SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
_____________________
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _______ to ______
Commission file number 1-7981
Full title of the Plan:
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT 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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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997
Audited Financial Statements
Reports of Independent Auditors ...................................... 1
Statements of Net Assets Available for Benefits ...................... 3
Statements of Changes in Net Assets Available for Benefits ........... 7
Notes to Financial Statements ........................................ 11
Schedules
Assets Held for Investment ........................................... 16
Reportable Transactions .............................................. 17
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Report of Independent Auditors
Administrative Board
USLIFE Corporation Employee Savings and Investment Plan
We have audited the accompanying statement of net assets available for
benefits of the USLIFE Corporation Employee Savings and Investment Plan (the
Plan) as of December 31, 1997, and the related statement of changes in net
assets available for benefits for the year 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the 1997 financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan at December 31, 1997, and the changes in its net assets available for
benefits for the year then ended, in conformity with generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of
assets held for investment as of December 31, 1997 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 specific fund information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for benefits and
changes in net assets available for benefits of each fund. The supplemental
schedules and specific fund information have been subjected to the auditing
procedures applied in our audit of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
ERNST & YOUNG LLP
Houston, Texas
June 19, 1998
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Independent Auditors' Report
The Board of Directors and Shareholders
USLIFE Corporation:
We have audited the accompanying statement of net assets available for
benefits of the USLIFE Corporation Employee Savings and Investment Plan (the
Plan) as of December 31, 1996, and the related statement of changes in net
assets available for benefits for the year 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 audit.
We conducted our audit 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 audit provides 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 the changes in its net assets available for benefits
for the year then ended, in conformity with generally accepted accounting
principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The specific fund information in the statements
of net assets available for benefits and the statement 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 specified fund information
has been subjected to the auditing procedures applied in our audit of the
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
KPMG PEAT MARWICK LLP
New York, New York
May 2, 1997
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
American Express
Trust Research
Stock Fund 150 Fund
Assets
Investments
American General Corporation
common stock
(775,806 shares)(Note D) ........... $8,111 $ -
American Express Trust
Research 150 Fund(469,821 shares) .. - 16,255
American Express Trust
Income Fund II
(684,844 shares) ................... - -
IDS Growth Fund (203,892 shares) ..... - -
IDS Mutual Fund (114,950 shares) ..... - -
IDS Selective Fund (183,149 shares) .. - -
Templeton Foreign Fund
(169,508 shares) ................... - -
Participant notes .................... - -
Short-term investments ............... 343 -
Total investments .................. 8,454 16,255
Receivables
Other ................................ 2 -
Total assets ....................... 8,456 16,255
Net assets available for benefits ........ $8,456 $16,255
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
American IDS
Express Trust Growth
Income Fund II Fund
Assets
Investments
American General Corporation
common stock
(775,806 shares)(Note D) ........... $ - $ -
American Express Trust
Research 150 Fund(469,821 shares) .. - -
American Express Trust
Income Fund II
(684,844 shares) ................... 11,912 -
IDS Growth Fund (203,892 shares) ..... - 6,482
IDS Mutual Fund (114,950 shares) .....
IDS Selective Fund (183,149 shares) .. - -
Templeton Foreign Fund
(169,508 shares) ................... - -
Participant notes .................... - -
Short-term investments ............... - -
Total investments .................. 11,912 6,482
Receivables
Other ................................ - -
Total assets ....................... 11,912 6,482
Net assets available for benefits ........ $11,912 $6,482
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
IDS IDS Templeton
Mutual Selective Foreign
Fund Fund Fund
Assets
Investments
American General Corporation
common stock
(775,806 shares)(Note D) ........... $ - $ - $ -
American Express Trust
Research 150 Fund(469,821 shares) .. - - -
American Express Trust
Income Fund II
(684,844 shares) ................... - - -
IDS Growth Fund (203,892 shares) ..... - - -
IDS Mutual Fund (114,950 shares) ..... 1,578 - -
IDS Selective Fund (183,149 shares) .. - 1,681 -
Templeton Foreign Fund
(169,508 shares) ................... - - 1,687
Participant notes .................... - - -
Short-term investments ............... - - -
Total investments .................. 1,578 1,681 1,687
Receivables
Other ................................ - - -
Total assets ....................... 1,578 1,681 1,687
Net assets available for benefits ........ $1,578 $1,681 $1,687
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Participant Stock
Notes Fund Total
Assets
Investments
American General Corporation
common stock
(775,806 shares)(Note D) ........... $ - $33,831 $41,942
American Express Trust
Research 150 Fund(469,821 shares) .. - - 16,255
American Express Trust
Income Fund II
(684,844 shares) ................... - - 11,912
IDS Growth Fund (203,892 shares) ..... - - 6,482
IDS Mutual Fund (114,950 shares) ..... - - 1,578
IDS Selective Fund (183,149 shares) .. - - 1,681
Templeton Foreign Fund
(169,508 shares) ................... - - 1,687
Participant notes .................... 3,141 - 3,141
Short-term investments ............... - 762 1,105
Total investments .................. 3,141 34,593 85,783
Receivables
Other ................................ - 3 5
Total assets ....................... 3,141 34,596 85,788
Net assets available for benefits ........ $3,141 $34,596 $85,788
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
American Express
Trust Research
Stock Fund 150 Fund
Assets
Investments
USLIFE Corporation
common stock
(872,793 shares)(Note D) ........... $7,494 $ -
American Express Trust
Research 150 Fund(521,201 shares) .. - 14,132
American Express Trust
Income Fund II
(716,782 shares) ................... - -
IDS Growth Fund (190,215 shares) ..... - -
IDS Mutual Fund (88,986 shares) ..... - -
IDS Selective Fund (121,982 shares) .. - -
Templeton Foreign Fund
(100,594 shares) ................... - -
Participant notes .................... - -
Short-term investments ............... 185 -
Total investments .................. 7,679 14,132
Receivables
Contributions ........................ 31 2
Other ................................ 1 -
Total assets ....................... 7,711 14,134
Net assets available for benefits ........ $7,711 $14,134
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
American IDS
Express Trust Growth
Income Fund II Fund
Assets
Investments
USLIFE Corporation
common stock
(872,793 shares)(Note D) ........... $ - $ -
American Express Trust
Research 150 Fund(521,201 shares) .. - -
American Express Trust
Income Fund II
(716,782 shares) ................... 11,757 -
IDS Growth Fund (190,215 shares) ..... - 5,162
IDS Mutual Fund (88,986 shares) ...... - -
IDS Selective Fund (121,982 shares) .. - -
Templeton Foreign Fund
(100,594 shares) ................... - -
Participant notes .................... - -
Short-term investments ............... - -
Total investments .................. 11,757 5,162
Receivables
Contributions ........................ 91 31
Other ................................ - -
Total assets ....................... 11,848 5,193
Net assets available for benefits ........ $11,848 $5,193
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
IDS IDS Templeton
Mutual Selective Foreign
Fund Fund Fund
Assets
Investments
USLIFE Corporation
common stock
(872,793 shares)(Note D) ........... $ - $ - $ -
American Express Trust
Research 150 Fund(521,201 shares) .. - - -
American Express Trust
Income Fund II
(716,782 shares) ................... - - -
IDS Growth Fund (190,215 shares) ..... - - -
IDS Mutual Fund (88,986 shares) ...... 1,199 - -
IDS Selective Fund (121,982 shares) .. - 1,111 -
Templeton Foreign Fund
(100,594 shares) ................... - - 1,042
Participant notes .................... - - -
Short-term investments ............... - - -
Total investments .................. 1,199 1,111 1,042
Receivables
Contributions ........................ 8 4 8
Other ................................ - - -
Total assets ....................... 1,207 1,115 1,050
Net assets available for benefits ........ $1,207 $1,115 $1,050
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Participant Stock
Notes Fund Total
Assets
Investments
USLIFE Corporation
common stock
(872,793 shares)(Note D) ........... $ - $21,526 $29,020
American Express Trust
Research 150 Fund(521,201 shares) .. - - 14,132
American Express Trust
Income Fund II
(716,782 shares) ................... - - 11,757
IDS Growth Fund (190,215 shares) ..... - - 5,162
IDS Mutual Fund (88,986 shares) ..... - - 1,199
IDS Selective Fund (121,982 shares) .. - - 1,111
Templeton Foreign Fund
(100,594 shares) ................... - - 1,042
Participant notes .................... 3,148 - 3,148
Short-term investments ............... - 475 660
Total investments .................. 3,148 22,001 67,231
Receivables
Contributions ........................ (46) 58 187
Other ................................ - 4 5
Total assets ....................... 3,102 22,063 67,423
Net assets available for benefits ........ $3,102 $22,063 $67,423
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
American Express
Trust Research
Stock Fund 150 Fund
Additions to net assets
Investment income
Dividends ....................... $ 241 $ -
Interest ........................ 15 -
Net appreciation (depreciation)
in fair value of
investments .................... 6,212 3,798
Total investment income .......... 6,468 3,798
Contributions
Companies' .......................... - -
Participants' ....................... 856 1,279
Total contributions ............... 856 1,279
Total additions ................. 7,324 5,077
Deductions from net assets
Benefits
Common stock ..................... 923 -
Cash ............................. 3,430 2,911
Total deductions .............. 4,353 2,911
Interfund transfers .................. (2,226) (45)
Net increase ................. 745 2,121
Net assets available for benefits
Beginning of year ............ 7,711 14,134
End of year .................. $8,456 $16,255
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
American IDS
Express Trust Growth
Income Fund II Fund
Additions to net assets
Investment income
Dividends ....................... $ - $ -
Interest ........................ - 196
Net appreciation (depreciation)
in fair value of
investments .................... 457 853
Total investment income .......... 457 1,049
Contributions
Companies' .......................... - -
Participants' ....................... 1,039 872
Total contributions ............... 1,039 872
Total additions ................. 1,496 1,921
Deductions from net assets
Benefits
Common stock ..................... - -
Cash ............................. 2,574 601
Total deductions .............. 2,574 601
Interfund transfers .................. 1,142 (31)
Net increase ................. 64 1,289
Net assets available for benefits
Beginning of year ............ 11,848 5,193
End of year .................. $11,912 $6,482
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
IDS IDS Templeton
Mutual Selective Foreign
Fund Fund Fund
Additions to net assets
Investment income
Dividends ....................... $ - $ - $ -
Interest ........................ 236 87 183
Net appreciation (depreciation)
in fair value of
investments .................... 4 (14) (111)
Total investment income .......... 240 73 72
Contributions
Companies' .......................... - - -
Participants' ....................... 241 148 263
Total contributions ............... 241 148 263
Total additions ................. 481 221 335
Deductions from net assets
Benefits
Common stock ..................... - - -
Cash ............................. 281 80 203
Total deductions .............. 281 80 203
Interfund transfers .................. 171 425 505
Net increase ................. 371 566 637
Net assets available for benefits
Beginning of year ............ 1,207 1,115 1,050
End of year .................. $1,578 $1,681 $1,687
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT 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
Participant Stock
Notes Fund Total
Additions to net assets
Investment income
Dividends ....................... $ - $ 743 $ 984
Interest ........................ 247 33 997
Net appreciation (depreciation)
in fair value of
investments .................... - 16,640 27,839
Total investment income .......... 247 17,416 29,820
Contributions
Companies' .......................... - 2,120 2,120
Participants' ....................... - - 4,698
Total contributions ............... - 2,120 6,818
Total additions ................. 247 19,536 36,638
Deductions from net assets
Benefits
Common stock ..................... - 1,485 2,408
Cash ............................. 267 5,518 15,865
Total deductions .............. 267 7,003 18,273
Interfund transfers .................. 59 - -
Net increase ................. 39 12,533 18,365
Net assets available for benefits
Beginning of year ............ 3,102 22,063 67,423
End of year .................. $3,141 $34,596 $85,788
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
American Express
Trust Research
Stock Fund 150 Fund
Additions to net assets
Investment income
Dividends ....................... $ 229 $ -
Interest ........................ - -
Net appreciation (depreciation)
in fair value of
investments .................... 1,002 2,634
Total investment income .......... 1,231 2,634
Contributions
Companies' .......................... - -
Participants' ....................... 836 1,363
Total contributions ............... 836 1,363
Total additions ................. 2,067 3,997
Deductions from net assets
Benefits
Common stock ..................... 28 -
Cash ............................. 418 691
Total deductions .............. 446 691
Interfund transfers .................. (1,345) (929)
Net increase (decrease) ...... 276 2,377
Net assets available for benefits
Beginning of year ............ 7,435 11,757
End of year .................. $7,711 $14,134
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
American IDS
Express Trust Growth
Income Fund II Fund
Additions to net assets
Investment income
Dividends ....................... $ - $ -
Interest ........................ - 126
Net appreciation (depreciation)
in fair value of
investments .................... 678 711
Total investment income .......... 678 837
Contributions
Companies' .......................... - -
Participants' ....................... 1,283 968
Total contributions ............... 1,283 968
Total additions ................. 1,961 1,805
Deductions from net assets
Benefits
Common stock ..................... - -
Cash ............................. 880 178
Total deductions .............. 880 178
Interfund transfers .................. (1,395) 1,782
Net increase (decrease) ...... (314) 3,409
Net assets available for benefits
Beginning of year ............ 12,162 1,784
End of year .................. $11,848 $5,193
The accompanying notes are an integral part of these financial statements.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts
Participant Directed
IDS IDS Templeton
Mutual Selective Foreign
Fund Fund Fund
Additions to net assets
Investment income
Dividends ....................... $ - $ - $ -
Interest ........................ 113 83 37
Net appreciation (depreciation)
in fair value of
investments .................... 28 (38) 82
Total investment income .......... 141 45 119
Contributions
Companies' .......................... - - -
Participants' ....................... 336 173 210
Total contributions ............... 336 173 210
Total additions ................. 477 218 329
Deductions from net assets
Benefits
Common stock ..................... - - -
Cash ............................. 98 74 46
Total deductions .............. 98 74 46
Interfund transfers .................. 268 480 430
Net increase (decrease) ...... 647 624 713
Net assets available for benefits
Beginning of year ............ 560 491 337
End of year .................. $1,207 $1,115 $1,050
The accompanying notes are an integral part of these financial statements.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Participant Stock
Notes Fund Total
Additions to net assets
Investment income
Dividends ....................... $ - $ 590 $ 819
Interest ........................ 216 - 575
Net appreciation (depreciation)
in fair value of
investments .................... - 1,956 7,053
Total investment income .......... 216 2,546 8,447
Contributions
Companies' .......................... - 2,077 2,077
Participants' ....................... - - 5,169
Total contributions ............... - 2,077 7,246
Total additions ................. 216 4,623 15,693
Deductions from net assets
Benefits
Common stock ..................... - 71 99
Cash ............................. 121 1,075 3,581
Total deductions .............. 121 1,146 3,680
Interfund transfers .................. 709 - -
Net increase (decrease) ...... 804 3,477 12,013
Net assets available for benefits
Beginning of year ............ 2,298 18,586 55,410
End of year .................. $3,102 $22,063 $67,423
The accompanying notes are an integral part of these financial statements.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
The USLIFE Corporation Employee Savings and Investment Plan (the Plan)
financial statements are prepared in conformity with generally accepted
accounting principles.
Investments are stated at fair value. The fair value of marketable securities
is based on quotations obtained from national securities exchanges. The fair
value of mutual funds shares is based on quoted market prices which represent
the net asset value of shares held by the Plan as of the balance sheet date.
Security transactions are recognized on the trade date. Dividend income is
recorded on an accrual basis as of the ex-dividend date. Realized gains and
losses on the sale of investments are recognized based on average cost.
Participant notes are recorded as plan investments at amortized values.
Contributions are recorded as additions to net assets on the date the
contributions become payable to the Plan.
Interfund transfers are recorded at the market value of the amount
transferred.
Benefits paid to participants are recorded upon distribution at the market
value of the assets distributed.
The preparation of financial statements requires management to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosures of contingent assets and liabilities, and (3) the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with current year
presentation.
NOTE B--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General
The Plan, which is subject to certain provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), is an employee savings and investment
plan for eligible employees of USLIFE Corporation and certain of its
subsidiaries (the Company). Employees are eligible to participate in the plan
upon the completion of one year of service and attainment of age twenty-one.
The Plan provides for participant elective salary deferrals in accordance with
Section 401(k) of the Internal Revenue Code of 1986, as amended (IRC).
The Plan's investments are held by American Express Trust Company (the
Trustee).
Substantially all of the costs of administering the plan are paid by the
Company.
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USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE B--DESCRIPTION OF THE PLAN--Continued
Investment Options
Participants may designate that their contributions be invested entirely in
any one of the available funds or allocated, at their discretion, among two or
more of such funds. These funds invest in: 1) shares of American General
Corporation common stock, previously USLIFE Corporation common stock prior to
USLIFE Corporation's merger with American General Corporation on June 17,
1997 (Stock Fund); 2) common stocks of companies outside the United States
(Templeton Foreign Fund); 3) common stocks of rapidly growing companies that
are believed to have above potential for long-term growth as a result of new
management, marketing opportunities, or technological superiority (IDS Growth
Fund); 4) common stocks included in the Standard and Poor's 500 index
(American Express Trust Research 150 Fund); 5) common stocks and senior
securities such as bonds and preferred stocks that offer fixed interest and
dividend payments (IDS Mutual Fund); 6) investment grade corporate bonds,
government securities, and money market securities (IDS Selective Fund); and
7) short-term securities and investment contracts intended to be relatively
stable in value (American Express Trust Income Fund II). The Company's
contributions are invested on behalf of the Plan's participants in the Stock
Fund. Refer to Note D regarding changes in the Stock Fund.
Contributions
Under the Plan, eligible employees may make pretax contributions up to a
stated percentage of salary determined by the Administrative Committee,
currently from a minimum of 1 percent to a maximum of 12 percent of their
salary, each pay period. Eligible employees may also make aftertax
contributions up to 12 percent of their salary less their pretax contribution
percentage. The first 3 percent of salary that an employee contributes to the
Plan is designated as the basic contribution. For those employees who are not
highly compensated under the IRC (ie., those employees earning less than
$80,000 in 1997 and less than $66,000 in 1996), up to 12 percent of the
employee's salary may be contributed on a pretax basis under the Extra Savings
Potential (ESP) option. Those employees who are highly compensated may
contribute up to 7 percent of salary under the ESP option. The Company will
contribute an amount equal to 100 percent of the employee's basic
contribution.
Participants may change their contribution rate under the Plan, suspend
contributions, or resume previously suspended contributions, as well as
transfer the amounts in their account among funds, on any business day.
Contribution Limitations
For 1997 and 1996, the total amount of participant pretax contributions is
limited to $9,500. Additionally, the total amount of annual participant and
company contributions must not exceed the lesser of 25 percent of compensation
or $30,000. During 1997 and 1996, the total amount of salary that can be used
in determining contributions under the Plan is $160,000 and $150,000
respectively.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE B--DESCRIPTION OF THE PLAN --Continued
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. No
such refunds were required for the years ended December 31, 1997 and 1996.
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 particip-
ant's vested account.
Vesting
Participants are immediately vested in their contributions plus the earnings
thereon. Company contributions vest under a five-year graded vesting schedule
that provides for 20 percent vesting upon the completion of the first year of
employment and an additional 20 percent vesting upon the completion of each
additional year of employment until 100 percent vesting is reached at the end
of the fifth year of employment. Company contributions may also fully vest
under certain conditions including retirement, death, permanent disability, or
a Change in Control as defined in the Plan.
Payment of Benefits
Upon death, retirement, permanent disability, or other termination of
employment, or pursuant to a Qualified Domestic Relations Order as that term
is defined by the IRC or Title I of ERISA or the rules thereunder, the amount
credited to a Participant's account is distributed to the employee or
employee's beneficiary either in an immediate single sum or in installments
over a period not to exceed ten years.
Participants may withdraw from the Plan an amount credited to their account
attributable to their contributions and fully vested Company contributions at
any time, subject to certain restrictions regarding resumption of
contributions and subsequent withdrawals. Except as noted below, all
participants may elect to receive withdrawals from the Stock Fund in cash or
in shares of common stock. A demonstration of financial hardship is required
for a withdrawal from a participant's vested account balance under the ESP
option, unless the participant has attained age 59-1/2 or is totally disabled.
A withdrawal of the earnings on ESP contributions accruing after December 31,
1988 is not permitted under any circumstances. A participant must first seek
a loan from the Plan before making a hardship withdrawal. For distributions
made on or after January 1, 1993, a participant may elect to have any portion
of an eligible rollover distribution paid directly to an eligible retirement
plan. In the absence of such a request, the Plan administrator is required to
withhold 20% of the eligible rollover distribution for federal tax purposes.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Participant Loans
A participant who has participated in the Plan for one year or more may borrow
once in any Plan year, after meeting certain Plan requirements, from his or
her fully vested account balance provided that the total amounts borrowed and
not repaid (including interest due and unpaid) do not exceed the lesser of
$50,000 or 50 percent of the value of the participants' vested account
balance. For participants with vested account balances of $100,000 or more,
the maximum loan amount is $50,000 reduced by the highest outstanding loan
balance during the one year period ending on the day before the new loan is
made.
To comply with the interest rate requirements of the Department of Labor, the
current interest rate charged on new loans for the term of the loan is changed
monthly and based on the prime rate charged by commercial banks. Loans to
participants are for terms of not less than one year and not more than five
years, with the exception of loans for the purchase of a principal residence
which may be for up to 30 years. Payments of principal and interest on such
loans commence as soon as administratively feasible, by payroll deduction from
wages of the participant, according to an amortization schedule established by
the Administrative Committee in a nondiscriminatory manner. A loan made to a
Plan participant under this provision matures in full upon the retirement,
death, or termination of employment of the participant. A participant may
accelerate repayment during the term of the loan, after the loan has been in
force for at least one year, provided that such repayment includes the full
remaining principal together with interest to the date of repayment.
The Plan provides that the Administrative Committee may determine an overall
limit on the amount of loans that may be provided by the Plan to all
participants at any one time and may establish such further rules and
limitations as it deems appropriate.
Forfeitures
Any Company contributions made on behalf of a terminated employee which are
not vested will be forfeited upon termination of employment and will be used
to reduce the Company's future contributions to the Plan. Company
contributions are reported net of approximately $164,000 and $72,000 of
forfeitures in 1997 and 1996, respectively.
Plan Members
At December 31, 1997, 2,017 active employees were contributing to the Plan.
NOTE C--PLAN TERMINATION
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. The Plan was merged into the American General Employee's
Thrift and Incentive Plan (AG Thrift Plan) effective January 1, 1998.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE D--MERGER TRANSACTION
On June 17, 1997, the Company and American General Corporation completed a
merger agreement in an all-stock transaction. Under this agreement, Company
shareholders exchanged each share of USLIFE Corporation common stock for
1.1069 shares of American General Corporation common stock. The exchange
ratio was based on the transaction price of $49 per USLIFE common share
divided by an average trading price of American General Corporation common
stock for a period prior to closing. As a result of this transaction, 830,870
shares of USLIFE Corporation common stock in the Stock Fund were converted to
919,690 shares of American General Corporation common stock. In addition, all
active Plan participants became 100 percent vested in Company contributions
made to their accounts.
NOTE E--FEDERAL INCOME TAXES
Based on a favorable determination letter dated August 1, 1995, the Internal
Revenue Service has ruled that the Plan is qualified under Section 401(a) of
the IRC and, therefore, exempt under Section 501(a) from federal income taxes.
The Plan has been amended since receiving the determination letter. However,
the Plan s administrators believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
NOTE F--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
At December 31,
In thousands
1997 1996
Net assets available for benefits per the
financial statements...................... $85,788 $67,423
Transfers out due to Plan merger (Note G)... (85,788) -
Accrued receivables ........................ - (187)
Net assets available for benefits per
Form 5500 ................................ $ - $67,236
NOTE G--SUBSEQUENT EVENT
Effective January 1, 1998, the Plan was merged into the AG Thrift Plan. This
plan merger was the result of the corporate merger previously discussed in
Note D. Assets totaling approximately $86 million, which includes 775,806
shares of American General Corporation common stock, were transferred from the
Plan's trust in January, 1998. Plan participants automatically became eligible
to participate in the AG Thrift Plan as of January 1, 1998.
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<PAGE>
USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN
ASSETS HELD FOR INVESTMENT
AT DECEMBER 31, 1997
In thousands, except share amounts
Fair
Issuer Description Cost Value
American General 775,806 shares of $13,787 $41,942
Corporation* common stock
American Express 469,821 shares of American 10,751 16,255
Trust Company Express Trust Research
150 Fund
American Express 684,844 shares of American 10,935 11,912
Trust Company Express Trust Income
Fund II
IDS 203,892 shares of IDS 5,520 6,482
Growth Fund
Templeton 169,508 shares of Templeton 1,755 1,687
Foreign Fund
IDS 183,149 shares of IDS 1,683 1,681
Selective Fund
IDS 114,950 shares of IDS 1,589 1,578
Mutual Fund
Participant Notes* Loans issued at interest - 3,141
rates between 7.00%
and 8.50%
American Express Short-term investments in 1,105 1,105
Trust Company money-market fund
$47,125 $85,783
*Party in interest
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<PAGE>
USLIFE CORPORATION SAVINGS AND INVESTMENT PLAN
REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts and transaction counts
Amount of
Party Involved Description Transaction
American Express Purchases of short-term investments in $18,159
Trust Company 127 transactions
American Express Sales of short-term investments in 17,718
Trust Company 170 transactions
American Express Sales of 397,982 shares of American 6,715
Trust Company Express Trust Income Fund II
in 163 transactions at a
gain of $156
American Express Purchases of 366,045 shares of American 6,157
Trust Company Express Trust Income Fund II
in 79 transactions
(B) Sales of 116,789 shares of USLIFE 5,526
Corporation common stock in 7
transactions at a gain of $3,251
American Express Sales of 153,340 shares of American 4,758
Trust Company Express Trust Research 150 Fund
in 135 transactions at a gain
of $545
(B) Sales of 74,546 shares of American 3,829
General Corporation common stock in
6 transactions at a gain of $2,507
(B) Distributions of 69,338 shares of 3,480
American General Corporation common
stock to various individuals who
withdrew from or terminated
participation in the Plan in 6
transactions at a gain of $2,250
(B) Purchases of 83,591 shares of USLIFE 3,265
Corporation common stock in 9
transactions
American Express Purchases of 103,704 shares of IDS 3,249
Trust Company Growth Fund in 135 transactions
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<PAGE>
USLIFE CORPORATION SAVINGS AND INVESTMENT PLAN
REPORTABLE TRANSACTIONS (A)--Continued
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts and transaction counts
Amount of
Party Involved Description Transaction
American Express Purchases of 468,004 shares of $3,198
Trust Company American Express Trust Research 150
Fund in 104 transactions
American Express Sales of 90,026 shares of IDS 2,767
Trust Company Growth Fund in 115 transactions
at a gain of $259
(B) Distribution of 8,725 shares of 418
USLIFE Corporation common stock
to various individuals who
withdrew from or terminated
participation in the Plan in
1 transaction at a gain of $247
(B) Purchase of 1,743 shares of 93
American General Corporation
common stock in 1 transaction
(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.
- 26 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
USLIFE Corporation Employee Savings and Investment Plan Administrative Board
has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
USLIFE CORPORATION
EMPLOYEE SAVINGS AND
INVESTMENT PLAN
June 26, 1998 ELLEN H. MASTERSON
Ellen H. Masterson, Member of
the Administrative Board
- 27 -
<PAGE>
Appendix
- 28 -
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(No. 333-29393) pertaining to the USLIFE Corporation Employee Savings and
Investment Plan of our report dated June 19, 1998, with respect to the
financial statements and schedules of the USLIFE Corporation Employee Savings
and Investment Plan included in this Annual Report (Form 11-K) for the year
ended December 31, 1997.
ERNST & YOUNG LLP
Houston, Texas
June 26, 1998
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<PAGE>
Consent of Independent Accountants
The Board of Directors and Shareholders
American General Corporation:
We consent to incorporation by reference in Registration Statement No. 333-
29393 on Form S-8 of American General Corporation of our report dated May 2,
1997, relating to the statement of net assets available for benefits of the
USLIFE Corporation Employee Savings and Investment Plan as of December 31,
1996, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1996, which report appears in the
December 31, 1997 annual report on Form 11-K of the Plan.
KPMG PEAT MARWICK LLP
New York, New York
June 24, 1998
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<PAGE>
