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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AMERICAN GENERAL CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF AMERICAN GENERAL APPEARS HERE]
Notice of Annual Meeting of Shareholders
and Proxy Statement
Meeting Date: April 29, 1999
American General Corporation
2929 Allen Parkway
Houston, Texas
<PAGE>
Robert M. Devlin
[LOGO OF AMERICAN GENERAL APPEARS HERE] Chairman,
President and
Chief Executive
Officer
March 22, 1999
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of
Shareholders of American General scheduled for Thursday, April 29,
1999, at Chase Center Auditorium, 601 Travis Street, Houston, Texas,
at 9:00 a.m. CDT.
Please review the enclosed Notice of Meeting and Proxy Statement,
which describe the matters to be acted upon at the meeting. To ensure
that your shares are represented at the meeting, we strongly
encourage you to sign, date and mail the proxy card in the enclosed
envelope. The proxy card should be completed and mailed even if you
plan to attend the meeting.
On behalf of the Board of Directors, thank you for your continued
support. We look forward to your participation.
Sincerely,
/s/ Robert M. Devlin
------------------------------
Robert M. Devlin
2929 Allen Parkway . Houston, Texas 77019-2155
<PAGE>
American General Corporation
Notice of Annual Meeting of Shareholders
Date: Thursday, April 29, 1999
Time: 9:00 a.m. CDT
Place: Chase Center Auditorium
601 Travis Street
Houston, Texas
Matters to be voted on:
. Election of twelve directors for one-year terms
. Re-approval of the Performance-Based Plan for Executive Officers
. Approval of the American General Corporation 1999 Stock and Incentive
Plan
. Ratification of the appointment of Ernst & Young LLP as independent
auditors for 1999
. Any other business that may properly come before the meeting
You have the right to receive this notice and vote at the Annual
Meeting if you were a shareholder of record at the close of business on
March 10, 1999. Please remember that your shares cannot be voted unless
you sign and return the enclosed proxy card, vote in person at the
Annual Meeting, or make other arrangements to vote your shares.
For the board of directors,
/S/ SUSAN A. JACOBS
Susan A. Jacobs
Corporate Secretary
March 22, 1999
<PAGE>
1999 PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information......................................................... 1
Solicitation of Proxies..................................................... 1
Voting...................................................................... 2
Election of Directors (Item 1).............................................. 2
Information About the Nominees............................................. 3
The Board of Directors..................................................... 6
Security Ownership.......................................................... 8
Executive Compensation ..................................................... 10
Personnel Committee Report................................................. 10
Comparison of Five-Year Cumulative Total Shareholder Return................ 14
Executive Compensation Tables.............................................. 15
Change in Control Arrangements ............................................. 19
Employment Agreements....................................................... 20
Certain Relationships and Transactions...................................... 21
Proposal to Re-Approve the Performance-Based Plan
for Executive Officers (Item 2)............................................ 22
Proposal to Approve the American General Corporation
1999 Stock and Incentive Plan (Item 3)..................................... 23
Independent Auditors (Item 4)............................................... 24
Other Business.............................................................. 25
Annex A..................................................................... A-1
</TABLE>
Copies of this proxy statement, American General's Annual Report to
Shareholders, and its Annual Report on Form 10-K are available to shareholders
at no charge upon request directed to:
American General Corporation
Corporate Relations
P.O. Box 3247
Houston, TX 77253-3247
Telephone: (800) AGC-1111
Facsimile: (713) 523-8531
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AMERICAN GENERAL
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GENERAL INFORMATION
Proxy Statement
The board of directors of American General is soliciting proxies to obtain
support for the proposals to be voted on at the annual meeting of American
General shareholders scheduled for April 29, 1999. The matters to be voted
upon are the following: election of twelve directors for one-year terms; re-
approval of the Performance-Based Plan for Executive Officers; approval of the
American General Corporation 1999 Stock and Incentive Plan; ratification of
the appointment of Ernst & Young LLP as independent auditors for 1999; and any
other business that may properly come before the meeting.
Whenever we refer in this Proxy Statement to the Annual Meeting, we are also
referring to any meeting that results from an adjournment of the Annual Meet-
ing. We are first mailing this Proxy Statement to our shareholders on or about
March 22, 1999.
We encourage you to vote your shares, either by voting in person at the An-
nual Meeting or by granting a proxy. To assist you in deciding how to vote,
this Proxy Statement includes information about American General, its offi-
cers, nominees for director, and related matters. In addition, a graph showing
American General's performance over a five year period is included on page 14.
SOLICITATION OF PROXIES
The Proxy Card
If you execute the attached proxy card, the individuals designated on the
card (J. Evans Attwell, W. Lipscomb Davis Jr., and Robert M. Devlin) will vote
your shares according to your instructions. You may vote in favor of, against,
or abstain from voting on any proposal. In addition, with respect to Item 1
(the election of directors), you may, if you desire, indicate on the proxy
card that you are not authorizing the designated individuals to vote your
shares for one or more particular nominees.
If a proxy is signed without choices specified, those shares will be voted
for the election of the director nominees and in favor of Items 2, 3 and 4. If
you sign a proxy card and deliver it to us, but then want to change your vote,
you may revoke your proxy at any time prior to the Annual Meeting by sending
us a written revocation or a new proxy, or by attending the Annual Meeting and
voting your shares in person.
Costs of Soliciting Proxies
American General will pay the cost of soliciting proxies. Proxies are being
solicited by mail and may be solicited by telephone, telegram, facsimile, or
in person by employees of the company, who will not receive additional compen-
sation for any such solicitation. Morrow & Co., Inc. has been retained to as-
sist in the solicitation of proxies at a fee of approximately $15,000, plus
expenses. The company will reimburse brokerage houses and other custodians,
nominees, and fiduciaries for their reasonable expenses in sending proxy mate-
rial to the beneficial owners of voting securities.
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1999 PROXY STATEMENT 1
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VOTING
Shareholders Entitled to Vote
Holders of record of Common Stock and holders of record of Preferred Stock at
the close of business on March 10, 1999, will be entitled to vote at the meet-
ing. As of such date, approximately 251,575,314 shares of Common Stock and
2,317,701 shares of Preferred Stock were issued and outstanding. Preferred
Stock refers to American General's 7% convertible preferred stock. Each share-
holder is entitled to one vote for each share of Common Stock, and four-fifths
of one vote for each share of Preferred Stock, held by such shareholder. Hold-
ers of Common Stock and Preferred Stock will vote together as a single class
on the matters to be voted on at the Annual Meeting.
Voting of Thrift Plan Holdings
Common Stock held through the American General Employees' Thrift and Incen-
tive Plan, the American General Agents' and Managers' Thrift Plan, and The
Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan and
the related trust agreements is voted by State Street Bank & Trust Company, as
Trustee, as directed by the participants in those plans. If a participant does
not provide specific voting instructions, the Trustee must vote the shares in
accordance with the instructions received from a majority of shares for which
the Trustee did receive instructions and in accordance with its fiduciary du-
ty.
Quorum and Votes Necessary to Adopt Proposals
In order to transact business at the Annual Meeting, a quorum consisting of a
majority of all outstanding shares entitled to vote must be present. Absten-
tions and proxies returned by brokerage firms for which no voting instructions
have been received from their principals will be counted for the purpose of
determining whether a quorum is present. Once a share is represented for any
purpose at the Annual Meeting, it will be deemed present for quorum purposes
for the entirety of the meeting. A majority of the votes cast is required for
approval of any matters that are presented at the meeting.
ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
By resolution of the board of directors, the number of directors of American
General has been fixed at twelve as of the date of the Annual Meeting. All
nominees have been nominated for one-year terms ending at the next annual
meeting. To be elected, each director must receive a majority of affirmative
votes.
All directors to be elected at the Annual Meeting were elected at the annual
meeting of shareholders in 1998 for one-year terms, with the exception of
J. Edward Easler II. Mr. Easler was elected as a director of American General
by a unanimous vote of the board of directors on December 15, 1998. All nomi-
nees have been nominated for one-year terms ending at the next annual meeting.
Although the management of American General has no reason to believe that any
of the nominees will be unable to serve, if such situation should arise prior
to the meeting, no replacement(s) will be named, and the number of directors
to be elected will be reduced accordingly. Information regarding each nominee,
including principal occupation during the past five years and other director-
ships, is provided on the succeeding pages. Jon P. Newton also serves as a di-
rector of American General Finance, Inc. and American General Finance Corpora-
tion, which are subsidiaries of the company with publically issued debt out-
standing.
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2 AMERICAN GENERAL
<PAGE>
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INFORMATION ABOUT THE NOMINEES
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J. EVANS ATTWELL (Age 67)
[PHOTO OF J. Mr. Attwell has been a director of American General since
EVANS ATTWELL] 1963 and is currently of counsel to the firm of Vinson &
Elkins L.L.P. He has been with that firm since 1956. Mr.
Attwell is also a director of Seagull Energy Corporation
and Dain Rauscher Corporation.
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BRADY F. CARRUTH (Age 41)
[PHOTO OF Mr. Carruth has been a director of American General since
BRADY F. 1990 and has been President and CEO of Gulf Coast Capital
CARRUTH] Corporation (commercial landscaping) since 1986. He is also
a director of Consolidated Graphics, Inc. and Carruth-
Doggett Industries, Inc.
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W. LIPSCOMB DAVIS JR. (Age 67)
[PHOTO OF Mr. Davis has been a director of American General since
W. LIPSCOMB 1977 and has been a partner of Hillsboro Enterprises (in-
DAVIS JR.] vestments) since 1985. He is also a director of Genesco,
Inc., Thomas Nelson, Inc., and SunTrust Bank, Nashville,
N.A.
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ROBERT M. DEVLIN (Age 58)
[PHOTO OF Mr. Devlin joined American General in 1977 and has been a
ROBERT M. DEVLIN] director since 1993. He currently serves as Chairman, Pres-
ident, and CEO of American General (Chairman since 1997,
President from 1995 to 1997 and since 1998, and CEO since
1996). Mr. Devlin served as Vice Chairman of American Gen-
eral from 1993 to 1995 and President and CEO of American
General Life Insurance Company from 1986 to 1993. He is
also a director of Cooper Industries, Inc.
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1999 PROXY STATEMENT 3
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INFORMATION ABOUT THE NOMINEES (Continued)
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J. EDWARD EASLER II (Age 51)
[PHOTO OF J. Mr. Easler has been a director of American General since
EDWARD December 1998 and has been Vice President, Institutional
EASLER II] Advancement, of Morehouse School of Medicine since 1998. He
was Vice President, Institutional Advancement, of Lemoyne
Owen College from 1997 to 1998 and Chief Development
Officer/Director of Development of the Center to Prevent
Handgun Violence/Handgun Control from 1996 to 1997. Mr.
Easler was a consultant at The Easler Group from 1994 to
1996.
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LARRY D. HORNER (Age 64)
[PHOTO OF Mr. Horner has been a director of American General since
LARRY D. HORNER] 1991 and has been Chairman of Pacific USA Holdings Corp.
(real estate and thrift operations) since 1994. He was Man-
aging Director of Arnhold and S. Bleichroeder, Inc. from
1991 to 1994 and Chairman and CEO of KPMG Peat Marwick LLP
from 1984 to 1990. He is also a director of Asia Pacific
Electric Wire & Cable Corp. Limited, Atlantis Plastics,
Inc., Laidlaw Holdings, Inc., Newmark Homes Corp., Pacific
Southwest Bank, and Phillips Petroleum Company.
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RICHARD J. V. JOHNSON (Age 68)
[PHOTO OF RICHARD Mr. Johnson has been a director of American General since
J. V. JOHNSON] 1990 and has been with the Houston Chronicle (newspaper
publishing) since 1956. He currently serves as Chairman and
Publisher of the Houston Chronicle (Chairman since 1990 and
Publisher since 1987). He is also an advisory director of
Chase Bank of Texas N.A.
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MICHAEL E. MURPHY (Age 62)
[PHOTO OF Mr. Murphy has been a director of American General since
MICHAEL E. MURPHY] 1997. He had been Vice Chairman of Sara Lee Corporation
(packaged food and consumer products) for four years, when
he retired in 1997. He also served as Chief Administrative
Officer from 1979 to 1997, and Chief Financial Officer from
1979 to 1994, of Sara Lee Corporation. Mr. Murphy is also a
director of Bassett Furniture Industries, Incorporated,
GATX Corporation, Payless ShoeSource, Inc., and True North
Communications Inc., and a trustee of Northern Trust Funds.
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4 AMERICAN GENERAL
<PAGE>
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INFORMATION ABOUT THE NOMINEES (Continued)
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JON P. NEWTON (Age 57)
[PHOTO OF Mr. Newton joined American General in 1993 and has been a
JON P. NEWTON] director since 1995. He has served as Vice Chairman since
1995, having served as Vice Chairman and General Counsel
from 1995 to 1997 and Senior Vice President and General
Counsel from 1993 to 1995. Mr. Newton was with the law firm
of Clark, Thomas, Winters & Newton from 1979 to 1993. He is
also a director of Newmark Homes Corp.
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MICHAEL J. POULOS (Age 68)
[PHOTO OF Mr. Poulos served as a director of American General from
MICHAEL J. POULOS] 1980 to 1993 and was re-elected as a director in 1998. He
had been Chairman, President, and CEO of Western National
Corporation (financial services) for five years, when he
retired in 1998. He was with American General from 1970 to
1993, and served as Vice Chairman from 1991 to 1993. Mr.
Poulos is also an advisory director of Greystone Capital
Partners I, LP and a trustee of Century Shares Trust.
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ROBERT E. SMITTCAMP (Age 57)
[PHOTO OF Mr. Smittcamp has been a director of American General since
ROBERT E. 1990 and has been President and CEO of Lyons-Magnus Co.,
SMITTCAMP] Inc. (food processing) since 1971. He has been co-owner of
Wawona Frozen Foods, Inc. since 1987, and Wawona Orchards
since 1960. He is also a director of Lyons Transportation
Co.
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ANNE M. TATLOCK (Age 59)
[PHOTO OF Ms. Tatlock has been a director of American General since
ANNE M. TATLOCK] 1995 and has been President of Fiduciary Trust Company In-
ternational (investment management) since 1994. She was Ex-
ecutive Vice President of Fiduciary Trust Company Interna-
tional from 1990 to 1994. Ms. Tatlock is also a director of
Fortune Brands, Inc. and Fiduciary Trust Company Interna-
tional.
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1999 PROXY STATEMENT 5
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THE BOARD OF DIRECTORS
Composition of the Board of Directors and its Committees
American General is governed by a board of directors and various committees of
the board that meet throughout the year. The five standing committees of the
board are listed in the following table.
Audit Committee
Functions Members*
. Recommend to the board the independent W. Lipscomb Davis Jr.
auditors to be engaged by American (chair)
General J. Evans Attwell
. Confer with the independent auditors Brady F. Carruth
regarding their review of the annual Michael E. Murphy
financial statements
. Review compliance with American
General's corporate responsibility
program
. Review the scope of the audit to be
performed and the accounting principles
and policies of American General
Executive Committee
Functions Members
. Exercise the authority of the board Robert M. Devlin (chair)
between regular meetings J. Evans Attwell
. Perform the functions of a nominating Larry D. Horner
committee to recommend candidates for Jon P. Newton
election to the board and committees of Michael J. Poulos
the board
Finance Committee
Functions Members
. Advise and consult with management Anne M. Tatlock (chair)
concerning the general financial J. Evans Attwell
affairs of American General, including Larry D. Horner
capital structure, financing Michael E. Murphy
arrangements, investment strategy, and Jon P. Newton
similar matters of a financial nature Michael J. Poulos
Management Development Committee
Functions Members
. Advise and consult with the chief Robert M. Devlin (chair)
executive officer concerning the Brady F. Carruth
management structure of the W. Lipscomb Davis Jr.
organization and the recruitment and J. Edward Easler II
development of executive management Richard J.V. Johnson
Robert E. Smittcamp
Personnel Committee
Functions Members*
. Review the contribution of key officers Larry D. Horner (chair)
and the compensation of these J. Edward Easler II
individuals Richard J.V. Johnson
. Review American General's employee Michael J. Poulos
benefit programs and administer certain Robert E. Smittcamp
of these plans Anne M. Tatlock
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* Each of the members of the Committee is a "non-employee director"
(i.e., not an officer or employee of American General or its sub-
sidiaries)
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6 AMERICAN GENERAL
<PAGE>
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Attendance at Meetings
During 1998, the board of directors held nine meetings. In addition, the
Finance Committee met four times; the Audit Committee and Personnel Committee
each met three times; and the Management Development Committee met two times.
The Executive Committee met concurrently with the board of directors in
January 1998. The directors (as a group) attended at least 93% of the meetings
of the board and board committees on which they served.
Compensation of Directors
Each member of the board of directors receives an annual retainer of $32,000,
plus a fee of $1,500 for attendance at each meeting of the board or a board
committee. Committee chairmen receive an additional $5,000 annual retainer. No
fees or retainers are paid to any director who is an employee of American Gen-
eral.
Non-employee directors may elect to defer some or all of their cash compensa-
tion under American General's deferred compensation plan. Deferred accounts
are credited, at the director's election, with either phantom units of Common
Stock or with interest at rates that mirror the Cash Fund under the American
General Employees' Thrift and Incentive Plan. If the director elects to have
the deferred compensation invested in Common Stock, then the director will be
credited with an award equal to 20% of the deferred compensation, which will
generally vest in three years and be deemed to be invested in Common Stock.
Vesting of this award will accelerate upon the death or disability of the di-
rector, or a change in control.
The American General Retirement Plan for Directors was terminated effective
March 1, 1997. Each of the non-employee directors who was serving on that date
received phantom units of Common Stock with a value equal to the benefits such
director would have received under the Plan through March 1, 1997. Upon termi-
nation of board service, such directors will be entitled to receive cash in an
amount equal to the then current value of such units.
Non-employee directors are eligible for certain awards pursuant to American
General's stock and incentive plans. In 1998, each of American General's non-
employee directors received a grant of phantom units equivalent to 500 shares
of Common Stock at the date of grant. In addition, each such director received
options to purchase 1,500 shares of Common Stock at an exercise price of
$58.875, which was the fair market value of Common Stock on the date of grant.
These stock options expire on March 5, 2008. Future awards are subject to the
discretion of the board.
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1999 PROXY STATEMENT 7
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SECURITY OWNERSHIP
Security Ownership of Directors and Executive Officers
The following table shows the number of shares of Common Stock and phantom
stock units beneficially owned by each director and Named Executive Officer,
individually, and by all directors and executive officers as a group (in each
case as of February 28, 1999). As of that date, none of the persons listed in
the table owned more than 1% of American General's issued and outstanding Com-
mon Stock, nor did any of those persons own any Preferred Stock. All directors
and executive officers as a group beneficially owned approximately 1% of Amer-
ican General's outstanding Common Stock.
The Named Executive Officers refer to those executive officers that American
General is required to identify in the Summary Compensation Table on page 15.
Those individuals are: Robert M. Devlin, Jon P. Newton, James S. D'Agostino
Jr., Rodney O. Martin Jr., and Thomas L. West Jr.
<TABLE>
<CAPTION>
Number of Shares
Name of Beneficial Owner Beneficially Owned/1/,/2/,/3/
------------------------ -----------------------------
<S> <C>
Robert M. Devlin........................... 539,824/4/
Jon P. Newton.............................. 199,819
James S. D'Agostino Jr. ................... 208,316
Rodney O. Martin Jr. ...................... 91,285/4/
Thomas L. West Jr. ........................ 121,454
J. Evans Attwell........................... 163,871/4/
Brady F. Carruth........................... 35,669/4/
W. Lipscomb Davis Jr....................... 31,913/4/,/5/
J. Edward Easler II........................ 500
Larry D. Horner............................ 8,368/4/
Richard J. V. Johnson...................... 19,761
Michael E. Murphy.......................... 4,008
Michael J. Poulos.......................... 592,378/4/
Robert E. Smittcamp........................ 75,731/4/
Anne M. Tatlock............................ 5,408
All Director Nominees and Executive
Officers as a Group....................... 2,880,311
</TABLE>
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/1/Beneficial ownership signifies sole voting and investment power, unless
otherwise noted. Each participant in the Thrift Plan has sole voting power
with respect to shares held in the participant's plan account (subject to
being exercised by the Thrift Plan's trustee in the event the participant
does not exercise voting power). A holder of restricted stock granted under
American General's stock and incentive plans has sole voting power but not
investment power with respect to such shares. Those disclaiming beneficial
ownership share voting and investment power with respect to the securities
subject to disclaimer, unless otherwise noted. Securities subject to such
disclaimers are included in the total number of 2,880,311 shares listed
above.
/2/Includes shares of Common Stock issuable upon the exercise of options
exercisable within a period of 60 days from February 28, 1999, as follows:
Messrs. Attwell, Carruth, Davis, Horner, Johnson, Smittcamp, and Ms.
Tatlock--2,000 shares each; Mr. Murphy--500 shares; Mr. Poulos--400,500
shares; Mr. Devlin--360,334 shares; Mr. Newton--138,933 shares; Mr.
D'Agostino--156,366 shares; Mr. Martin--43,833 shares; and Mr. West--74,400
shares.
/3/Includes all phantom stock units, excluding performance share awards
granted to Named Executive Officers.
/4/Includes shares owned by family members as follows: Mr. Attwell--7,200
shares; Mr. Carruth--9,021 shares; Mr. Davis--5,008 shares; Mr. Horner--
1,000 shares; Mr. Martin--1,050 shares; Mr. Poulos--6,033 shares; and Mr.
Smittcamp--300 shares; and, for Mr. Davis, includes 4,090 shares held in
trust. Messrs. Attwell, Carruth and Davis disclaim beneficial ownership of
such shares; Mr. Carruth has sole voting and investment power with respect
to 5,719 of the shares held by family members. Also, includes shares held
by a family foundation as follows: Mr. Devlin--3,778 shares and Mr.
Poulos--3,000 shares.
/5/Includes 4,162 shares held by a limited partnership of which he is the
general partner.
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8 AMERICAN GENERAL
<PAGE>
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Security Ownership of Certain Beneficial Owners
The following table sets forth as of February 28, 1999, the number of shares
of Common Stock or Preferred Stock owned by each person who is known by Ameri-
can General to own beneficially more than 5% of American General's outstanding
Common Stock or Preferred Stock:
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Percent of
of Beneficial Owner Title of Class Owned Class
---------------------------------------------------------------------------
<S> <C> <C> <C>
Putnam Investments, Inc. Common Stock 16,757,409/1/ 6.7%
One Post Office Square
Boston, MA
AMVESCAP PLC Common Stock 13,078,876/2/ 5.2%
11 Devonshire Square
London EC2M 4YR
England
The Lucy B. Gooding Preferred Stock 753,422/3/ 32.5%
1995 Living Trust
2970 St. Johns Avenue
Jacksonville, FL
The Bryan Trust Preferred Stock 479,236/4/ 20.7%
One Independent Drive
Jacksonville, FL
The Olive Julia Gibson Preferred Stock 186,506/4/ 8.1%
Bryan Testamentary Trust
One Independent Drive
Jacksonville, FL
</TABLE>
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/1/Based on a Schedule 13G dated February 4, 1999. Putnam Investments,
Inc. reports sole voting power with respect to none of such shares and
shared voting power with respect to 1,171,577 shares.
/2/Based on a Schedule 13G dated February 12, 1998. AMVESCAP PLC and cer-
tain of its subsidiaries report shared voting and investment power with
respect to all of the shares reported in the table.
/3/Lucy B. Gooding, Robert A. Mills, and Bonnie H. Smith are trustees of
The Lucy B. Gooding 1995 Living Trust.
/4/Jacob F. Bryan IV, G. Howard Bryan, and Cynthia Craig Bliss are bene-
ficiaries and/or trustees of The Bryan Trust and The Olive Julia Gibson
Bryan Testamentary Trust.
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1999 PROXY STATEMENT 9
<PAGE>
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EXECUTIVE COMPENSATION
PERSONNEL COMMITTEE REPORT
The Personnel Committee of the board is responsible for reviewing and estab-
lishing the compensation principles for American General, administering the
company's executive compensation programs, and recommending to the board the
compensation for the Chief Executive Officer, the Vice Chairman, and the other
top 25 most highly salaried executives. It also approves or ratifies the com-
pensation for the second 25 most highly salaried executives. The members of
the Personnel Committee are non-employee directors who receive no compensa-
tion, other than as described on page 7.
Compensation Philosophy
American General recognizes the rapid consolidation and convergence of the
financial services industry and the inherent challenges that result from these
and other market changes. To manage effectively through these complexities,
the company must attract and retain executives with superior skills and tal-
ents. Such individuals, through their performance, will best serve the inter-
ests of shareholders and the company.
To ensure appropriate focus on shareholder interests, American General has
implemented a "pay for performance" system of compensation to create a direct
link between compensation and the company's performance. The objectives of the
company's compensation programs are to:
. attract, motivate, and retain the highest quality employees
. align the financial interests of American General's employees with the
interests of its shareholders
. create incentives for both short-term and long-term performance
. motivate the company's employees to achieve its objectives in a manner
that is consistent with the company's goals
To achieve its objectives, American General's compensation philosophy and
programs:
. reward compensation based on the achievement of financial and other
performance measures for the company and its operating divisions
. provide a significant percentage of compensation through long-term
incentive awards directly linked to performance and shareholder returns
. encourage significant ownership participation by employees in the
company's Common Stock
Compensation Methodology
The financial services industry is consolidating and converging as insurance
companies, banks, money managers, and brokers compete in the sale of similar
consumer products and services. American General is committed to employing ex-
ecutives who are capable of competing successfully in this changing market-
place. To this end, the company strives to provide compensation at levels and
in forms that will attract and retain superior talent and motivate those indi-
viduals to achieve superior short-term and long-term performance consistent
with the company's vision and values.
- -------------------------------------------------------------------------------
10 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
To ensure that American General is offering sufficient compensation to at-
tract the highest quality executive talent, the Personnel Committee reviewed
compensation data from a peer group in the financial services industry. The
primary market comparison information was derived from a survey of 21 compa-
nies that compete in the company's lines of business. The peer companies se-
lected for the survey are subject to change as the company and its competitors
change their focus or as new competitors emerge in the industry.
Using market data and the company's past practices, and relying on the advice
of outside compensation specialists, the company establishes a range of com-
pensation and stock awards for its executives. The range for each executive is
established based upon the executive's position in the company. Decisions re-
garding compensation for each individual executive are based on these ranges,
the performance of the company and its operating divisions, and the execu-
tive's degree of responsibility and performance against stated objectives.
Company and division performance are measured by factors that include growth
in earnings and return on equity. The Personnel Committee took particular note
of American General's outstanding performance in 1998 -- exceeding its goals
for profitability with a 16% increase in operating earnings per share, achiev-
ing an operating return on equity of over 15%, and surpassing $1 billion in
operating earnings and $100 billion in assets. The Committee also recognized
that the company produced a total return to shareholders in 1998 that outpaced
both the S&P 500 Index and its industry peer group.
Components of Compensation
American General's compensation programs reflect its commitment to a "pay for
performance" culture, which emphasizes aligning the interests of employees
with those of its shareholders. Consistent with this approach, the company has
de-emphasized base salary and has relied increasingly on incentive-based vari-
able compensation. In addition, the company has expanded the number of indi-
viduals eligible for incentive-based variable compensation to employees with
an annual base salary of $65,000 or higher.
There are three compensation components: base salaries, cash bonuses, and
long-term incentives. Individual compensation decisions for each component of
compensation are made consistent with the company's compensation philosophy
and methodology. In addition, to solidify the on-going commitment of manage-
ment to the profitability of the enterprise and shareholder interests, employ-
ees eligible for variable compensation are encouraged to meet ownership guide-
lines.
Base Compensation
Base salaries are set at competitive market rates to ensure that superior
executive talent is attracted and retained. Individual base compensation
decisions take into consideration the factors described above.
Cash Bonuses
For 1998 performance, American General paid performance bonuses totaling
$20 million to 697 employees. Consistent with the company's "pay for per-
formance" culture, the number of employees receiving performance bonuses
increased by over 50% from the prior year. Bonuses paid in January 1999 to
the 15 highest salaried employees were subject to performance hurdles es-
tablished under the Performance-Based Plan for Executive Officers described
at page 22 of this Proxy Statement.
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT 11
<PAGE>
- -------------------------------------------------------------------------------
Long-Term Incentive Awards
Long-term incentive awards are designed to build employee ownership in the
company and align the interests of employees with those of American
General's shareholders.
Stock Options. In 1998, the company extended stock options deeper into the
organization than it had in the past. The company believes that the use of
stock options in this manner will enhance long-term growth and
profitability and benefit shareholders. In 1998, options were awarded to
539 employees for 2,503,000 shares of Common Stock, of which 460,000 were
awarded to the Named Executive Officers. This compares to 1997, when
options were awarded to 277 employees for 1,446,833 shares of Common Stock,
of which 326,000 were awarded to the Named Executive Officers.
Stock options are granted with an exercise price equal to the fair market
value of Common Stock on the date of the grant. Options issued in 1998
become exercisable in three equal annual installments beginning on the
first anniversary of the grant. American General has never cancelled
existing options and replaced them with new options exercisable at lower
prices.
Reload Options. Reload options are granted in support of American
General's overall objective to increase employee Common Stock ownership.
Certain executives, including the Named Executive Officers, are eligible to
receive reload options. With the reload feature, an executive who exercises
an option with already-owned shares of Common Stock prior to the end of the
option term will receive a reload option for the shares of Common Stock
tendered. The reload option will be exercisable for the remaining term of
the original option, at a price equal to the fair market value of Common
Stock on the date the original option is exercised.
Performance Awards. Performance awards are phantom units that are
equivalent to shares of Common Stock and earned over a three-year
performance period. These awards are contingent upon the company's
achieving certain performance goals that are established in advance by the
Personnel Committee. The performance goals established by the Committee
have been based on earnings per share growth and could result in vesting
from zero up to 200%. (See the Long Term Incentive Awards Table on page
17.) In 1998, performance awards were granted to each of the Named
Executive Officers.
Restricted Stock. The Personnel Committee is also authorized to make
awards of restricted stock. In 1998, each of the Named Executive Officers
received a restricted stock award as reported in the "Summary Compensation
Table" on page 15. Such awards are subject to forfeiture if certain
performance criteria are not met.
- -------------------------------------------------------------------------------
12 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
Stock Ownership Guidelines
American General's goal is to increase employee Common Stock ownership to
6% over the next five years. As a natural complement to the company's "pay
for performance" compensation philosophy and its belief that equity based
compensation leads to greater alignment with the interests of sharehold-
ers, employees eligible for variable compensation are encouraged to meet
the following stock ownership guidelines within five years:
<TABLE>
<CAPTION>
Stock Ownership
Title/Salary Level Guidelines
------------------ ------------------------
<S> <C>
Chairman............................................ 8x annual base salary
Vice Chairman and Group Executives.................. 7x annual base salary
Management Committee................................ 6x annual base salary
Salary greater than or equal to $300,000............ 5x annual base salary
Salary between $250,000 and $299,999................ 4x annual base salary
Salary between $200,000 and $249,999................ 3x annual base salary
Salary between $150,000 and $199,999................ 1.50x annual base salary
Salary between $100,000 and $149,999................ .75x annual base salary
Salary between $65,000 and $99,999.................. .50x annual base salary
</TABLE>
These guidelines are subject to change from time to time by the board of
directors.
Compensation of Chief Executive Officer
Mr. Devlin's compensation, including his variable compensation, was awarded
consistent with American General's overall compensation philosophy and method-
ology. The Personnel Committee took note of the substantial and unique contri-
bution made by Mr. Devlin in connection with the company's outstanding profit-
ability and shareholder return. In particular, the Committee considered Mr.
Devlin's contribution to the company in achieving significant growth in earn-
ings per share and return on equity and in reaching the milestones of $1 bil-
lion in operating earnings and $100 billion in assets. Mr. Devlin's compensa-
tion is set forth in the "Summary Compensation Table" at page 15, the "Stock
Options Granted in 1998" table at page 16, and the "Long-term Incentive Plan
Awards Granted in 1998" table at page 17 .
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax deduc-
tion to public companies for annual compensation over $1 million paid to their
chief executive officer and other highly compensated executive officers. The
Code generally excludes from the calculation of the $1 million cap compensa-
tion that is based on the attainment of pre-established, objective performance
goals. Where practicable, it is the policy of the Personnel Committee to es-
tablish compensation practices that are both cost-efficient from a tax stand-
point and effective as a compensation program. The Committee also considers it
important to be able to utilize the full range of incentive compensation, even
though some compensation may not be fully deductible.
By the Personnel Committee:
Larry D. Horner (Chair)
J. Edward Easler II
Richard J.V. Johnson
Michael J. Poulos
Robert E. Smittcamp
Anne M. Tatlock
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT 13
<PAGE>
- -------------------------------------------------------------------------------
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
The performance graph below shows American General's total return on Common
Stock compared to the S&P 500 Composite Stock Price Index and the S&P Insur-
ance (Life/Health) Index over the five-year period beginning December 31,
1993. The results are based on an assumed $100 invested on December 31, 1993,
and reinvestment of dividends.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
5-Year Annualized
Year-End 1993 1994 1995 1996 1997 1998 Total Return
<S> <C> <C> <C> <C> <C> <C> <C>
American General $100.00 $102.92 $131.79 $159.92 $217.82 $321.61 26.32%
- ------------------------------------------------------------------------------------
S&P 500 100.00 101.31 139.23 171.35 228.52 293.83 24.06%
- ------------------------------------------------------------------------------------
S&P Insurance
(Life/Health) 100.00 83.01 119.00 144.95 181.25 191.35 13.86%
</TABLE>
There can be no assurance that the company's stock performance will continue
into the future with the same or similar trends depicted in the performance
graph. American General does not make or endorse any predictions as to future
performance of its stock. The performance graph above shall not be deemed in-
corporated by reference into any other public filing, unless the company spe-
cifically incorporates such graph by reference.
- -------------------------------------------------------------------------------
14 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
SUMMARY ANNUAL AND LONG-TERM COMPENSATION
The following table includes information concerning the annual compensation
to the Named Executive Officers for services in all capacities to American
General and its subsidiaries for the fiscal years ended December 31, 1998,
1997, and 1996.
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Long-
Term Compensation/1/
-------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------------------------------------------------
Long-Term
Other Annual Restricted Securities Incentive All Other
Compen- Stock Underlying Plan Compen-
Name and Position Year Salary($) Bonus($)/2/ sation($)/3/ Awards ($)/4/ Options (#) Payouts ($)/5/ sation ($)/6/
----------------- ---- --------- ----------- ------------ ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert M. Devlin, 1998 $951,346 $2,250,000 $19,455 $3,000,000 225,000 $ -0- $391,069
Chairman, 1997 816,154 1,750,000 17,602 2,181,250 150,000 -0- 40,645
President and CEO 1996 615,385 750,000 -0- -0- 100,000 123,375 31,776
---------------------------------------------------------------------------------------------------
Jon P. Newton, 1998 579,808 1,100,000 5,893 1,500,000 100,000 -0- 187,046
Vice Chairman 1997 483,077 650,000 -0- 436,250 60,000 174,750 25,754
1996 416,154 300,000 -0- -0- 25,000 -0- 23,102
---------------------------------------------------------------------------------------------------
James S. D'Agostino
Jr., 1998 539,423 500,000 -0- 1,200,000 75,000 -0- 144,523
Vice Chairman and 1997 466,154 500,000 -0- -0- 75,000 174,750 112,498
Group Executive-- 1996 369,539 300,000 -0- -0- 25,000 88,125 19,124
Consumer Finance
---------------------------------------------------------------------------------------------------
Rodney O. Martin Jr., 1998 413,864 500,000 4,314 1,730,000 30,000 -0- 62,008
Vice Chairman and 1997 308,077 325,000 -0- 218,125 20,000 -0- 168,048
Group Executive-- 1996 250,385 135,000 -0- -0- 15,500 -0- 7,253
Life Insurance
---------------------------------------------------------------------------------------------------
Thomas L. West Jr., 1998 413,864 400,000 -0- 1,580,000 30,000 -0- 73,930
Vice Chairman and 1997 325,000 300,000 -0- -0- 21,000 -0- 21,668
Group Executive-- 1996 316,539 135,000 -0- -0- 21,000 -0- 18,344
Retirement Services
---------------------------------------------------------------------------------------------------
</TABLE>
/1/Plan Awards. All long-term compensation awards were granted under the
stock and incentive plans of American General.
/2/Bonus Payment. The bonus amounts for performance for each year are de-
termined and paid in the subsequent year.
/3/Other Annual Compensation. Amounts represent reimbursement for certain
income taxes.
/4/Restricted Stock Awards. These amounts represent the value of the re-
stricted stock on the date of grant. At December 31, 1998, Messrs.
Devlin, Newton, D'Agostino, Martin, and West held an aggregate of
100,000, 41,000, 20,000, 37,500, and 32,500 shares, respectively, with
a value of $7,800,000, $3,198,000, $1,560,000, $2,925,000, and
$2,535,000, respectively. Dividends are paid to holders with respect
to restricted stock at the same rate as is paid on all other shares of
Common Stock. The restricted stock awards granted in 1998 are subject
to forfeiture if certain performance criteria are not met. In the
event of a Change in Control, all forfeiture restrictions with respect
to all outstanding shares of restricted stock immediately lapse. See
"Change in Control Arrangements" below for the definition of "Change
in Control."
/5/Long-Term Incentive Plan Payouts. These amounts represent the value of
performance awards on the date of vesting, following the three-year
performance period, regardless of whether the vested award was paid in
cash, stock, or a combination thereof.
/6/All Other Compensation. For each Named Executive Officer, the 1998
amount includes American General's contributions to the Thrift Plan
and Supplemental Thrift Plan, premiums paid by the company for a group
carve out individual life insurance policy, and the value of split
dollar life insurance. The Thrift Plan contributions for 1998 were
$7,200 for each of the Named Executive Officers. The Supplemental
Thrift Plan contributions and the premiums paid for group carve out
life insurance for 1998 were as follows: Mr. Devlin-$35,311 and
$11,098; Mr. Newton-$18,591 and $4,966; Mr. D'Agostino-$16,774 and
$2,790; Mr. Martin-$10,414 and $1,260; and Mr. West-$10,414 and
$4,315. The following amounts were included for split dollar life in-
surance: Mr. Devlin-$337,460; Mr. Newton-$156,289; Mr. D'Agostino-
$117,759; Mr. Martin-$43,134; and Mr. West-$52,001. Cumulative premi-
ums paid by the company for split dollar life insurance are recovered
by the company from the cash value of the life insurance policy at the
later of retirement or 16 years. The amounts included for split dollar
life insurance in the table represent the present value of the inter-
est projected to accrue on the current year's insurance premium.
- ----------------------------------------------------------------------------
1999 PROXY STATEMENT 15
<PAGE>
- -------------------------------------------------------------------------------
STOCK OPTIONS GRANTED, OPTION EXERCISES AND YEAR END VALUE
The following table includes information on grants of stock options during
fiscal year 1998 to the Named Executive Officers. No stock appreciation rights
were granted during fiscal year 1998.
STOCK OPTIONS GRANTED IN 1998
<TABLE>
------------------------------------------------------------------------------------
<CAPTION>
Individual Stock Option Grants
----------------------------------------------
% of Total Grant Date
Options Options Granted Exercise Present
Granted to Employees Price Expiration Value
Name (#)/1/,/2/ in 1998 ($/Sh) Date ($)/3/
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert M. Devlin 225,000 9% $59.4375 03-04-08 $3,422,250
Jon P. Newton 100,000 4 59.4375 03-04-08 1,521,000
James S.
D'Agostino Jr. 75,000 3 59.4375 03-04-08 1,140,750
Rodney O. Martin
Jr. 30,000 1 59.4375 03-04-08 456,300
Thomas L. West Jr. 30,000 1 59.4375 03-04-08 456,300
------------------------------------------------------------------------------------
</TABLE>
/1/Options. These consist of non-qualified options and incentive stock
options to acquire Common Stock, which generally become exercisable in
three equal annual installments beginning on the first anniversary of the
grant. The non-qualified options include the right to receive reload
options in the event the optionee exercises an option with already-owned
shares of Common Stock. A description of the reload options is set forth
on page 12 in the Personnel Committee Report.
/2/Change in Control. In the event of a Change in Control, the stock option
agreements provide for acceleration of vesting. See "Change in Control
Arrangements" below for the definition of "Change in Control."
/3/Grant Date Present Value. These estimates of value are disclosed for
illustration only and should not be interpreted as projections of the
future price of Common Stock. These estimates were developed using a
Black-Scholes option pricing model incorporating the following
assumptions: expected volatility of 23%, risk free interest rate of
5.77%, expected life of 6 years, and dividend yield of 2.5%.
The following table contains information concerning the options exercised by
the Named Executive Officers during fiscal year 1998 and the unexercised op-
tions held by the Named Executive Officers as of December 31, 1998.
AGGREGATED OPTION EXERCISES IN 1998 AND OPTION VALUES AT DECEMBER 31, 1998/1/
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at 12/31/98 (#) at 12/31/98($)/2/
Shares Acquired in Value ------------------------- -------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. Devlin -0- -0- 218,667 358,334 $9,429,112 $8,997,424
Jon P. Newton -0- -0- 77,266 148,334 3,327,821 3,585,028
James S. D'Agostino Jr. 4,264 $169,615 98,032 133,334 4,320,189 3,464,091
Rodney O. Martin Jr. -0- -0- 21,999 48,501 891,713 1,235,287
Thomas L. West Jr. -0- -0- 50,400 51,000 2,229,837 1,336,500
-------------------------------------------------------------------------------------------------------------
</TABLE>
/1/Options. The options reported in the table include both incentive stock
options and non-qualified options. All outstanding options are subject to
acceleration of vesting in the event of a Change in Control.
/2/Value. "Value" is the difference between the fair market value of the
underlying shares of Common Stock and the exercise price.
- -------------------------------------------------------------------------------
16 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
LONG-TERM INCENTIVE PLAN AWARDS GRANTED IN 1998
The following table describes the performance awards granted during the fis-
cal year ended December 31, 1998, to the Named Executive Officers.
LONG-TERM INCENTIVE PLAN AWARDS GRANTED IN 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Performance
or Other
Period Estimated Future Payouts
Until in Units/2/,/3/
Number of Maturation ------------------------------------
Name Units (#)/1/ or Payout Threshold (#) Target (#) Maximum (#)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert M. Devlin 22,500 1998-2000 11,250 22,500 45,000
Jon P. Newton 7,500 1998-2000 3,750 7,500 15,000
James S. D'Agostino Jr. 7,500 1998-2000 3,750 7,500 15,000
Rodney O. Martin Jr. 2,500 1998-2000 1,250 2,500 5,000
Thomas L. West Jr. 2,500 1998-2000 1,250 2,500 5,000
- ----------------------------------------------------------------------------------------
</TABLE>
/1/Performance Units. Each unit is the equivalent of one share of Common
Stock.
/2/Future Payouts. The performance criterion for these performance awards is
cumulative operating earnings per share for the three-year performance
period. Subject to downward adjustment at the discretion of the Personnel
Committee, performance awards will vest from 0% to 200% on a pro rata
basis according to the following levels: If cumulative operating earnings
per share for the period are less than a threshold performance level of
$11.78, no units will vest; if cumulative operating earnings per share
for the period are between $11.78 and a target performance level of
$12.35, units will vest pro-rata from 50% up to 100%; and if cumulative
operating earnings per share for the period are between $12.35 and a
maximum performance level of $13.31, units will vest pro-rata from 100%
up to 200% of the original grant.
/3/Change in Control. In the event of a Change in Control, performance
awards would vest at 100%. See "Change in Control Arrangements" below for
the definition of "Change in Control."
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT 17
<PAGE>
- -------------------------------------------------------------------------------
PENSION PLANS
Pension Plan Table "A" shows the estimated annual retirement benefits payable
to Messrs. Devlin, Newton, and D'Agostino pursuant to their respective Supple-
mental Executive Retirement Agreements ("SERAs") with American General, which
comprise a non-qualified, unfunded, defined benefit pension plan.
PENSION PLAN TABLE "A"
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years of Service
Remuneration 10 Yr. 15 Yr. 20 Yr. 25 Yr. 28 Yr.
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 400,000 $ 96,000 $ 144,000 $ 192,000 $ 240,000 $ 268,800
500,000 120,000 180,000 240,000 300,000 336,000
750,000 180,000 270,000 360,000 450,000 504,000
1,000,000 240,000 360,000 480,000 600,000 672,000
1,500,000 360,000 540,000 720,000 900,000 1,008,000
2,000,000 480,000 720,000 960,000 1,200,000 1,344,000
2,500,000 600,000 900,000 1,200,000 1,500,000 1,680,000
3,000,000 720,000 1,080,000 1,440,000 1,800,000 2,016,000
- --------------------------------------------------------------------------
</TABLE>
The SERA benefits shown in Pension Plan Table "A" are subject to offset (i)
for the respective Named Executive Officer's benefits under the American
General Retirement Plan, a qualified non-contributory defined benefit
pension plan, and American General's Restoration of Retirement Income Plan,
a non-qualified, unfunded, defined benefit pension plan, and (ii) for one-
half of his annual benefit under the Social Security Act relating to Old-Age
and Disability benefits. Compensation for the purposes of the SERAs includes
annual salary and bonus amounts reported in the Summary Compensation Table.
The estimated credited years of service under the SERAs for Messrs. Devlin,
Newton, and D'Agostino are 21, 12, and 13, respectively. The maximum number
of years of service that can be credited under the SERAs is 28. The SERA
benefit is computed on the basis of a straight-life annuity with a 10-year
term certain.
Pension Plan Table "B" shows the estimated annual retirement benefits payable
to Messrs. Martin and West pursuant to American General's Supplemental Execu-
tive Retirement Plan ("SERP"), which comprises a non-qualified, unfunded, de-
fined benefit pension plan.
PENSION PLAN TABLE "B"
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years of Service
Remuneration 10 Yr. 15 Yr. 20 Yr. 25 Yr. 30 Yr.
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 400,000 $ 80,000 $120,000 $160,000 $ 200,000 $ 240,000
500,000 100,000 150,000 200,000 250,000 300,000
750,000 150,000 225,000 300,000 375,000 450,000
1,000,000 200,000 300,000 400,000 500,000 600,000
1,500,000 300,000 450,000 600,000 750,000 900,000
2,000,000 400,000 600,000 800,000 1,000,000 1,200,000
2,500,000 500,000 750,000 1,000,000 1,250,000 1,500,000
3,000,000 600,000 900,000 1,200,000 1,500,000 1,800,000
- -----------------------------------------------------------------------
</TABLE>
The SERP benefits shown in Pension Plan Table "B" are subject to offset
(i) for the respective Named Executive Officer's benefits under the American
General Retirement Plan, a qualified non-contributory defined benefit
pension plan, and American General's Restoration of Retirement Income Plan,
a non-qualified, unfunded, defined benefit pension plan and (ii) for one-
half of his annual benefit under the Social Security Act relating to Old-Age
and Disability benefits. Compensation for the purposes of the SERPs includes
annual salary and bonus amounts reported in the Summary Compensation Table.
The estimated credited years of service under the SERP for Messrs. Martin
and West are 3 and 6, respectively. The maximum number of years of service
that can be credited under the SERP is 30. The SERP benefit is computed on
the basis of a straight-life annuity with a 10-year term certain.
- -------------------------------------------------------------------------------
18 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
CHANGE IN CONTROL ARRANGEMENTS
Change in Control. The phrase "Change in Control" for all purposes used in
this proxy statement is generally defined as (i) the acquisition of 30% or
more of the voting securities of American General by a non-affiliate; (ii) the
merger or consolidation of American General or its direct or indirect subsidi-
ary unless the voting securities of American General immediately prior to the
transaction continue to represent at least 51% of the voting power of American
General, the surviving entity, or any parent thereof immediately after the
transaction; (iii) the sale of substantially all of the assets of American
General, except to an entity that has 51% of its voting power held by those
who were the shareholders of American General immediately prior to such sale,
in substantially the same proportions; (iv) the adoption of a plan of liquida-
tion of American General by its shareholders; or (v) a change in the constitu-
ency of the board of directors, where the current directors or their nominees
cease to constitute a majority of the board of directors of American General.
Change in Control Severance Agreements. American General has agreements pro-
viding for the payment of severance benefits to Messrs. Martin and West and
certain other officers of American General and its subsidiaries following a
Change in Control in the event of certain qualifying terminations of employ-
ment within a three-year period after the Change in Control. The initial terms
of the agreements will expire on December 31, 2000. Terminations that will
qualify the terminated officer for severance payments include a termination by
American General without "Cause" (as defined in the severance agreement) and a
termination by the officer with "Good Reason" (as defined in the severance
agreement) within three years following a Change in Control. Good Reason in-
cludes certain changes in duties, responsibilities, salary and bonus amounts,
or benefits.
In the event of a qualifying termination, these agreements provide for sever-
ance payments equal to approximately three times the sum of the officer's an-
nual base salary and average annual bonus. Each agreement provides an addi-
tional amount to cover payment of any applicable excise tax on all benefits
received as the result of a Change in Control (whether or not pursuant to the
severance agreement) and any income or employment taxes imposed on the excise
tax payment in order that the net amount retained by the officer will equal
the amount the officer would have received absent any such excise tax. The
agreements also provide for certain other benefits.
Supplemental Executive Retirement Plan and Agreements. Under the Supplemental
Executive Retirement Agreements entered into as of February 1, 1998, with
Messrs. Devlin, Newton, and D'Agostino and the Supplemental Executive
Retirement Plan in which Messrs. Martin and West participate as of February 1,
1998, the retirement benefit of each Named Executive Officer will vest upon a
Change in Control. In the event of certain qualifying terminations of employ-
ment after a Change in Control, each Named Executive Officer will be given up
to 36 additional months of age and service credit in the determination of this
supplemental retirement benefit.
Company Stock-Based Awards. All of the awards outstanding or to be granted
under American General's stock and incentive plans are subject to the auto-
matic acceleration of vesting upon a Change in Control. See the applicable
footnotes to the preceding executive compensation tables for a description of
how a Change in Control would affect each type of award under such plans.
Deferred Compensation Plan. American General has adopted a deferred compensa-
tion plan that allows certain officers, including all of the Named Executive
Officers, to defer a portion of their salary and bonus. The investment options
for the deferred compensation plan include phantom units of Common Stock. If
the officer elects to have the deferred compensation invested in Common Stock,
then the officer will be credited with an award equal to 20% of the deferred
salary and bonus, which will generally vest in three years and be deemed to be
invested in Common Stock. Vesting of this award will accelerate upon the nor-
mal retirement, disability, or death of the officer or a Change in Control.
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT 19
<PAGE>
- -------------------------------------------------------------------------------
EMPLOYMENT AGREEMENTS
As of February 1, 1998 (the "Effective Date"), American General entered into
three-year Employment Agreements with Messrs. Devlin, Newton, and D'Agostino
(the "Executives"), the terms of which are automatically extended for an
additional month on the first day of each month, unless American General or
the Executive has given prior notice. Under each Agreement, the Executive
agrees to devote his full working time, energies, and attention to his duties,
and undertakes certain non-competition obligations to American General, which
generally require the Executive not to directly or indirectly compete with the
company in any area of the United States in which the company conducts
business for the three-year period following his termination of employment.
Each Agreement provides that the Executive will be entitled to receive an an-
nual base salary not less than that in effect on May 1, 1998, and will be pro-
vided with an opportunity to earn an annual bonus. If, as is anticipated for
the 1999 fiscal year, the Executive participates in a bonus plan pursuant to
which performance objectives, bonus opportunities, and levels of payment are
set for the Executive (a "formula bonus plan"), his minimum bonus opportunity
for the 1999 fiscal year (when measured as a percentage of the Executive's
salary) will not be less than the average bonus percentage over the three pre-
ceding years. The Executive's bonus opportunity for future years under the
formula bonus plan cannot be reduced; however, the actual bonus to be paid
with respect to each such year will be determined pursuant to the plan's pro-
visions. The Agreement also provides that, when non-qualified options granted
to the Executive after the Effective Date become exercisable, they will remain
exercisable for their full term. The Agreement with Mr. Devlin also provides
that if he retires after age 60, he will be credited with no fewer than 25
years of service under his Supplemental Executive Retirement Agreement with
American General.
If an Executive's employment is terminated (i) by American General for
"Cause" (as defined in the Agreement), (ii) due to the Executive's death, or
(iii) by the Executive without "Good Reason" (as defined in the Agreement),
then, except as described below, the Executive will generally be entitled only
to payment of his salary through the date of termination of employment and to
the other post-termination compensation and benefits to which he is entitled
under the terms of the company's compensation and benefit plans.
If an Executive's employment is terminated by the company without Cause, by
the Executive for Good Reason, or by the Executive for any reason during the
year immediately following a Change in Control, then, in addition to being
entitled to his salary through the date of termination and the compensation
and benefits to which he is entitled under the terms of American General's
compensation and benefit plans, the Executive will be entitled to the payments
and benefits described in this paragraph. The Executive will be generally
entitled to a cash payment equal to a pro rata portion of the bonus that would
be payable for the year in which his employment is terminated, assuming the
applicable performance targets were achieved at target level. The Executive
will also be entitled to a cash severance payment equal to three times the
Executive's salary and average bonus as measured immediately prior to the date
of termination as well as certain other benefits. This cash severance will be
paid to the Executive over a three-year period in installments, except that,
if the termination occurs following a Change in Control, the cash severance
will be paid in a lump sum. In addition, American General will pay (or
establish a trust to pay) all remaining premiums on any "split-dollar"
insurance policy arrangement in effect between the Executive and American
General and will transfer the rights and incidents of any such policy to the
Executive at no cost to him. All unvested awards under American General's
deferred compensation plan and outstanding stock
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20 AMERICAN GENERAL
<PAGE>
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options, restricted stock, and similar equity-based awards made by American
General to the Executive will become fully vested and any applicable
performance goals will be deemed met at target level.
Upon termination of each Executive's employment, other than a termination by
the company for Cause or by the Executive without Good Reason, the Executive
(and the Executive's spouse) will be entitled to lifetime medical and dental
insurance benefits. In addition, if, following the attainment by the Executive
of age 62 (or age 60 in the case of Mr. Devlin), the Executive's employment
with American General terminates for any reason (other than a termination by
American General for Cause), the Executive will become fully vested in all
outstanding time-vested stock options, restricted stock, and similar equity-
based awards granted to him by American General, and will also become vested
in at least a pro rata portion of all equity-based performance awards.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
On February 25, 1998, American General acquired the remaining shares of
common stock of Western National Corporation. Mr. Poulos, Western National,
and American General entered into a letter agreement regarding the treatment
of benefits payable to Mr. Poulos upon Mr. Poulos' resignation as Chairman,
President, and CEO of Western National. In the letter agreement, Mr. Poulos
agreed to increase the exercise price of his Western National options from no
exercise price to $12 per option and to reduce the amount of his severance
payment from $7.5 million to $4.5 million. Pursuant to the letter agreement,
he surrendered to American General 16,268 shares of Common Stock in exchange
for $950,000 (based on the NYSE closing sales price on the date of surrender)
and 276,625 options to acquire Common Stock in exchange for $9.98 million
(based on the spread between the NYSE closing sales price on the date of
surrender and the exercise price). In addition, the other Western National
options held by Mr. Poulos and converted in the acquisition will continue to
be exercisable for the remainder of the original ten-year term of such
options.
In 1994, Mr. Poulos acquired 100,000 shares of Western National common stock
from Conseco, Inc. at a net price of $11.365 per share. To finance this
purchase, Western National made a five-year non-recourse loan, payable in one
installment at maturity, to Mr. Poulos for the full purchase price, which was
secured by the common stock. On March 4, 1998, Mr. Poulos repaid the loan in
full (principal and accrued interest of approximately $1.5 million). On that
date, he also received a payment from Western National of approximately
$727,000 pursuant to a related tax-sharing agreement that he entered into at
the request of Western National.
In 1998, Mr. Attwell was Of Counsel to the law firm of Vinson & Elkins
L.L.P., which provided legal services to American General and its subsidiaries
during 1998.
Various executive officers and directors of American General may from time to
time purchase insurance or annuity products marketed by American General
companies in the ordinary course of business.
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1999 PROXY STATEMENT 21
<PAGE>
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PROPOSAL TO RE-APPROVE THE PERFORMANCE-BASED PLAN FOR EXECUTIVE OFFICERS
(Item 2 on Proxy Card)
The Performance-Based Plan for Executive Officers was approved by the board
of directors on March 17, 1994. The shareholders approved the Plan at the 1994
annual meeting of shareholders. The Plan became effective as of January 1,
1994. The Plan was re-approved by the board on March 4, 1999.
Purpose of Re-Approving the Plan. As a result of the 1993 amendments to the
Internal Revenue Code of 1986, publicly-held companies generally will not be
entitled to a federal income tax deduction for annual compensation in excess
of $1 million paid to any officer named in the Summary Compensation Table.
However, a deduction is permitted for compensation if it is paid pursuant to a
plan that has been approved by the shareholders. Federal tax rules require
that the Plan be re-approved by the shareholders every five years.
Summary of the Plan. The Plan is administered by the Personnel Committee of
the board of directors.
The Plan provides for the creation of a pool of funds each year in which (i)
operating earnings for the Plan year exceed 7% of average shareholders' equity
for a three-year period, including the current and prior two Plan years, and
(ii) a cash dividend was declared on the outstanding Common Stock during the
Plan year.
The pool for each year will be the sum of (i) 3% of that portion of the
company's operating earnings for the Plan year that exceeds a base percentage
return to shareholders on average shareholders' equity for the three-year pe-
riod ending on the last day of the Plan year, plus (ii) the amount, not to ex-
ceed $2 million, that was available to pay awards under the Plan for prior
years but was not so paid. The base percentage return to shareholders is es-
tablished annually by the Personnel Committee.
The maximum annual award that will be made to a participant under the Plan
for a Plan year will not exceed .05% of operating earnings for such year. This
maximum amount is a limitation and does not represent a target. The award for
each participant is based on a fixed percentage of the bonus pool and is es-
tablished annually by the Committee, subject to reduction, in the Committee's
discretion. Prior to the payment of awards under the Plan, the Committee will
certify (by written minutes) that the performance goals and any other material
terms of the Plan have been satisfied.
A participant for purposes of the Plan will mean any officer of American Gen-
eral or its subsidiaries who is, during the Plan year, among the 15 highest
salaried employees of American General and its subsidiaries and who has been
designated by the Committee as eligible to receive an award under the Plan for
the Plan year. Only participants who remain employed by American General or
its subsidiaries through the end of the applicable Plan year will receive pay-
ment of an award. It is anticipated that all awards made under the Plan will
be paid out in cash in one lump sum payment during the first quarter of the
calendar year following the Plan year to which the award relates.
The Plan may be amended at any time by the board of directors; provided, that
no amendment that requires shareholder approval in order for awards paid under
the Plan to continue to be deductible under the Code may be made without
shareholder approval. The board of directors may terminate the Plan at any
time.
Shareholder Vote. Re-approval of the Plan will require the affirmative vote
of the holders of a majority of the votes entitled to be cast by the holders
of Common Stock and Preferred Stock represented at the meeting.
The board of directors believes that the re-approval of the Performance-Based
Plan for Executive Officers is in the best interests of American General and
its shareholders and recommends that you vote FOR its approval.
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22 AMERICAN GENERAL
<PAGE>
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PROPOSAL TO APPROVE THE AMERICAN GENERAL CORPORATION
1999 STOCK AND INCENTIVE PLAN
(Item 3 on Proxy Card)
The board of directors has adopted, subject to shareholder approval, the
American General 1999 Stock and Incentive Plan. The 1999 Plan provides for the
issuance of up to twelve million shares of Common Stock, which represents ap-
proximately 4.8% of American General's outstanding shares as of March 10,
1999. The 1999 Plan is intended to promote the interests of American General
and its shareholders by providing for equity-based incentive awards for Ameri-
can General's employees and directors in order to further align their inter-
ests with those of the shareholders. The 1999 Plan is designed to permit Amer-
ican General to take a deduction under section 162(m) of the Internal Revenue
Code, as amended, with respect to performance-based compensation to any par-
ticipant who is a "covered employee" within the meaning of section 162(m).
Summary of the 1999 Plan. A copy of the complete text of the 1999 Plan is at-
tached as Annex A, and the following summary is qualified in its entirety by
reference to such text. No awards have been granted to employees or non-em-
ployee directors under the 1999 Plan. The shares provided for in the 1999 Plan
are necessary to carry out the company's compensation philosophy described in
the Personnel Committee report beginning on page 10.
Administration. The 1999 Plan will be administered by the Personnel Commit-
tee. Grants to non-employee directors will be approved by the board.
Effective Date. The 1999 Plan became effective on January 21, 1999, subject
to shareholder approval. No awards may be granted under the 1999 Plan after
ten years from that date.
Participants. Employees of American General and its subsidiaries and direc-
tors of American General will be eligible to receive awards under the 1999
Plan. Recipients will be selected and awards will be granted by the Personnel
Committee in its sole discretion.
Shares of Stock Subject to the 1999 Plan. The aggregate number of shares of
Common Stock that may be issued under the 1999 Plan to one or more holders
will not exceed twelve million shares. The maximum number of shares that may
be subject to awards, other than Stock Options, will not exceed six million
shares. These limits will be adjusted in the event of future changes in the
outstanding Common Stock by reason of stock splits or other relevant changes
in capitalization.
Types of Awards. Under the 1999 Plan, the Personnel Committee may grant Stock
Options, Restricted Stock Awards, Performance Awards, and Incentive Awards.
Please refer to Annex A for a brief description of each of the types of awards
available under the 1999 Plan.
Tax Consequences Relating to Stock Options. There are no tax consequences at
the date of grant for Non-Qualified Stock Options. Upon exercise, the optionee
will realize ordinary income equal to the excess of the fair market value of
the Common Stock on the date of exercise over the option price. The company
will be entitled to claim a tax deduction for compensation paid equal to the
amount the optionee recognizes as ordinary income. The optionee generally does
not recognize income at either the date of grant or exercise of an Incentive
Stock Option. Upon subsequent sale of the Common Stock, the optionee receives
long-term capital gain or loss treatment for the difference between the sales
price and the option price, provided the shares are held for two years after
the option is granted and one year after the date of exercise. The company
will be entitled to claim a tax deduction for compensation paid equal to the
amount the optionee recognizes as income in a disqualifying disposition.
Change in Control. Subject to the Committee's discretion, agreements provid-
ing for awards may contain provisions addressing a change in control of Ameri-
can General, including the acceleration of or vesting of, any award.
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1999 PROXY STATEMENT 23
<PAGE>
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Amendment. The board of directors may amend, suspend, or terminate the 1999
Plan (except with respect to awards that are then outstanding) at any time ex-
cept that it may not, without approval of shareholders, increase the maximum
number of shares issuable (except to reflect changes in capitalization as dis-
cussed above), or change the class of individuals eligible to receive awards.
Shareholder Vote. Approval of the 1999 Plan will require the affirmative vote
of a majority of the votes entitled to be cast by the holders of Common Stock
and Preferred Stock represented at the meeting.
The board of directors believes that the approval of the 1999 Plan is in the
best interests of American General and its shareholders and recommends that
you vote FOR its approval.
INDEPENDENT AUDITORS
(Item 4 on Proxy Card)
The board of directors, adopting the recommendation of the Audit Committee,
has appointed the firm of Ernst & Young LLP as American General's independent
auditors to audit the accounts of the company for 1999 and recommends
ratification of the appointment by the shareholders at the Annual Meeting. One
or more representatives of Ernst & Young LLP are expected to be present at the
meeting where they will be given the opportunity to make a statement and will
be available to respond to appropriate questions. Ernst & Young LLP served as
American General's independent auditors for 1998.
If the appointment of Ernst & Young LLP is not ratified by a majority of the
votes entitled to be cast by the holders of Common Stock and Preferred Stock
represented at the meeting, or if, prior to the meeting, Ernst & Young LLP
declines to act or otherwise becomes incapable of acting, or its engagement is
otherwise discontinued by the board of directors at any time, then, in any
such case, the board of directors will appoint other independent auditors
whose employment will then be subject to ratification by shareholders at the
annual meeting following such appointment.
Shareholder Vote. Ratification of the appointment of Ernst & Young LLP as in-
dependent auditors for 1999 will require the affirmative vote of a majority of
the votes entitled to be cast by the holders of Common Stock and Preferred
Stock represented at the meeting.
The board of directors recommends a vote FOR ratification of the appointment
of Ernst & Young LLP as independent auditors.
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24 AMERICAN GENERAL
<PAGE>
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OTHER BUSINESS
1999 Annual Meeting. At the date of this proxy statement, the management of
American General knows of no other matter to be presented for action at the
meeting. However, if any other matters do properly come before the meeting, it
is intended that the persons named on the accompanying proxy will vote on such
matters pursuant to the proxy in accordance with their best judgment.
Shareholder Proposals and Nominations. Shareholders may propose matters to be
presented at shareholders' meetings and also may nominate directors. Formal
procedures have been established for those proposals and nominations.
Shareholder proposals must be received at American General's principal
offices on or before November 23, 1999, in order to be included in the proxy
materials for presentation at American General's annual meeting of
shareholders in 2000.
American General's bylaws provide generally that nominations of persons for
election to the board of directors and shareholder proposals for an annual
meeting may be made by a shareholder only if the shareholder is a shareholder
of record and such shareholder gives timely written notice of such
shareholder's intent to make such nomination or nominations or shareholder
proposals to the corporate secretary. In the case of American General's annual
meeting of shareholders in 2000, to be timely, notice of shareholder proposals
or director nominations must be given to the corporate secretary between
December 1, 1999, and December 31, 1999. In the event that such annual meeting
is called for a date that is not within 30 days before or after April 29,
2000, notice by the shareholder in order to be timely must be given not later
than the close of business on the earlier of the tenth day following (i) the
day on which notice of the date of such annual meeting is mailed or (ii)
public disclosure of the date of such annual meeting is made. The notice must
contain certain specified information with respect to the shareholder making
the proposal, and the nominee or nominees or the shareholder proposal.
A copy of the requirements described above will be provided to any
shareholder upon written request to the corporate secretary.
By order of the board of directors,
/s/ SUSAN A. JACOBS
Susan A. Jacobs
Corporate Secretary
March 22, 1999
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1999 PROXY STATEMENT 25
<PAGE>
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ANNEX A
AMERICAN GENERAL CORPORATION
1999 STOCK AND INCENTIVE PLAN
1. PURPOSE
The purpose of the American General Corporation 1999 Stock and Incentive
Plan (the "Plan") is to provide a means through which American General Corpo-
ration, a Texas corporation, and its subsidiaries (collectively, the "Compa-
ny") may attract able persons to enter the employ or become directors of the
Company and to provide a means whereby those persons upon whom the responsi-
bilities of the successful administration and management of the Company rest,
and whose present and potential contributions to the welfare of the Company
are of importance, can acquire and maintain stock ownership, thereby strength-
ening their concern for the welfare of the Company and their desire to remain
in its employ or as directors. A further purpose of the Plan is to provide
such persons with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company. So that the maximum incentive
can be provided, the Plan provides for granting Incentive Stock Options, Non-
Qualified Options, Restricted Stock Awards, Performance Awards, and Incentive
Awards, or any combination of the foregoing, as is best suited to the circum-
stances of the particular person.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
(a) "Award" means, individually or collectively, any Option, Restricted
Stock Award, Performance Award, or Incentive Award.
(b) "Board" means the Board of Directors of American General Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations under such section.
(d) "Committee" means a committee of the Board that is selected by the
Board as provided in Section 4(a).
(e) "Common Stock" means the common stock of American General
Corporation.
(f) "Company" means, collectively, American General Corporation and its
subsidiaries.
(g) "Director" means an individual elected to the Board by the
shareholders of American General Corporation or by the Board under
applicable corporate law.
(h) "Employee" means any person (including a Director) in an employment
relationship with the Company or any parent or subsidiary corporation (as
defined in section 424 of the Code).
(i) "Fair Market Value" means, as of any specified date, the average of
the highest and lowest quoted selling prices of the Common Stock as
reported on the Composite Tape for issues listed on the New York Stock
Exchange on the specified date, or, if no sales were reported on the
Composite Tape on such specified date, the average of the highest and
lowest quoted selling prices of the Common Stock on the nearest dates
before and after such specified date on which sales of the Common Stock
were so reported.
(j) "Grant Document" means the document or documents evidencing an Award
under the Plan, which may be either an agreement between the Company and
the Holder as to the Award (with any amendments thereto) or a notice of
grant of the Award from the Company to the Holder (including any
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1999 PROXY STATEMENT A-1
<PAGE>
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attached statement of the terms and conditions of the Award and any
modifications thereto made in accordance with the Plan).
(k) "Holder" means an employee or a non-employee Director who has been
granted an Option, a Restricted Stock Award, a Performance Award, or an
Incentive Award.
(l) "Incentive Award" means an Award granted under Section 10 of the
Plan.
(m) "Incentive Stock Option" means an incentive stock option within the
meaning of section 422(b) of the Code.
(n) "Immediate Family" means, with respect to a Holder, the Holder's
spouse, children or grandchildren (including adopted children, step
children and grandchildren).
(o) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(p) "Non-Qualified Option" means an Option that is not an Incentive Stock
Option.
(q) "Option" means an Award under Section 7 of the Plan and includes both
Non-Qualified Options and Incentive Stock Options to purchase Common Stock.
(r) "Performance Award" means an Award granted under Section 9 of the
Plan.
(s) "Plan" means the American General Corporation 1999 Stock and
Incentive Plan, as amended from time to time.
(t) "Restricted Stock Award" means an Award granted under Section 8 of
the Plan.
(u) "Rule 16b-3" means Securities and Exchange Commission Rule 16b-3
promulgated under the 1934 Act, as such may be amended from time to time,
and any successor rule, regulation, or statute fulfilling the same or
similar function.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective on January 21, 1999, following adoption by
the Board, provided the Plan is approved by the shareholders of American Gen-
eral Corporation within twelve months thereafter. Notwithstanding any provi-
sion in the Plan or in any Grant Document under the Plan, no Option shall be
exercisable and no Award shall vest prior to such shareholder approval. No
further Awards may be granted under the Plan after ten years from the date the
Plan becomes effective. The Plan shall remain in effect (at least for the pur-
pose of governing outstanding Awards) until all Option Awards granted under
the Plan have been exercised or expired by reason of lapse of time, all re-
strictions imposed upon Restricted Stock Awards have been eliminated or the
Restricted Stock Awards have been forfeited, and all Performance Awards and
Incentive Awards have been satisfied or have terminated.
4. ADMINISTRATION
(a) Composition of Committee. The Plan shall be administered by a committee
of, and appointed by, the Board, and such Committee shall be comprised solely
of two or more outside Directors of American General Corporation (within the
meaning of section 162(m) of the Code and applicable interpretive authority
thereunder) who are also non-employee Directors (within the meaning of Rule
16b-3). A majority of the Committee shall constitute a quorum. The Committee
shall act by majority action at a meeting, except that action permitted to be
taken at a meeting may be taken without a meeting if written consent thereto
is given by all members of the Committee.
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A-2 AMERICAN GENERAL
<PAGE>
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(b) Powers. Subject to the express provisions of the Plan and except as oth-
erwise provided below with respect to non-employee Directors, the Committee
shall have authority, in its discretion, to determine which Employees or Di-
rectors of the Company shall receive an Award, the time or times when such
Award shall be made, whether an Incentive Stock Option or Non-Qualified Option
shall be granted, the number of shares to be subject to each Option and Re-
stricted Stock Award, and the value of each Performance Award and Incentive
Award. In making such determinations, the Committee shall take into account
the nature of the services rendered by the respective Employees or Directors,
their present and potential contribution to the Company's success, and such
other factors as the Committee shall deem relevant. Notwithstanding the fore-
going, the Board shall have authority, in its discretion, to make the determi-
nations set forth above with respect to non-employee Directors.
(c) Additional Powers. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the ex-
press provisions of the Plan and except as otherwise provided below with re-
spect to non-employee Directors, this shall include the power to construe the
Plan and the respective Grant Documents thereunder, to prescribe rules and
regulations relating to the Plan and to determine the terms, restrictions, and
provisions of the Grant Document for each Award, including such terms, re-
strictions, and provisions as shall be requisite in the judgment of the Com-
mittee to cause designated Options to qualify as Incentive Stock Options, to
ensure that the grants of Awards are exempt under Rule 16b-3, and to make all
other determinations necessary or advisable for administering the Plan. With-
out limiting the generality of the foregoing, Grant Documents providing for
Awards under the Plan may contain such provisions covering a "change in con-
trol" of American General Corporation, as defined by the Committee in its sole
discretion, as the Committee may approve, not inconsistent with the terms of
this Plan, including without limitation provisions for the acceleration of,
vesting of, or the payment of cash in lieu of, any Award. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Grant Document relating to an Award in the manner and to
the extent it shall deem expedient to carry it into effect. The Committee may
delegate to other persons the responsibility of performing ministerial acts in
furtherance of the Plan's purposes. The determinations of the Committee on the
matters referred to in this Section 4 shall be conclusive. Notwithstanding the
foregoing, the Board, in its discretion, shall have the power to determine the
terms, restrictions, and provisions of the Grant Document for each Award with
respect to non-employee Directors.
5. GRANT OF OPTIONS, RESTRICTED STOCK AWARDS, PERFORMANCE AWARDS, AND
INCENTIVE AWARDS; SHARES SUBJECT TO THE PLAN
(a) Stock Grant Limit. The Committee may from time to time grant Awards to
one or more Employees or Directors determined by it to be eligible for partic-
ipation in the Plan in accordance with the provisions of Section 6. Subject to
adjustment in the same manner as provided in Section 11 with respect to shares
of Common Stock subject to Awards then outstanding, the aggregate number of
shares of Common Stock that may be issued under the Plan shall not exceed
12,000,000. Shares shall be deemed to have been issued under the Plan only to
the extent actually issued and delivered pursuant to an Award. To the extent
that an Award lapses, the rights of its Holder terminate, an Award is paid in
cash or is settled in a manner such that all or some of the shares of Common
Stock covered by the Award are not issued to the Holder, any shares of Common
Stock subject to such Award shall again be available for the grant of an
Award. The maximum limitation contained herein shall be applied in a manner
which will permit compensation generated under the Plan which is intended to
constitute "performance-based" compensation for purposes of section 162(m) of
the Code to be treated as such "performance-based" compensation.
(b) Special Grant Limit. The maximum number of shares of Common Stock that,
in the aggregate, may be subject to Awards, other than Options, under the Plan
shall not exceed 50% of the maximum number of shares of Common Stock that may
be issued under the Plan, as provided in Section 5(a).
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1999 PROXY STATEMENT A-3
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(c) Individual Holder Limit. Notwithstanding any provision of the Plan to
the contrary, the maximum number of shares of Common Stock that may be subject
to Awards granted under the Plan to any individual Holder during the term of
the Plan shall not exceed the maximum number of shares of Common Stock that
may be issued under the Plan, as provided in Section 5(a).
(d) Stock Offered. The stock to be offered pursuant to the grant of an Award
may be authorized but unissued Common Stock or Common Stock previously issued
and outstanding and reacquired by the Company.
6. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are Employ-
ees of the Company or Directors. Awards may not be granted to any person who
immediately after such grant is the owner, directly or indirectly, of more
than 10% of the total combined voting power of all classes of stock of the
Company. An Award may be granted on more than one occasion to the same person,
and such Award may include an Incentive Stock Option, Non-Qualified Option,
Restricted Stock Award, Performance Award, Incentive Award, or any combination
thereof.
7. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as specified by the Com-
mittee at the date of grant but shall not exceed ten years.
(b) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Commit-
tee.
(c) Stock Option Grant Document. Each Option shall be evidenced by an Option
Grant Document in such form and containing such provisions not inconsistent
with the provisions of the Plan as the Committee from time to time shall ap-
prove, including, without limitation, provisions to qualify as an Incentive
Stock Option under section 422 of the Code.
(d) Option Price and Payment. The price at which a share of Common Stock may
be purchased upon exercise of an Option shall be determined by the Committee,
but, subject to adjustment in the same manner as provided in Section 11, shall
not be less than the Fair Market Value of a share of Common Stock at the date
such Option is granted. The Option or portion thereof may be exercised by de-
livery of an irrevocable notice of exercise to the Company. The purchase price
of the Option or portion thereof shall be paid in full in the manner pre-
scribed by the Committee.
(e) Shareholder Rights and Privileges. The Holder shall be entitled to all
the privileges and rights of a shareholder only with respect to such shares of
Common Stock as have been purchased under the Option, for which certificates
of stock have been registered in the Holder's name, and as to which the Grant
Document for the respective Option requires no further restrictions.
(f) Special Limitations on Incentive Stock Options. An Incentive Stock Op-
tion may be granted only to an individual who is an Employee at the time the
Option is granted. In the case of Incentive Stock Options, the value of shares
of stock for which such Options are exercisable for the first time in any one
calendar year
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A-4 AMERICAN GENERAL
<PAGE>
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cannot exceed $100,000 based on the Fair Market Value of the stock at the date
of grant according to section 422(d)(1) of the Code (or such other individual
limit as may be in effect under the Code on the date of grant). An Incentive
Stock Option shall not be transferable or assignable otherwise than by will or
the laws of descent and distribution.
(g) Stock Appreciation Rights. The Committee (concurrently with the grant of
an Option or subsequent to such grant) may, in its sole discretion, grant
stock appreciation rights ("SARs") to any Holder of an Option. SARs may give
the Holder of an Option the right, upon written request, to surrender any ex-
ercisable Option or portion thereof in exchange for cash, whole shares of Com-
mon Stock, or a combination thereof, as determined by the Committee, with a
value equal to the excess of the Fair Market Value, as of the date of such re-
quest, of one share of Common Stock over the Option price for such share mul-
tiplied by the number of shares covered by the Option or portion thereof to be
surrendered. In the case of any SAR which is granted in connection with an In-
centive Stock Option, such SAR shall be exercisable only when the Fair Market
Value of the Common Stock exceeds the price specified therefor in the Option
or portion thereof to be surrendered. In the event of the exercise of any SAR
granted hereunder, the number of shares reserved for issuance under the Plan
shall be reduced only to the extent that shares of Common Stock are actually
issued in connection with the exercise of such SAR. Additional terms and con-
ditions governing any such SARs may from time to time be prescribed by the
Committee in its sole discretion.
(h) Reload Options. The Committee (concurrently with the grant of an Option
or subsequent to such grant) may, in its sole discretion, provide in an Option
Grant Document respecting an Option that, if the Holder pays the costs associ-
ated with exercising such Option in shares of Common Stock, upon the date of
such payment a new option shall be granted under this Plan or under another
available plan. The number of shares of Common Stock subject to such new op-
tion shall be equal to the number of shares of Common Stock tendered in pay-
ment. The new option shall not be exercisable after the original term of the
exercised Option.
8. RESTRICTED STOCK AWARDS
(a) Restriction Period to be Established by the Committee. At the time a Re-
stricted Stock Award is made, the Committee shall establish a period of time
(the "Restriction Period") applicable to such Award. Each Restricted Stock
Award may have a different Restriction Period, in the discretion of the Com-
mittee.
(b) Forfeiture Restrictions to be Established by the Committee. Shares of
Common Stock that are the subject of a Restricted Stock Award shall be subject
to restrictions on disposition by the Holder and an obligation of the Holder
to forfeit and surrender the shares to the Company under certain circumstances
(the "Forfeiture Restrictions"). The Forfeiture Restrictions shall be deter-
mined by the Committee in its sole discretion, and the Committee may provide
that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or
more performance measures established by the Committee that are based on (1)
the price of a share of Common Stock, (2) net income, (3) market share, (4)
return on shareholders' equity, (5) the payment of cash dividends, (6) operat-
ing income, (7) operating return on shareholders' equity, (8) finance receiv-
ables, (9) premium growth, or (10) total shareholder return, (ii) the Holder's
continued employment with the Company or continued service as a Director for a
specified period of time, (iii) the occurrence of any event or the satisfac-
tion of any other condition specified by the Committee in its sole discretion,
or (iv) a combination of any of the foregoing. The performance measures may be
subject to adjustment for specified significant extraordinary items or events,
and may be absolute, relative to one or more other companies, or relative to
one or more indexes, and may be contingent upon future performance of the Com-
pany or any subsidiary, division, or
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT A-5
<PAGE>
- -------------------------------------------------------------------------------
department thereof by or in which the Holder is employed during the perfor-
mance period. Each Restricted Stock Award may have different Forfeiture Re-
strictions, in the discretion of the Committee.
(c) Other Terms and Conditions. Common Stock awarded pursuant to a Re-
stricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have
the right to receive dividends during the Restriction Period, to vote Common
Stock subject thereto, and to enjoy all other shareholder rights, except that
(i) the Holder shall not be entitled to delivery of the stock certificate un-
til the Restriction Period shall have expired, (ii) the Company shall retain
custody of the stock during the Restriction Period, (iii) the Holder may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of the
stock during the Restriction Period, and (iv) a breach of the terms and condi-
tions established by the Committee pursuant to the Restricted Stock Award
shall cause a forfeiture of the Restricted Stock Award.
(d) Payment for Restricted Stock. A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except
to the extent otherwise required by law or the Committee.
9. PERFORMANCE AWARDS
(a) Performance Period. The Committee shall establish, with respect to and
at the time of each Performance Award, a performance period over which the
performance applicable to the Performance Award shall be measured.
(b) Performance Measures. A Performance Award shall be awarded to a Holder
contingent upon future performance of the Company or any subsidiary, division,
or department thereof by or in which such Holder is employed during the per-
formance period. The Committee shall establish the performance measures appli-
cable to such performance prior to the beginning of the performance period;
provided such measures may be made subject to adjustment for specified signif-
icant extraordinary items or events. The performance measures may be absolute,
relative to one or more other companies, or relative to one or more indexes.
The performance measures established by the Committee may be based upon (i)
the price of a share of Common Stock, (ii) net income, (iii) market share,
(iv) return on shareholders' equity, (v) the payment of cash dividends, (vi)
operating income, (vii) operating return on shareholders' equity, (viii) fi-
nance receivables, (ix) premium growth, (x) total shareholder return, or (xi)
a combination of any of the foregoing. The Committee, in its sole discretion,
may provide for an adjustable Performance Award value based upon the level of
achievement of performance measures.
(c) Awards Criteria. In determining the value of Performance Awards, the
Committee may take into account a Holder's responsibility level, performance,
potential, other Awards, and such other considerations as it deems appropri-
ate. The Committee, in its sole discretion, may provide for a reduction in the
value of a Holder's Performance Award during the performance period.
(d) Payment. Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount not ex-
ceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. Payment of a Performance Award may be made in cash, Common Stock,
or a combination thereof, as determined by the Committee. Payment shall be
made in a lump sum or in installments as prescribed by the Committee. Any pay-
ment to be made in cash shall be based on the Fair Market Value of the Common
Stock on the payment date.
- -------------------------------------------------------------------------------
A-6 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
(e) Termination of Employment. A Performance Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Direc-
tor) of the Company at all times during the applicable performance period, ex-
cept as may be determined by the Committee.
10. INCENTIVE AWARDS
(a) Incentive Awards. Incentive Awards are rights to receive shares of Com-
mon Stock (or the Fair Market Value thereof), or rights to receive an amount
equal to any appreciation or increase in the Fair Market Value of Common Stock
over a specified period of time, which vest over a period of time as estab-
lished by the Committee, without satisfaction of any performance criteria or
objectives. The Committee may, in its discretion, require payment or other
conditions of the Holder respecting any Incentive Award.
(b) Award Period. The Committee shall establish, with respect to and at the
time of each Incentive Award, a period over which the Award shall vest with
respect to the Holder.
(c) Awards Criteria. In determining the value of Incentive Awards, the Com-
mittee may take into account a Holder's responsibility level, performance, po-
tential, other Awards, and such other considerations as it deems appropriate.
(d) Payment. Following the end of the vesting period for an Incentive Award
(or at such other time as the applicable Grant Document may provide), the
Holder of an Incentive Award shall be entitled to receive payment of an
amount, not exceeding the maximum value of the Incentive Award, based on the
then vested value of the Award. Payment of an Incentive Award may be made in
cash, Common Stock, or a combination thereof as determined by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by the
Committee. Any payment to be made in cash shall be based on the Fair Market
Value of the Common Stock on the payment date. Cash dividend equivalents may
be paid during or after the vesting period with respect to an Incentive Award,
as determined by the Committee.
(e) Termination of Employment. An Incentive Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Direc-
tor) of the Company at all times during the applicable vesting period, except
as may be otherwise determined by the Committee.
11. EQUITABLE ADJUSTMENTS
Subject to any required action by the Company's shareholders, upon the oc-
currence of any event which affects the shares of Common Stock in such a way
that an adjustment of outstanding Awards is appropriate in order to prevent
the dilution or enlargement of rights under the Awards (including, without
limitation, any extraordinary dividend or other distribution (whether in cash
or in kind), recapitalization, stock split, reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share exchange,
or other similar corporate transaction or event), the Committee shall make ap-
propriate equitable adjustments, which may include, without limitation, ad-
justments to any or all of the number and kind of shares of stock (or other
securities) which may thereafter be issued in connection with such outstanding
Awards and adjustments to any exercise price specified in the outstanding
Awards and shall also make appropriate equitable adjustments to the number and
kind of shares of stock (or other securities) authorized by or to be granted
under the Plan. Further, the Committee, in its sole discretion, may make ap-
propriate equitable adjustments, including, without limitation, those de-
scribed in the immediately preceding sentence, in any other circumstances un-
der which the Committee deems such adjustments to be desirable. Any adjustment
made to an Incentive Stock Option hereunder, with respect to either (i) the
number or price of shares of stock subject to Incentive Stock Options or (ii)
the aggregate number of shares which may be issued pursuant to Incentive Stock
Options,
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT A-7
<PAGE>
- -------------------------------------------------------------------------------
shall be made in a manner which will permit such option to continue to consti-
tute an Incentive Stock Option within the meaning of section 422 of the Code.
12. AMENDMENT AND TERMINATION OF THE PLAN
The Board may amend the Plan at any time and the Committee may amend any
Award (and its related Grant Document) at any time, except as otherwise spe-
cifically provided in such Grant Document; provided that no change in any
Award theretofore granted may be made that would impair the rights of the
Holder of any Award under the Plan without the consent of the Holder, and pro-
vided, further, that the Board may not, without approval of the shareholders,
amend the Plan (a) to increase the maximum aggregate number of shares which
may be issued under the Plan or (b) to change the class of individuals eligi-
ble to receive Awards under the Plan. Subject to the last sentence of Section
3 hereof, the Board, in its discretion, may terminate the Plan at any time.
13. EFFECT OF THE PLAN
(a) No Right to an Award. Neither the adoption of the Plan nor any action of
the Board or of the Committee shall be deemed to give an Employee or Director
any right to an Award except as may be evidenced by a written instrument from
the Company reflecting a grant by the Company of an Award and setting forth
the terms and conditions thereof. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of funds or assets to assure the payment of any Award.
(b) No Employment/Membership Rights Conferred. Nothing contained in the Plan
shall (i) confer upon any employee any right with respect to continuation of
employment with the Company or (ii) interfere in any way with the right of the
Company to terminate his or her employment at any time. Nothing contained in
the Plan shall confer upon any Director any right with respect to continuation
of membership on the Board.
(c) Other Laws; Withholding. The Company shall not be obligated to issue any
shares of Common Stock until there has been compliance with such laws and reg-
ulations as the Company may deem applicable. No fractional shares of Common
Stock shall be delivered. The Company shall have the right to deduct in con-
nection with all Awards any taxes required by law to be withheld and to re-
quire any payments required to enable it to satisfy its withholding obliga-
tions.
(d) No Restriction on Corporate Action. Nothing contained in the Plan shall
be construed to prevent the Company from taking any corporate action which is
deemed by the Company to be appropriate or in its best interests, whether or
not such action would have an adverse effect on the Plan or any Award made un-
der the Plan. No Employee, Director, beneficiary, or other person shall have
any claim against the Company as a result of any such action.
(e) Restrictions on Transfer. An Award (other than an Incentive Stock Op-
tion, which shall be subject to the transfer restrictions set forth in Section
7(g)) shall not be transferable or assignable otherwise than (i) by will or
the laws of descent and distribution, (ii) pursuant to a "qualified domestic
relations order" (as defined by the Code), (iii) with respect to Awards of
Non-Qualified Options, if such transfer is permitted in the sole discretion of
the Committee, by transfer by a Holder to a member of the Holder's Immediate
Family, to a trust solely for the benefit of the Holder and the Holder's Imme-
diate Family, or to a partnership or limited liability company whose only
partners or shareholders are the Holder and members of the Holder's Immediate
Family, or (iv) with the consent of the Committee.
- -------------------------------------------------------------------------------
A-8 AMERICAN GENERAL
<PAGE>
- -------------------------------------------------------------------------------
(f) Section 162(m). It is intended that the Plan comply fully with and meet
all the requirements of section 162(m) of the Code so that Options and Perfor-
mance Awards granted hereunder and, if determined by the Committee, Restricted
Stock Awards shall constitute "performance-based" compensation within the
meaning of such section. If any provision of the Plan would disqualify the
Plan or would not otherwise permit the Plan to comply with section 162(m) as
so intended, such provision shall be construed or deemed amended to conform to
the requirements or provisions of section 162(m); provided that no such con-
struction or amendment shall have an adverse effect on the economic value to a
Holder of any Award previously granted hereunder.
(g) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Texas.
- -------------------------------------------------------------------------------
1999 PROXY STATEMENT A-9
<PAGE>
[American General Logo]
<PAGE>
PROXY
AMERICAN GENERAL CORPORATION
Annual Meeting of Shareholders on April 29, 1999
The undersigned hereby appoints ROBERT M. DEVLIN, J. EVANS ATTWELL, and W.
LIPSCOMB DAVIS JR., and each of them, as proxies with full power of
substitution, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of American General Corporation
7% Convertible Preferred Stock that the undersigned is entitled to vote at the
annual meeting of shareholders to be held in Houston, Texas, on Thursday, April
29, 1999, and at any postponement or adjournment thereof.
Election of the following Director Nominees is recommended by the Board of
Directors:
J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., Robert M. Devlin, J.
Edward Easler II, Larry D. Horner, Richard J.V. Johnson, Michael E. Murphy, Jon
P. Newton, Michael J. Poulos, Robert E. Smittcamp, and Anne M. Tatlock.
You are encouraged to specify your choices by marking the appropriate boxes (see
reverse side). You need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The named proxies cannot vote your
shares unless you sign and return this card. This proxy is solicited on behalf
of the Board of Directors of the Company.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Annual Meeting of Shareholders
Thursday, April 29, 1999
9 a.m. CDT
Chase Center Auditorium
601 Travis Street
Houston, Texas
<PAGE>
[X] Please mark your votes 7566
as in this example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of all Director
Nominees and FOR Items 2, 3, and 4.
The Board of Directors recommends a vote FOR Item 1.
FOR WITHHELD
1. Election of Directors. (see reverse) [_] [_]
For, except vote withheld from the following
nominee(s):
--------------------------------------------
The Board of Directors recommends a vote FOR Item 2.
FOR AGAINST ABSTAIN
2. Re-Approval of Performance-Based Plan for [_] [_] [_]
Executive Officers.
The Board of Directors recommends a vote FOR Item 3.
FOR AGAINST ABSTAIN
3. Approval of 1999 Stock and Incentive Plan. [_] [_] [_]
The Board of Directors recommends a vote FOR Item 4.
FOR AGAINST ABSTAIN
4. Ratification of Appointment of Independent [_] [_] [_]
Auditors.
In their discretion, the proxies are authorized to vote upon such other business
as is properly brought before the meeting.
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee, or guardian, give
full title as such.
- ---------------------------------
- ---------------------------------
SIGNATURE(S) DATE
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
<PAGE>
PROXY
AMERICAN GENERAL CORPORATION
Annual Meeting of Shareholders on April 29, 1999
The undersigned hereby appoints ROBERT M. DEVLIN, J. EVANS ATTWELL, and W.
LIPSCOMB DAVIS JR., and each of them, as proxies with full power of
substitution, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of American General Corporation
Common Stock that the undersigned is entitled to vote at the annual meeting of
shareholders to be held in Houston, Texas, on Thursday, April 29, 1999, and at
any postponement or adjournment thereof.
Election of the following Director Nominees is recommended by the Board of
Directors:
J. Evans Attwell, Brady F. Carruth, W. Lipscomb Davis Jr., Robert M. Devlin, J.
Edward Easler II, Larry D. Horner, Richard J.V. Johnson, Michael E. Murphy, Jon
P. Newton, Michael J. Poulos, Robert E. Smittcamp, and Anne M. Tatlock.
If you are a participant in any of the American General Thrift Plans referenced
in the Proxy Statement, this card also constitutes instructions to the trustee
of such plans to vote the shares allocated to your accounts in the manner
described in the Proxy Statement.
You are encouraged to specify your choices by marking the appropriate boxes (see
reverse side). You need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. The named proxies cannot vote your
shares unless you sign and return this card. This proxy is solicited on behalf
of the Board of Directors of the Company.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
Annual Meeting of Shareholders
Thursday, April 29, 1999
9 a.m. CDT
Chase Center Auditorium
601 Travis Street
Houston, Texas
<PAGE>
[X] Please mark your votes 3147
as in this example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of all Director
Nominees and FOR Items 2, 3, and 4. (However, if no direction is made as to
Thrift Plan Stock, see the Proxy Statement.)
The Board of Directors recommends a vote FOR Item 1.
FOR WITHHELD
1. Election of Directors. (see reverse) [_] [_]
For, except vote withheld from the following
nominee(s):
--------------------------------------------
The Board of Directors recommends a vote FOR Item 2.
FOR AGAINST ABSTAIN
2. Re-Approval of Performance-Based Plan for [_] [_] [_]
Executive Officers.
The Board of Directors recommends a vote FOR Item 3.
FOR AGAINST ABSTAIN
3. Approval of 1999 Stock and Incentive Plan. [_] [_] [_]
The Board of Directors recommends a vote FOR Item 4.
FOR AGAINST ABSTAIN
4. Ratification of Appointment of Independent [_] [_] [_]
Auditors.
In their discretion, the proxies are authorized to vote upon such other business
as is properly brought before the meeting.
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee, or guardian, give
full title as such.
- ---------------------------------
- ---------------------------------
SIGNATURE(S) DATE
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO US. THANK YOU FOR VOTING.
