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THE FOLLOWING ITEMS WERE THE SUBJECT
OF A FORM 12b-25 FILED ON MARCH 31,
2005 AND ARE INCLUDED HEREIN:
ITEMS 4, 10, 11, 12, 13 AND 15
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number 1-6155
AMERICAN GENERAL FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-0416090
(State of incorporation) (I.R.S. Employer Identification No.)
601 N.W. SECOND STREET, EVANSVILLE, IN 47708
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (812) 424-8031
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
--------------------- -----------------------
8.45% Senior Notes due October 15, 2009 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ]. Not applicable.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [ ] No [X]
As the registrant is an indirect wholly owned subsidiary of American
International Group, Inc., none of the registrant's common stock is held by
non-affiliates of the registrant.
At April 7, 2005, there were 10,160,012 shares of the registrant's common stock,
$.50 par value, outstanding.
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EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A amends the Annual Report on Form 10-K for
the year ended December 31, 2004, as initially filed by American General Finance
Corporation with the Securities and Exchange Commission (SEC) on March 7, 2005,
and is being filed solely to include the information that was properly excluded
from Form 10-K pursuant to General Instruction I of Form 10-K.
American General Finance Corporation will be referred to as "AGFC" or
collectively with its subsidiaries, whether directly or indirectly owned, as the
"Company" or "we". All of the common stock of AGFC is owned by American General
Finance, Inc. (AGFI). AGFI is an indirect wholly owned subsidiary of American
International Group, Inc. (AIG).
AIG has been unable to file its Annual Report on Form 10-K for the year ended
December 31, 2004 within the prescribed time period applicable to AIG. This Form
10-K/A does not alter or restate any of the information we reported in the Form
10-K filed on March 7, 2005. Instead, it adds the disclosures we had previously
omitted pursuant to General Instruction I of Form 10-K.
2
PART I
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the fourth
quarter of 2004.
3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Directors are elected for one year terms at the annual meeting of the
shareholder. They receive no additional compensation for serving as directors.
The board of directors elects executive officers to one year terms subject to
removal at the board's discretion. AGFC directors and executive officers are as
follows:
Name Age* Position Director Since
- -------------------------------------------------------------------------------------------------------------------
Frederick W. Geissinger 59 President and Chief Executive Officer of the Company 1995
since November, 1995; also serving as Vice Chairman of
American General Corporation since October, 1999
Stephen L. Blake 54 Senior Vice President, Human Resources of the Company 1999
since 1998
Donald R. Breivogel, Jr. 44 Senior Vice President and Chief Financial Officer of the 2001
Company since January, 2002; served as Vice President
and Chief Financial Officer from September, 2001 through
January, 2002; Vice President, Chief Financial Officer
and Treasurer from February, 2001, through September,
2001; Vice President and Treasurer from August, 2000 to
February, 2001; Director of Planning & Analysis for the
Company from January, 1996 to August, 2000
Robert A. Cole 53 Senior Vice President, Marketing and Insurance 1997
Operations of the Company since September, 2003; served
as Senior Vice President, Risk Management, Marketing and
Insurance Operations from February, 2001 through
September, 2003; and Senior Vice President, Risk
Management and Chief Financial Officer from November,
1997 through February, 2001
William N. Dooley 52 Senior Vice President - Financial Services of AIG since 2001
1998; Vice President (1996-1998) and Treasurer
(1992-1998) of AIG; held other positions at AIG since
joining in 1978
Jerry L. Gilpin 62 Senior Vice President, Information Systems & Services of 1996
the Company since 1996
Stephen H. Loewenkamp 62 Executive Vice President of the Company since June, 2004
2004; served as Senior Director of Operations for
certain subsidiaries of the Company from 1996 to June,
2004
George D. Roach 54 President of MorEquity, Inc. (a subsidiary of the 2004
Company) since 2004;
served as Senior Director of Operations for certain
subsidiaries of the Company from 1997 to June, 2004
Timothy M. Hayes 49 Senior Vice President, General Counsel & Corporate -
Secretary of the Company since April 3, 2000
Jerry Schiano 44 President and Chief Executive Officer of Wilmington -
Finance, Inc. (WFI) (a subsidiary of the Company) since
1999
Gregory E. Reynolds 46 Senior Vice President, Acquisitions and Corporate -
Development of the Company since August, 2004; served as
Senior Vice President
4
and Vice President, Business
Development of Federal Home Loan Mortgage Corporation
(Freddie Mac) from 2001 through 2003; and Senior Vice
President, Corporate Controller of Freddie Mac from 1998
to 2001
Bryan A. Binyon 48 Vice President and Treasurer of the Company since -
September, 2001; served as Vice President and Treasurer
of KB Home from August, 2000 to August, 2001; and Vice
President and Treasurer of the Company from 1998 through
2000
Raymond S. Brown 56 Vice President, Risk Management of the Company since -
October, 1999
George W. Schmidt 60 Vice President, Controller, and Assistant Secretary of -
the Company since January, 2003; served as Controller
and Assistant Secretary of the Company since June, 1992
- ----------
* As of March 31, 2005
Mr. Schiano was a Senior Vice President of ContiMortgage Corp. from October 1993
to October, 1999. ContiMortgage Corp. filed for relief under Chapter 11 of the
United States Bankruptcy Code on May 17, 2000.
The Company does not have an audit committee and relies on the Audit Committee
of the board of directors of AIG.
CODE OF ETHICS AND CONDUCT
The Company's employees are subject to AIG's Code of Conduct designed to assure
that all employees perform their duties with honesty and integrity. In the
second quarter of 2004, AIG adopted the AIG Director, Executive Officer, and
Senior Financial Officer Code of Business Conduct and Ethics, which covers such
directors and officers of AIG and its subsidiaries, including the Company and
the Company's Chief Executive Officer (principal executive officer), Chief
Financial Officer (principal financial officer) and Controller (principal
accounting officer). Both of these Codes appear in the Corporate Governance
section of www.aigcorporate.com.
5
ITEM 11. EXECUTIVE COMPENSATION.
Each of the executive officers of AGFC is also an executive officer of AGFI. We
do not allocate the compensation that such individuals receive between the two
companies. Except as otherwise indicated, we pay the compensation as presented
below to such individuals for services they provide to AGFI, AGFC and all
subsidiaries of both companies.
SUMMARY COMPENSATION TABLE
Compensation accrued for services in all capacities to AGFC and its subsidiaries
by the "named executive officers" required to be disclosed pursuant to the rules
of the SEC was as follows:
Annual Compensation Long Term Compensation
---------------------------------- ----------------------------------
Restricted
Other Annual Stock Securities All Other SICO LTIP
Name and Bonus Compensation Awards Underlying LTIP Compensation Payouts
Principal Position Year Salary (3) (4) (5)(6) Options(#) Payouts (7) (8)
- --------------------------------------------------------------------------------------------------------------------------------
Frederick W. 2004 $500,001 $890,000 $50,384 - 35,000 $ - $ 9,225 $ -
Geissinger 2003 509,616 840,000 46,607 - 143,500 - 64,150 -
President and Chief 2002 490,385 650,000 18,185 - 209,686 - 8,260 -
Executive Officer
Jerry Schiano(1)(9) 2004 300,000 875,000 13,200 $128,940 - - 2,581 -
President and Chief 2003 299,954 769,599 13,200 - 5,000 - 6,000 -
Executive Officer- 2002 n/a n/a n/a - - - - -
Wilmington
Finance, Inc.
George D. 2004 217,212 125,000 16,029 - 4,600 - 14,350 -
Roach(2) 2003 n/a n/a n/a - n/a - n/a -
President- 2002 n/a n/a n/a - n/a - n/a -
MorEquity, Inc.
Stephen H. 2004 205,577 125,000 - - 4,600 - 14,350 -
Loewenkamp(2)
Executive Vice 2003 n/a n/a n/a - n/a - n/a -
President - Branch 2002 n/a n/a n/a - n/a - n/a -
Operations
Timothy M. Hayes 2004 250,001 124,000 - - 2,300 - 9,225 -
Senior Vice 2003 254,809 124,000 9,000 - 4,900 - 33,412 -
President and 2002 250,001 100,000 15,800 - 10,096 - 8,805 -
General Counsel
1) WFI became a subsidiary of the Company effective January 1, 2003.
Prior to that date, Mr. Schiano was not an executive officer of the
Company.
2) Messrs. Roach and Loewenkamp became executive officers of the
Company during 2004.
3) Amounts shown include quarterly bonuses paid pursuant to an AIG
quarterly bonus program as follows: Mr. Geissinger - $90,000 (2003
and 2004); Mr. Hayes - $24,000 (2003 and 2004).
4) Amounts shown in "Other Annual Compensation" for Mr. Geissinger
include payment of an annual salary from C.V. Starr & Co., Inc.
(Starr) - $25,000 (2003 and 2004); annual bonus from Starr - $25,000
6
(2004); and automobile allowance - $14,400 (2002). Amounts for Mr.
Schiano include an automobile allowance of $13,200 (2003 and 2004).
Amounts shown for Mr. Roach include relocation expense reimbursement
- $15,954 (2004). Amounts shown for Mr. Hayes include an automobile
allowance - $9,000 (2003), $10,800 (2002); and financial planning
and consulting - $5,000 (2002).
5) Aggregate market value on the date of grant based on closing sale
price of AIG Common Stock as reported in the New York Stock Exchange
Composite Transactions Report.
6) At December 31, 2004, the aggregate number and value of restricted
shares previously awarded based on the closing sale price of AIG's
Common Stock (as reported in the New York Stock Exchange Composite
Transactions Report) on December 31, 2004 were as follows: Mr.
Schiano: 2,000 shares - $131,340 and Mr. Roach: 600 shares -
$39,402. Dividends are not paid on restricted shares until they are
vested. Restricted shares vest on the fourth anniversary of the date
of grant.
7) Amounts shown in "All Other Compensation" for Mr. Geissinger
represent advance payment of benefits that were scheduled to be paid
under the change in control severance agreement of $50,257 in 2003;
matching contributions under the 401(k) Plan - $9,225 (2004), $9,000
(2003), and $8,260 (2002); and premiums paid by the Company for a
group carve out individual life insurance policy and the value of
split-dollar life insurance - $8,586 (2003), and $3,785 (2002).
Amounts shown for Mr. Schiano represent matching contributions under
the 401(k) Plan - $2,581 (2004), and $6,000 (2003). Amounts shown
for Messrs. Roach and Loewenkamp represent matching contributions
under the 401(k) Plan - $14,350 (2004) for each. Amounts shown for
Mr. Hayes represent advance payment of benefits that were scheduled
to be paid under the change in control severance agreement of
$23,778 (2003); matching contributions under the 401(k) Plan -
$9,225 (2004), $9,000 (2003), and $8,260 (2002); and premiums paid
by the Company for a group carve out individual life insurance
policy and the value of split-dollar life insurance - $634 (2003),
$545 (2002). American General Corporation (AGC), the former ultimate
parent of the Company, had in place certain change in control
severance agreements (Severance Agreements) which were triggered by
AIG's acquisition of AGC and Messrs. Geissinger and Hayes were
parties to these agreements. The Severance Agreements provided for
payment of certain benefits in the event of changes in terms or
conditions of employment (including pay and benefits) within 3 years
after the acquisition was completed. Certain payments were made to
executive officers pursuant to the Severance Agreements, and the
Severance Agreements terminated in August, 2004.
8) There were no LTIP payouts under Starr International Company, Inc.'s
(SICO) Deferred Compensation Profit Participation Plan (the SICO
Plan). Messrs. Geissinger and Hayes participate in the SICO Plan and
information with respect to their awards under the SICO Plan for the
two-year period from January 1, 2003 to December 31, 2004 is set
forth below in the table SICO Long-Term Incentive Plan Awards.
9) Mr. Schiano is employed as the Chief Executive Officer of WFI, which
we acquired in January, 2003. In connection with the acquisition,
Mr. Schiano entered into an employment agreement with WFI. Under the
agreement, Mr. Schiano receives a base salary of $300,000 per year,
and may be eligible for an annual bonus, the payment and amount of
which depend on WFI's actual pretax earnings compared to a specified
profit target for each year as established by the Company from time
to time. While the agreement has a five year term, it may be
terminated by either party at any time for no reason; any severance
payments to Mr. Schiano in the event of an early
7
termination would be dependent on the reason for termination. If Mr.
Schiano is terminated without cause, or resigns for good reason (as
described in the agreement), he will be eligible to receive a
severance payment consisting of monthly base salary plus benefits
for a declining number of months (currently, 18 months) over the
remaining term of the agreement.
8
OPTION GRANTS IN 2004
Options to purchase shares of AIG Common Stock which were granted during 2004 to
the individuals named in the Summary Compensation Table were as follows:
Percentage
of Total Percentage
Options of Total Potential Realizable Value
Granted to Options at Assumed Annual Rates of
the Granted to Stock Appreciation for
Number of Company's AIG Exercise Option Term
Securities Employees Employees Price -------------------------------
Date of Underlying During During Per Expiration 5 Percent 10 Percent
Name Grant Options(1) 2004 2004 Share Date (2) (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Frederick W. 12/16/04 35,000 58.24% 1.04% $64.47 12/16/14 $1,419,069 $3,596,200
Geissinger
Jerry Schiano -- -- -- -- -- -- -- --
George D. Roach 12/16/04 4,600 7.65% (4) 64.47 12/16/14 186,506 472,643
Stephen H. 12/16/04 4,600 7.65% (4) 64.47 12/16/14 186,506 472,643
Loewenkamp
Timothy M. Hayes 12/16/04 2,300 3.83% (4) 64.47 12/16/14 93,253 236,322
1) All options were granted pursuant to AIG's Amended and Restated 1999
Stock Option Plan at an exercise price equal to the fair market
value of such stock at the date of grant. The option grants in 2004
provide that 25 percent of the options granted on any date become
exercisable on each anniversary date in each of the successive four
years and expire ten years from the date of grant.
2) The appreciated price per share at 5 percent per year is $105.01 per
share.
3) The appreciated price per share at 10 percent per year is $167.22
per share.
4) Represents less than 1% of total AIG options granted to AIG
employees during 2004.
9
AGGREGATED OPTION EXERCISES DURING THE YEAR ENDED DECEMBER 31, 2004
AND DECEMBER 31, 2004 OPTION VALUES
The exercise of options to purchase shares of AIG Common Stock during 2004 by
the individuals named in the Summary Compensation Table and the unexercised
options to purchase AIG Common Stock held by such individuals at December 31,
2004 was as follows:
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options at
Acquired December 31, 2004 December 31, 2004 (2)
on Value ----------------------------- -----------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------------------------
Frederick W. Geissinger 23,160 $ 836,771 436,716 333,839 $2,536,995 $ 997,865
Jerry Schiano -- -- 1,250 3,750 2,150 6,450
George D. Roach 579 23,368 39,951 13,844 338,090 72,521
Stephen H. Loewenkamp 34,738 817,513 15,705 12,032 18,069 49,059
Timothy M. Hayes -- -- 24,133 12,848 155,313 56,398
(1) Aggregate market value on date of exercise (closing sale price as
reported in the New York Stock Exchange Composite Transactions
Report) less aggregate exercise price.
(2) Aggregate market value on December 31, 2004 (closing sale price as
reported in the New York Stock Exchange Composite Transactions
Report) less aggregate exercise price.
SICO LONG-TERM INCENTIVE PLAN AWARDS (1)
Certain information with respect to benefits granted under the SICO Plan which
were granted during 2002 (with respect to the 2003-2004 period) to the
individuals named in the Summary Compensation Table was as follows:
Unit Award Estimated Future
Name Number of Units Period Payouts
- --------------------------------------------------------------------------------------------
Frederick W. Geissinger 900 Two years 10,800
Jerry Schiano - -
George D. Roach - -
Stephen H. Loewenkamp - -
Timothy M. Hayes 300 Two Years 2,400
(1) Awards represent grants of units under the SICO Plan with respect to
the two-year period from January 1, 2003 through December 31, 2004. The
SICO Plan contains neither threshold amounts nor maximum payout
limitations. The number of shares of AIG Common Stock, if any,
allocated to a unit for the benefit of a participant in the SICO Plan
is primarily dependent upon two factors: the growth in future earnings
of AIG during the unit award period and the book value of AIG at the
end of the award period. As a result, the number of shares to be
allocated with respect to units held for the 2003-2004 period and the
value of such shares upon future payout cannot be determined at this
time. The number of shares shown under "Estimated Future Payouts"
represent the number of shares contingently allocable to the named
individuals based upon the units awarded to them for the 2003-2004
period, assuming the same criteria as those used to allocate the shares
of AIG Common Stock for the 2001-2002 period. Prior to earning the
right to payout, the participant is not entitled to any equity interest
with respect to such shares, and the shares are subject to forfeiture
under certain conditions, including but not limited to the
participant's voluntary termination of employment with AIG or its
subsidiaries prior to normal retirement age other than by death or
disability.
10
The Company participates in several employee benefit plans sponsored by AIG.
PENSION BENEFITS
Prior to the purchase of American General Corporation (AGC) by AIG, the
Company's employees were covered by the American General Retirement Plan (AG
Plan). The AG Plan benefits were based on the employee's period of employment
with the Company and its subsidiaries (up to a maximum of 40 years of benefits
service). Benefits were calculated using average monthly compensation (including
all cash compensation except for certain excluded payments such as severance
payments, and subject to limitations for certain highly compensated employees
imposed by law) during the highest 5 consecutive calendar years of the last 10
years of employment, and covered compensation, using the average Social Security
taxable wage base over a 35-year period, ending when an employee attains Social
Security retirement age. The AG Plan benefit was frozen as of December 31, 2002.
Employees of the Company and its subsidiaries became eligible for the American
International Group, Inc. Retirement Plan (AIG Plan), effective January 1, 2003.
The AG Plan was merged into the AIG Plan. Employees were given both vesting and
benefit service credit for their prior service with the Company and its
subsidiaries.
The AIG Plan is a non-contributory, qualified, defined benefit plan. For
employees of the Company and its subsidiaries, the formula equals .925% times
Average Final Compensation (defined as the average annual compensation, which
includes base pay and sales commissions, subject to limitations for certain
highly compensated employees imposed by law, during the three consecutive years
in the last ten years of credited service affording the highest such average) up
to 150% of the employee's "covered compensation" (the average of the Social
Security Wage Bases during the 35 years preceding the Social Security retirement
age), plus 1.425% times Average Final Compensation in excess of 150% of "covered
compensation" times years of credited service (up to 35 years), plus 1.425%
times Average Final Compensation times years of credited service in excess of 35
years but limited to 44 years.
Employees of the Company and its subsidiaries will receive pension payments
based on the greater of (A) or (B). (A) is equal to (i) the AG Plan benefit
frozen as of December 31, 2002, plus (ii) a benefit reflecting service after
December 31, 2002 using the AIG Plan formula. (B) is equal to a benefit
determined using the AIG Plan formula reflecting service for employment with the
Company or its subsidiaries before and after AIG's acquisition of AGC.
AGC also had in place the American General Restoration of Retirement Income Plan
(AG Restoration Plan) for employees participating in the AG Plan whose benefits
under the AG Plan were limited by applicable tax laws. The AG Restoration Plan
provided benefits in excess of the AG Plan benefits determined as if the benefit
under the AG Plan had been calculated without the limitations imposed by
applicable tax laws. The AG Restoration Plan was a nonqualified, unfunded plan,
and was frozen as of December 31, 2002.
Certain employees also became eligible for payments under the AIG Excess
Retirement Income Plan (AIG Excess Plan), effective January 1, 2003. The AIG
Excess Plan was established to provide additional retirement benefits to
designated executives and key employees, and replaced the AG Restoration Plan.
In addition, certain officers are covered by the AGC Supplemental Executive
Retirement Agreement
11
(SERA) or the AGC Supplemental Executive Retirement Plan (SERP). The SERA and
SERP are non-qualified, unfunded, defined benefit pension plans or agreements
that provide for payment computed on the basis of a straight-life annuity with a
10-year term certain period, subject to certain offsets for payments under the
AIG Plan, the AG Restoration Plan, the AIG Excess Plan and Social Security
payments. Compensation used to calculate payments includes annual salary and
bonus amounts. The SERA and SERP benefit accruals continued in effect for 3
years after the acquisition of AGC by AIG, and benefits were frozen effective
August 31, 2004.
Annual amounts of normal retirement pension commencing at normal retirement age
of 65 based on average final compensation and credited service under the AIG
Plan, the AG Restoration Plan and the AIG Excess Plan are illustrated in the
following table:
ESTIMATED ANNUAL PENSION AT AGE 65
AVERAGE
FINAL
COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- -------------------------------------------------------------------------------------------------------
$ 125,000 $14,341 $21,512 $28,682 $35,853 $43,024 $50,194 $59,100
$ 150,000 17,904 26,856 35,807 44,759 53,711 62,663 73,350
$ 175,000 21,466 32,199 42,932 53,666 64,399 75,132 87,600
$ 200,000 25,029 37,543 50,057 62,572 75,086 87,600 101,850
$ 225,000 28,591 42,887 57,182 71,478 85,774 100,069 116,100
$ 250,000 32,154 48,231 64,307 80,384 96,461 112,538 130,350
$ 300,000 39,279 58,918 78,557 98,197 117,836 137,475 158,850
$ 375,000 49,966 74,949 99,932 124,916 149,899 174,882 201,600
$ 400,000 53,529 80,293 107,057 133,822 160,586 187,350 215,850
$ 500,000 67,779 101,668 135,557 169,447 203,336 237,225 272,850
$ 600,000 82,029 123,043 164,057 205,072 246,086 287,100 329,850
The amounts shown in the table above reflect benefits calculated under the AIG
Plan, the AG Restoration Plan and the AIG Excess Plan assuming the benefits
described in (B) above (the AIG pension formula for all benefit service) result
in the greater benefit. The table does not reflect benefits payable under the
SERP or the SERA.
The years of benefit service under the pension plans as of December 31, 2004 are
as follows: Mr. Geissinger - -10.9 years; Mr. Loewenkamp - -39.8 years; Mr.
Roach- - 17.0 years; Mr. Hayes - -4.8 years. Base salaries used to calculate
benefits under the pension plans as of December 31, 2004 are as follows: Mr.
Geissinger - -$525,000; Mr. Loewenkamp - -$205,577; Mr. Roach- - $217,211; Mr.
Hayes - -$250,000.
Payments under the AGC plans have been "frozen" as of the dates noted above, and
as a result, projected payments for the four officers need to be determined on
an individual basis. Assuming a normal retirement age of 65, the following
officers would receive the annual pension payments noted: Mr. Geissinger -
$397,406 (payable as a 10-year certain and continuous annuity); Mr. Loewenkamp -
$117,523 (payable as a life annuity); Mr. Roach - $74,861 (payable as a life
annuity); and Mr. Hayes - $90,458 (payable as a 10-year certain and continuous
annuity);. As an employee of WFI, Mr. Schiano is not covered by the Company's
pension plan; WFI does not have a pension plan. Mr. Geissinger and Mr. Hayes
also have the option to select certain benefits as a lump sum.
Employees of the Company and its subsidiaries participate in the American
International Group, Inc. Incentive Savings Plan (Incentive Savings Plan), a
401(k) plan established by AIG which includes salary reduction contributions by
employees and matching contributions. Matching contributions vary based on the
number of years the employee has been employed. As an employee of WFI, Mr.
Schiano is not covered by the Incentive Savings Plan; WFI has a separate 401(k)
plan which similarly provides for salary reduction and
12
matching contributions (the matching contributions are not based on years of
service).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The board of directors of the Company does not have a Compensation Committee.
Compensation decisions regarding the Chief Executive Officer are made by AIG.
Compensation decisions regarding other executive officers are made by the Chief
Executive Officer.
13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
AGFC is an indirect wholly owned subsidiary of AIG. The number of shares of AIG
Common Stock beneficially owned as of January 31, 2005, by directors, executive
officers named in the Summary Compensation Table (as set forth in Item 11) and
directors and executive officers as a group were as follows:
AIG Common Stock
--------------------
Amount and Nature of
Beneficial Ownership
Director or Executive Officer (1)(2)(3)(5)
- ------------------------------------------------------------------
Frederick W. Geissinger (4) 452,446
Stephen L. Blake 42,375
Donald R. Breivogel, Jr. 13,443
Robert A. Cole 38,977
William N. Dooley (4) 81,896
Jerry L. Gilpin 73,216
Stephen H. Loewenkamp 22,050
George D. Roach 46,141
Timothy M. Hayes 31,057
Jerry Schiano 1,700
All Directors and Executive Officers as
a Group 825,853
1) The number of shares of AIG Common Stock owned by each individual
and by all directors and executive officers as a group represents
less than 1% of the outstanding shares of AIG Common Stock.
2) The number of shares of AIG Common Stock shown includes shares with
respect to which the individual shares voting and investment power
as follows: Mr. Loewenkamp - 725 shares with his spouse; Mr. Schiano
- 450 shares with his spouse.
3) The number of shares of AIG Common Stock shown includes shares
subject to options which may be exercised within 60 days as follows:
Mr. Geissinger - 452,243, Mr. Dooley - 50,218, Mr. Hayes - 26,057,
Mr. Loewenkamp - 17,377, Mr. Roach - 41,406 and Mr. Schiano - 1,250,
Mr. Cole - 37,867, Mr. Breivogel - 12,931, Mr. Blake - 40,506, Mr.
Gilpin - 69,411, and all Directors and Executive Officers as a Group
- 765,410.
4) Each of Mr. Geissinger and Mr. Dooley hold equity securities of
Starr as follows: Mr. Geissinger - 125 shares of Common Stock Class
B (non-voting) and 250 shares of Preferred Stock; and Mr. Dooley -
750 shares of Common Stock and 4,750 shares of various series of
Preferred Stock.
5) The number of shares of AIG Common Stock shown excludes the
following shares owned by members of the named individual's
immediate family as to which such individual has disclaimed
beneficial ownership: Mr. Blake - 215 shares held by his spouse; Mr.
Dooley - 17,480 shares held by various family members; Mr. Roach -
161 shares held by his spouse; and Mr. Hayes - 5,000 shares held by
his spouse.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AIG AND ITS AFFILIATES
During 2004, we paid cash dividends to our stockholder aggregating $15 million
and received cash capital contributions from our stockholder in the amount of
$156 million. We are party to cost sharing arrangements with AIG which provide
for an allocation of corporate costs to the Company. The charges include, but
are not limited to, pension costs, certain senior management compensation and
costs of various corporate services. During 2004 the charges aggregated $15
million.
The counterparty to certain of our derivative financial instruments that relate
to long-term debt is an AIG subsidiary, AIG Financial Products Corp. (AIGFP).
During 2004, we executed the equivalent of $2.1 billion notional amount of
interest rate swap, foreign currency swap and equity-indexed swap transactions
with AIGFP. Additionally during 2004, we entered into and subsequently
terminated a short-term Treasury rate lock agreement with AIGFP with a notional
amount of $300 million. All of these transactions with AIGFP were executed in
connection with the Company's issuances of long-term debt in the capital markets
and were on arms-length bases.
We join in the filing of a consolidated U.S. Federal income tax return with AIG
and its eligible domestic subsidiaries. We are a party to a written agreement
(the "Tax Sharing Agreement") with AIG setting forth the manner in which the
total consolidated U.S. Federal income tax is allocated to each entity that
joins in the consolidated return. The Tax Sharing Agreement provides that AIG
agrees not to charge us a greater portion of the consolidated tax liability than
would have been paid by us had we filed a separate federal income tax return.
Additionally, AIG agrees to reimburse us for any tax benefits arising out of net
losses or tax credits, if any, within ninety days after the filing of the
consolidated federal income tax return for the year in which such losses or tax
credits are utilized by AIG.
Certain of our subsidiaries have agreements with AIG Federal Savings Bank (AIG
Bank), a non-subsidiary affiliate, in two businesses. First, we purchase and
service private label receivables originated by AIG Bank pursuant to a
participation agreement. Private label receivables are open end accounts that
account holders can use for financing repeated purchases from the same merchant.
Second, our mortgage origination subsidiaries have entered into agreements with
AIG Bank whereby these subsidiaries provide marketing, certain mortgage
origination processing services, loan servicing, and related services for AIG
Bank's origination and sale of non-conforming residential real estate loans. Our
subsidiaries regularly purchase a portion of the mortgages so originated. Fees
paid pursuant to these agreements are based on arms-length market price for the
services. Each of AIG Bank on the one hand and the Company's subsidiaries on the
other hand receives compensation in the aforementioned agreements. The Company's
2004 revenues include an aggregate net amount of $196.8 million as compensation
received from AIG Bank for services rendered or activities undertaken by the
Company's private label and mortgage operations.
OTHER
In 2002, the Company entered into an agreement to purchase all of the stock of
WFI which transaction was consummated effective January 1, 2003. Mr. Schiano,
the founder and Chief Executive Officer of WFI, was a holder of approximately
19% of the shares of WFI, and was one of the selling shareholders. The purchase
price was $121 million, part of which was
15
deferred as to the individual selling shareholders who were part of management.
The purchase price was determined based on arms-length negotiations between the
management of the Company and the sellers and was approved by the board of
directors of the Company. Deferred payments, which are scheduled to be made
annually over a five (5) year period, are contingent on the continued employment
by WFI of the individual selling shareholders. The payment by the Company to Mr.
Schiano which is attributable to 2004 under the agreement was $2.08 million.
Assuming Mr. Schiano continues to meet the contingency described above, the
Company will be required to pay approximately $2.83 million in the aggregate to
Mr. Schiano in the future under the agreement.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) (1) AND (2) THE FOLLOWING CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN
GENERAL FINANCE CORPORATION AND SUBSIDIARIES ARE INCLUDED IN ITEM 8 OF THE
COMPANY'S FORM 10-K FILED ON MARCH 7, 2005:
Consolidated Balance Sheets, December 31, 2004 and 2003
Consolidated Statements of Income, years ended December 31, 2004,
2003, and 2002
Consolidated Statements of Shareholder's Equity, years ended
December 31, 2004, 2003, and 2002
Consolidated Statements of Cash Flows, years ended December 31,
2004, 2003, and 2002
Consolidated Statements of Comprehensive Income, years ended
December 31, 2004, 2003, and 2002
Notes to Consolidated Financial Statements
Schedule I--Condensed Financial Information of Registrant is included in
Item 15(d) of the Company's Form 10-K filed on March 7, 2005.
All other financial statement schedules have been omitted because they are
inapplicable.
(3) Exhibits:
Exhibits are listed in the Exhibit Index beginning on page 19
herein.
(B) EXHIBITS
The exhibits required to be included in this portion of Item 15. are
submitted as a separate section of this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on April 7, 2005.
AMERICAN GENERAL FINANCE CORPORATION
By: /s/ Donald R. Breivogel, Jr.
------------------------------------
Donald R. Breivogel, Jr.
(Senior Vice President, Chief
Financial Officer, and Director)
18
EXHIBIT INDEX
EXHIBIT
NUMBER
(3) a. Restated Articles of Incorporation of American General Finance
Corporation (formerly Credithrift Financial Corporation) dated July
22, 1988 and amendments thereto dated August 25, 1988 and March 20,
1989. Incorporated by reference to Exhibit (3)a. filed as a part of
the Company's Annual Report on Form 10-K for the year ended December
31, 1988 (File No. 1-6155).
b. By-laws of American General Finance Corporation. Incorporated by
reference to Exhibit (3)b. filed as a part of the Company's Annual
Report on Form 10-K for the year ended December 31, 1992 (File No.
1-6155).
(4) a. The following instruments are filed pursuant to Item
601(b)(4)(ii) of Regulation S-K, which requires with certain
exceptions that all instruments be filed which define the rights of
holders of the Company's long-term debt and of our consolidated
subsidiaries. In the aggregate, the outstanding issuances of debt at
December 31, 2004 under the following Indenture exceeds 10% of the
Company's total assets on a consolidated basis:
Indenture dated as of May 1, 1999 from American General
Finance Corporation to Citibank, N.A. Incorporated by
reference to Exhibit (4)a.(1) filed as a part of our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000
(File No. 1-6155).
b. In accordance with Item 601(b)(4)(iii) of Regulation S-K, certain
other instruments defining the rights of holders of the Company's
long-term debt and of our consolidated subsidiaries have not been
filed as exhibits to this Annual Report on Form 10-K because the
total amount of securities authorized and outstanding under each
instrument does not exceed 10% of the total assets of the Company on
a consolidated basis. We hereby agree to furnish a copy of each
instrument to the Securities and Exchange Commission upon request.
(12) Computation of ratio of earnings to fixed charges *
(21) Subsidiaries of American General Finance Corporation
(23) Consent of PricewaterhouseCoopers LLP, Independent Registered
Accounting Firm *
(24) Power of Attorney *
(31.1) Rule 13a-14(a)/15d-14(a) Certifications
(31.2) Rule 13a-14(a)/15d-14(a) Certifications
(32) Section 1350 Certifications
- ----------
* Included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2004, filed on March 7, 2005.
19