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, 1996
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
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
DECEMBER 31, 1996
Audited Financial Statements
Report of Independent Auditors ........................................ 1
Statements of Net Assets Available for Benefits ....................... 2
Statements of Changes in Net Assets Available for Benefits ............ 3
Notes to Financial Statements ......................................... 4
Schedules
Assets Held for Investment ............................................ 9
Reportable Transactions ............................................... 10
Signature Page ........................................................... 11
Appendix: Consent of Independent Auditors ............................... 13
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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, 1996 and 1995, 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, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment as of December 31, 1996 and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in our audit of the
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Houston, Texas
June 3, 1997
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31,
In thousands, except share amounts
1996 1995
Assets
Investments
American General Corporation common stock
(1,849,095 shares in 1996 and 1,866,522 shares
in 1995) ...................................... $75,582 $65,095
Short-term investments .......................... 468 630
Total investments ............................. 76,050 65,725
Receivables ....................................... 6 7
Total assets ................................ 76,056 65,732
Liabilities
Payables
Forfeitures ..................................... 48 81
Other ........................................... 7 23
Total liabilities ........................... 55 104
Net assets available for benefits ................... $76,001 $65,628
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31,
In thousands, except share amounts
1996 1995
Additions to net assets
Investment income
Dividends ...................................... $ 2,440 $ 2,248
Interest ....................................... 16 16
Net appreciation in fair value of common stock . 11,064 11,955
Total investment income ...................... 13,520 14,219
Contributions
Company's ...................................... 835 1,031
Participants' .................................. 4,334 5,291
Total contributions .......................... 5,169 6,322
Total additions ............................ 18,689 20,541
Deductions from net assets
Benefits
American General Corporation common stock
(60,182 shares in 1996 and 46,318 shares
in 1995) ..................................... 2,207 1,486
Cash ........................................... 5,917 3,862
Forfeitures ...................................... 192 197
Total deductions ........................... 8,316 5,545
Net increase ............................... 10,373 14,996
Net assets available for benefits
Beginning of year ................................ 65,628 50,632
End of year ...................................... $76,001 $65,628
The accompanying notes are an integral part of these financial statements.
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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. Short-term
investments are reported at cost which approximates fair value. Purchases and
sales of securities are recorded on a trade-date basis. Dividends are
recorded as income on ex-dividend dates, and interest income is recorded using
the accrual method of accounting.
Contributions are recorded as additions to net assets on the date the
contributions become payable to the Plan.
Benefits paid to participants are recorded upon distribution at the market
value of the assets distributed.
The preparation of financial statements requires management to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosures of contingent assets and liabilities, and (3) the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with current year
presentation.
NOTE B--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General
The Plan, sponsored by American General, is a defined contribution plan
currently offered to eligible agents and managers (sales employees) of
American General Life and Accident Insurance Company (the Company), 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).
The cost of administering the Plan is paid by American General and the
Company.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Investments
The Plan's investments are held in a bank-administered trust fund. The Plan's
funds are invested in shares of American General common stock. Funds which
have not yet been used to purchase American General common stock 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 nine percent
of base pay, subject to the contribution limitations discussed below. The
Company contributes an amount equal to one-third of the basic contribution.
Participants may change their contribution percentage two times each year
effective on the first day of the first pay period of the month following the
change.
Contribution Limitations
For 1996 and 1995, the total amount of participant pretax contributions is
limited to $9,500 and $9,240, 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 1996 and
1995, the total amount of base pay that can be used in determining
contributions under the Plan is $150,000.
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 1996 and 1995, 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 earn-
ings 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.
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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 exceeds
$3,500 and the participant is under age 65), a participant will receive a
distribution equal to the vested value of his or her account. A minimum
distribution must be made after a participant reaches age 70-1/2, regardless
of whether service has been terminated.
Forfeitures
Participants terminating employment forfeit their nonvested interest in
Company contributions on the earlier of (1) the distribution of the entire
nonforfeitable portion of their account or (2) upon incurring a period of
severance equal to five consecutive one-year breaks in service. Forfeitures
are available to reduce future Company contributions.
Participants who terminate and are reemployed with the Company before
incurring five consecutive one-year breaks in service are entitled to their
nonvested or forfeited amounts subject to certain provisions as stated in the
Plan document.
Plan Members
At December 31, 1996, 2,217 active sales employees were contributing to the
Plan.
NOTE C--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.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE D--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
1996 1995
Net assets available for benefits per the
financial statements ........................... $76,001 $65,628
Benefits payable to withdrawing participants ..... (812) (397)
Net assets available for benefits per
Form 5500 .................................... $75,189 $65,231
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
In thousands
Year Ended
December 31, 1996
Benefits paid to participants per the financial
statements
American General Corporation common stock .... $2,207
Cash ......................................... 5,917
Total benefits paid to participants per the
financial statements ..................... 8,124
Benefits payable to withdrawing participants
at year end .................................... 812
Benefits payable to withdrawing participants
at beginning of year ........................... (397)
Benefits paid to participants per Form 5500 .. $8,539
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE E--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 (see Note F). However, the Plan's administrators believe
that the Plan is designed and is currently being operated in compliance with
the applicable requirements of the IRC.
NOTE F--SUBSEQUENT EVENT
Effective January 1, 1997, the Plan was restated and amended. The amendments
include an increased range of additional participant contributions from nine
percent, as discussed in Note B, to thirteen percent. Participants may change
their contribution percentage at anytime during the year, effective on the
first day of the first pay period of the month following the change. In
addition, participants can direct the investment of their employee
contributions into six new funds: 1) The Templeton Foreign Fund
(International Fund), 2) Putnam OTC & Emerging Growth Fund (Small-Cap Fund),
3) American General Series Portfolio Company (AGSPC) Growth Fund (Mid-Cap
Fund), 4) AGSPC Stock Index Fund (Equity Index Fund), 5) Vanguard Fixed Income
Securities Fund - Long-Term Corporate Portfolio (Bond Fund), and 6) a deposit
administration group annuity contract (Cash Fund). Participants age 60 or
older can direct the investment of their employer matching contributions into
any of the available funds. The amendments also include participant loan
provisions and the acceptance of rollover contributions from other qualified
plans.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ASSETS HELD FOR INVESTMENT
AT DECEMBER 31, 1996
In thousands, except share amounts
Fair
Issuer Description Cost Value
American General 1,849,095 shares of common $43,524 $75,582
Corporation* stock
State Street Bank Short-term investments in
& Trust Company* money-market fund 468 468
$43,992 $76,050
*Party in interest
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts and transaction counts
Amount of
Party Involved Description Transaction
State Street Bank Purchases of short-term investments $7,256
& Trust Company in 67 transactions
State Street Bank Sales or maturities of short-term 7,418
& Trust Company investments in 50 transactions
(B) Purchases of 141,308 shares of 5,131
American General Corporation common
stock in 20 transactions
(B) Sales of 98,553 shares of American 3,486
General Corporation common stock
in 11 transactions at a gain of
$1,298
(B) Distributions of 60,182 shares of 2,207
American General Corporation common
stock to various individuals who
withdrew from or terminated
participation in the Plan in 17
transactions at a gain of $1,169
(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.
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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 24, 1997 CARL J. SANTILLO
Carl J. Santillo, Member of
the Administrative Board
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Appendix
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Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Nos. 33-39201 and 333-13401) pertaining to the American General Agents' and
Managers' Thrift Plan of our report dated June 3, 1997, 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, 1996.
ERNST & YOUNG LLP
Houston, Texas
June 23, 1997
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