SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
_____________________
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _______ to ______
Commission file number 1-7981
Full title of the Plan:
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
Name of the issuer of the securities held pursuant to the Plan
and the address of its principal executive office:
AMERICAN GENERAL CORPORATION
2929 Allen Parkway
Houston, Texas 77019
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998
Audited Financial Statements
Report of Independent Auditors .................................... 1
Statements of Net Assets Available for Benefits ................... 2
Statements of Changes in Net Assets Available for Benefits ........ 8
Notes to Financial Statements ..................................... 14
Schedules
Item 27a - Schedule of Assets Held for Investment Purposes ........ 19
Item 27d - Schedule of Reportable Transactions .................... 20
Item 27b - Schedule of Loans or Fixed Income Obligations .......... 21
<PAGE>
Report of Independent Auditors
Administrative Board
American General Agents' and Managers' Thrift Plan
We have audited the accompanying statements of net assets available for
benefits of the American General Agents' and Managers' Thrift Plan (the Plan)
as of December 31, 1998 and 1997, and the related statements of changes in net
assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1998,
reportable transactions, and loans or fixed income obligations for the year
then ended are presented for purpose of additional analysis and are not a
required part of the financial statements but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's management. The
Fund information in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and Fund information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Houston, Texas
June 14, 1999
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1998
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Assets
Investments
American General Corporation common
stock (1,686,717 shares)......... $97,955 $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity
contract ........................ - 14,139 -
American General Series Portfolio
Company - Stock Index Fund
(26,339 shares) ................. - - 991
Putnam OTC & Emerging Growth Fund
(76,967 shares).................. - - -
American General Series Portfolio
Company - Growth Fund
(53,398 shares) ................. - - -
Templeton Foreign Fund
(83,992 shares) ................. - - -
Vanguard Fixed Income Securities Fund
(36,716 shares) ................. - - -
Participant notes ................. - - -
Short-term investments ............ 353 22 13
Total investments ............... 98,308 14,161 1,004
Receivables
Contributions ..................... - 10 8
Interfund transfers ............... - 161 6
Other ............................. 3 284 2
Total assets .................... 98,311 14,616 1,020
Liabilities
Payables
Forfeitures ....................... - 10 -
Interfund transfers ............... 154 - -
Other ............................. 171 - -
Total liabilities ............... 325 10 -
Net assets available for benefits ..... $97,986 $14,606 $1,020
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1998
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Assets
Investments
American General Corporation common
stock (1,686,717 shares) ......... $ - $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity
contract ......................... - - -
American General Series Portfolio
Company - Stock Index Fund
(26,339 shares)................... - - -
Putnam OTC & Emerging Growth Fund
(76,967 shares)................... 1,328 - -
American General Series Portfolio
Company - Growth Fund
(53,398 shares) .................. - 1,191 -
Templeton Foreign Fund
(83,992 shares) .................. - - 705
Vanguard Fixed Income Securities Fund
(36,716 shares) .................. - - -
Participant notes .................. - - -
Short-term investments ............. 19 17 13
Total investments ................ 1,347 1,208 718
Receivables
Contributions ...................... 12 10 6
Interfund transfers ................ - - -
Other .............................. - - -
Total assets ..................... 1,359 1,218 724
Liabilities
Payables
Forfeitures ........................ - - -
Interfund transfers ................ 1 11 1
Other .............................. 17 15 9
Total liabilities ................ 18 26 10
Net assets available for benefits ...... $1,341 $1,192 $714
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1998
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Bond Participant Stock
Fund Notes Fund Total
Assets
Investments
American General Corporation
common stock
(1,686,717 shares) .......... $ - $ - $33,609 $131,564
American General Life & Accident
Insurance Company deposit
administration group annuity
contract .................... - - - 14,139
American General Series Portfolio
Company - Stock Index Fund
(26,339 shares).............. - - - 991
Putnam OTC & Emerging Growth Fund
(76,967 shares).............. - - - 1,328
American General Series Portfolio
Company - Growth Fund
(53,398 shares) ............. - - - 1,191
Templeton Foreign Fund
(83,992 shares) ............. - - - 705
Vanguard Fixed Income Securities
Fund(36,716 shares) ......... 341 - - 341
Participant notes ............. - 3,227 - 3,227
Short-term investments ........ 6 - 119 562
Total investments ........... 347 3,227 33,728 154,048
Receivables
Contributions ................. 5 - - 51
Interfund transfers ........... - - - 167
Other ......................... - - 2 291
Total assets ................ 352 3,227 33,730 154,557
Liabilities
Payables
Forfeitures ................... - - 48 58
Interfund transfers ........... - - - 167
Other ......................... 5 - 304 521
Total liabilities ........... 5 - 352 746
Net assets available for benefits . $347 $3,227 $33,378 $153,811
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Assets
Investments
American General Corporation common
stock (1,765,035 shares)......... $70,665 $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity
contract ........................ - 13,998 -
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares) ................. - - 412
Putnam OTC & Emerging Growth Fund
(42,377 shares).................. - - -
American General Series Portfolio
Company - Growth Fund
(26,641 shares) ................. - - -
Templeton Foreign Fund
(49,450 shares) ................. - - -
Vanguard Fixed Income Securities Fund
(10,958 shares) ................. - - -
Participant notes ................. - - -
Short-term investments ............ 79 56 8
Total investments ............... 70,744 14,054 420
Receivables
Contributions ..................... - 54 5
Interfund transfers ............... - 194 4
Other ............................. 3 1,569 -
Total assets .................... 70,747 15,871 429
Liabilities
Payables
Forfeitures ....................... - 3 -
Interfund transfers ............... 224 - -
Other ............................. 195 14 11
Total liabilities ............... 419 17 11
Net assets available for benefits ..... $70,328 $15,854 $418
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Assets
Investments
American General Corporation common
stock (1,765,035 shares) ......... $ - $ - $ -
American General Life & Accident
Insurance Company deposit
administration group annuity
contract ......................... - - -
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares)................... - - -
Putnam OTC & Emerging Growth Fund
(42,377 shares)................... 683 - -
American General Series Portfolio
Company - Growth Fund
(26,641 shares) .................. - 534 -
Templeton Foreign Fund
(49,450 shares) .................. - - 492
Vanguard Fixed Income Securities Fund
(10,958 shares) .................. - - -
Participant notes .................. - - -
Short-term investments ............. 10 9 9
Total investments ................ 693 543 501
Receivables
Contributions ...................... 5 5 4
Interfund transfers ................ - 38 -
Other .............................. - 5 -
Total assets ..................... 698 591 505
Liabilities
Payables
Forfeitures ........................ - - -
Interfund transfers ................ 11 - 1
Other .............................. 13 9 12
Total liabilities ................ 24 9 13
Net assets available for benefits ...... $674 $582 $492
The accompanying notes are an integral part of these financial statements.
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997
In thousands, except share amounts
Non-
Participant Participant
Directed Directed
Bond Participant Stock
Fund Notes Fund Total
Assets
Investments
American General Corporation
common stock
(1,765,035 shares) .......... $ - $ - $24,757 $ 95,422
American General Life & Accident
Insurance Company deposit
administration group annuity
contract .................... - - - 13,998
American General Series Portfolio
Company - Stock Index Fund
(13,851 shares).............. - - - 412
Putnam OTC & Emerging Growth Fund
(42,377 shares).............. - - - 683
American General Series Portfolio
Company - Growth Fund
(26,641 shares) ............. - - - 534
Templeton Foreign Fund
(49,450 shares) ............. - - - 492
Vanguard Fixed Income Securities
Fund(10,958 shares) ......... 101 - - 101
Participant notes ............. - 2,739 - 2,739
Short-term investments ........ 5 - 28 204
Total investments ........... 106 2,739 24,785 114,585
Receivables
Contributions ................. 3 - - 76
Interfund transfers ........... - - - 236
Other ......................... 7 - 1 1,585
Total assets ................ 116 2,739 24,786 116,482
Liabilities
Payables
Forfeitures ................... - - 46 49
Interfund transfers ........... - - - 236
Other ......................... 2 - 21 277
Total liabilities ........... 2 - 67 562
Net assets available for benefits . $114 $2,739 $24,719 $115,920
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Additions to net assets
Investment income
Dividends .......................... $ 1,924 $ - $ 12
Interest ........................... 11 884 1
Net appreciation (depreciation)
in fair value of investments ...... 30,914 - 162
Total investment income (loss) ... 32,849 884 175
Contributions
Company's .......................... - 271 -
Participants' ...................... 5,659 749 350
Total contributions .............. 5,659 1,020 350
Total additions ................ 38,508 1,904 525
Deductions from net assets
Benefits
American General Corporation common
stock (33,816 shares) ............ 1,580 - -
Cash ............................... 7,979 3,130 56
Forfeitures .......................... - 281 -
Participant loan origination fees .... 10 - -
Total deductions ............... 9,569 3,411 56
Interfund transfers .................... (1,281) 259 133
Net increase (decrease) ........ 27,658 (1,248) 602
Net assets available for benefits
Beginning of year .............. 70,328 15,854 418
End of year .................... $97,986 $14,606 $1,020
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Additions to net assets
Investment income
Dividends .......................... $ - $ 52 $ 17
Interest ........................... 1 1 1
Net appreciation (depreciation) in
fair value of investments ......... 124 82 (63)
Total investment income (loss) ... 125 135 (45)
Contributions
Company's .......................... - - -
Participants' ...................... 613 506 382
Total contributions .............. 613 506 382
Total additions ................ 738 641 337
Deductions from net assets
Benefits
American General Corporation common
stock (33,816 shares) ............ - - -
Cash ............................... 75 64 81
Forfeitures .......................... - - -
Participant loan origination fees .... 1 1 -
Total deductions ............... 76 65 81
Interfund transfers .................... 5 34 (34)
Net increase (decrease) ........ 667 610 222
Net assets available for benefits
Beginning of year .............. 674 582 492
End of year .................... $1,341 $1,192 $714
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
In thousands, except share
amounts
Non-
Participant
Participant Directed Directed
Bond Participant Stock
Fund Notes Fund Total
Additions to net assets
Investment income
Dividends ..................... $ 12 $ - $ 649 $ 2,666
Interest ...................... 1 169 4 1,073
Net appreciation (depreciation)
in fair value of investments . 6 - 10,432 41,657
Total investment income
(loss) .................... 19 169 11,085 45,396
Contributions
Company's ..................... - - 972 1,243
Participants' ................. 143 - - 8,402
Total contributions ......... 143 - 972 9,645
Total additions ........... 162 169 12,057 55,041
Deductions from net assets
Benefits
American General Corporation
common stock (33,816 shares). - - 533 2,113
Cash .......................... 30 464 2,693 14,572
Forfeitures ..................... - - 169 450
Participant loan origination fees - - 3 15
Total deductions .......... 30 464 3,398 17,150
Interfund transfers ............... 101 783 - -
Net increase (decrease) ... 233 488 8,659 37,891
Net assets available for benefits
Beginning of year ......... 114 2,739 24,719 115,920
End of year ............... $347 $3,227 $33,378 $153,811
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Equity
Stock Cash Index
Fund Fund Fund
Additions to net assets
Investment income
Dividends ......................... $ 1,855 $ - $ 5
Interest .......................... 13 227 1
Net appreciation (depreciation)in
fair value of investments ........ 17,363 - 26
Total investment income (loss)... 19,231 227 32
Contributions
Company's ......................... - - -
Participants' ..................... 4,836 244 222
Total contributions ............. 4,836 244 222
Merger of Home Beneficial Thrift Plan - 14,599 -
Total additions ............... 24,067 15,070 254
Deductions from net assets
Benefits
American General Corporation common
stock (12,080 shares) ........... 392 - -
Cash .............................. 5,194 592 3
Forfeitures ......................... - 3 -
Participant loan origination fees ... 27 - -
Total deductions .............. 5,613 595 3
Interfund transfers ................... (5,062) 1,379 167
Net increase .................. 13,392 15,854 418
Net assets available for benefits
Beginning of year ............. 56,936 - -
End of year ................... $70,328 $15,854 $418
The accompanying notes are an integral part of these financial statements.
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Participant Directed
Inter-
Small-Cap Mid-Cap national
Fund Fund Fund
Additions to net assets
Investment income
Dividends ......................... $ - $ 9 $ 42
Interest .......................... 2 1 1
Net appreciation (depreciation)in
fair value of investments ....... 26 28 (57)
Total investment income (loss)... 28 38 (14)
Contributions
Company's ......................... - - -
Participants' ..................... 439 340 258
Total contributions ............. 439 340 258
Merger of Home Beneficial Thrift Plan - - -
Total additions ............... 467 378 244
Deductions from net assets
Benefits
American General Corporation common
stock (12,080 shares) ........... - - -
Cash ............................... 7 10 4
Forfeitures .......................... - - -
Participant loan origination fees .... - - -
Total deductions ............... 7 10 4
Interfund transfers .................... 214 214 252
Net increase ................... 674 582 492
Net assets available for benefits
Beginning of year .............. - - -
End of year .................... $674 $582 $492
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
In thousands, except share amounts
Non-
Participant
Participant Directed Directed
Bond Participant Stock
Fund Notes Fund Total
Additions to net assets
Investment income
Dividends ................. $ 3 $ - $ 650 $ 2,564
Interest .................. 1 79 4 329
Net appreciation (depreciation)
in fair value of investments 3 - 6,082 23,471
Total investment income (loss) 7 79 6,736 26,364
Contributions
Company's ................. - - 1,042 1,042
Participants' ............. 83 - - 6,422
Total contributions ..... 83 - 1,042 7,464
Merger of Home Beneficial Thrift
Plan ...................... - - - 14,599
Total additions ....... 90 79 7,778 48,427
Deductions from net assets
Benefits
American General Corporation
common stock (12,080 shares) - - 137 529
Cash ...................... 1 151 1,819 7,781
Forfeitures ................. - - 168 171
Participant loan origination fees - - - 27
Total deductions ...... 1 151 2,124 8,508
Interfund transfers ........... 25 2,811 - -
Net increase .......... 114 2,739 5,654 39,919
Net assets available for benefits
Beginning of year ..... - - 19,065 76,001
End of year ........... $114 $2,739 $24,719 $115,920
The accompanying notes are an integral part of these financial statements.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
The American General Agents' and Managers' Thrift Plan (the Plan) financial
statements are prepared in conformity with generally accepted accounting
principles.
Investments in American General Corporation (American General) common stock
are reported at fair value based on published market prices. Fair values of
other investments are reported as follows: 1) investment in American General
Life and Accident Insurance Company (AGLA or the Company) deposit
administration group annuity contract, at contract value (see Note C); 2)
investments in the American General Series Portfolio Company (AGSPC) Stock
Index and Growth Funds, the Putnam OTC & Emerging Growth Fund, the Templeton
Foreign Fund, and the Vanguard Fixed Income Securities Fund, at net asset
value; and 3) short-term investments, at cost which approximates fair value.
AGSPC is an open-end management investment company (mutual fund) whose
investment adviser is The Variable Annuity Life Insurance Company (VALIC).
VALIC and AGLA are wholly owned subsidiaries of American General.
Participant notes are recorded as plan investments at amortized values.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded as income on ex-dividend dates, and interest income is
recorded using the accrual method of accounting.
Contributions are recorded as additions to net assets on the date the
contributions become payable to the Plan.
Interfund transfers are recorded at the market value of the amount
transferred.
Benefits paid to participants are recorded upon distribution at the market
value of the assets distributed.
The preparation of financial statements requires management to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosures of contingent assets and liabilities, and (3) the
reported amounts of additions and deductions during the reporting periods.
Actual results could differ from those estimates.
NOTE B--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
General
The Plan, sponsored by American General, is a defined contribution plan
currently offered to eligible agents and managers (sales employees) of AGLA, a
wholly owned subsidiary of American General, who have completed one year of
service. The Plan provides for participant elective salary deferrals
(participant pretax contributions) in accordance with Section 401(k) of the
Internal Revenue Code of 1986, as amended (IRC). The Plan is subject to
certain provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Substantially all of the costs of administering the Plan are paid by American
General and the Company.
The Plan's investments are held in a bank-administered trust fund.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Investment Options
Participants may direct their employee contributions in one of seven funds or
a combination of each fund. These funds, designated on the financial
statements as participant directed, invest in: 1) shares of American General
common stock (Stock Fund); 2) a deposit administration group annuity contract
issued by AGLA (Cash Fund); 3) shares of the AGSPC Stock Index Fund (Equity
Index Fund); 4) shares of the Putnam OTC & Emerging Growth Fund (Small-Cap
Fund); 5) shares of the AGSPC Growth Fund (Mid-Cap Fund); 6) shares of the
Templeton Foreign Fund (International Fund); and 7) shares of the Vanguard
Fixed Income Securities Fund (Bond Fund). The Company's contributions are
invested solely in the non-participant directed portion of the Stock Fund;
however, participants age 60 or older can direct the investment of their
employer matching contributions into any of the available funds.
Amounts which have not yet been used to purchase investments in either the
Stock, Cash, Equity Index, Small-Cap, Mid-Cap, International, or Bond Funds
are temporarily invested in short-term investments. Income from these
short-term investments is allocated to Plan participants based on current
contributions.
Contributions
Sales employees who elect to participate contribute on a pretax basis, a basic
amount equal to three percent of base pay. Participants may also make
additional pretax contributions in an amount ranging from one to thirteen
percent of base pay, subject to the contribution limitations discussed below.
The Company contributes an amount equal to one-third of the basic
contribution.
Participants may change their contribution rate and investment election for
future contributions, as well as transfer all or part of their employee
account balances among funds, no more than once each month. All changes
except transfers are effective on the first day of the first pay period of
each month. Transfers are effective on the last business day of the month the
request is received.
Contribution Limitations
For 1998 and 1997, the total amount of participant pretax contributions is
limited to $10,000 and $9,500, respectively. Additionally, the total amount
of annual participant and company contributions (including forfeitures) must
not exceed the lesser of 25 percent of compensation or $30,000. During 1998
and 1997, the total amount of base pay that can be used in determining
contributions under the Plan is $160,000.
ERISA and the IRC provide that qualified plans cannot discriminate in favor of
highly compensated individuals. Certain highly compensated individuals may be
required to receive refunds of any contributions in excess of the IRC Sections
401(k) and (m) limits and all earnings attributable to such contributions.
Highly compensated individuals are not allowed to make additional
contributions if such contributions will adversely affect the Plan's
nondiscrimination test under Sections 401(k) and (m). In 1998 and 1997, no
refunds of contributions were necessary to comply with these laws.
Participant Accounts
Each participant's account is credited with the participant's and Company's
contributions and an allocation of Plan earnings. Allocations of Plan
earnings are based on participants' account balances.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
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AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Vesting
Participants are immediately vested in their contributions plus the earnings
thereon. Participants become 100 percent vested in the remainder of their
account after five years of service (as defined in the Plan document).
Payment of Benefits
Upon termination of service, and if consented to by the participant (required
only if the total value, both vested and nonvested, of the account exceeded
$5,000 in 1998 or $3,500 in 1997, and the participant is under age 65), a
participant will receive a distribution equal to the vested value of his or
her account. For years beginning after December 31, 1996, distributions must
begin by April 1 of the calendar year following the later of either the
calendar year in which the employee reaches age 70-1/2, or the calendar year
in which the employee retires.
Participants Loans Receivable
Participants may borrow from their fund accounts, in a single loan, a minimum
of $1,000 and up to a maximum equal to the lesser of $50,000 or 50% of the
participant's vested account balance. Loan terms range from 12 to 58 months.
Loans are secured by the vested balance in the participant's account and bear
interest at a rate commensurate with prevailing rates as determined from time
to time. Principal and interest are paid to the participant's account through
payroll deductions. Early loan payoff is allowed.
Forfeitures
Participants terminating employment forfeit their nonvested interest in the
Company's contributions on the earlier of (1) the distribution of the entire
nonforfeitable portion of their account or (2) upon incurring a period of
severance equal to five consecutive one-year breaks in service. Forfeitures
are available to reduce future Company contributions. Participants who
terminate and are reemployed with the Company before incurring five
consecutive one-year breaks in service are entitled to their nonvested or
forfeited amounts, subject to certain provisions as stated in the Plan
document.
Plan Members
At December 31, 1998, 2,852 active sales employees were contributing to the
Plan.
NOTE C--INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan maintains an investment contract with AGLA. The deposit
administration group annuity contract is valued at contract value, which
approximates fair value, and represents contributions under the contract, plus
interest at the contract rate, less funds used to pay benefits. The
guaranteed minimum rate of the contract is reset annually by AGLA.
The contract had a guaranteed minimum rate of 6.00% for 1998 and 1997. Any
earnings in excess of the guaranteed minimum rate are credited to the
participants.
The effective earned yield is calculated based on the calendar year. The
effective earned yield of the investment contract for 1998 and 1997 was 6.52%
and 6.55%, respectively.
-16-
<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE D--PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to withdraw
from the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
NOTE E--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
Benefits processed and approved for payment, but not paid as of December 31,
are recorded on Form 5500 but not in the financial statements.
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
At December 31,
In thousands
1998 1997
Net assets available for benefits per the
financial statements ............................. $153,811 $115,920
Benefits payable to withdrawing participants ....... (2,075) (616)
Net assets available for benefits per Form 5500 .. $151,736 $115,304
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
In thousands
Year Ended
December 31, 1998
Benefits paid to participants per the
financial statements
American General Corporation common stock ...... $ 2,113
Cash ........................................... 14,572
Total benefits paid to participants per the
financial statements ....................... 16,685
Benefits payable to withdrawing participants at
year end ......................................... 2,075
Benefits payable to withdrawing participants
at beginning of year ............................. (616)
Benefits paid to participants per Form 5500 .. $18,144
NOTE F--FEDERAL INCOME TAXES
Based on a favorable determination letter dated August 3, 1995, the Internal
Revenue Service has ruled that the Plan, as restated and amended, is qualified
under Section 401(a) of the IRC and, therefore, exempt under Section 501(a)
from federal income taxes. The Plan has been amended since receiving the
determination letter, and a new determination letter has been requested. The
Plan's administrators anticipate a favorable reply and believe that the Plan
is designed and is currently being operated in compliance with the applicable
requirements of the IRC.
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE G--YEAR 2000 ISSUE (UNAUDITED)
As of December 31, 1998, American General had completed Year 2000 readiness
activities for substantially all of its critical systems, making them Year 2000
ready. American General will continue to test its systems throughout 1999 to
maintain Year 2000 readiness. In addition, American General has developed a
plan to assess and attempt to mitigate the risks associated with the potential
failure of third parties to achieve Year 2000 readiness. As of April 30,
1999, American General had identified and assessed its critical third-party
dependencies. Due to the various stages of Year 2000 readiness for critical
third-party dependencies, American General's testing activities related to
critical third parties will extend throughout 1999.
American General has commenced contigency planning to reduce the risk of Year
2000-related business failures. As of April 30, 1999, American General had
completed its contingency plans. These plans will be tested during the second
and third quarters of 1999.
Based on these activities and plans, American General believes that it will
experience at most isolated and minor disruptions of business processes
following the turn of the century. Such disruptions are not expected to have
a material effect on the Plan's operations.
NOTE H--SUBSEQUENT EVENT
Effective January 1, 1999, the Plan's eligibility requirement was changed from
the completion of one year of service to 30 days of service.
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<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1998
EIN: 74-0483432
PN: 002
In thousands, except share amounts
Fair
Issuer Description Cost Value
American General 1,686,717 shares of $49,663 $131,564
Corporation* common stock
American General Life & Deposit administration 14,139 14,139
Accident Insurance group annuity contract
Company*
American General Series 26,339 shares of AGSPC 804 991
Portfolio Company* Stock Index Fund
Putnam 76,967 shares of Putnam OTC 1,212 1,328
& Emerging Growth Fund
American General Series 53,398 shares of AGSPC 1,080 1,191
Portfolio Company* Growth Fund
Templeton 83,992 shares of Templeton 852 705
Foreign Fund
Vanguard 36,716 shares of Vanguard 339 341
Fixed Income Securities
Fund
Participant Notes* Loans issued at interest - 3,227
rates between 8.75%
and 9.50%
State Street Bank Short-term investments
& Trust Company* in money-market fund 562 562
$68,651 $154,048
*Party in interest
-19-
<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS (A)
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 74-0483432
PN: 002
In thousands, except share amounts and transaction counts
Amount of
Party Involved Description Transaction
Category (iii) - Series of transactions in excess of 5% of Plan assets
State Street Bank Purchases of short-term investments in $18,587
& Trust Company 504 transactions
State Street Bank Sales of short-term investments in 18,229
& Trust Company 438 transactions
(B) Purchases of American General Life & 3,571
Accident Insurance Company deposit
administration group annuity
contract in 41 transactions
(B) Sales of American General Life & 3,430
Accident Insurance Company deposit
administration group annuity
contract in 17 transactions
(B) Purchases of 96,413 shares of American 6,214
General Corporation common stock in
30 transactions
(B) Sales of 140,915 shares of American 9,231
General Corporation common stock in
15 transactions at a gain of $5,589
(B) Distributions of 33,816 shares of 2,188
American General Corporation common
stock to various individuals who
withdrew from or terminated
participation in the Plan in 14
transactions at a gain of $1,299
(A) Reportable transactions are transactions or series of transactions in
excess of five percent of the current value of Plan assets at the beginning
of the year and are defined in Section 2520.103-6 of the Department of
Labor's Rules and Regulations.
(B) Parties involved are not presented, as permitted by Section 2520.103-6
(d)(1)(I) of the Department of Labor's Rules and Regulations.
-20-
<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 74-0483432
PN: 002
In whole dollars
Original Amount Received Unpaid
Identity Amount of during Reporting Year: Balance at
of Obligor* Loan Principal Interest End of Year
Carroll, Ida M. $7,000 - - $6,004
DeClue, Richard 4,000 - - 3,208
Evans, Terry 8,000 - - 8,000
Fields, Brandon 1,000 - - 1,000
Geitzen, Richard 6,534 - - 5,830
Jenkins, Lloyd 2,000 - - 1,778
Leshko, Lori 1,473 - - 1,181
Webb, Matthew 1,600 - - 1,267
Wiley, Gregory 2,958 - - 2,818
* Form 1099-R to be issued to terminated participants with loans in default
-21-
<PAGE>
AMERICAN GENERAL AGENTS' AND MANAGERS' THRIFT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
EIN: 74-0483432
PN: 002
In whole dollars
Loan Interest Amount Overdue:
Issued Rate Defaulted Principal Interest
02/27/97 9.25% 03/31/98 $6,004 $139
01/31/97 9.25 03/31/98 3,208 74
10/30/97 9.50 02/28/98 8,000 190
09/29/97 9.50 02/28/98 1,000 24
01/31/97 9.25 12/31/97 5,830 135
05/29/97 9.50 01/31/98 1,778 41
01/31/97 9.25 11/30/97 1,181 27
03/28/97 9.25 12/31/97 1,267 29
06/27/97 9.50 02/28/98 2,818 67
* Form 1099-R to be issued to terminated participants with loans in default
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
American General Agents' and Managers' Thrift Plan Administrative Board has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
AMERICAN GENERAL AGENTS' AND
MANAGERS' THRIFT PLAN
June 25, 1999 ELIZABETH A. DOBBS
Elizabeth A. Dobbs
Vice President-Benefits and Payroll
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 33-39201 and 333-13401) pertaining to the American General
Agents' and Managers' Thrift Plan of our report dated June 14, 1999, with
respect to the financial statements and schedules of the American General
Agents' and Managers' Thrift Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1998.
ERNST & YOUNG LLP
Houston, Texas
June 23, 1999
