SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
_____________________
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _______ to ______
Commission file number 1-7981
Full title of the Plan:
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
Name of the issuer of the securities held pursuant to the Plan
and the address of its principal executive office:
AMERICAN GENERAL CORPORATION
2929 Allen Parkway
Houston, Texas 77019
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1997
Audited Financial Statements
Report of Independent Auditors....................................... 1
Statements of Net Assets Available for Benefits .................... 2
Statements of Changes in Net Assets Available for Benefits ......... 6
Notes to Financial Statements ...................................... 10
Schedules
Assets Held for Investment ......................................... 16
Reportable Transactions ............................................ 17
Loans in Default ................................................... 18
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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, 1997 and 1996, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment as of December 31, 1997, reportable
transactions, and loans in default for the year then ended are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the financial statements. The specific
fund information in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and specific fund information have been
subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Houston, Texas
June 19, 1998
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Assets
Investments
American General Corporation
common stock (1,765,035 shares) ........ $70,665 $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity contract .. - 13,998 -
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares) ........................ - - 412
Putnam OTC & Emerging Growth Fund
(42,377 shares) ........................ - - -
American General Series Portfolio
Company - Growth Fund (26,641 shares) .. - - -
Templeton Foreign Fund (49,450 shares) ... - - -
Vanguard Fixed Income Securities Fund
(10,958 shares) ........................ - - -
Participant notes ........................ - - -
Short-term investments ................... 79 56 8
Total investments ...................... 70,744 14,054 420
Receivables
Contributions ............................ - 54 5
Interfund transfers ...................... - 194 4
Other .................................... 3 1,569 -
Total assets ........................... 70,747 15,871 429
Liabilities
Payables
Forfeitures .............................. - 3 -
Loan origination fees .................... 8 - -
Interfund transfers ...................... 224 - -
Other .................................... 187 14 11
Total liabilities ...................... 419 17 11
Net assets available for benefits ............ $70,328 $15,854 $418
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Assets
Investments
American General Corporation
common stock (1,765,035 shares) ........ $ - $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity contract .. - - -
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares) ........................ - - -
Putnam OTC & Emerging Growth Fund
(42,377 shares) ........................ 683 - -
American General Series Portfolio
Company - Growth Fund (26,641 shares) .. - 534 -
Templeton Foreign Fund (49,450 shares) ... - - 492
Vanguard Fixed Income Securities Fund
(10,958 shares) ........................ - - -
Participant notes ........................ - - -
Short-term investments ................... 10 9 9
Total investments ...................... 693 543 501
Receivables
Contributions ............................ 5 5 4
Interfund transfers ...................... - 38 -
Other .................................... - 5 -
Total assets ........................... 698 591 505
Liabilities
Payables
Forfeitures .............................. - - -
Loan origination fees .................... - - -
Interfund transfers ...................... 11 - 1
Other .................................... 13 9 12
Total liabilities ...................... 24 9 13
Net assets available for benefits ............ $674 $582 $492
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Bond Participant
Fund Notes
Assets
Investments
American General Corporation
common stock (1,765,035 shares) ........ $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity contract .. - -
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares) ........................ - -
Putnam OTC & Emerging Growth Fund
(42,377 shares) ........................ - -
American General Series Portfolio
Company - Growth Fund (26,641 shares) .. - -
Templeton Foreign Fund (49,450 shares) ... - -
Vanguard Fixed Income Securities Fund
(10,958 shares) ........................ 101 -
Participant notes ........................ - 2,739
Short-term investments ................... 5 -
Total investments ...................... 106 2,739
Receivables
Contributions ............................ 3 -
Interfund transfers ...................... - -
Other .................................... 7 -
Total assets ........................... 116 2,739
Liabilities
Payables
Forfeitures .............................. - -
Loan origination fees .................... - -
Interfund transfers ...................... - -
Other .................................... 2 -
Total liabilities ...................... 2 -
Net assets available for benefits ............ $114 $2,739
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Non-Participant
Directed
Stock
Fund Total
Assets
Investments
American General Corporation
common stock (1,765,035 shares) ........ $24,757 $95,422
American General Life & Accident
Insurance Company deposit
administration group annuity contract .. - 13,998
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares) ........................ - 412
Putnam OTC & Emerging Growth Fund
(42,377 shares) ........................ - 683
American General Series Portfolio
Company - Growth Fund (26,641 shares) .. - 534
Templeton Foreign Fund (49,450 shares) ... - 492
Vanguard Fixed Income Securities Fund
(10,958 shares) ........................ - 101
Participant notes ........................ - 2,739
Short-term investments ................... 28 204
Total investments ...................... 24,785 114,585
Receivables
Contributions ............................ - 76
Interfund transfers ...................... - 236
Other .................................... 1 1,585
Total assets ........................... 24,786 116,482
Liabilities
Payables
Forfeitures .............................. 46 49
Loan origination fees .................... - 8
Interfund transfers ...................... - 236
Other .................................... 21 269
Total liabilities ...................... 67 562
Net assets available for benefits ............ $24,719 $115,920
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1996
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Stock Stock
Fund Fund Total
Assets
Investments
American General Corporation
common stock (1,849,095 shares) ...... $56,587 $18,995 $75,582
American General Life & Accident
Insurance Company deposit
administration group annuity
contract ............................. - - -
American General Series Portfolio
Company - Stock Index Fund ........... - - -
Putnam OTC & Emerging Growth Fund ...... - - -
American General Series Portfolio
Company - Growth Fund ................ - - -
Templeton Foreign Fund ................. - - -
Vanguard Fixed Income Securities Fund .. - - -
Participant notes ...................... - - -
Short-term investments ................. 350 118 468
Total investments .................... 56,937 19,113 76,050
Receivables
Contributions .......................... 3 1 4
Other .................................. 1 1 2
Total assets ......................... 56,941 19,115 76,056
Liabilities
Payables
Forfeitures ............................ - 48 48
Other .................................. 5 2 7
Total liabilities .................... 5 50 55
Net assets available for benefits .......... $56,936 $19,065 $76,001
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Addition to net assets
Investment income
Dividends ........................ $ 1,855 $ - $ 5
Interest ......................... 13 227 1
Net appreciation (depreciation)
in fair value of investments ... 17,363 - 26
Total investment income (loss).. 19,231 227 32
Contributions
Company's ........................ - - -
Participants' .................... 4,836 244 222
Total contributions ............ 4,836 244 222
Merger of Home Beneficial Thrift
Plan ............................. - 14,599 -
Total additions .............. 24,067 15,070 254
Deductions from net assets
Benefits
American General Corporation
common stock (12,080 shares) ... 392 - -
Cash ............................. 5,194 592 3
Forfeitures ........................ - 3 -
Participant loan origination fees .. 27 - -
Total deductions ............. 5,613 595 3
Interfund transfers .................. (5,062) 1,379 167
Net increase ................. 13,392 15,854 418
Net assets available for benefits
Beginning of year ............ 56,936 - -
End of year .................. $70,328 $15,854 $418
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Addition to net assets
Investment income
Dividends ........................ $ - $ 9 $ 42
Interest ......................... 2 1 1
Net appreciation (depreciation)
in fair value of investments ... 26 28 (57)
Total investment income (loss).. 28 38 (14)
Contributions
Company's ........................ - - -
Participants' .................... 439 340 258
Total contributions ............ 439 340 258
Merger of Home Beneficial Thrift
Plan ............................. - - -
Total additions .............. 467 378 244
Deductions from net assets
Benefits
American General Corporation
common stock (12,080 shares) ... - - -
Cash ............................. 7 10 4
Forfeitures ........................ - - -
Participant loan origination fees .. - - -
Total deductions ............. 7 10 4
Interfund transfers .................. 214 214 252
Net increase ................. 674 582 492
Net assets available for benefits
Beginning of year ............ - - -
End of year .................. $674 $582 $492
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Bond Participant
Fund Notes
Addition to net assets
Investment income
Dividends ........................ $ 3 $ -
Interest ......................... 1 79
Net appreciation (depreciation)
in fair value of investments ... 3 -
Total investment income (loss).. 7 79
Contributions
Company's ........................ - -
Participants' .................... 83 -
Total contributions ............ 83 -
Merger of Home Beneficial Thrift
Plan ............................. - -
Total additions .............. 90 79
Deductions from net assets
Benefits
American General Corporation
common stock (12,080 shares) ... - -
Cash ............................. 1 151
Forfeitures ........................ - -
Participant loan origination fees .. - -
Total deductions ............. 1 151
Interfund transfers .................. 25 2,811
Net increase ................. 114 2,739
Net assets available for benefits
Beginning of year ............ - -
End of year .................. $114 $2,739
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Non-Participant
Directed
Stock
Fund Total
Addition to net assets
Investment income
Dividends ........................ $ 650 $ 2,564
Interest ......................... 4 329
Net appreciation (depreciation)
in fair value of investments ... 6,082 23,471
Total investment income (loss).. 6,736 26,364
Contributions
Company's ........................ 1,042 1,042
Participants' .................... - 6,422
Total contributions ............ 1,042 7,464
Merger of Home Beneficial Thrift
Plan ............................. - 14,599
Total additions .............. 7,778 48,427
Deductions from net assets
Benefits
American General Corporation
common stock (12,080 shares) ... 137 529
Cash ............................. 1,819 7,781
Forfeitures ........................ 168 171
Participant loan origination fees .. - 27
Total deductions ............. 2,124 8,508
Interfund transfers .................. - -
Net increase ................. 5,654 39,919
Net assets available for benefits
Beginning of year ............ 19,065 76,001
End of year .................. $24,719 $115,920
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
In thousands, except share amounts
Participant Non-Participant
Directed Directed
Stock Stock
Fund Fund Total
Addition to net assets
Investment income
Dividends .................. $ 1,827 $ 613 $2,440
Interest ............ 12 4 16
Net appreciation in fair
value of investments .. 8,284 2,780 11,064
Total investment income ... 10,123 3,397 13,520
Contributions
Company's ................... - 835 835
Participants' ............... 4,334 - 4,334
Total contributions ....... 4,334 835 5,169
Total additions ......... 14,457 4,232 18,689
Deductions from net assets
Benefits
American General Corporation
common stock
(60,182 shares) ........... 1,653 554 2,207
Cash ........................ 4,430 1,487 5,917
Forfeitures ................... - 192 192
Total deductions......... 6,083 2,233 8,316
Net increase ............ 8,374 1,999 10,373
Net assets available for
benefits
Beginning of year ....... 48,562 17,066 65,628
End of year ............. $56,936 $19,065 $76,001
The accompanying notes are an integral part of these financial statements.
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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. Fair values of
other investments are reported as follows: 1) investment in American General
Life and Accident Insurance Company (the Company or AGLA) deposit
administration group annuity contract, at contract value (see Note C); 2)
investments in the American General Series Portfolio Company (AGSPC) Stock
Index and Growth Funds, the Putnam OTC & Emerging Growth Fund, the Templeton
Foreign Fund, and the Vanguard Fixed Income Securities Fund, at net asset
value; and 3) short-term investments, at cost which approximates fair value.
AGSPC is an open-end management investment company (mutual fund) whose
investment adviser is The Variable Annuity Life Insurance Company (VALIC).
VALIC and AGLA are wholly owned subsidiaries of American General.
Participant notes are recorded as plan investments at amortized values.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded as income on ex-dividend dates, and interest income is
recorded using the accrual method of accounting.
Contributions are recorded as additions to net assets on the date the
contributions become payable to the Plan.
Interfund transfers are recorded at the market value of the amount
transferred.
Benefits paid to participants are recorded upon distribution at the market
value of the assets distributed.
The preparation of financial statements requires management to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosures of contingent assets and liabilities, and (3) the
reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from those estimates.
Certain prior year amounts have been reclassified to conform with current year
presentation.
NOTE B--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
General
The Plan, sponsored by American General, is a defined contribution plan
currently offered to eligible agents and managers (sales employees) of AGLA, a
wholly owned subsidiary of American General, who have completed one year of
service. The Plan provides for participant elective salary deferrals
(participant pretax contributions) in accordance with Section 401(k) of the
Internal Revenue Code of 1986, as amended (IRC). The Plan is subject to
certain provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Substantially all of the costs of administering the Plan are paid by American
General and the Company.
The Plan's investments are held in a bank-administered trust fund.
Investment Options
Participants may direct their employee contributions in one of seven funds or
a combination of each fund. These funds, designated on the financial
statements as participant directed, invest in: 1) shares of American General
common stock (Stock Fund); 2) a deposit administration group annuity contract
issued by AGLA (Cash Fund); 3) shares of the AGSPC Stock Index Fund (Equity
Index Fund); 4) shares of the Putnam OTC & Emerging Growth Fund (Small-Cap
Fund); 5) shares of the AGSPC Growth Fund (Mid-Cap Fund); 6) shares of the
Templeton Foreign Fund (International Fund); and 7) shares of the Vanguard
Fixed Income Securities Fund (Bond Fund). The Companies' contributions are
invested solely in the non-participant directed portion of the Stock Fund;
however, participants age 60 or older can direct the investment of their
employer matching contributions into any of the available funds.
Amounts which have not yet been used to purchase investments in either the
Stock, Cash, Equity Index, Small-Cap, Mid-Cap, International, or Bond Funds
are temporarily invested in short-term investments. Income from these short-
term investments is allocated to Plan participants based on current contribu-
tions.
Contributions
Sales employees who elect to participate contribute on a pretax basis, a basic
amount equal to three percent of base pay. Participants may also make
additional pretax contributions in an amount ranging from one to thirteen
percent of base pay, subject to the contribution limitations discussed below.
The Company contributes an amount equal to one-third of the basic
contribution.
Participants may change their contribution percentage at any time during the
year, effective on the first day of the first pay period of the month
following the change.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Contribution Limitations
For 1997 and 1996, the total amount of participant pretax contributions is
limited to $9,500. Additionally, the total amount of annual participant and
company contributions (including forfeitures) must not exceed the lesser of 25
percent of compensation or $30,000. During 1997 and 1996, the total amount of
base pay that can be used in determining contributions under the Plan is
$160,000 and $150,000, respectively.
ERISA and the IRC provide that qualified plans cannot discriminate in favor of
highly compensated individuals. Certain highly compensated individuals may be
required to receive refunds of any contributions in excess of the IRC Sections
401(k) and (m) limits and all earnings attributable to such contributions.
Highly compensated individuals are not allowed to make additional
contributions if such contributions will adversely affect the Plan's
nondiscrimination test under Sections 401(k) and (m).
In 1997 and 1996, no refunds of contributions were necessary to comply with
these laws.
Participant Accounts
Each participant's account is credited with the participant's and Company's
contributions and an allocation of Plan earnings. Allocations of Plan
earnings are based on participants' account balances.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting
Participants are immediately vested in their contributions plus the earnings
thereon. Participants become 100 percent vested in the remainder of their
account after five years of service (as defined in the Plan document).
Payment of Benefits
Upon termination of service, and if consented to by the participant (required
only if the total value, both vested and nonvested, of the account exceeds
$3,500 and the participant is under age 65), a participant will receive a
distribution equal to the vested value of his or her account. For years
beginning after December 31, 1996, distributions must begin by April 1 of the
calendar year following the later of either the calendar year in which the
employee reaches age 70-1/2, or the calendar year in which the employee
retires.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Participants Loans Receivable
Beginning on January 1, 1997, participants may borrow from their fund
accounts, in a single loan, a minimum of $1,000 and up to a maximum equal to
the lesser of $50,000 or 50% of the participant's vested account balance.
Loan terms range from 12 to 58 months. Loans are secured by the vested
balance in the participant's account and bear interest at a rate commensurate
with prevailing rates as determined from time to time. Principal and interest
are paid to the participant's account through payroll deductions. Early loan
payoff is allowed.
Forfeitures
Participants terminating employment forfeit their nonvested interest in the
Company contributions on the earlier of (1) the distribution of the entire
nonforfeitable portion of their account or (2) upon incurring a period of
severance equal to five consecutive one-year breaks in service. Forfeitures
are available to reduce future Company contributions. Participants who
terminate and are reemployed with the Company before incurring five
consecutive one-year breaks in service are entitled to their nonvested or
forfeited amounts, subject to certain provisions as stated in the Plan
document.
Plan Members
At December 31, 1997, 3,288 active sales employees were contributing to the
Plan.
NOTE C--INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan maintains an investment contract with AGLA. The deposit
administration group annuity contract is valued at contract value, which
approximates fair value, and represents contributions under the contract, plus
interest at the contract rate, less funds used to pay benefits. The
guaranteed minimum rate of the contract is reset annually by AGLA.
The contract had a guaranteed minimum rate of 6.00% for the 1997 calendar
year. Any earnings in excess of the guaranteed minimum rate are credited to
the participants.
The effective earned yield is calculated based on the calendar year. The
effective earned yield of the investment contract for 1997 was 6.55%.
NOTE D--PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to withdraw
from the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE E--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
Benefits processed and approved for payment, but not paid as of December 31,
are recorded on Form 5500 but not in the financial statements.
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
At December 31,
In thousands
1997 1996
Net assets available for benefits per the
financial statements ............................. $115,920 $76,001
Benefits payable to withdrawing participants ....... (616) (812)
Net assets available for benefits per Form 5500 .. $115,304 $75,189
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
In thousands
Year Ended
December 31, 1997
Benefits paid to participants per the
financial statements
American General Corporation common stock ...... $ 529
Cash ........................................... 7,781
Total benefits paid to participants per the
financial statements ....................... 8,310
Benefits payable to withdrawing participants at
year end ......................................... 616
Benefits payable to withdrawing participants
at beginning of year ............................. (812)
Benefits paid to participants per Form 5500 .. $8,114
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE F--FEDERAL INCOME TAXES
Based on a favorable determination letter dated August 3, 1995, the Internal
Revenue Service has ruled that the Plan, as restated and amended, is qualified
under Section 401(a) of the IRC and, therefore, exempt under Section 501(a)
from federal income taxes. The Plan has been amended since receiving the
determination letter. However, the Plan's administrators believe that the Plan
is designed and is currently being operated in compliance with the applicable
requirements of the IRC.
NOTE G--PLAN MERGER
Effective October 1, 1997, the Home Beneficial Thrift Plan was split into two
identical plans: one covering home office and field clerical employees and
the other covering agents. The Home Beneficial Thrift Plan covering agents
was merged into the Plan, and assets totaling approximately $14.6 million were
transferred to the Plan's trust. This plan merger was the result of the
acquisition of Home Beneficial Corporation, made by American General through
one of its wholly owned subsidiaries on April 16, 1997. Participants of the
Home Beneficial Thrift Plan became eligible to participate in the Plan on
October 1, 1997.
NOTE H--YEAR 2000 ISSUE (UNAUDITED)
American General has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical
data processing systems. The project also includes determining whether third-
party service providers have reasonable plans in place to become year 2000
compliant. American General currently expects the project to be substantially
complete by December 31, 1998, and does not expect this project to have a
significant effect on Plan operations.
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ASSETS HELD FOR INVESTMENT
AT DECEMBER 31, 1997
In thousands, except share amounts
Fair
Issuer Description Cost Value
American General 1,765,035 shares of $45,018 $95,422
Corporation* common stock
American General Life & Deposit administration 13,998 13,998
Accident Insurance group annuity contract
Company*
American General Series 13,851 shares of AGSPC 385 412
Portfolio Company* Stock Index Fund
Putnam 42,377 shares of Putnam OTC 657 683
& Emerging Growth Fund
American General Series 26,641 shares of AGSPC 507 534
Portfolio Company* Growth Fund
Templeton 49,450 shares of Templeton 549 492
Foreign Fund
Vanguard 10,958 shares of Vanguard 99 101
Fixed Income Securities
Fund
Participant Notes* Loans issued at interest - 2,739
rates between 9.25%
and 9.50%
State Street Bank Short-term investments
& Trust Company* in money-market fund 204 204
$61,417 $114,585
*Party in interest
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts and transaction counts
Amount of
Party Involved Description Transaction
Category (i) - Individual transaction in excess of 5% of Plan assets
(B) Purchase of American General Life & $13,030
Accident Insurance Company deposit
administration group annuity contract
Category (iii) - Series of transactions in excess of 5% of Plan assets
(B) Purchases of American General Life & 14,473
Accident Insurance Company deposit
administration group annuity
contract in 27 transactions
(B) Sales of American General Life & 475
Accident Insurance Company deposit
administration group annuity
contract in 4 transactions
State Street Bank Purchases of short-term investments in 12,105
& Trust Company 439 transactions
State Street Bank Sales of short-term investments in 12,369
& Trust Company 221 transactions
(B) Purchases of 80,424 shares of American 3,907
General Corporation common stock in
12 transactions
(B) Sales of 152,404 shares of American 6,980
General Corporation common stock in
15 transactions at a gain of $3,399
(B) Distributions of 12,080 shares of 531
American General Corporation common
stock to various individuals who
withdrew from or terminated
participation in the Plan in 12
transactions at a gain of $247
(A) Reportable transactions are transactions or series of transactions in
excess of five percent of the current value of Plan assets at the
beginning of the year and are defined in Section 2520.103-6 of the
Department of Labor's Rules and Regulations.
(B) Parties involved are not presented, as permitted by Section 2520.103-6
(d)(1)(I) of the Department of Labor's Rules and Regulations.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
LOANS IN DEFAULT
FOR THE YEAR ENDED DECEMBER 31, 1997
In whole dollars
Original Amount Received Unpaid
Indentity Amount of during Reporting Year: Balance at
of Obligor* Loan Principal Interest End of Year
Vest, John $ 2,381 - - $ 2,381
Duesenberry, S. 12,787 - - 12,787
Garcia, Jose 2,588 - - 2,588
*Tax statements to be issued to participants with loans in default.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
LOANS IN DEFAULT
FOR THE YEAR ENDED DECEMBER 31, 1997
In whole dollars
Loan Interest Amount Overdue:
Issued Rate Defaulted Principal Interest
4/29/97 9.50% 8/16/97 $ 2,381 $ 57
2/27/97 9.25 6/07/97 12,787 296
7/30/97 9.50 11/29/97 2,588 61
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
American General Agents' and Managers' Thrift Plan Administrative Board has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
AMERICAN GENERAL AGENTS' AND
MANAGERS' THRIFT PLAN
June 26, 1998 ELLEN H. MASTERSON
Ellen H. Masterson, Member of
the Administrative Board
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<PAGE>
Appendix
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<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Nos. 33-39201 and 333-13401) pertaining to the American General Agents' and
Managers' Thrift Plan of our report dated June 19, 1998, with respect to the
financial statements and schedules of the American General Agents' and
Managers' Thrift Plan included in this Annual Report (Form 11-K) for the year
ended December 31, 1997.
ERNST & YOUNG LLP
Houston, Texas
June 26, 1998
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