-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qmd82S7FeANXVKezwBKpI7WwMfXF09GGv+tpkh91R6ACDpsKtxk46H6B0BiQqEF1 f5J5qZaF7OR5fKzrrO3ykg== 0000005103-98-000049.txt : 19980629 0000005103-98-000049.hdr.sgml : 19980629 ACCESSION NUMBER: 0000005103-98-000049 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL CORP /TX/ CENTRAL INDEX KEY: 0000005103 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 740483432 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-07981 FILM NUMBER: 98655483 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135221111 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________ FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 _____________________ [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from _______ to ______ Commission file number 1-7981 Full title of the Plan: USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN Name of the issuer of the securities held pursuant to the Plan and the address of its principal executive office: AMERICAN GENERAL CORPORATION 2929 Allen Parkway Houston, Texas 77019 USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AUDITED FINANCIAL STATEMENTS AND SCHEDULES DECEMBER 31, 1997 Audited Financial Statements Reports of Independent Auditors ...................................... 1 Statements of Net Assets Available for Benefits ...................... 3 Statements of Changes in Net Assets Available for Benefits ........... 7 Notes to Financial Statements ........................................ 11 Schedules Assets Held for Investment ........................................... 16 Reportable Transactions .............................................. 17 Report of Independent Auditors Administrative Board USLIFE Corporation Employee Savings and Investment Plan We have audited the accompanying statement of net assets available for benefits of the USLIFE Corporation Employee Savings and Investment Plan (the Plan) as of December 31, 1997, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 1997 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1997, and the changes in its net assets available for benefits for the year then ended, in conformity with generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment as of December 31, 1997 and reportable transactions for the year then ended are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The specific fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and specific fund information have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. ERNST & YOUNG LLP Houston, Texas June 19, 1998 - 1 - Independent Auditors' Report The Board of Directors and Shareholders USLIFE Corporation: We have audited the accompanying statement of net assets available for benefits of the USLIFE Corporation Employee Savings and Investment Plan (the Plan) as of December 31, 1996, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1996, and the changes in its net assets available for benefits for the year then ended, in conformity with generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The specific fund information in the statements of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The specified fund information has been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. KPMG PEAT MARWICK LLP New York, New York May 2, 1997 - 2 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed American Express Trust Research Stock Fund 150 Fund Assets Investments American General Corporation common stock (775,806 shares)(Note D) ........... $8,111 $ - American Express Trust Research 150 Fund(469,821 shares) .. - 16,255 American Express Trust Income Fund II (684,844 shares) ................... - - IDS Growth Fund (203,892 shares) ..... - - IDS Mutual Fund (114,950 shares) ..... - - IDS Selective Fund (183,149 shares) .. - - Templeton Foreign Fund (169,508 shares) ................... - - Participant notes .................... - - Short-term investments ............... 343 - Total investments .................. 8,454 16,255 Receivables Other ................................ 2 - Total assets ....................... 8,456 16,255 Net assets available for benefits ........ $8,456 $16,255 The accompanying notes are an integral part of these financial statements. - 3 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed American IDS Express Trust Growth Income Fund II Fund Assets Investments American General Corporation common stock (775,806 shares)(Note D) ........... $ - $ - American Express Trust Research 150 Fund(469,821 shares) .. - - American Express Trust Income Fund II (684,844 shares) ................... 11,912 - IDS Growth Fund (203,892 shares) ..... - 6,482 IDS Mutual Fund (114,950 shares) ..... IDS Selective Fund (183,149 shares) .. - - Templeton Foreign Fund (169,508 shares) ................... - - Participant notes .................... - - Short-term investments ............... - - Total investments .................. 11,912 6,482 Receivables Other ................................ - - Total assets ....................... 11,912 6,482 Net assets available for benefits ........ $11,912 $6,482 The accompanying notes are an integral part of these financial statements. - 4 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Participant Directed IDS IDS Templeton Mutual Selective Foreign Fund Fund Fund Assets Investments American General Corporation common stock (775,806 shares)(Note D) ........... $ - $ - $ - American Express Trust Research 150 Fund(469,821 shares) .. - - - American Express Trust Income Fund II (684,844 shares) ................... - - - IDS Growth Fund (203,892 shares) ..... - - - IDS Mutual Fund (114,950 shares) ..... 1,578 - - IDS Selective Fund (183,149 shares) .. - 1,681 - Templeton Foreign Fund (169,508 shares) ................... - - 1,687 Participant notes .................... - - - Short-term investments ............... - - - Total investments .................. 1,578 1,681 1,687 Receivables Other ................................ - - - Total assets ....................... 1,578 1,681 1,687 Net assets available for benefits ........ $1,578 $1,681 $1,687 The accompanying notes are an integral part of these financial statements. - 5 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1997 In thousands, except share amounts Non- Participant Participant Directed Directed Participant Stock Notes Fund Total Assets Investments American General Corporation common stock (775,806 shares)(Note D) ........... $ - $33,831 $41,942 American Express Trust Research 150 Fund(469,821 shares) .. - - 16,255 American Express Trust Income Fund II (684,844 shares) ................... - - 11,912 IDS Growth Fund (203,892 shares) ..... - - 6,482 IDS Mutual Fund (114,950 shares) ..... - - 1,578 IDS Selective Fund (183,149 shares) .. - - 1,681 Templeton Foreign Fund (169,508 shares) ................... - - 1,687 Participant notes .................... 3,141 - 3,141 Short-term investments ............... - 762 1,105 Total investments .................. 3,141 34,593 85,783 Receivables Other ................................ - 3 5 Total assets ....................... 3,141 34,596 85,788 Net assets available for benefits ........ $3,141 $34,596 $85,788 The accompanying notes are an integral part of these financial statements. - 6 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 In thousands, except share amounts Participant Directed American Express Trust Research Stock Fund 150 Fund Assets Investments USLIFE Corporation common stock (872,793 shares)(Note D) ........... $7,494 $ - American Express Trust Research 150 Fund(521,201 shares) .. - 14,132 American Express Trust Income Fund II (716,782 shares) ................... - - IDS Growth Fund (190,215 shares) ..... - - IDS Mutual Fund (88,986 shares) ..... - - IDS Selective Fund (121,982 shares) .. - - Templeton Foreign Fund (100,594 shares) ................... - - Participant notes .................... - - Short-term investments ............... 185 - Total investments .................. 7,679 14,132 Receivables Contributions ........................ 31 2 Other ................................ 1 - Total assets ....................... 7,711 14,134 Net assets available for benefits ........ $7,711 $14,134 The accompanying notes are an integral part of these financial statements. - 7 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 In thousands, except share amounts Participant Directed American IDS Express Trust Growth Income Fund II Fund Assets Investments USLIFE Corporation common stock (872,793 shares)(Note D) ........... $ - $ - American Express Trust Research 150 Fund(521,201 shares) .. - - American Express Trust Income Fund II (716,782 shares) ................... 11,757 - IDS Growth Fund (190,215 shares) ..... - 5,162 IDS Mutual Fund (88,986 shares) ...... - - IDS Selective Fund (121,982 shares) .. - - Templeton Foreign Fund (100,594 shares) ................... - - Participant notes .................... - - Short-term investments ............... - - Total investments .................. 11,757 5,162 Receivables Contributions ........................ 91 31 Other ................................ - - Total assets ....................... 11,848 5,193 Net assets available for benefits ........ $11,848 $5,193 The accompanying notes are an integral part of these financial statements. - 8 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 In thousands, except share amounts Participant Directed IDS IDS Templeton Mutual Selective Foreign Fund Fund Fund Assets Investments USLIFE Corporation common stock (872,793 shares)(Note D) ........... $ - $ - $ - American Express Trust Research 150 Fund(521,201 shares) .. - - - American Express Trust Income Fund II (716,782 shares) ................... - - - IDS Growth Fund (190,215 shares) ..... - - - IDS Mutual Fund (88,986 shares) ...... 1,199 - - IDS Selective Fund (121,982 shares) .. - 1,111 - Templeton Foreign Fund (100,594 shares) ................... - - 1,042 Participant notes .................... - - - Short-term investments ............... - - - Total investments .................. 1,199 1,111 1,042 Receivables Contributions ........................ 8 4 8 Other ................................ - - - Total assets ....................... 1,207 1,115 1,050 Net assets available for benefits ........ $1,207 $1,115 $1,050 The accompanying notes are an integral part of these financial statements. - 9 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AT DECEMBER 31, 1996 In thousands, except share amounts Non- Participant Participant Directed Directed Participant Stock Notes Fund Total Assets Investments USLIFE Corporation common stock (872,793 shares)(Note D) ........... $ - $21,526 $29,020 American Express Trust Research 150 Fund(521,201 shares) .. - - 14,132 American Express Trust Income Fund II (716,782 shares) ................... - - 11,757 IDS Growth Fund (190,215 shares) ..... - - 5,162 IDS Mutual Fund (88,986 shares) ..... - - 1,199 IDS Selective Fund (121,982 shares) .. - - 1,111 Templeton Foreign Fund (100,594 shares) ................... - - 1,042 Participant notes .................... 3,148 - 3,148 Short-term investments ............... - 475 660 Total investments .................. 3,148 22,001 67,231 Receivables Contributions ........................ (46) 58 187 Other ................................ - 4 5 Total assets ....................... 3,102 22,063 67,423 Net assets available for benefits ........ $3,102 $22,063 $67,423 The accompanying notes are an integral part of these financial statements. - 10 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed American Express Trust Research Stock Fund 150 Fund Additions to net assets Investment income Dividends ....................... $ 241 $ - Interest ........................ 15 - Net appreciation (depreciation) in fair value of investments .................... 6,212 3,798 Total investment income .......... 6,468 3,798 Contributions Companies' .......................... - - Participants' ....................... 856 1,279 Total contributions ............... 856 1,279 Total additions ................. 7,324 5,077 Deductions from net assets Benefits Common stock ..................... 923 - Cash ............................. 3,430 2,911 Total deductions .............. 4,353 2,911 Interfund transfers .................. (2,226) (45) Net increase ................. 745 2,121 Net assets available for benefits Beginning of year ............ 7,711 14,134 End of year .................. $8,456 $16,255 The accompanying notes are an integral part of these financial statements. - 11 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed American IDS Express Trust Growth Income Fund II Fund Additions to net assets Investment income Dividends ....................... $ - $ - Interest ........................ - 196 Net appreciation (depreciation) in fair value of investments .................... 457 853 Total investment income .......... 457 1,049 Contributions Companies' .......................... - - Participants' ....................... 1,039 872 Total contributions ............... 1,039 872 Total additions ................. 1,496 1,921 Deductions from net assets Benefits Common stock ..................... - - Cash ............................. 2,574 601 Total deductions .............. 2,574 601 Interfund transfers .................. 1,142 (31) Net increase ................. 64 1,289 Net assets available for benefits Beginning of year ............ 11,848 5,193 End of year .................. $11,912 $6,482 The accompanying notes are an integral part of these financial statements. - 12 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Participant Directed IDS IDS Templeton Mutual Selective Foreign Fund Fund Fund Additions to net assets Investment income Dividends ....................... $ - $ - $ - Interest ........................ 236 87 183 Net appreciation (depreciation) in fair value of investments .................... 4 (14) (111) Total investment income .......... 240 73 72 Contributions Companies' .......................... - - - Participants' ....................... 241 148 263 Total contributions ............... 241 148 263 Total additions ................. 481 221 335 Deductions from net assets Benefits Common stock ..................... - - - Cash ............................. 281 80 203 Total deductions .............. 281 80 203 Interfund transfers .................. 171 425 505 Net increase ................. 371 566 637 Net assets available for benefits Beginning of year ............ 1,207 1,115 1,050 End of year .................. $1,578 $1,681 $1,687 The accompanying notes are an integral part of these financial statements. - 13 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts Non- Participant Participant Directed Directed Participant Stock Notes Fund Total Additions to net assets Investment income Dividends ....................... $ - $ 743 $ 984 Interest ........................ 247 33 997 Net appreciation (depreciation) in fair value of investments .................... - 16,640 27,839 Total investment income .......... 247 17,416 29,820 Contributions Companies' .......................... - 2,120 2,120 Participants' ....................... - - 4,698 Total contributions ............... - 2,120 6,818 Total additions ................. 247 19,536 36,638 Deductions from net assets Benefits Common stock ..................... - 1,485 2,408 Cash ............................. 267 5,518 15,865 Total deductions .............. 267 7,003 18,273 Interfund transfers .................. 59 - - Net increase ................. 39 12,533 18,365 Net assets available for benefits Beginning of year ............ 3,102 22,063 67,423 End of year .................. $3,141 $34,596 $85,788 The accompanying notes are an integral part of these financial statements. - 14 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 In thousands, except share amounts Participant Directed American Express Trust Research Stock Fund 150 Fund Additions to net assets Investment income Dividends ....................... $ 229 $ - Interest ........................ - - Net appreciation (depreciation) in fair value of investments .................... 1,002 2,634 Total investment income .......... 1,231 2,634 Contributions Companies' .......................... - - Participants' ....................... 836 1,363 Total contributions ............... 836 1,363 Total additions ................. 2,067 3,997 Deductions from net assets Benefits Common stock ..................... 28 - Cash ............................. 418 691 Total deductions .............. 446 691 Interfund transfers .................. (1,345) (929) Net increase (decrease) ...... 276 2,377 Net assets available for benefits Beginning of year ............ 7,435 11,757 End of year .................. $7,711 $14,134 The accompanying notes are an integral part of these financial statements. - 15 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 In thousands, except share amounts Participant Directed American IDS Express Trust Growth Income Fund II Fund Additions to net assets Investment income Dividends ....................... $ - $ - Interest ........................ - 126 Net appreciation (depreciation) in fair value of investments .................... 678 711 Total investment income .......... 678 837 Contributions Companies' .......................... - - Participants' ....................... 1,283 968 Total contributions ............... 1,283 968 Total additions ................. 1,961 1,805 Deductions from net assets Benefits Common stock ..................... - - Cash ............................. 880 178 Total deductions .............. 880 178 Interfund transfers .................. (1,395) 1,782 Net increase (decrease) ...... (314) 3,409 Net assets available for benefits Beginning of year ............ 12,162 1,784 End of year .................. $11,848 $5,193 The accompanying notes are an integral part of these financial statements. - 16 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 In thousands, except share amounts Participant Directed IDS IDS Templeton Mutual Selective Foreign Fund Fund Fund Additions to net assets Investment income Dividends ....................... $ - $ - $ - Interest ........................ 113 83 37 Net appreciation (depreciation) in fair value of investments .................... 28 (38) 82 Total investment income .......... 141 45 119 Contributions Companies' .......................... - - - Participants' ....................... 336 173 210 Total contributions ............... 336 173 210 Total additions ................. 477 218 329 Deductions from net assets Benefits Common stock ..................... - - - Cash ............................. 98 74 46 Total deductions .............. 98 74 46 Interfund transfers .................. 268 480 430 Net increase (decrease) ...... 647 624 713 Net assets available for benefits Beginning of year ............ 560 491 337 End of year .................. $1,207 $1,115 $1,050 The accompanying notes are an integral part of these financial statements. - 17 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1996 In thousands, except share amounts Non- Participant Participant Directed Directed Participant Stock Notes Fund Total Additions to net assets Investment income Dividends ....................... $ - $ 590 $ 819 Interest ........................ 216 - 575 Net appreciation (depreciation) in fair value of investments .................... - 1,956 7,053 Total investment income .......... 216 2,546 8,447 Contributions Companies' .......................... - 2,077 2,077 Participants' ....................... - - 5,169 Total contributions ............... - 2,077 7,246 Total additions ................. 216 4,623 15,693 Deductions from net assets Benefits Common stock ..................... - 71 99 Cash ............................. 121 1,075 3,581 Total deductions .............. 121 1,146 3,680 Interfund transfers .................. 709 - - Net increase (decrease) ...... 804 3,477 12,013 Net assets available for benefits Beginning of year ............ 2,298 18,586 55,410 End of year .................. $3,102 $22,063 $67,423 The accompanying notes are an integral part of these financial statements. - 18 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS NOTE A--SIGNIFICANT ACCOUNTING POLICIES The USLIFE Corporation Employee Savings and Investment Plan (the Plan) financial statements are prepared in conformity with generally accepted accounting principles. Investments are stated at fair value. The fair value of marketable securities is based on quotations obtained from national securities exchanges. The fair value of mutual funds shares is based on quoted market prices which represent the net asset value of shares held by the Plan as of the balance sheet date. Security transactions are recognized on the trade date. Dividend income is recorded on an accrual basis as of the ex-dividend date. Realized gains and losses on the sale of investments are recognized based on average cost. Participant notes are recorded as plan investments at amortized values. Contributions are recorded as additions to net assets on the date the contributions become payable to the Plan. Interfund transfers are recorded at the market value of the amount transferred. Benefits paid to participants are recorded upon distribution at the market value of the assets distributed. The preparation of financial statements requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities, (2) disclosures of contingent assets and liabilities, and (3) the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform with current year presentation. NOTE B--DESCRIPTION OF THE PLAN The following description of the Plan provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General The Plan, which is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA), is an employee savings and investment plan for eligible employees of USLIFE Corporation and certain of its subsidiaries (the Company). Employees are eligible to participate in the plan upon the completion of one year of service and attainment of age twenty-one. The Plan provides for participant elective salary deferrals in accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended (IRC). The Plan's investments are held by American Express Trust Company (the Trustee). Substantially all of the costs of administering the plan are paid by the Company. - 19 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS--CONTINUED NOTE B--DESCRIPTION OF THE PLAN--Continued Investment Options Participants may designate that their contributions be invested entirely in any one of the available funds or allocated, at their discretion, among two or more of such funds. These funds invest in: 1) shares of American General Corporation common stock, previously USLIFE Corporation common stock prior to USLIFE Corporation's merger with American General Corporation on June 17, 1997 (Stock Fund); 2) common stocks of companies outside the United States (Templeton Foreign Fund); 3) common stocks of rapidly growing companies that are believed to have above potential for long-term growth as a result of new management, marketing opportunities, or technological superiority (IDS Growth Fund); 4) common stocks included in the Standard and Poor's 500 index (American Express Trust Research 150 Fund); 5) common stocks and senior securities such as bonds and preferred stocks that offer fixed interest and dividend payments (IDS Mutual Fund); 6) investment grade corporate bonds, government securities, and money market securities (IDS Selective Fund); and 7) short-term securities and investment contracts intended to be relatively stable in value (American Express Trust Income Fund II). The Company's contributions are invested on behalf of the Plan's participants in the Stock Fund. Refer to Note D regarding changes in the Stock Fund. Contributions Under the Plan, eligible employees may make pretax contributions up to a stated percentage of salary determined by the Administrative Committee, currently from a minimum of 1 percent to a maximum of 12 percent of their salary, each pay period. Eligible employees may also make aftertax contributions up to 12 percent of their salary less their pretax contribution percentage. The first 3 percent of salary that an employee contributes to the Plan is designated as the basic contribution. For those employees who are not highly compensated under the IRC (ie., those employees earning less than $80,000 in 1997 and less than $66,000 in 1996), up to 12 percent of the employee's salary may be contributed on a pretax basis under the Extra Savings Potential (ESP) option. Those employees who are highly compensated may contribute up to 7 percent of salary under the ESP option. The Company will contribute an amount equal to 100 percent of the employee's basic contribution. Participants may change their contribution rate under the Plan, suspend contributions, or resume previously suspended contributions, as well as transfer the amounts in their account among funds, on any business day. Contribution Limitations For 1997 and 1996, the total amount of participant pretax contributions is limited to $9,500. Additionally, the total amount of annual participant and company contributions must not exceed the lesser of 25 percent of compensation or $30,000. During 1997 and 1996, the total amount of salary that can be used in determining contributions under the Plan is $160,000 and $150,000 respectively. - 20 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS--CONTINUED NOTE B--DESCRIPTION OF THE PLAN --Continued ERISA and the IRC provide that qualified plans cannot discriminate in favor of highly compensated individuals. Certain highly compensated individuals may be required to receive refunds of any contributions in excess of the IRC Sections 401(k) and (m) limits and all earnings attributable to such contributions. No such refunds were required for the years ended December 31, 1997 and 1996. Participant Accounts Each participant's account is credited with the participant's and Company's contributions and an allocation of Plan earnings. Allocations of Plan earnings are based on participants' account balances. The benefit to which a participant is entitled is the benefit that can be provided from the particip- ant's vested account. Vesting Participants are immediately vested in their contributions plus the earnings thereon. Company contributions vest under a five-year graded vesting schedule that provides for 20 percent vesting upon the completion of the first year of employment and an additional 20 percent vesting upon the completion of each additional year of employment until 100 percent vesting is reached at the end of the fifth year of employment. Company contributions may also fully vest under certain conditions including retirement, death, permanent disability, or a Change in Control as defined in the Plan. Payment of Benefits Upon death, retirement, permanent disability, or other termination of employment, or pursuant to a Qualified Domestic Relations Order as that term is defined by the IRC or Title I of ERISA or the rules thereunder, the amount credited to a Participant's account is distributed to the employee or employee's beneficiary either in an immediate single sum or in installments over a period not to exceed ten years. Participants may withdraw from the Plan an amount credited to their account attributable to their contributions and fully vested Company contributions at any time, subject to certain restrictions regarding resumption of contributions and subsequent withdrawals. Except as noted below, all participants may elect to receive withdrawals from the Stock Fund in cash or in shares of common stock. A demonstration of financial hardship is required for a withdrawal from a participant's vested account balance under the ESP option, unless the participant has attained age 59-1/2 or is totally disabled. A withdrawal of the earnings on ESP contributions accruing after December 31, 1988 is not permitted under any circumstances. A participant must first seek a loan from the Plan before making a hardship withdrawal. For distributions made on or after January 1, 1993, a participant may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan. In the absence of such a request, the Plan administrator is required to withhold 20% of the eligible rollover distribution for federal tax purposes. - 21 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE B--DESCRIPTION OF THE PLAN--Continued Participant Loans A participant who has participated in the Plan for one year or more may borrow once in any Plan year, after meeting certain Plan requirements, from his or her fully vested account balance provided that the total amounts borrowed and not repaid (including interest due and unpaid) do not exceed the lesser of $50,000 or 50 percent of the value of the participants' vested account balance. For participants with vested account balances of $100,000 or more, the maximum loan amount is $50,000 reduced by the highest outstanding loan balance during the one year period ending on the day before the new loan is made. To comply with the interest rate requirements of the Department of Labor, the current interest rate charged on new loans for the term of the loan is changed monthly and based on the prime rate charged by commercial banks. Loans to participants are for terms of not less than one year and not more than five years, with the exception of loans for the purchase of a principal residence which may be for up to 30 years. Payments of principal and interest on such loans commence as soon as administratively feasible, by payroll deduction from wages of the participant, according to an amortization schedule established by the Administrative Committee in a nondiscriminatory manner. A loan made to a Plan participant under this provision matures in full upon the retirement, death, or termination of employment of the participant. A participant may accelerate repayment during the term of the loan, after the loan has been in force for at least one year, provided that such repayment includes the full remaining principal together with interest to the date of repayment. The Plan provides that the Administrative Committee may determine an overall limit on the amount of loans that may be provided by the Plan to all participants at any one time and may establish such further rules and limitations as it deems appropriate. Forfeitures Any Company contributions made on behalf of a terminated employee which are not vested will be forfeited upon termination of employment and will be used to reduce the Company's future contributions to the Plan. Company contributions are reported net of approximately $164,000 and $72,000 of forfeitures in 1997 and 1996, respectively. Plan Members At December 31, 1997, 2,017 active employees were contributing to the Plan. NOTE C--PLAN TERMINATION The Company has the right under the Plan to discontinue its contributions at any time and to withdraw from the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts. The Plan was merged into the American General Employee's Thrift and Incentive Plan (AG Thrift Plan) effective January 1, 1998. - 22 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS--Continued NOTE D--MERGER TRANSACTION On June 17, 1997, the Company and American General Corporation completed a merger agreement in an all-stock transaction. Under this agreement, Company shareholders exchanged each share of USLIFE Corporation common stock for 1.1069 shares of American General Corporation common stock. The exchange ratio was based on the transaction price of $49 per USLIFE common share divided by an average trading price of American General Corporation common stock for a period prior to closing. As a result of this transaction, 830,870 shares of USLIFE Corporation common stock in the Stock Fund were converted to 919,690 shares of American General Corporation common stock. In addition, all active Plan participants became 100 percent vested in Company contributions made to their accounts. NOTE E--FEDERAL INCOME TAXES Based on a favorable determination letter dated August 1, 1995, the Internal Revenue Service has ruled that the Plan is qualified under Section 401(a) of the IRC and, therefore, exempt under Section 501(a) from federal income taxes. The Plan has been amended since receiving the determination letter. However, the Plan s administrators believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. NOTE F--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500: At December 31, In thousands 1997 1996 Net assets available for benefits per the financial statements...................... $85,788 $67,423 Transfers out due to Plan merger (Note G)... (85,788) - Accrued receivables ........................ - (187) Net assets available for benefits per Form 5500 ................................ $ - $67,236 NOTE G--SUBSEQUENT EVENT Effective January 1, 1998, the Plan was merged into the AG Thrift Plan. This plan merger was the result of the corporate merger previously discussed in Note D. Assets totaling approximately $86 million, which includes 775,806 shares of American General Corporation common stock, were transferred from the Plan's trust in January, 1998. Plan participants automatically became eligible to participate in the AG Thrift Plan as of January 1, 1998. - 23 - USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN ASSETS HELD FOR INVESTMENT AT DECEMBER 31, 1997 In thousands, except share amounts Fair Issuer Description Cost Value American General 775,806 shares of $13,787 $41,942 Corporation* common stock American Express 469,821 shares of American 10,751 16,255 Trust Company Express Trust Research 150 Fund American Express 684,844 shares of American 10,935 11,912 Trust Company Express Trust Income Fund II IDS 203,892 shares of IDS 5,520 6,482 Growth Fund Templeton 169,508 shares of Templeton 1,755 1,687 Foreign Fund IDS 183,149 shares of IDS 1,683 1,681 Selective Fund IDS 114,950 shares of IDS 1,589 1,578 Mutual Fund Participant Notes* Loans issued at interest - 3,141 rates between 7.00% and 8.50% American Express Short-term investments in 1,105 1,105 Trust Company money-market fund $47,125 $85,783 *Party in interest - 24 - USLIFE CORPORATION SAVINGS AND INVESTMENT PLAN REPORTABLE TRANSACTIONS (A) FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts and transaction counts Amount of Party Involved Description Transaction American Express Purchases of short-term investments in $18,159 Trust Company 127 transactions American Express Sales of short-term investments in 17,718 Trust Company 170 transactions American Express Sales of 397,982 shares of American 6,715 Trust Company Express Trust Income Fund II in 163 transactions at a gain of $156 American Express Purchases of 366,045 shares of American 6,157 Trust Company Express Trust Income Fund II in 79 transactions (B) Sales of 116,789 shares of USLIFE 5,526 Corporation common stock in 7 transactions at a gain of $3,251 American Express Sales of 153,340 shares of American 4,758 Trust Company Express Trust Research 150 Fund in 135 transactions at a gain of $545 (B) Sales of 74,546 shares of American 3,829 General Corporation common stock in 6 transactions at a gain of $2,507 (B) Distributions of 69,338 shares of 3,480 American General Corporation common stock to various individuals who withdrew from or terminated participation in the Plan in 6 transactions at a gain of $2,250 (B) Purchases of 83,591 shares of USLIFE 3,265 Corporation common stock in 9 transactions American Express Purchases of 103,704 shares of IDS 3,249 Trust Company Growth Fund in 135 transactions - 25 - USLIFE CORPORATION SAVINGS AND INVESTMENT PLAN REPORTABLE TRANSACTIONS (A)--Continued FOR THE YEAR ENDED DECEMBER 31, 1997 In thousands, except share amounts and transaction counts Amount of Party Involved Description Transaction American Express Purchases of 468,004 shares of $3,198 Trust Company American Express Trust Research 150 Fund in 104 transactions American Express Sales of 90,026 shares of IDS 2,767 Trust Company Growth Fund in 115 transactions at a gain of $259 (B) Distribution of 8,725 shares of 418 USLIFE Corporation common stock to various individuals who withdrew from or terminated participation in the Plan in 1 transaction at a gain of $247 (B) Purchase of 1,743 shares of 93 American General Corporation common stock in 1 transaction (A) Reportable transactions are transactions or series of transactions in excess of five percent of the current value of Plan assets at the beginning of the year and are defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations. (B) Parties involved are not presented, as permitted by Section 2520.103-6 (d)(1)(I) of the Department of Labor's Rules and Regulations. - 26 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the USLIFE Corporation Employee Savings and Investment Plan Administrative Board has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. USLIFE CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN June 26, 1998 ELLEN H. MASTERSON Ellen H. Masterson, Member of the Administrative Board - 27 - Appendix - 28 - Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (No. 333-29393) pertaining to the USLIFE Corporation Employee Savings and Investment Plan of our report dated June 19, 1998, with respect to the financial statements and schedules of the USLIFE Corporation Employee Savings and Investment Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. ERNST & YOUNG LLP Houston, Texas June 26, 1998 - 29 - Consent of Independent Accountants The Board of Directors and Shareholders American General Corporation: We consent to incorporation by reference in Registration Statement No. 333- 29393 on Form S-8 of American General Corporation of our report dated May 2, 1997, relating to the statement of net assets available for benefits of the USLIFE Corporation Employee Savings and Investment Plan as of December 31, 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1996, which report appears in the December 31, 1997 annual report on Form 11-K of the Plan. KPMG PEAT MARWICK LLP New York, New York June 24, 1998 - 30 - -----END PRIVACY-ENHANCED MESSAGE-----