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, 1999
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:
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
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
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999
Audited Financial Statements
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . 1
Statements of Net Assets Available for Benefits . . . . . . . . . . . 2
Statements of Changes in Net Assets Available for Benefits . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 4
Schedules
Schedule H, Line 4 (i) - Schedule of Assets Held for Investment
Purposes at End of Year . . . . . . . . . . . . . . . . . . . . . . 11
Schedule H, Line 4 (j) - Schedule of Reportable Transactions . . . . 12
Report of Independent Auditors
Administrative Board
The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan
We have audited the accompanying statements of net assets available for
benefits of the Variable Annuity Life Insurance Company Agents' and Managers'
Thrift Plan (the Plan) as of December 31, 1999 and 1998, 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 auditing standards generally
accepted in the United States. 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, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
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 at end of year as of December
31, 1999, and reportable transactions for the year then ended, are presented
for purposes 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 supplemental
schedules 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 22, 2000
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
In thousands
December 31,
1999 1998
Assets
Investments (See Note C) . . . . . . . . . . . $148,093 $152,097
Receivables
Participant contributions . . . . . . . . . . 37 22
Interest . . . . . . . . . . . . . . . . . . 162 97
Total receivables . . . . . . . . . . . . . 199 119
Total assets . . . . . . . . . . . . . . 148,292 152,216
Liabilities
Payables
Forfeitures . . . . . . . . . . . . . . . . . 392 248
Excess contribution refunds . . . . . . . . . - 1,009
Other . . . . . . . . . . . . . . . . . . . . 43 -
Total liabilities . . . . . . . . . . . . 435 1,257
Net assets available for benefits . . . . . . . $147,857 $150,959
The accompanying notes are an integral part of these financial statements.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSET AVAILABLE FOR BENEFITS
In thousands
Years Ended
December 31,
1999 1998
Additions to net assets
Investment income
Dividends . . . . . . . . . . . . . . . . $ 3,442 $ 2,983
Interest . . . . . . . . . . . . . . . . . 556 327
Net appreciation in fair value of
investments (See Note C) . . . . . . . . 2,780 41,829
Total investment income . . . . . . . . 6,778 45,139
Contributions
Companies' . . . . . . . . . . . . . . . . 3,978 3,045
Participants' . . . . . . . . . . . . . . 6,875 4,784
Total contributions . . . . . . . . . 10,853 7,829
Total additions . . . . . . . . . 17,631 52,968
Deductions from net assets
Benefits
American General Corporation common
stock . . . . . . . . . . . . . . . . . 13,522 6,738
Cash . . . . . . . . . . . . . . . . . . . 7,062 2,503
Forfeitures . . . . . . . . . . . . . . . 144 217
Participant loan origination fees . . . . 5 7
Total deductions . . . . . . . . . . 20,733 9,465
Net increase(decrease) . . . . . . . (3,102) 43,503
Net assets available for benefits
Beginning of year . . . . . . . . . 150,959 107,456
End of year . . . . . . . . . . . . $147,857 $150,959
The accompanying notes are an integral part of these financial statements.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
The Variable Annuity Life Insurance Company Agents' and Managers' Thrift Plan
(the Plan) financial statements are prepared in conformity with accounting
principles generally accepted in the United States.
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) The Variable Annuity Life
Insurance Company (VALIC, also referred to as the Company)group deposit
administration contract, at contract value (see Note E); 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. The contract value of
the group deposit administration contract approximates fair value because the
interest crediting rate is reset annually. AGSPC is an open-end management
investment company (mutual fund) whose investment advisor is VALIC.
Participant loans are recorded as plan investments at their outstanding
balance.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded as income on ex-dividend dates, and interest income is
recorded using the accrual method of accounting.
Contributions are recorded as additions to net assets on the date the
contributions become payable to the Plan.
Benefits paid to participants are recorded upon distribution at the market
value of the assets distributed.
Benefits payable to participants are not accrued as liabilities in the
financial statements.
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.
Statement of Position ("SOP") 99-3, effective for plan years ending after
December 15, 1999, was adopted by the Plan's management in 1999. SOP 99-3
required various changes to the reporting of certain defined contribution
benefit plan investments and other financial disclosure matters; therefore,
certain prior year amounts have been reclassified to conform with current year
presentation.
NOTE B--DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
General
The Plan, which is subject to certain provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), is a defined contribution plan offered to
eligible agents and managers of VALIC and VALIC Investment Services Company
(the Companies). 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).
Substantially all of the costs of administering the Plan are paid by VALIC.
Investment Options
Participants may direct their employee contributions in one of seven funds or
a combination of each fund. These funds invest in: 1) shares of American
General common stock (Stock Fund); 2) a group deposit administration contract
issued by VALIC (Cash Fund); 3) shares of the AGSPC Stock Index Fund (Mutual
Fund A); 4) shares of the Putnam OTC & Emerging Growth Fund (Small-Cap Fund);
5) shares of the AGSPC Growth Fund (Large-Cap Blend Fund, formally called Mid-
Cap Fund); 6) shares of the Templeton Foreign Fund (Foreign Fund); and 7)
shares of the Vanguard Fixed Income Securities Fund (Bond Fund). The
Companies' contributions are invested solely in 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 the Stock Fund
are temporarily invested in short-term investments. Income from these short-
term investments is allocated to Plan participants based on current
contributions.
Contributions
Employees who elect to participate may contribute, on a pretax basis, a basic
amount ranging from one to six percent of base pay and an additional amount
ranging from one to eight percent of base pay, subject to the contribution
limitations discussed below. Prior to January 1, 1999, the Companies
contributed an amount ranging from 50 percent to 100 percent of the employee's
basic contribution as determined annually by the Board of Directors. The
Companies contributed 75 percent of employee's basic contributions during
1998. Effective January 1, 1999, the Companies contribute an amount equal to
100 percent of the first three percent of the participant's basic
contribution, plus 50 percent of the next three percent of the participant's
basic contribution. These changes place the Plan under the safe harbor
provisions of the IRC Section 401(k)(12).
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Contribution Limitations
For 1999 and 1998, the total amount of participant pretax contributions is
limited to $10,000. 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 1999 and 1998, 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, such as the Variable Annuity
Life Insurance Company Agents' and Managers' Thrift Plan, cannot discriminate
in favor of highly compensated individuals. Effective January 1, 1999 the
nondiscrimination testing and refunds of excess contributions will no longer
be required under the safe harbor provisions of the IRC Section 401(k)(12).
For 1998, pre safe harbor, certain highly compensated individuals may be
required to receive refunds of any contributions in excess of the IRC
Sections 401(k)and 401(m) limits and all earnings attributable to such
contributions.
Amounts in excess of the limits discussed above are designated on the
statement of net assets as "Payables - Excess contribution refunds" and were
refunded within 2-1/2 months of the Plan's year end. "Payables - Excess
contribution forfeitures" represent the nonvested excess contributions of the
Companies and are available to reduce future company contributions.
Participant Accounts
Each participant's account is credited with the participant's and the
Companies' contributions and an allocation of Plan earnings. Allocation of
Plan earnings is based on participants' account balances. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting
Participants are immediately vested in their contributions plus the earnings
thereon. Participants obtain a vested interest in the Companies'
contributions and the earnings thereon at the rate of twenty percent per year
of service after three years of service. In addition, participants will
become 100 percent vested in the Companies' contributions upon their
retirement, attainment of age 65, total disability, or death.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE B--DESCRIPTION OF THE PLAN--Continued
Effective January 1, 1999, the participants immediately become 100 percent
vested in the Companies' contributions made in 1999 and subsequent years.
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 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.
Participant Loans
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
Companies' 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 the Companies' future contributions. Participants who
terminate and are reemployed with a participating 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.
Due to the adoption of safe harbor provisions of IRC Section 401(k)(12), for
years beginning after December 31, 1998, the Companies' contributions are
immediately fully vested and nonforfeitable.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE C--INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets.
In thousands
December 31,
1999 1998
American General Corporation
common stock . . . . . . . . . . . . . . . $114,504* $128,843*
American General Series Portfolio Company
Stock Index Fund. . . . . . . . . . . . . . 13,944 10,911
*Nonparticipant-directed (See Note D)
The Plan's investments (including gains and losses on investments bought and
sold as well as held during the years) appreciated (depreciated) in value as
follows:
In thousands
Years Ended
December 31,
1999 1998
Mutual funds . . . . . . . . . . . . . $5,743 $ 2,343
Common stock . . . . . . . . . . . . . (2,963) 39,486
$2,780 $41,829
NOTE D--NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investment is as
follows:
In thousands
Years Ended
December 31,
1999 1998
Net Assets
AGC common stock fund . . . . . . . . . $114,896 $127,818
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE D--NONPARTICIPANT-DIRECTED INVESTMENTS--Continued
Years Ended
December 31,
1999 1998
Changes in Net Assets
Contributions . . . . . . . . . . . . . . . . $ 6,385 $ 4,465
Dividends and interest . . . . . . . . . . . 2,676 2,541
Net appreciation(depreciation) . . . . . . . (2,963) 39,486
Benefits paid to participants . . . . . . . . . (17,900) (8,322)
Interfund transfers . . . . . . . . . . . . . . (1,120) (2,369)
$(12,922) $35,801
The Stock Fund contains both participant and nonparticipant-directed
contributions with earnings not separately determinable; therefore, the Stock
Fund is considered a total nonparticipant-directed investment option.
NOTE E--INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan maintains an investment contract with VALIC, a wholly owned
subsidiary of American General. The group deposit administration 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 VALIC.
The contract had a guaranteed minimum rate of 6.25% for 1999 and 1998. 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 1999 and 1998 was 7.87%
and 8.05%, respectively.
NOTE F--PLAN TERMINATION
Although they have not expressed any intent to do so, the Companies have the
right under the Plan to discontinue their 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 G--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 VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
NOTE G--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500--Continued
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
In thousands
December 31,
1999 1998
Net assets available for benefits
per the financial statements . . . . . . . . . . $147,857 $150,959
Benefits payable to withdrawing participants . . . (155) (351)
Net assets available for benefits per Form 5500 . $147,702 $150,608
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
In thousands
Year Ended
December 31, 1999
Benefits paid to participants per the
financial statements
American General Corporation common stock . . . . $ 13,522
Cash . . . . . . . . . . . . . . . . . . . . . . 7,062
Total benefits paid to participants per
the financial statements . . . . . . . . . . 20,584
Benefits payable to withdrawing participants at
year end . . . . . . . . . . . . . . . . . . . . . 155
Benefits payable to withdrawing participants at
beginning of year . . . . . . . . . . . . . . . . . (351)
Benefits paid to participants per
Form 5500 . . . . . . . . . . . . . . . . . $20,388
NOTE H--FEDERAL INCOME TAXES
Based on a favorable determination letter dated December 8, 1995, the
Internal Revenue Service (IRS) has ruled that the Plan, as restated and
amended effective August 31, 1990, December 6, 1991, March 4, 1992,
May 26, 1993, December 6,1993, and August 25, 1995, is qualified under
Section 401(a)of the IRC and, therefore, exempt under Section 501(a)
from federal income taxes.
Once qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Administrator is not aware of any course
of action or series of events that have occurred that might adversely affect
the Plan's qualified status.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
SCHEDULE H, Line 4 (i) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT
END OF YEAR
AT DECEMBER 31, 1999
EIN: 74-1625348
PN: 018
In thousands, except share amounts
Fair
Issuer Description Cost Value
American General 1,509,110 shares of $39,471 $114,504
Corporation* common stock
American General Series 314,753 shares of AGSPC ** 13,944
Portfolio Company* Stock Index Fund
Putnam 171,204 shares of Putnam OTC ** 6,336
& Emerging Growth Fund
The Variable Annuity Deposit administration ** 4,694
Life Insurance Company* group annuity contract
Participant Notes* Loans issued at interest ** 3,004
rates between 8.75%
and 9.50%
American General Series 110,805 shares of AGSPC ** 2,587
Portfolio Company* Growth Fund
Templeton 164,974 shares of Templeton ** 1,851
Foreign Fund
State Street Bank Short-term investments ** 827
& Trust Company* in money-market fund
Vanguard 42,726 shares of Vanguard ** 346
Fixed Income Securities
Fund
$39,471 $148,093
*Party in interest
**Cost not required for participant-directed investments
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY AGENTS' AND MANAGERS' THRIFT PLAN
SCHEDULE H, LINE 4 (j) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN: 74-1625348
PN: 018
In thousands
Current
Value of
Identity of Cost Asset on Net
Party Purchase Selling of Transaction Gain
Involved Description Price Price Asset Date (Loss)
Category (i) - Individual non-participant directed transactions in excess of
5% of net assets available for benefits
State Street S/T Investments $ 9,035 $ - $ 9,035 $ 9,035 $ -
Bank & Trust
Company
State Street S/T Investments - 8,987 8,987 8,987 -
Bank & Trust
Company
Category (iii) - Series of non-participant directed transactions in excess of
5% of net assets available for benefits
State Street
Bank & Trust S/T Investments $21,259 $ - $21,259 $21,259 $ -
Company
State Street
Bank & Trust S/T Investments - 20,617 20,617 20,617 -
Company
(A) Company Stock 11,069 - 11,069 11,069 -
(A) Company Stock - 25,633 13,512 25,633 12,121
(A) Parties involved are not presented, as permitted by Section 25250.103-6
(d)(1)(i) of the Department of Labor's Rules and Regulations.
Note: Includes both participant-directed and nonparticipant-directed
transactions.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Variable Annuity Life Insurance Company 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.
June 22, 2000
ELIZABETH A. DOBBS
Elizabeth A. Dobbs,
Vice President - Benefits &
Payroll
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-13395) pertaining to The Variable Annuity Life Insurance
Company Agents' and Managers' Thrift Plan of our report dated June 22, 2000,
with respect to the financial statements and schedules of The Variable
Annuity Life Insurance Company Agents' and Managers' Thrift Plan included in
this Annual Report (Form 11-K) for the year ended December 31, 1999.
ERNST & YOUNG LLP
Houston, Texas
June 22, 2000
