PROSPECTUS SUPPLEMENT
(To Prospectus dated December 14, 1994)
$200,000,000
AMERICAN GENERAL FINANCE CORPORATION
8% SENIOR NOTES DUE FEBRUARY 15, 2000
Interest on the 8% Senior Notes due February 15, 2000 (the "Notes") is
payable semi-annually on February 15 and August 15 of each year, beginning
August 15, 1995. The Notes will not be redeemable or repayable prior to maturity
and will not be subject to any sinking fund. The Notes will be represented by a
global Debt Security registered in the name of The Depository Trust Company (the
"Depository") or its nominee. Interests in the global Debt Security will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depository and its participants. Except as described in the
Prospectus, Notes in definitive form will not be issued. See "Description of
Debt Securities -- Global Debt Securities" in the Prospectus.
Settlement for the Notes will be made in immediately available funds. So
long as the Notes are represented by the global Debt Security registered in the
name of the Depository or its nominee, the Notes will trade in the Depository's
Same-Day Funds Settlement System, and secondary market trading activity in the
Notes will therefore settle in immediately available funds. So long as the Notes
are represented by the global Debt Security, all payments of principal and
interest will be made by American General Finance Corporation (the "Company") in
immediately available funds. See "Description of Notes -- Same-Day Settlement
and Payment" in this Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
------------- ------------ ---------------
Per Note................... 100.000% .246% 99.754%
Total...................... $200,000,000 $492,000 $199,508,000
(1) Plus accrued interest, if any, from February 10, 1995 to date of delivery.
(2) Before deduction of expenses payable by the Company estimated at $150,000.
The Notes offered by this Prospectus Supplement and Prospectus are offered
by the Underwriters subject to prior sale, withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
Underwriters and to certain further conditions. It is expected that delivery of
the global Debt Security will be made in book-entry form only through the
facilities of the Depository, on or about February 10, 1995.
LEHMAN BROTHERS
NATIONSBANC CAPITAL MARKETS, INC.
TRILON INTERNATIONAL INC.
February 3, 1995
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY SUPPLEMENTS THE DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF DEBT
SECURITIES SET FORTH IN THE PROSPECTUS UNDER THE CAPTION "DESCRIPTION OF DEBT
SECURITIES".
GENERAL
The Notes are to be issued as a series of Debt Securities under the
Indenture, which is more fully described in the Prospectus. Certain terms used
herein are defined in the Prospectus.
The Notes are to mature on February 15, 2000 and bear interest at the rate
set forth on the cover page of this Prospectus Supplement, payable semi-annually
on February 15 and August 15, commencing August 15, 1995, to the registered
holders thereof on the preceding February 1 or August 1, as the case may be.
The Notes are not redeemable at the option of the Company or repayable at
the option of any holder prior to maturity.
The Notes will be issued as a global Debt Security. See "Description of Debt
Securities -- Global Debt Securities" in the Prospectus. The Depository Trust
Company, New York, New York will be the Depository with respect to the Notes.
The Notes will be issued as fully-registered securities in the name of Cede &
Co., the Depository's partnership nominee, and will be deposited with the
Depository.
BOOK-ENTRY NOTES
The Depository has advised the Company and the Underwriters that it is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository was created to hold securities for persons that have
accounts with the Depository ("Participants") and facilitate the clearance and
settlement of securities transactions among its Participants in such securities
through electronic book-entry changes in accounts of the Participants, thereby
eliminating the need for physical movement of certificates. The Depository's
Participants include securities brokers and dealers (including certain of the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own the Depository.
Access to the Depository's book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Persons who are not Participants may beneficially own interests in securities
held by the Depository only through Participants.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Notes are represented by the global Debt
Security, all payments of principal and interest on the Notes will be made by
the Company in immediately available funds.
S-2
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, so long as
the Notes are represented by the global Debt Security and deposited with the
Depository, the Notes will trade in the Depository's Same-Day Funds Settlement
System, and secondary market trading activity in the Notes will therefore be
required by the Depository to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement dated the
date hereof, the Company has agreed to sell to the underwriters named below (the
"Underwriters"), and the Underwriters have severally agreed to purchase from the
Company, the principal amount of Notes set forth below opposite their respective
names. The Underwriters are committed to purchase all of such Notes if any are
purchased.
PRINCIPAL
AMOUNT OF
NAME OF UNDERWRITER NOTES
------------------- ---------
Lehman Brothers Inc.................. $140,000,000
NationsBanc Capital Markets, Inc..... 30,000,000
Trilon International Inc............. 30,000,000
------------
Total................................ $200,000,000
============
The Underwriters propose initially to offer the Notes to the public at the
public offering price set forth on the cover page of this Prospectus Supplement
and to certain dealers at such price less a concession not in excess of .200% of
the principal amount of the Notes. The Underwriters may allow and such dealers
may reallow concessions not in excess of .100% of such principal amount of
Notes. After the initial public offering, the public offering price and such
concessions may be changed.
All secondary trading in the Notes will settle in immediately available
funds. See "Description of Notes -- Same-Day Settlement and Payment".
The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
The Company has not applied for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Notes, as permitted by applicable laws
and regulations. The Underwriters are not obligated, however, to make a market
in the Notes and any such market making may be discontinued at any time at the
sole discretion of the Underwriters. Accordingly, no assurance can be given as
to the liquidity of, or trading markets for, the Notes.
S-3
<PAGE>
$2,000,000,000
AMERICAN GENERAL FINANCE CORPORATION
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
American General Finance Corporation (the "Company") may offer from time
to time, either jointly or separately, (i) up to $2,000,000,000 aggregate
principal amount of its debt securities (the "Debt Securities") and (ii)
warrants (without limitation as to number or offering price) to purchase such
Debt Securities (the "Warrants") (the Debt Securities and the Warrants being
herein referred to collectively as the "Securities"). The Debt Securities will
be direct, unsecured obligations of the Company and will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. See
"Description of Debt Securities."
The Securities may be offered as separate series in amounts, at prices and
on terms to be determined at the time of sale. The title, aggregate principal
amount, initial public offering price, denominations, maturity, rate (which
may be fixed or variable) and time of payment of any interest, any terms for
redemption at the option of the Company or repayment at the option of the
holder, any terms for sinking fund payments, any listing on a securities
exchange, any exercise provisions and any other terms in connection with the
offering and sale of the Securities in respect of which this Prospectus is
being delivered will be set forth in one or more supplements to this
Prospectus (each, a "Prospectus Supplement").
The Company may sell the Securities directly, through agents designated
from time to time or through underwriters or dealers. If any agents of the
Company or any dealers or underwriters are involved in the sale of the
Securities in respect of which this Prospectus is being delivered, the names
of such agents, dealers or underwriters and any applicable agent's commission,
dealer's purchase price, or underwriter's discount will be set forth in, or
may be calculated on the basis set forth in, the applicable Prospectus
Supplement. The net proceeds to the Company from such sale will be the
purchase price of such Securities less such commission in the case of an
agent, the purchase price of such Securities in the case of a dealer or the
public offering price less such discount in the case of an underwriter, and
less, in each case, other issuance expenses. See "Plan of Distribution" for
possible indemnification arrangements for any such agents, dealers and
underwriters.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
-------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER 14, 1994.
1
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by the
Company may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's Regional Offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center,
Suite 1300, New York, New York 10048. Copies of such materials may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. In addition, such
material may also be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits thereto, referred to as
the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement. Statements contained
herein concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of
such document so filed. Each such statement is qualified in its entirety by
such reference.
INCORPORATION BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 1-6155), are incorporated by
reference into this Prospectus and shall be deemed to be a part hereof:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994 (as amended by Form 10-Q/A dated May 19, 1994), June
30, 1994 and September 30, 1994; and
(c) the Company's Current Reports on Form 8-K dated February 1, 1994,
April 27, 1994, July 26, 1994 and October 25, 1994 (which relate to
earnings releases of the Company); and March 22, 1994, April 6, 1994, May
17, 1994, June 8, 1994, September 26, 1994 and November 10, 1994 (which
relate to prior issuances of debt securities of the Company or to its
Medium-Term Notes, Series C).
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities made hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such document.
Any statement contained herein, in a Prospectus Supplement or in a
document incorporated or deemed to be incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of the Registration
Statement and this Prospectus to the extent that a statement contained herein,
in a Prospectus Supplement or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
The Company files with the Commission Annual Reports on Form 10-K
containing financial information that has been audited and reported upon, with
an opinion expressed, by independent auditors. Such Annual Reports are
available from the Company upon request.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
which are incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
into such documents). Requests should be directed to the Company, 2929 Allen
Parkway, Houston, Texas 77019, Attention: Treasury Department, telephone
(713) 522-1111.
2
THE COMPANY
American General Finance Corporation is a financial services holding
company, the subsidiaries of which are engaged primarily in the consumer
finance and credit insurance businesses.
The Company was incorporated under the laws of the State of Indiana in
1927 as successor to a business started in 1920. All of the common stock of
the Company is owned by American General Finance, Inc. ("AGFI"), which was
incorporated under the laws of the State of Indiana in 1974. Since 1982, AGFI
has been a direct or indirect wholly-owned subsidiary of American General
Corporation, a consumer financial services organization incorporated in the
State of Texas in 1980 as the successor to American General Insurance Company,
a Texas insurance company incorporated in 1926.
At September 30, 1994, the Company and its subsidiaries had over 1,200
offices in 39 states, Puerto Rico and the Virgin Islands. Total finance
receivables, net of unearned finance charges, at September 30, 1994 were $6.3
billion.
The principal executive offices of the Company are located at 601 N.W.
Second Street, Evansville, Indiana 47708, and its telephone number is (812)
424-8031.
USE OF PROCEEDS
Except as may otherwise be provided in an applicable Prospectus
Supplement, the net proceeds to be received by the Company from the sale of
the Securities being offered hereby will be used to repay borrowings incurred
in, or to finance the growth of receivables arising in connection with, the
Company's consumer finance operations or will be available for the purchase of
receivables or for other general corporate purposes. Pending the uses
described above, such net proceeds may be temporarily invested in short-term
marketable securities.
3
SELECTED FINANCIAL INFORMATION
The following selected financial information is derived from consolidated
financial statements of the Company and its subsidiaries which have been
audited by Ernst & Young LLP, independent auditors. The information should be
read in conjunction with the consolidated financial statements, related notes,
and other financial information incorporated herein by reference. See
"Incorporation by Reference."
(DOLLARS IN THOUSANDS)
YEARS ENDED DECEMBER 31,
--------------------------------------
1993 1992 1991
----------- ---------- ----------
SELECTED FINANCIAL INFORMATION
Revenues:
Finance charges ................... $ 974,276 $ 890,989 $ 801,040
Insurance ......................... 142,333 118,950 110,069
Other ............................. 96,308 82,919 82,296
----------- ---------- ----------
Total revenues ................ 1,212,917 1,092,858 993,405
----------- ---------- ----------
Expenses:
Interest expense .................. 368,986 378,679 375,349
Operating expenses ................ 304,037 280,605 243,619
Provision for finance
receivable losses ............... 133,577 107,608 96,732
Insurance losses and loss
adjustment expenses ............. 79,214 66,603 59,410
----------- ---------- ----------
Total expenses ................ 885,814 833,495 775,110
----------- ---------- ----------
Income before provision for
income taxes and cumulative
effect of accounting
changes ............................. 327,103 259,363 218,295
Provision for income taxes ............ 124,884 99,192 82,458
----------- ---------- ----------
Income before cumulative effect
of accounting changes ............... 202,219 160,171 135,837
Cumulative effect of accounting
changes ............................. (12,591) -- --
----------- ---------- ----------
Net income .................... $ 189,628 $ 160,171 $ 135,837
=========== ========== ==========
DECEMBER 31,
--------------------------------------
1993 1992 1991
----------- ---------- ----------
Finance receivables, net of unearned
finance charges ..................... $ 5,871,648 $5,607,078 $5,137,942
Total assets .......................... 7,504,798 6,999,570 6,464,519
Short-term debt ....................... 1,647,461 1,718,839 2,030,070
Long-term debt ........................ 3,965,772 3,558,401 2,776,561
Preferred stock ....................... -- -- 4,000
Common shareholder's equity ........... 1,201,889 1,120,494 1,086,756
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical consolidated ratios of
earnings to fixed charges of the Company and its subsidiaries for the periods
indicated:
NINE MONTHS ENDED
SEPTEMBER 30, 1994 YEARS ENDED DECEMBER 31,
- ------------------ ----------------------------------------
1994 1993 1992 1991 1990 1989
--- ---- ---- ---- ---- ----
1.9 1.9 1.7 1.6 1.5 1.4
For purposes of computing the ratio of earnings to fixed charges, earnings
represent the aggregate of net income, provision for income taxes, cumulative
effect of accounting changes and fixed charges. Fixed charges represent
interest expense and implicit interest in rents.
4
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture dated as of
October 1, 1994 (the "Indenture") between the Company and The Chase Manhattan
Bank (National Association), as trustee (the "Trustee").
The form of the Indenture is filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The statements and descriptions
under this heading regarding provisions of the Debt Securities and the
Indenture are summaries thereof, do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the provisions
of the Indenture and the Debt Securities, including the definitions therein of
certain terms. Certain capitalized terms used herein are defined in the
Indenture. Wherever particular sections of the Indenture or terms that are
defined in the Indenture are referred to herein or in a Prospectus Supplement,
it is intended that such sections or defined terms shall be incorporated by
reference herein or therein, as the case may be.
The Indenture allows for the issuance of Debt Securities denominated in
foreign currencies and/or in bearer form. The Company does not intend to issue
any such Debt Securities pursuant to this Prospectus. Accordingly, certain
provisions of the Indenture relating to such Debt Securities are not described
herein.
GENERAL
The Debt Securities will be direct, unsecured and unsubordinated
obligations of the Company, and may be issued in one or more series. The
particular terms of each series of Debt Securities, as well as any
modifications or additions to the general terms of the Debt Securities as
described herein which may be applicable in the case of a particular series of
Debt Securities, are described in the Prospectus Supplement relating to such
series of Debt Securities. Accordingly, for a description of the terms of a
particular series of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and to the description of Debt
Securities set forth in this Prospectus.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities being offered thereby: (1) the designation of such Debt
Securities; (2) any limit on the aggregate principal amount of such Debt
Securities and the series in which such Debt Securities shall be included; (3)
the percentage of their principal amount at which such Debt Securities will be
issued and, in the case of Original Issue Discount Securities, the principal
amount thereof payable upon acceleration of the maturity thereof; (4) the date
or dates on which such Debt Securities will mature or the manner in which such
dates are determined; (5) the rate or rates per annum (which may be fixed or
variable) at which such Debt Securities will bear interest, if any, or the
method of determining such rate or rates; (6) the date from which such
interest, if any, on such Debt Securities will accrue, the dates on which such
interest, if any, will be payable, the date on which payment of such interest,
if any, will commence and the record dates for such interest payment dates, if
any; (7) the terms of any mandatory or optional redemption (including any
sinking fund provisions or any provisions for repayment at the option of a
Holder); (8) whether such Debt Securities are to be issued initially or
permanently in the form of a global Debt Security and, if so, the identity of
the Depository (hereinafter defined) for such global Debt Security; and (9)
any other terms of such Debt Securities not inconsistent with the provisions
of the Indenture. Debt Securities may also be issued under the Indenture upon
the exercise of Warrants. See "Description of Warrants."
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder or of any particular series of such
Debt Securities and provides that, in addition to the Debt Securities,
additional securities may be issued thereunder from time to time in one or
more series up to the aggregate principal amount which may be authorized from
time to time by the Company. (Section 301 of the Indenture) All Debt
Securities issued under the Indenture will rank equally and ratably with any
additional Debt Securities issued thereunder. Because the Company is a holding
company, the right of the Company, and hence the right of creditors of the
Company (including the Holders of the Debt Securities), to participate in any
distribution of the assets of any
5
subsidiary upon its liquidation or reorganization or otherwise is necessarily
subject to the prior claims of creditors of the subsidiary, except to the
extent that claims of the Company itself as a creditor of the subsidiary may
be recognized.
Unless the Prospectus Supplement relating to a particular issuance of Debt
Securities specifies otherwise, Debt Securities will be issued in
denominations of $1,000 and integral multiples thereof. No service charge will
be made for any transfer or exchange of Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Sections 302 and 305 of the
Indenture)
Some of the Debt Securities may be issued under the Indenture as Original
Issue Discount Securities (bearing no interest or interest at a rate which at
the time of issuance is below market rates) to be sold at a substantial
discount below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue
Discount Securities will be described in the Prospectus Supplement relating
thereto.
Unless otherwise indicated in the Prospectus Supplement relating to a
particular series of Debt Securities, the principal of and any premium or
interest on Debt Securities issued in certificated form will be payable, and
the transfer of Debt Securities will be registrable, at the office of the
Trustee designated for that purpose in New York City, provided that, at the
option of the Company, interest may be paid by check, wire transfer or any
other means permitted in the form of such Debt Securities. In the case of
global Debt Securities (which will be registered in the name of the Depository
or its nominee), payment will be made to the Depository or its nominee in
accordance with the then-existing arrangements between the paying agent(s) for
such global Debt Securities and the Depository. See "-- Global Debt
Securities." (Sections 305, 307 and 1002 of the Indenture)
The Indenture does not contain any provision that limits the ability of
the Company to incur indebtedness or that would afford Holders of Debt
Securities protection in the event of a highly leveraged or similar
transaction involving the Company, except as described herein under
"-- Limitations on Liens" and "-- Merger and Consolidation." Reference is made
to the Prospectus Supplement relating to the series of Debt Securities offered
thereby for information with respect to any deletions from, modifications of,
or additions to, the Events of Default or covenants that may be included in
the terms of such series of Debt Securities, including any addition of a
covenant or other provision providing event risk or similar protection.
Under the Indenture, the Company will have the ability, in addition to the
ability to issue Debt Securities with terms different from those of Debt
Securities previously issued, to "reopen" a previous issue of a series of Debt
Securities and issue additional Debt Securities of such series.
LIMITATIONS ON LIENS
The Indenture provides that neither the Company nor a Subsidiary shall
create, assume or suffer to exist, except in favor of the Company or a
Wholly-owned Subsidiary, any Mortgage upon any of its or their property,
without equally and ratably securing the Debt Securities, but this restriction
does not apply to certain permitted encumbrances described in the Indenture,
including, without limitation, (a) Mortgages existing on October 1, 1994, (b)
any Mortgages on properties or assets, in addition to those otherwise
permitted, securing Indebtedness which at the time incurred does not, together
with all other Indebtedness so secured and not otherwise permitted, exceed in
the aggregate 10% of Consolidated Net Worth, (c) any Mortgages on properties
or assets securing Indebtedness of Subsidiaries, created in the ordinary
course of business by such Subsidiaries, if, as a matter of practice, such
Subsidiaries prior to becoming Subsidiaries had incurred Indebtedness on a
secured basis, (d) purchase money Mortgages on property acquired or
constructed by the Company or any of its Subsidiaries after October 1, 1994 to
secure the purchase price thereof (or to secure Indebtedness incurred for the
purpose of financing the acquisition or construction thereof), Mortgages
existing on any property at the time of acquisition, Mortgages existing on any
property of any corporation at the time it becomes a Subsidiary, and any
Mortgage with respect to property acquired after October 1,
6
1994, in any amount (with respect to any Mortgage described in this clause
(d)) not exceeding 75% of the cost of any property, including improvements
thereon, so acquired or constructed, (e) refundings or extensions of any
permitted Mortgage, and (f) any Mortgage created by the Company or any
Subsidiary in connection with a transaction intended by the Company or such
Subsidiary to be one or more sales of properties or assets of the Company or
such Subsidiary; provided that such Mortgage shall only apply to the
properties or assets involved in such sale or sales, the income therefrom
and/or the proceeds thereof. (Section 1009 of the Indenture) "Mortgage" means
any mortgage, pledge, lien, security interest, conditional sale or other title
retention agreement or other similar encumbrance. (Section 101 of the
Indenture)
EVENTS OF DEFAULT, NOTICE AND WAIVER
If an Event of Default with respect to any Debt Securities of any series
Outstanding under the Indenture shall occur and be continuing, the Trustee or
the Holders of at least 25% in principal amount of the Debt Securities of that
series Outstanding may declare, by notice as provided in the Indenture, the
principal amount (or such lesser amount as may be provided for in the Debt
Securities of that series) of all the Debt Securities of that series
Outstanding to be due and payable immediately; provided, that in the case of
an Event of Default involving certain events in bankruptcy, insolvency or
reorganization, acceleration is automatic; and, provided further, that if all
Events of Default with respect to Debt Securities of that series shall have
been cured, or waived as hereinafter provided, and all amounts due otherwise
than on account of such acceleration shall have been paid or deposited with
the Trustee, the Holders of a majority in aggregate principal amount of the
Debt Securities of that series then Outstanding may rescind and annul such
acceleration and its consequences. (Section 502 of the Indenture) Upon
acceleration of the Maturity of Original Issue Discount Securities, an amount
less than the principal amount thereof will become due and payable. Reference
is made to the Prospectus Supplement relating to any Original Issue Discount
Securities for the particular provisions relating to acceleration of the
Maturity thereof. Any past default under the Indenture with respect to Debt
Securities of any series, and any Event of Default arising therefrom, may be
waived by the Holders of a majority in principal amount of all Debt Securities
of such series Outstanding under the Indenture, except in the case of (i)
default in the payment of the principal of or any premium or interest on any
Debt Securities of such series or (ii) default in respect of a covenant or
provision which may not be amended or modified without the consent of the
Holder of each Outstanding Debt Security of such series affected. (Section 513
of the Indenture)
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being: (a) default in the payment of any interest
upon any Debt Security of such series when such interest becomes due and
payable, and continuance of such default for a period of 30 days; (b) default
in the payment of the principal of and any premium on any Debt Security of
such series when it becomes due and payable, whether at the Stated Maturity,
upon redemption or repayment, by declaration or otherwise; (c) default in the
making of any sinking fund payment on any Debt Security of such series; (d)
default in the performance or breach of any covenant or warranty of the
Company contained in the Indenture for the benefit of such series or in the
Debt Securities of such series, and the continuance of such default for 60
days after written notice has been given as provided in the Indenture; (e)
acceleration of the maturity of indebtedness for money borrowed of the Company
in a principal amount in excess of $25,000,000 if such acceleration is not
annulled or such indebtedness is not discharged within 10 days after written
notice as provided in the Indenture; (f) certain events in bankruptcy,
insolvency or reorganization; and (g) any other Event of Default provided with
respect to the Debt Securities of such series. (Section 501 of the Indenture)
The Trustee is required, within 90 days after the occurrence of a default
with respect to the Debt Securities of any series which is known to the
Trustee and is continuing (without regard to any grace period or notice
requirements), to give to the Holders of the Debt Securities of such series
notice of such default; provided, however, that, except in the case of a
default in the payment of the principal of or any premium or interest on any
Debt Securities of such series or in the payment of any sinking
7
fund installment with respect to the Debt Securities of such series, the
Trustee shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Debt Securities of such series; and provided further that, in
the case of any default referred to in clause (d) of the preceding paragraph
with respect to the Debt Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. (Section
602 of the Indenture)
The Trustee, subject to its duties during default to act with the required
standard of care, may require indemnification by the Holders of the Debt
Securities of any series with respect to which a default has occurred before
proceeding to exercise any right or power under the Indenture at the request
of the Holders of the Debt Securities of such series. (Sections 601 and 603 of
the Indenture) Subject to such right of indemnification and to certain other
limitations, the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of such series. (Section 512 of the Indenture)
The Company is required to furnish annually to the Trustee statements as
to the Company's compliance with all conditions and covenants under the
Indenture. (Section 1007 of the Indenture)
MERGER AND CONSOLIDATION
The Company may consolidate or merge with or into any other corporation,
and the Company may sell or transfer all or substantially all of its assets to
another corporation, provided that (a) the corporation (if other than the
Company) formed by, resulting from or surviving any such consolidation or
merger or which shall have received the transfer of such assets shall be a
corporation organized and existing under the laws of The United States of
America or a state thereof and shall assume payment of the principal of and
any premium and interest on the Debt Securities and the performance and
observance of all of the covenants and conditions of the Indenture to be
performed or observed by the Company and (b) the Company or such successor
corporation, as the case may be, shall not immediately thereafter be in
default in the performance of any such covenant or condition under the
Indenture and shall not immediately thereafter have outstanding (or otherwise
be liable for) any Indebtedness secured by a Mortgage not permitted by the
provisions of Section 1009 of the Indenture or shall have secured the Debt
Securities equally and ratably with (or prior to) any Indebtedness secured by
any Mortgage not so permitted. (Section 801 of the Indenture)
MODIFICATION AND WAIVER
Modification and amendment of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than 66 2/3% in
principal amount of the Outstanding Debt Securities of each series affected
thereby, provided that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby, (a)
change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Outstanding Debt Security; (b) reduce the
principal amount of or the rate of interest on or any premium payable with
respect to any Debt Security; (c) reduce the amount of principal of an
Original Issue Discount Security that would be due and payable upon
acceleration of the Maturity thereof or that would be provable in bankruptcy;
(d) adversely affect any right of repayment at the option of the Holder of any
Debt Security; (e) change the place or currency of payment of the principal of
or any premium or interest on any Debt Security; (f) impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity, or any date of redemption or repayment, thereof; (g) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the Indenture with respect to such series or reduce the
percentage of Outstanding Debt Securities of any series necessary to waive any
past default or compliance with certain restrictive provisions to less than a
majority of such series, or reduce the requirements of Section 1404 of the
Indenture for quorum or voting; or (h) modify the provisions of the Indenture
described in this
8
paragraph or those regarding waiver of compliance with certain provisions of,
or certain defaults and their consequences under, the Indenture, except to
increase the percentage of Outstanding Debt Securities necessary to modify and
amend the Indenture or to give any such waiver, and except to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Debt Security affected thereby.
The Holders of at least a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by the Company with certain
restrictive provisions applicable to such series. (Sections 902 and 1010 of
the Indenture)
Modification and amendment of the Indenture may be made by the Company and
the Trustee without the consent of any Holder of Outstanding Debt Securities,
for any of the following purposes: (a) to evidence the succession of another
corporation to the Company and the assumption of the covenants of the Company;
(b) to add to the covenants of the Company for the benefit of the Holders of
all or any series of Debt Securities or to surrender any right or power
conferred upon the Company; (c) to add any additional Events of Default with
respect to all or any series of Debt Securities; (d) to change or eliminate
any restrictions on the payment of the principal of or any premium or interest
on Debt Securities or to permit the issuance of Debt Securities in
uncertificated form, provided any such action does not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (e) to change or eliminate any provision of the Indenture, provided
that no Outstanding Debt Security of any series is entitled to the benefit of
such provision; (f) to secure the Debt Securities pursuant to the requirements
of Sections 801 or 1009 of the Indenture or otherwise; (g) to establish the
form or terms of the Debt Securities of any series; (h) to provide for the
acceptance of appointment by a successor Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the provisions
as shall be necessary to provide for or facilitate the administration of the
trusts under the Indenture by more than one Trustee; (i) to change the
conditions, limitations and restrictions on the authorized amount, terms or
purposes of issuance, authentication and delivery of the Debt Securities as
set forth in the Indenture, the Debt Securities and the Prospectus Supplement
relating thereto; or (j) to cure any ambiguity, defect or inconsistency in the
Indenture, provided such action does not adversely affect the interests of the
Holders of the Debt Securities of any series in any material respect. (Section
901 of the Indenture)
DEFEASANCE AND DISCHARGE
The Indenture provides that the Company and the Trustee, without the
consent of any Holder of Outstanding Debt Securities, may execute a
supplemental indenture to provide that the Company will be discharged from any
and all obligations in respect of the Debt Securities of any series (except
for certain obligations to register the transfer or exchange of Debt
Securities, to replace stolen, lost or mutilated Debt Securities, to maintain
paying agencies and hold moneys for payment in trust) upon the deposit with
the Trustee, in trust, of money or Government Obligations, or a combination
thereof, which through the payment of interest and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of, any premium and interest on, and any mandatory sinking fund
payments in respect of, the Debt Securities of such series on the Stated
Maturity of such payments in accordance with the terms of the Indenture and
such Debt Securities. Such a supplemental indenture may only be executed if
the Company has received from, or there has been published by, the United
States Internal Revenue Service a ruling, or if there has been a change in the
applicable federal income tax law, in either case, to the effect that such a
discharge will not cause the Holders of the Debt Securities of such series to
recognize income, gain or loss for federal income tax purposes; and the
provisions of such a supplemental indenture shall not be applicable to any
series of Debt Securities then listed on the New York Stock Exchange if the
provisions would cause the Outstanding Debt Securities of such series to be
delisted. (Section 901 of the Indenture)
The Indenture provides that, when the conditions set forth in Section 401
thereof have been satisfied, upon the request of the Company, the Indenture
will cease to be of further effect (except as to any surviving right of
registration of transfer or exchange of Debt Securities expressly provided for
9
therein). Such conditions include that (i) all Debt Securities issued under
the Indenture either shall have been delivered to the Trustee for cancellation
or shall be due, or are to be called for redemption, within one year and (ii)
with respect to all Debt Securities issued under the Indenture but not
previously delivered to the Trustee for cancellation, there shall have been
delivered to the Trustee, in trust, money or Government Obligations, or a
combination thereof, which through the payment of interest and principal
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of, and any premium and interest on, all such
Debt Securities on the Stated Maturity of such payments in accordance with the
Indenture. (Section 401 of the Indenture)
DEFEASANCE OF CERTAIN COVENANTS
The terms of the Debt Securities of any series may provide the Company
with the option to omit to comply with the covenants described under
"-- Limitations on Liens" above and any additional covenants not included in
the Indenture that may be specified as applicable to such series in the
Prospectus Supplement with respect thereto. If such terms make such option
available with respect to the Debt Securities of any series, the Company, in
order to exercise such option, will be required to deposit with the Trustee,
in trust, money or Government Obligations, or a combination thereof, which
through the payment of interest and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay the principal of, any
premium and interest on, and any mandatory sinking fund payments in respect
of, the Debt Securities of such series on the Stated Maturity of such payments
in accordance with the terms of the Indenture and such Debt Securities. The
Company will also be required to deliver to the Trustee an Opinion of Counsel
to the effect that the deposit and related covenant defeasance will not cause
the Holders of the Debt Securities of such series to recognize income, gain or
loss for federal income tax purposes. Such covenant defeasance would not be
available with respect to any series of Debt Securities then listed on the New
York Stock Exchange if such defeasance would cause the Outstanding Debt
Securities of such series to be delisted. (Section 1011 of the Indenture) The
Prospectus Supplement relating to a particular issuance of Debt Securities may
further describe the provisions, if any, permitting such an omission to
comply.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global Debt Securities that will be deposited with, or on
behalf of, a depositary (the "Depository") identified in the Prospectus
Supplement relating to such series. Unless and until it is exchanged in whole
or in part for the individual Debt Securities represented thereby, a global
Debt Security may not be transferred except as a whole among the Depository,
any successor Depository and their respective nominees.
The specific terms of the depository arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Unless otherwise indicated in the applicable Prospectus
Supplement, the following provisions will apply to all depository
arrangements.
Upon the issuance of a global Debt Security, the Depository for such
global Debt Security or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
individual Debt Securities represented by such global Debt Security to the
accounts of persons that have accounts with such Depository ("Participants").
Such accounts will be designated by the underwriters or agents with respect to
such Debt Securities or by the Company if such Debt Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a global
Debt Security will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
global Debt Security will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depository or
its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons other than Participants).
The laws of some states may require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limitation and
such laws may impair the ability to transfer beneficial interests in a global
Debt Security.
10
So long as the Depository for a global Debt Security, or its nominee, is
the registered owner of such global Debt Security, such Depository or such
nominee, as the case may be, will be considered the sole owner or Holder of
the Debt Securities represented by such global Debt Security for all purposes
under the Indenture. Except as provided below, owners of beneficial interests
in a global Debt Security will not be entitled to have any of the individual
Debt Securities of the series represented by such global Debt Security
registered in their names, will not receive or be entitled to receive physical
delivery of such Debt Securities in definitive form, and will not be
considered the owners or Holders thereof under the Indenture.
Payments of principal of, premium, if any, and interest, if any, on
individual Debt Securities represented by a global Debt Security registered in
the name of a Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the global Debt
Security representing such Debt Securities. Neither the Company, the Trustee,
any Paying Agent, nor the Security Registrar for such Debt Securities will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the global
Debt Security for such Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depository for a series of Debt Securities,
or its nominee, upon receipt of any payment of principal, premium or interest
in respect of a global Debt Security representing any of such Debt Securities,
will immediately credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such global Debt Security for such Debt Securities as shown on the records
of such Depository or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such global Debt Security
held through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities registered in "street
name." Such payments will be the responsibility of such Participants.
If the Depository for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days or if the Company
executes and delivers to the Trustee a Company Order to the effect that a
global Debt Security shall be exchangeable for certificated Debt Securities or
if an Event of Default has occurred and is continuing with respect to a series
of Debt Securities, the Company will issue individual certificated Debt
Securities of such series in definitive form in exchange for the global Debt
Security or Debt Securities representing such series of Debt Securities.
Accordingly, the Company may at any time and in its sole discretion, subject
to any limitations described in the Prospectus Supplement relating to such
Debt Securities, determine not to have any Debt Securities of a series
represented by one or more global Debt Securities and, in such event, will
issue individual certificated Debt Securities of such series in definitive
form in exchange for the global Debt Security or Debt Securities representing
such series of Debt Securities. In any such instance, the individual
certificated Debt Securities of such series issued by the Company will be
issued to Participants, as directed by the Depository or its nominee, or to
the beneficial owners holding Debt Securities of such series through such
Participants, as directed by such Participants, all in accordance with
standing instructions and customary practices, as is now the case with
securities registered in "street name." Certificated Debt Securities of such
series so issued in definitive form will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
MISCELLANEOUS
No Holder of a Debt Security of any series may institute any action
against the Company under the Indenture (except actions for payment of overdue
principal of, premium, if any, or interest on such Debt Securities) unless the
Holders of at least 25% of the principal amount of the Debt Securities of that
series then Outstanding under the Indenture shall have requested the Trustee
to institute such action and offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be
11
incurred in compliance with such request and the Trustee shall not have
instituted such action within 60 days of such request. (Sections 507 and 508
of the Indenture)
THE TRUSTEE UNDER THE INDENTURE
The Company and certain of its affiliates maintain banking and borrowing
relations with The Chase Manhattan Bank (National Association).
The Indenture provides that an alternative Trustee may be appointed by the
Company with respect to any particular series of Debt Securities. Any such
appointment will be described in the Prospectus Supplement relating to such
series of Debt Securities.
DESCRIPTION OF WARRANTS
The Company may issue, together with Debt Securities or separately,
Warrants for the purchase of Debt Securities. Any Warrants are to be issued
under Warrant Agreements (each a "Warrant Agreement") to be entered into
between the Company and a bank or trust company, as Warrant Agent (the
"Warrant Agent"), all as shall be set forth in the Prospectus Supplement
relating to Warrants being offered thereby. A copy of the form of Warrant
Agreement, including the forms of Warrant Certificates representing the
Warrants (the "Warrant Certificates"), reflecting the alternative provisions
to be included in the Warrant Agreements that will be entered into with
respect to particular offerings of Warrants, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Warrant Agreement and the Warrant Certificates do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Warrant Agreement and the Warrant Certificates,
respectively, including the definitions therein of certain terms.
The form of Warrant Agreement allows for the issuance of Warrants in
foreign currencies and/or in bearer form. The Company does not intend to issue
any such Warrants pursuant to this Prospectus. Accordingly, certain provisions
of the form of Warrant Agreement relating to such Warrants are not described
herein.
GENERAL
The applicable Prospectus Supplement will describe the terms of Warrants
offered thereby, the Warrant Agreement relating to such Warrants and the
Warrant Certificates representing such Warrants, including the following: (1)
the designation, aggregate principal amount, denominations and terms of the
series of Debt Securities purchasable upon exercise of such Warrants and the
procedures and conditions relating to the exercise of such Warrants; (2) the
designation and terms of any related series of Debt Securities with which such
Warrants are issued and the number of such Warrants issued with each such Debt
Security; (3) the date, if any, on and after which such Warrants and the
related Debt Securities will be separately transferable; (4) the principal
amount of the series of Debt Securities purchasable upon exercise of each such
Warrant and the price at which such principal amount of Debt Securities may be
purchased upon such exercise and whether such Debt Securities may be purchased
for consideration other than cash; (5) the date on which the right to exercise
such Warrants shall commence and the date on which such right shall expire
(the "Expiration Date"); (6) if the series of Debt Securities purchasable upon
exercise of such Warrants are Original Issue Discount Securities, a discussion
of Federal income tax considerations applicable thereto; (7) where the Warrant
Certificates may be transferred and registered; and (8) any other terms of the
Warrants.
Warrant Certificates will be exchangeable for new Warrant Certificates of
different denominations at the corporate trust office of the Warrant Agent or
any other office indicated in the applicable Prospectus Supplement. Prior to
the exercise of Warrants, holders of such Warrants will not have any of the
rights of Holders of the Debt Securities purchasable upon such exercise and
will not be entitled to payments of principal of or any premium or interest on
the Debt Securities purchasable upon such exercise.
12
EXERCISE OF WARRANTS
Each Warrant will entitle the Holder to purchase for cash or specified
securities such principal amount of the related series of Debt Securities at
such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the Prospectus Supplement relating to the Warrants offered
thereby. Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby and may be so exercised up to the
close of business on the Expiration Date set forth in such Prospectus
Supplement. After the close of business on the Expiration Date, unexercised
Warrants will become void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities purchasable upon such exercise together with
certain information set forth in the Warrant Certificate. Warrants will be
deemed to have been exercised upon receipt of the exercise price, subject to
the receipt within five business days of the Warrant Certificate representing
such Warrants. Upon receipt of the requisite payment and the Warrant
Certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, the Company will, as soon as practicable, issue and
deliver pursuant to the Indenture the Debt Securities purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell the Securities to or through underwriters or dealers;
directly to other purchasers; or through agents. Any such underwriter, dealer
or agent involved in the offer and sale of the Securities will be named in an
applicable Prospectus Supplement or Prospectus Supplements (including any
Pricing Supplement or Pricing Supplements).
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they
may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as agent. Underwriters, dealers and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them from the Company and any profit on the resale
of Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any compensation paid by the Company to
underwriters, dealers or agents in connection with the offering of the
Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be described in an applicable
Prospectus Supplement or Pricing Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against and/or contribution by the
Company toward certain liabilities, including liabilities under the Securities
Act.
The Company has reserved the right to sell the Securities through AGF
Investment Corp. ("AGFIC"), an affiliate of the Company which may, as an agent
acting on a best efforts basis, solicit offers to purchase the Securities in
those jurisdictions where it is authorized to do so. No commissions will be
payable to AGFIC. AGFIC's business is limited to the solicitation of offers to
purchase
13
securities of the Company and the Company's parent, American General Finance,
Inc. AGFIC utilizes as salespersons full-time employees of the Company and
American General Corporation, who continue to receive their regular salaries
for the continued performance of their regular duties. The Company intends to
pay all direct expenses associated with sales of Securities through AGFIC. The
offering of the Securities will be conducted in compliance with any applicable
requirements of Schedule E of the By-Laws of the National Association of
Securities Dealers, Inc. ("NASD") regarding the distribution by an NASD member
firm of the securities of an affiliate. In accordance with Section 12 of such
Schedule E, underwriters, dealers and agents who participate in the
distribution of Securities will not engage in transactions in Securities for
any discretionary account without the prior specific written approval of the
customer.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in a Prospectus Supplement, the Company will authorize
underwriters, dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject. The underwriters and
such other agents will not have any responsibility in respect of the validity
or performance of such contracts.
LEGAL OPINIONS
Unless otherwise indicated in a Prospectus Supplement, the validity of
each issue of the Securities will be passed upon for the Company by Baker &
Daniels, Indianapolis, Indiana, and certain legal matters relating to the
Securities offered hereby will be passed upon for any underwriters or agents
by Brown & Wood, New York, New York. Brown & Wood may rely as to matters of
Indiana law on the opinion of Baker & Daniels.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. See "Incorporation by Reference." Such
financial statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of Ernst & Young LLP, pertaining to such financial
statements (to the extent covered by consents filed with the Commission) given
upon the authority of such firm as experts in accounting and auditing.
14
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT
Description of Notes................. S-2
Underwriting......................... S-3
PROSPECTUS
Available Information................ 2
Incorporation by Reference........... 2
The Company.......................... 3
Use of Proceeds...................... 3
Selected Financial Information....... 4
Ratio of Earnings to Fixed
Charges.............................. 4
Description of Debt Securities....... 5
Description of Warrants.............. 12
Plan of Distribution................. 13
Legal Opinions....................... 14
Experts.............................. 14
$200,000,000
AMERICAN GENERAL
FINANCE CORPORATION
8% SENIOR NOTES
DUE FEBRUARY 15, 2000
PROSPECTUS SUPPLEMENT
February 3, 1995
LEHMAN BROTHERS
NATIONSBANC CAPITAL
MARKETS, INC.
TRILON INTERNATIONAL INC.
