ 20.7%
- --------------------------------------------------------------------------------
The Olive Julia Gibson
Bryan Testamentary Trust
One Independent Drive
Jacksonville, FL 186,506/2/ 8.1%
- --------------------------------------------------------------------------------
</TABLE>
/1/Lucy B. Gooding, Jack E. Brooks, and Bonnie H. Smith are trustees of The Lucy
B. Gooding 1995 Living Trust.
/2/Jacob F. Bryan IV, G. Howard Bryan, and Julia Olive Craig Brooke are benefi-
ciaries and/or trustees of The Bryan Trust and The Olive Julia Gibson Bryan
Testamentary Trust. In addition to the shares reported in the table, G. How-
ard Bryan has direct beneficial ownership of 8,033 shares of Preferred Stock.
- --------------------------------------------------------------------------------
14 AMERICAN GENERAL CORPORATION
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITY OWNERSHIP OF MANAGEMENT
The beneficial ownership as of February 15, 1996, or such later date for
which such information is available, of Common Stock by each director nominee,
by each of the named executive officers identified herein under the caption
"Summary Compensation Table," and by all director nominees and executive offi-
cers as a group is set forth below, except that the American General Employ-
ees' Thrift and Incentive Plan (the "Thrift Plan") ownership is as of December
31, 1995, the latest date for which such information is available. The persons
included in the table below own no shares of Preferred Stock.
NAME AND SHARES ADDITIONAL RIGHTS AND DISCLAIMERS OF BENEFICIAL OWNERSHIP/1/
- -------------------------------------------------------------------------------
J. Evans
Attwell Disclaims beneficial ownership of 7,200 shares owned by a
157,214 shares family member.
- -------------------------------------------------------------------------------
Stephen D. Includes 62,669 shares owned directly; 44,132 shares held
Bickel 123,989 through the Thrift Plan; and 17,188 shares owned by a family
shares member for which he disclaims beneficial ownership. Does not
include 110,985 shares that may be acquired within 60 days on
exercise of stock options.
- -------------------------------------------------------------------------------
Brady F. Disclaims beneficial ownership of 4,618 shares held as
Carruth 28,976 custodian for a family member, as to which he has sole voting
shares and investment power, and 2,518 shares owned by a family
member.
- -------------------------------------------------------------------------------
James S. All shares are beneficially owned; 20,147 shares are owned
D'Agostino Jr. directly, of which 14,000 are restricted shares; and 6,644
26,791 shares shares are held through the Thrift Plan. Does not include
40,796 shares that may be acquired within 60 days on exercise
of stock options.
- -------------------------------------------------------------------------------
W. Lipscomb Disclaims beneficial ownership of 13,260 shares owned by
Davis Jr. family members, by a limited partnership of which he is the
22,102 shares general partner, and by a trust of which he is co-trustee.
- -------------------------------------------------------------------------------
Robert M.
Devlin 73,610 All shares are beneficially owned; 48,109 shares are owned
shares directly, of which 15,000 are restricted shares; and 25,501
shares are held through the Thrift Plan. Does not include
63,000 shares that may be acquired within 60 days on exercise
of stock options.
- -------------------------------------------------------------------------------
Harold S. Hook All shares are beneficially owned; 157,113 shares are owned
290,489 shares directly; 47,640 shares are owned by Main Event Management
Corporation; and 85,736 shares are held through the Thrift
Plan. Does not include 839,653 shares that may be acquired
within 60 days on exercise of stock options.
- -------------------------------------------------------------------------------
Larry D. Horner All shares are beneficially owned.
2,000 shares
- -------------------------------------------------------------------------------
Richard J.V. All shares are beneficially owned.
Johnson 12,500
shares
- -------------------------------------------------------------------------------
Jon P. Newton All shares are beneficially owned; 11,178 shares are owned
14,626 shares directly, of which 10,000 are restricted shares; and 3,448
shares are held through the Thrift Plan. Does not include
21,533 shares that may be acquired within 60 days on exercise
of stock options.
- -------------------------------------------------------------------------------
Robert E.
Smittcamp All shares are beneficially owned.
69,789 shares
- -------------------------------------------------------------------------------
Anne M. Tatlock All shares are beneficially owned.
500 shares
- -------------------------------------------------------------------------------
All Director Does not include 1,236,211 shares that may be acquired within
Nominees and 60 days on exercise of stock options. Includes 106,000
Executive restricted shares granted under the Plans. Shares owned by
Officers the group (including shares that may be acquired within 60
as a Group days on exercise of stock options) represent 1.1% of the
(23 persons)/2/ outstanding shares of Common Stock.
1,030,001 shares
- -------------------------------------------------------------------------------
/1/Beneficial ownership signifies sole voting and investment power, unless oth-
erwise noted. Each participant in the Thrift Plan has sole voting power with
respect to shares held in the participant's plan account (subject to being
exercised by the Thrift Plan's trustee in the event the participant does not
exercise voting power). A holder of restricted shares granted under the
Plans has sole voting power but not investment power with respect to such
shares. Those disclaiming beneficial ownership share voting and investment
power with respect to the securities subject to disclaimer, unless otherwise
noted. Securities subject to such disclaimers are included in the total num-
ber of 1,030,001 shares listed in the left column.
/2/Mr. Tuerff resigned as President of the Company on October 26, 1995 and as
an employee of the Company on January 17, 1996. As of February 15, 1996, he
beneficially owned 40,904 shares of Common Stock, of which 19,401 shares
were owned directly, and 21,503 shares were held through the Thrift Plan.
Such shares are included in the total number of 1,030,001 shares listed in
the left column.
- -------------------------------------------------------------------------------
1996 PROXY STATEMENT 15
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND TRANSACTIONS
. In 1995, Mr. Attwell, a director, was a partner in the law firm of Vinson &
Elkins L.L.P. that provided legal services to the Company and its subsidiaries
during 1995. Presently, Mr. Attwell is Of Counsel to such firm.
. During Mr. Hook's tenure with the Company, Main Event Management(R), the
proprietary management system owned by Main Event Management Corporation
("MEMC"), a corporation solely owned by Mr. Hook, has been made available to
the Company without the usual fees. In order to assure the continued avail-
ability of the system following Mr. Hook's retirement, the Company entered
into a License Agreement dated April 27, 1994 with MEMC, which superseded and
supplanted a License Agreement dated March 26, 1976. Pursuant to the 1994
agreement, MEMC granted to the Company and its subsidiaries a worldwide, non-
exclusive, perpetual, non-transferable right and license to its proprietary
management system, Main Event Management.
MEMC has agreed to continue to assist the Company in institutionalizing the
use of Main Event Management at the Company. As was the case under the prior
agreement, intellectual property rights to this proprietary system, including
improvements or additions thereto, will continue to be owned by MEMC.
Upon the earlier of June 1, 1997 or the day after termination of the Employ-
ment Agreement described on page 13, the Company will pay to MEMC the sum of
$1,250,000, and an annual payment of $125,000 per year for ten consecutive
years.
. Various executive officers and directors of American General may from time
to time purchase insurance or annuity products marketed by American General
companies in the ordinary course of business.
INDEPENDENT AUDITORS
(Item 2 on proxy card)
The board of directors of the Company, adopting the recommendation of the au-
dit committee, has appointed the firm of Ernst & Young LLP as the Company's
independent auditors to audit the accounts of the Company for the year 1996
and recommends ratification of the appointment by the shareholders at the
meeting. One or more representatives of Ernst & Young LLP are expected to be
present at the meeting where they will be given the opportunity to make a
statement and will be available to respond to appropriate questions. Ernst &
Young LLP has served as the Company's independent auditors for the fiscal year
just completed.
If the appointment of Ernst & Young LLP is not ratified by a majority of the
votes cast by holders of Common Stock and Preferred Stock present and entitled
to vote at the meeting, or if, prior to the meeting, Ernst & Young LLP de-
clines to act or otherwise becomes incapable of acting, or its engagement is
otherwise discontinued by the board of directors of the Company at any time,
then, in any such case, the board of directors will appoint other independent
auditors whose employment will then be subject to ratification by shareholders
at the annual meeting following such appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
- -------------------------------------------------------------------------------
16 AMERICAN GENERAL CORPORATION
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OTHER BUSINESS
1996 ANNUAL MEETING. At the date of this proxy statement, the management of
the Company knows of no other matter to be presented for action at the meet-
ing. However, if any other matters do properly come before the meeting, it is
intended that the persons named on the accompanying proxy will vote on such
matters pursuant to the proxy in accordance with their best judgment.
SHAREHOLDER PROPOSALS AND NOMINATIONS. Shareholders may propose matters to be
presented at shareholders' meetings and also may nominate directors. Formal
procedures have been established for those proposals and nominations.
Shareholder proposals must be received at the Company's principal offices on
or before November 19, 1996 in order to be included in the proxy materials for
presentation at the Company's 1997 annual meeting.
The Company bylaws provide generally that nominations of persons for election
to the board of directors may be made by any shareholder entitled to vote for
the election of directors. A shareholder who intends to nominate a director
nominee must provide written notification to the corporate secretary of the
Company at its principal office. The notification must be provided not fewer
than 60 nor more than 90 days prior to any shareholders' meeting called for
the election of directors; provided, that in the event the Company gives fewer
than 70 days' notice of the date of the shareholders' meeting, such written
notification must be provided not later than the close of business on the 10th
day following the day on which notice of the shareholders' meeting was mailed
to shareholders. In addition, to be effective, the notification must comply
with certain other procedures and provide certain information, all as set
forth in the Company bylaws. A copy of these requirements will be provided to
any shareholder upon written request to the corporate secretary.
PROXY SOLICITATION
In addition to the solicitation of proxies by mail, proxies also may be so-
licited by telephone, telegram, facsimile, or personal interview by employees
of the Company, who will not receive additional compensation therefor. The
Company has retained Morrow & Co., Inc. to assist in the solicitation of prox-
ies at a fee of approximately $13,500, plus expenses. The Company will pay the
cost of soliciting proxies. The Company also will reimburse brokerage houses
and other custodians, nominees, and fiduciaries for their expenses in sending
proxy material to the beneficial owners of voting securities.
VOTING OF THRIFT PLAN HOLDINGS
The terms of the American General Employees' Thrift and Incentive Plan, the
American General Agents' and Managers' Thrift Plan, and The Variable Annuity
Life Insurance Company Agents' and Managers' Thrift Plan and the related trust
agreements with State Street Bank & Trust Company, as Trustee, require that
the Trustee vote the shares of Common Stock held in participants' accounts as
directed by the participants. In the event a participant does not provide spe-
cific voting instructions, the Trustee must vote the shares in accordance with
the instructions received from a majority of shares for which the Trustee did
receive instructions and in accordance with its fiduciary duty. A participant
in one of the plans may use the proxy card to direct the Trustee to vote the
shares of Common Stock allocated to that participant's account. The Trustee
will vote the shares of the participant whose name and signature appear
thereon in the manner directed therein.
By order of the board of directors,
John A. Adkins
Corporate Secretary
March 19, 1996
- -------------------------------------------------------------------------------
1996 PROXY STATEMENT 17
<PAGE>
- --------------------------------------------------------------------------------
------------------------------------------------------------------------------
[LOGO OF AMERICAN GENERAL APPEARS HERE]
1996 PROXY STATEMENT
AMERICAN GENERAL CORPORATION
2929 ALLEN PARKWAY
HOUSTON, TEXAS 77019-2155
- --------------------------------------------------------------------------------
<PAGE>
P R O X Y
[AMERICAN GENERAL LOGO APPEARS HERE]
Annual Meeting of Shareholders April 25, 1996
The undersigned hereby appoints J. EVANS ATTWELL, W. LIPSCOMB DAVIS JR., and
HAROLD S. HOOK, and each of them, as proxies with full power of substitution,
and hereby authorizes each of them to represent and to vote, as designated on
the reverse side, all the shares of American General Corporation Common Stock
that the undersigned is entitled to vote at the annual meeting of shareholders
to be held in Houston, Texas, on Thursday, April 25, 1996, and at any
postponement or adjournment thereof.
Election of the following Director Nominees is recommended by the Board of
Directors:
J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., Robert M. Devlin,
Harold S. Hook, Larry D. Horner, Richard J. V. Johnson, Jon P. Newton, Robert E.
Smittcamp, and Anne M. Tatlock.
If you are a participant in any of the American General Thrift Plans referenced
in the Proxy Statement, this card also constitutes instructions to the trustee
of such plans to vote the shares allocated to your accounts in the manner
described in the Proxy Statement.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE). YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE NAMED PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD. THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF THE COMPANY.
SEE REVERSE SIDE
X Please mark your |
votes as in this | 3147
example. |______
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF ALL DIRECTOR
NOMINEES AND FOR ITEM 2. (HOWEVER, IF NO DIRECTION IS MADE AS TO VOTING OF
THRIFT PLAN STOCK, SEE THE PROXY STATEMENT.)
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of 2. Ratification of
Directors. Appointment of
(see reverse) Independent Auditors.
For, except vote withheld from the following
nominee(s):
--------------------------------------------------------
In their discretion, the proxies are authorized to vote upon
such other business as is properly brought before the meeting.
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, give full title as such.
--------------------------------------------------------------
--------------------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
<PAGE>
P R O X Y
[AMERICAN GENERAL LOGO APPEARS HERE]
Annual Meeting of Shareholders April 25, 1996
The undersigned hereby appoints J. EVANS ATTWELL, W. LIPSCOMB DAVIS JR., and
HAROLD S. HOOK, and each of them, as proxies with full power of substitution,
and hereby authorizes each of them to represent and to vote, as designated on
the reverse side, all the shares of American General Corporation 7% Convertible
Preferred Stock that the undersigned is entitled to vote at the annual meeting
of shareholders to be held in Houston, Texas, on Thursday, April 25, 1996, and
at any postponement or adjournment thereof.
Election of the following Director Nominees is recommended by the Board of
Directors:
J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., Robert M. Devlin,
Harold S. Hook, Larry D. Horner, Richard J. V. Johnson, Jon P. Newton, Robert E.
Smittcamp, and Anne M. Tatlock.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE). YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE NAMED PROXIES CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD. THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS OF THE COMPANY.
SEE REVERSE SIDE
X Please mark your |
votes as in this | 7566
example. |______
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ELECTION OF ALL DIRECTOR
NOMINEES AND FOR ITEM 2.
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 2.
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
1. Election of 2. Ratification of
Directors. Appointment of
(see reverse) Independent Auditors.
For, except vote withheld from the following
nominee(s):
--------------------------------------------------------
In their discretion, the proxies are authorized to vote upon
such other business as is properly brought before the meeting.
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, give full title as such.
--------------------------------------------------------------
--------------------------------------------------------------
SIGNATURE(S) DATE
</TABLE>
