<PAGE> 1
Filed Pursuant to Rule 424B2
Registration No. 033-30693
PROSPECTUS SUPPLEMENT
(To Prospectus Dated August 30, 1989) {AMERICAN GENERAL LOGO}
$100,000,000
AMERICAN GENERAL CORPORATION
7.70% NOTES DUE 1999
The Notes will mature on October 15, 1999. Interest on the Notes is payable
semi-annually on April 15 and October 15, commencing April 15, 1995. The Notes
may not be redeemed prior to maturity and will not be subject to any sinking
fund.
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 TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note............................... 100.000% .287% 99.713%
Total.................................. $100,000,000 $287,000 $99,713,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from October 20, 1994 to the date of
delivery.
(2) Before deducting expenses payable by the Company estimated to be $130,000.
The Notes are offered subject to receipt and acceptance by the Underwriters, to
prior sale and to the Underwriters' right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made at the office of Salomon Brothers Inc,
Seven World Trade Center, New York, New York on or about October 20, 1994.
SALOMON BROTHERS INC
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
The date of this Prospectus Supplement is October 13, 1994.
<PAGE> 2
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 SUPPLEMENT OR THE PROSPECTUS.
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.
AVAILABLE INFORMATION
The regional offices of the Securities and Exchange Commission referred to
under "Available Information" in the accompanying Prospectus have moved and are
now located at 219 Dearborn Street, Chicago, Illinois 60604 and Seven World
Trade Center, New York, New York 10048.
AMERICAN GENERAL
American General Corporation (the "Company") is the parent company of one
of the nation's largest consumer financial services organizations. The Company's
operating subsidiaries are leading providers of retirement annuities, consumer
loans, and life insurance. The Company's operations are classified into the
following three business segments: Retirement Annuities, Consumer Finance, and
Life Insurance. These segments provide insurance and other financial services in
all 50 states, the District of Columbia, Canada, Puerto Rico, and the Virgin
Islands.
RECENT DEVELOPMENTS
On July 12, 1994, the Company proposed to Unitrin, Inc. a merger offer to
acquire each of Unitrin's 51.8 million outstanding shares at a price of $50 3/8
per share in cash. Unitrin, a Chicago-based holding company with assets of $4.8
billion and shareholders' equity of $2.0 billion (based on Unitrin's public
filings), provides basic financial services including insurance and consumer
loans to individuals and small businesses throughout the United States.
Since the offer was based on publicly available information, the Company
indicated it would be willing to consider a higher price if Unitrin were to
demonstrate additional value in the course of due diligence and negotiation. The
Company also said it would be willing to consider alternative transaction
structures, including the opportunity for Unitrin shareholders to receive
American General Corporation equity securities in a tax-free exchange. Unitrin's
board of directors rejected the Company's offer in a letter dated July 26, 1994,
and continues to decline to hold merger discussions with the Company.
On August 2, 1994, the Company publicly announced the merger offer. The
Company initially announced that the offer would be open through September 16,
1994, and has announced subsequently that the offer has been extended to October
28, 1994.
On August 15, 1994, the Company filed a pre-merger notification under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 to acquire in excess of 50%
of the outstanding shares of Unitrin. The Company subsequently has provided
additional information to the Federal Trade Commission with respect to this
filing.
In a related action, on August 19, 1994, the Company filed suit in
Delaware's Court of Chancery to enjoin Unitrin and its board of directors from
proceeding with an announced share repurchase program. On October 13, 1994, the
Delaware court preliminarily enjoined Unitrin's share repurchase program.
As a result of this series of events, the Company's debt ratings are under
review by rating agencies. Until such time as the Company may enter into a
definitive arrangement for such a merger transaction, the Company cannot
determine what impact, if any, such transaction might have upon the ultimate
capital structure of the Company.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION
The following table sets forth summary financial information, on a
consolidated basis, of American General Corporation for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
--------------------- ------------------------------------
(IN MILLIONS OF DOLLARS) 1994 1993 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Operating Results
Revenues........................... $ 2,446 $ 2,392 $ 4,829 $ 4,602 $ 4,395
======== ======== ======== ======== ========
Business Segment Earnings:
Retirement Annuities............. $ 103 $ 87 $ 162 $ 130 $ 110
Consumer Finance................. 114 103 206 161 136
Life Insurance................... 127 142 (9)(1) 323 326
-------- -------- -------- -------- --------
Total Business
Segments............... 344 332 359 614 572
Corporate Operations:
Interest on Corporate Debt....... (37) (43) (81) (85) (87)
Unallocated Expenses............. (15) (11) (25) (28) (37)
Earnings on Corporate Assets..... 25 13 21 23 31
Realized Investment Gains........ 2 4 6 9 1
-------- -------- -------- -------- --------
Total Corporate
Operations............. (25) (37) (79) (81) (92)
-------- -------- -------- -------- --------
Income before Cumulative Effect and
Tax Rate Related Adjustment...... 319 295 280 533 480
Cumulative Effect of Accounting
Changes.......................... -- (46) (46) -- --
Tax Rate Related Adjustment........ -- -- (30) -- --
-------- -------- -------- -------- --------
Net Income......................... $ 319 $ 249 $ 204 $ 533 $ 480
======== ======== ======== ======== ========
Operating Earnings(2).............. $ 317 $ 291 $ 574 $ 524 $ 479
======== ======== ======== ======== ========
Financial Position
Assets............................. $ 44,824 $ 42,059 $ 43,982 $ 39,742 $ 36,105
Debt:
Corporate........................ 1,345 1,439 1,257 1,371 1,391
Real Estate...................... 424 560 429 616 590
Consumer Finance................. 6,309 5,655 5,843 5,484 5,243
Redeemable Equity.................. 22 -- -- -- --
Shareholders' Equity............... 4,266 4,746 5,137 4,616 4,329
</TABLE>
- ------------
(1) Includes a $300 million write-down of goodwill.
(2) Unaudited. Under generally accepted accounting principles, operating
earnings, which exclude after-tax realized investment gains, non-recurring
items, and the effect of accounting changes, are not separately presented.
They are presented here as supplemental information.
S-3
<PAGE> 4
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges has been calculated by dividing
fixed charges into earnings available for fixed charges. Earnings available for
fixed charges is the sum of net income before income tax expense, cumulative
effect of accounting changes, and fixed charges. Fixed charges consist of
interest expense, capitalized interest and a portion of rental expense.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------- -----------------------------------
1994 1993 1993 1992 1991 1990 1989
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges for
consolidated
continuing operations:
Consolidated operations..................... 2.9 2.7 2.1 2.4 2.1 2.2 1.8
Consolidated operations, Corporate fixed
charges only(1).......................... 9.4 8.4 6.0 7.2 5.8 5.3 3.3
</TABLE>
- ------------
(1) Calculated by dividing Corporate fixed charges (parent only) into the sum of
consolidated net income before income tax expense, cumulative effect of
accounting changes, and Corporate fixed charges.
DESCRIPTION OF NOTES
The following description of the particular terms of the 7.70% Notes Due
1999 offered hereby (referred to in the accompanying Prospectus as the "Offered
Debt Securities" and herein as the "Notes") supplements, and to the extent
inconsistent therewith replaces, the description of the general terms and
provisions of Debt Securities set forth in the Prospectus, to which description
reference is hereby made.
The Notes are to be issued as a series of Debt Securities under the
Indenture, which is more fully described in the Prospectus. The Notes will be
limited to $100,000,000 aggregate principal amount. Certain terms used herein
are defined in the Prospectus.
The Notes are to mature on October 15, 1999 and bear interest at the rate
set forth on the cover page of this Prospectus Supplement, payable semi-annually
on April 15 and October 15, commencing April 15, 1995, to the registered holders
thereof on the preceding April 1 or October 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 Indenture does not contain any provisions that limit 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 in the Prospectus under "Description of Debt
Securities -- Limitation on Liens" and "-- Consolidation, Merger and Sale of
Assets."
With reference to "Description of Debt Securities -- Limitation on Liens"
contained in the Prospectus, the Designated Subsidiaries of the Company as of
June 30, 1994 were American General Finance, Inc., American General Finance
Corporation, American General Life Insurance Company, AGC Life Insurance
Company, American General Life and Accident Insurance Company, and The Variable
Annuity Life Insurance Company.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
- ----------------------------------------------------------------------------- -------------
<S> <C>
Salomon Brothers Inc ........................................................ $ 50,000,000
Prudential Securities Incorporated........................................... 25,000,000
Smith Barney Inc. ........................................................... 25,000,000
-------------
Total.............................................................. $ 100,000,000
=============
</TABLE>
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 of .250% of the principal
amount of the Notes. The Underwriters may allow and such dealers may reallow
concessions not in excess of .125% of such principal amount of Notes. After the
initial public offering, the public offering price and such concessions may be
changed.
The Company does not intend to apply 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.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or
contribute to payments the Underwriters may be required to make in respect
thereof.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Vinson & Elkins L.L.P., 3300 First City Tower, Houston, Texas 77002.
Certain legal matters in connection with the Notes will be passed upon for the
Underwriters by Baker & Botts, L.L.P., 3000 One Shell Plaza, Houston, Texas
77002. J. Evans Attwell, a partner in the firm of Vinson & Elkins L.L.P., is a
director of the Company.
EXPERTS
The consolidated financial statements and schedules of American General
Corporation 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, as set forth in
their reports included therein and incorporated by reference in the Prospectus.
The financial statements and schedules referred to above are incorporated herein
by reference in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.
S-5
<PAGE> 6
{AMERICAN GENERAL LOGO}
AMERICAN GENERAL CORPORATION
DEBT SECURITIES
------------------------
American General Corporation ("American General" or the "Company") may from
time to time offer Debt Securities consisting of debentures, notes and/or other
unsecured evidences of indebtedness in one or more series in an aggregate
principal amount of up to $350,000,000. The Debt 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, denominations (which may be in
United States dollars or in any other currency, in composite currencies or in
amounts determined by reference to an index), 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 the holder, any terms for sinking fund payments,
any listing on a securities exchange and the initial public offering price and
any other terms in connection with the offering and sale of Debt Securities in
respect of which this Prospectus is being delivered will be set forth in a
Prospectus Supplement or Prospectus Supplements.
The Company may sell Debt 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 Debt
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 Prospectus Supplement. The net
proceeds to the Company from such sale will be the purchase price of such Debt
Securities less such commission in the case of an agent, the purchase price of
such Debt 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 NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is August 30, 1989.
<PAGE> 7
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at Room 3190, Kluczynski Building, 230 South Dearborn Street, Chicago,
Illinois 60604 and 75 Park Place, New York, New York 10007. Copies of such
materials may be obtained by mail from the Public Reference Branch of the
Commission at 450 Fifth Street, N.W., 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 and The Pacific Stock Exchange, Incorporated, 301 Pine Street, San
Francisco, California 94104.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 1-7981), are incorporated
herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1988;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1989 and June 30, 1989; and
(c) The Company's Current Reports on Form 8-K dated January 30, 1989,
February 16, 1989, May 25, 1989 and June 11, 1989.
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 Debt Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus 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 WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY 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:
SHAREHOLDER SERVICES, TELEPHONE (713) 831-1004.
2
<PAGE> 8
AMERICAN GENERAL
American General is an insurance and financial services organization,
headquartered in Houston, and through its subsidiaries operates in all 50 states
and Canada. The Company was incorporated as a general business corporation in
Texas in 1980 and is the successor to American General Insurance Company,
incorporated in 1926.
As part of its strategic program to focus on individual life insurance,
retirement annuities and consumer loans, the Company acquired in May 1988 the
consumer finance subsidiary of Manufacturers Hanover Trust Company, and in
August 1988 announced plans to sell its property-liability insurance and group
life and health insurance operations. In May 1989, the Company sold its
property-liability insurance segment to Zurich Insurance Company.
American General's continuing operations are grouped into three business
segments: Insurance-Home Service, which emphasizes the sale and service of
traditional insurance policies by employee agents to low-and middle-income
households; Insurance-Special Markets, which provides insurance products to
specific geographic areas, needs, or targeted customer groups; and Finance/Real
Estate, which focuses on consumer finance through American General Finance, Inc.
("AGF") and on real estate investment and development.
Since American General is a holding company, rights to participate in any
distribution of assets of any subsidiary upon its liquidation or reorganization
or otherwise (and thus the ability of holders of the Debt Securities to benefit
indirectly from such distribution) are subject to the prior claims of creditors
of that subsidiary, except to the extent that American General may itself be a
creditor of that subsidiary. Claims on American General's subsidiaries by other
creditors include substantial claims for policy benefits and debt obligations,
as well as other liabilities incurred in the ordinary course of business. In
addition, since many of American General's subsidiaries are insurance companies
subject to regulatory control by various state insurance departments, the
ability of such subsidiaries to pay dividends to American General without prior
regulatory approval is limited by applicable laws and regulations. At December
31, 1988, the amount available from subsidiaries included in continuing
operations during 1989 for dividends to the Company not limited by such
restrictions is $539 million.
The principal executive offices of American General are located at 2929
Allen Parkway, Houston, Texas 77019, and its telephone number is (713) 522-1111.
USE OF PROCEEDS
Except as may otherwise be set forth in a Prospectus Supplement, the net
proceeds from the sale of the Debt Securities offered hereby will be added to
American General's general corporate funds and may be used for repayment of
long-or short-term indebtedness, for the repurchase of shares of its Common
Stock, and for general corporate purposes.
3
<PAGE> 9
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges, including and excluding AGF, has
been calculated by dividing fixed charges into earnings available for fixed
charges. Earnings available for fixed charges is the sum of net income before
income tax expense (benefit) and fixed charges. Fixed charges consist of
interest expense, capitalized interest and a portion of rental expense.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEARS ENDED DECEMBER 31,
----------- -----------------------------------
1989 1988 1988 1987 1986 1985 1984
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
Ratio of earnings to fixed charges for
consolidated continuing operations
Including AGF................................. 1.8 2.1 1.9 2.4 2.9 2.2 2.3
Excluding AGF................................. 2.7 2.9 2.7 3.8 5.1 3.2 3.8
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities"), including
the nature of any variations from the following general provisions applicable to
such Offered Debt Securities, will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
The Offered Debt Securities are to be issued under an Indenture dated as of
April 15, 1986 as supplemented by a First Supplemental Indenture dated as of
August 31, 1987 (the "Indenture"), between the Company and The Bank of New York,
as Trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular provisions or defined
terms of the Indenture are referred to, such provisions or defined terms are
incorporated herein by reference. Certain defined terms in the Indenture are
capitalized herein. The section references below refer to the Indenture.
GENERAL
The Indenture does not limit the amount of debentures, notes or other
evidences of indebtedness which may be issued thereunder (such securities issued
under the Indenture being herein referred to as the "Debt Securities"). The
Indenture provides that Debt Securities may be issued from time to time in one
or more series. The Debt Securities are unsecured obligations of the Company.
The Prospectus Supplement relating to the Offered Debt Securities will
describe the following terms, where applicable, of the Offered Debt Securities:
(1) the title of the Offered Debt Securities; (2) any limit on the aggregate
principal amount of the Offered Debt Securities; (3) the date or dates on which
the Offered Debt Securities will mature; (4) the rate or rates at which the
Offered Debt Securities will bear interest, if any, and the date or dates from
which such interest will accrue; (5) the dates on which such interest, if any,
will be payable and the Regular Record Dates for such Interest Payment Dates;
(6) any mandatory or optional sinking fund or analogous provisions; (7) the
date, if any, after which, and the price or prices at which, the Offered Debt
Securities may, pursuant to any optional or mandatory redemption provisions, be
redeemed at the option of the Company; (8) the terms and conditions, if any,
upon which the Offered Debt Securities may be repayable prior to maturity at the
option of the holder thereof (which option may be conditional); (9) if other
than in United States dollars, the currency of payment of principal and premium,
if any, and interest on the Offered Debt Securities; (10) any index used to
determine the amount of payments of principal of and
4
<PAGE> 10
premium, if any, and interest on the Offered Debt Securities; and (11) any other
terms of the Offered Debt Securities. (Section 301).
Unless otherwise indicated in the Prospectus Supplement, principal of and
premium, if any, and interest, if any, on the Offered Debt Securities will be
payable, and transfers of the Offered Debt Securities will be registrable, at
the Corporate Trust Office of the Trustee, provided that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as it appears in the Security Register. (Sections 301,
305, 307 and 1002).
Unless otherwise indicated in the Prospectus Supplement, the Offered Debt
Securities will be issued only in fully registered form without coupons in
denominations of $1,000 or any integral multiple thereof. (Section 302). No
service charge will be made for any registration of transfer or exchange of
Offered Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305).
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be sold at a substantial discount below their principal
amount. Certain federal income tax and other considerations applicable thereto
will be described in the Prospectus Supplement relating to any Original Issue
Discount Securities.
LIMITATION ON LIENS
The Company will not, and will not permit any Designated Subsidiary (as
defined below), directly or indirectly, to create, issue, assume incur or
guarantee any indebtedness for money borrowed which is secured by a mortgage,
pledge, lien or other encumbrance of any nature on (i) any of the present or
future common stock of a Designated Subsidiary or (ii) any property or assets
(other than cash) representing, directly or indirectly, the consideration for
the sale, assignment, transfer or disposal of such common stock unless the Debt
Securities and, if the Company so elects, any other indebtedness of the Company
ranking pari passu with the Debt Securities, shall be equally and ratably
secured with, or prior to, such other secured indebtedness for money borrowed so
long as it is outstanding. (Section 1006).
The term "Designated Subsidiary" means any present or future consolidated
subsidiary of the Company the consolidated assets of which constitute 15 percent
or more of the consolidated assets of the Company. As of June 30, 1989, the
Company's Designated Subsidiaries were AGC Life Insurance Company, American
General Finance, Inc., American General Finance Corporation, American General
Life and Accident Insurance Company, American General Life Insurance Company and
The Variable Annuity Life Insurance Company.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (a) failure to pay principal of or premium, if
any, on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure to deposit any sinking fund payment, when due, in respect of any
Debt Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of series of Debt Securities other than that series), continued
for 90 days after written notice as provided in the Indenture; (e) the
acceleration, or failure to pay at maturity, of any indebtedness for money
borrowed of the Company exceeding $20,000,000 in principal amount, which
acceleration is not rescinded or annulled or indebtedness paid within 15 days
after the date on which written notice thereof shall have first been given to
the Company as provided in the Indenture; (f) certain events in bankruptcy,
insolvency or reorganization in respect of the Company; and (g) any other Event
of Default provided with respect to Debt Securities of that series. (Section
501).
5
<PAGE> 11
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25 percent in principal amount of the Outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of the series) of all the Debt
Securities of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502). For information as to waiver of defaults, see
"Modification and Waiver".
The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under the Indenture at
the request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603). Subject to such
provisions for indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will have the
right to 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 that series. (Section 512).
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1008).
DEFEASANCE
Defeasance and Discharge. The Indenture provides 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 of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and to hold monies for
payment in trust) upon the deposit with the Trustee, in trust, of money and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof in accordance with their terms will provide money in an
amount sufficient to pay the principal of and premium, if any, and each
installment of interest on the Debt Securities of such series on the stated
maturity of such payments in accordance with the terms of the Indenture and the
Debt Securities of such series. Such a trust may only be established if, among
other things, (i) either (x) the Company has delivered to the Trustee an Opinion
of Counsel (who may be counsel for the Company) to the effect that since the
date of the Indenture there has been a change in the applicable federal income
tax law, including a change in the official interpretation thereof, or (y) the
Company has received from, or there has been published by, the Internal Revenue
Service, a ruling, in either case to the effect that Holders of the Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge and
will be subject to federal income tax on the same amounts and in the same manner
and at the same times, as would have been the case if such deposit, defeasance
and discharge had not occurred, and (ii) the Company has delivered to the
Trustee an Opinion of Counsel to the effect that the Debt Securities of such
series, if then listed on The New York Stock Exchange, Inc., will not be
delisted as a result of such deposit, defeasance and discharge. (Section 403).
Defeasance of Certain Covenants and Certain Events of Default. The
Indenture provides that, if applicable, the Company may omit to comply with the
restrictive covenants in Section 1005 ("Maintenance of Properties") and Section
1006 ("Limitation on Liens on Common Stock of Designated Subsidiaries"), and
Section 501(4) (described in clause (d) under "Events of Default") with respect
to Sections 1005 and 1006 and Section 501(5) (described in clause (e) under
"Events of Default") shall not be deemed to be an Event of Default under the
Indenture and the Debt Securities of any series, upon the deposit with the
Trustee, in trust, of money and/or U.S. Government Obligations which through the
payment of interest and principal in respect thereof in accordance with
6
<PAGE> 12
their terms will provide money in an amount sufficient to pay the principal of
and premium, if any, and each installment of interest on the Debt Securities of
such series on the stated maturity of such payments in accordance with the terms
of the Indenture and the Debt Securities of such series. The obligations of the
Company under the Indenture and the Debt Securities of such series other than
with respect to the covenants referred to above and the Events of Default other
than the Events of Default referred to above shall remain in full force and
effect. Such a trust may only be established if, among other things, the Company
has delivered to the Trustee an Opinion of Counsel to the effect that (i) the
Holders of the Debt Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and defeasance
of certain covenants and Events of Default and will be subject to federal income
tax on the same amounts and in the same manner and at the same times, as would
have been the case if such deposit and defeasance had not occurred, and (ii) the
Debt Securities of such series, if then listed on The New York Stock Exchange,
Inc., will not be delisted as a result of such deposit and defeasance. (Section
1007).
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than an
Event of Default described in clauses (d) or (e) under "Events of Default", the
amount of money and U.S. Government Obligations on deposit with the Trustee will
be sufficient to pay amounts due on the Debt Securities of such series at the
time of their stated maturity but may not be sufficient to pay amounts due on
the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company will remain liable for such
payments.
MODIFICATION AND WAIVER
Modifications and amendments 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 percent
in principal amount of the Outstanding Debt Securities of each series affected
by such modification or amendment; provided, however, 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 date of the principal
of, or any installment of principal of or interest on, any Debt Security, (b)
reduce the principal amount of, or the premium, if any, or interest on, any Debt
Security, (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (d) change the place
or currency of payment of principal of, or premium, if any, or interest on, any
Debt Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, or (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of the Indenture
or for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults. (Section 902).
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1009). The Holders of a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all Debt
Securities of that series waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of or
premium, if any, or interest on any Debt Security of that series or in respect
of a provision which under the Indenture cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security of that series
affected. (Section 513).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may, without the consent of any Holders of Outstanding Debt
Securities, consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate or merge with or into, or transfer or lease its assets substantially
as
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<PAGE> 13
an entirety to, the Company, provided that (i) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases the assets of the Company substantially as an entirety
is organized under the laws of any United States jurisdiction and assumes the
Company's obligations on the Debt Securities and under the Indenture, (ii) after
giving effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing, and (iii) certain other conditions are met.
(Sections 801 and 802).
CONCERNING THE TRUSTEE
The Company maintains general banking and credit relations with the Trustee
in the ordinary course of business.
PLAN OF DISTRIBUTION
General. The Company may sell Debt Securities to or through underwriters or
dealers; directly to other purchasers; or through agents.
The distribution of the Debt 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 Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Debt 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 Debt 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 Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter, dealer or agent
will be identified, and any such compensation received from the Company will be
described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Delayed Delivery Arrangements. If so indicated in the 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 Offered Debt 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 Offered Debt 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 relating to Offered
Debt Securities, the validity of the Debt Securities offered hereby will be
passed upon for the Company by Vinson & Elkins, 3300 First City Tower, Houston,
Texas 77002 and for any underwriters, dealers or agents of a
8
<PAGE> 14
particular issue of Offered Debt Securities, by Baker & Botts, 3000 One Shell
Plaza, Houston, Texas 77002. J. Evans Attwell, a partner in the firm of Vinson &
Elkins, is a director of the Company.
EXPERTS
The consolidated financial statements and schedules of American General
Corporation incorporated by reference in this Prospectus have been audited by
Ernst & Whinney, independent auditors, to the extent and for the periods
indicated in their report thereon which is included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1988. The financial
statements and schedules audited by Ernst & Whinney have been incorporated
herein by reference in reliance on their report given on their authority as
experts in accounting and auditing.
The report of Peat Marwick Main & Co., independent auditors, on the
consolidated financial statements of American General Finance, Inc. and its
subsidiaries which is filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended December 31, 1988 has been incorporated herein by
reference in reliance on their report given on their authority as experts in
accounting and auditing.
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<PAGE> 15
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PROSPECTUS SUPPLEMENT
Available Information................ S-2
American General..................... S-2
Recent Developments.................. S-2
Summary Financial Information........ S-3
Ratio of Earnings to Fixed Changes... S-4
Description of Notes................. S-4
Underwriting......................... S-5
Legal Opinions....................... S-5
Experts.............................. S-5
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 2
American General..................... 3
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 4
Description of Debt Securities....... 4
Plan of Distribution................. 8
Legal Opinions....................... 8
Experts.............................. 9
</TABLE>
$100,000,000
AMERICAN GENERAL
CORPORATION
7.70% NOTES DUE 1999
{AMERICAN GENERAL LOGO}
SALOMON BROTHERS INC
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
PROSPECTUS SUPPLEMENT
DATED OCTOBER 13, 1994
