<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1995
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
AMERICAN GENERAL CORPORATION TEXAS 74-0483432
DELAWARE TO BE APPLIED FOR
AMERICAN GENERAL DELAWARE, L.L.C. TO BE APPLIED FOR
AMERICAN GENERAL CAPITAL, L.L.C. DELAWARE
(EXACT NAME OF EACH REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
2929 ALLEN PARKWAY
HOUSTON, TEXAS 77019-2155
(713) 522-1111
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF EACH
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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<TABLE>
<S> <C> <C>
JON P. NEWTON, ESQ. PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
AMERICAN GENERAL CORPORATION SCOTT N. WULFE, ESQ. JOHN H. NEWMAN, ESQ.
2929 ALLEN PARKWAY VINSON & ELKINS L.L.P. BROWN & WOOD
HOUSTON, TEXAS 77019-2155 2300 FIRST CITY TOWER ONE WORLD TRADE CENTER
(713) 522-1111 1001 FANNIN NEW YORK, NEW YORK 10048
(NAME, ADDRESS, INCLUDING ZIP CODE, HOUSTON, TEXAS 77002 (212) 839-5336
AND TELEPHONE NUMBER, INCLUDING AREA (713) 758-2222
CODE,
OF AGENT FOR SERVICE FOR EACH
REGISTRANT)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: from time
to time after the effective date of this registration statement, as determined
in light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(2) PER UNIT(3) PRICE(3) FEE
<S> <C> <C> <C> <C>
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American General Corporation Debt
Securities(4)
American General Corporation Warrants to
Purchase Debt Securities
American General Corporation Preferred Stock,
par value $1.50 per share(5)
American General Corporation Preferred Stock
Warrants
American General Corporation Common Stock,
par value $.50 per share, with
attached right(5)(6) $1,250,000,000 100% $1,250,000,000 $431,038
American General Corporation Common Stock
Warrants
American General Delaware, L.L.C.
Preferred Securities
American General Capital, L.L.C.
Preferred Securities
Guarantees of American General Corporation
with
respect to Preferred Securities(7)
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----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Securities registered hereunder may be sold separately, together or as units
with other securities registered hereunder.
(2) Plus an additional principal amount of Debt Securities issued with an
original issue discount such that the aggregate initial offering price of
all securities registered hereunder will not exceed $1,250,000,000.
(3) Estimated solely for the purpose of calculating the registration fee.
Exclusive of accrued interest, if any.
(4) Plus such indeterminate amount of Debt Securities as may be issued in
connection with the issuance of Preferred Securities. Such Debt Securities
will be issued for no additional consideration.
(5) Plus such indeterminate number of shares of Common Stock and Preferred Stock
as may from time to time be issued upon conversion or exchange of Debt
Securities, Preferred Stock or Preferred Securities registered hereunder, to
the extent any of such Debt Securities, shares of Preferred Stock or
Preferred Securities are, by their terms, so convertible or exchangeable.
Such shares of Common Stock and Preferred Stock will be issued for no
additional consideration.
(6) Preferred Share Purchase Rights are currently attached to, and trade with
the Common Stock, and entitle the holder thereof to purchase 1/100 of a
share of the Company's Series A Junior Participating Preferred Stock. These
attached rights will be issued for no additional consideration.
(7) No additional consideration will be received for the American General
Corporation Guarantees with respect to the Preferred Securities.
------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains the following two separate
prospectuses:
1. A form to be used in connection with offerings by American General
Corporation of, among other things, its Debt Securities, Common Stock, par
value $.50 per share, Preferred Stock, par value $1.50 per share, or
Warrants to purchase Debt Securities, Common Stock or Preferred Stock.
2. A form to be used in connection with offerings by American General
Delaware, L.L.C. or American General Capital, L.L.C. of, among other
things, their respective Preferred Securities.
This Registration Statement also contains a Prospectus Supplement to the
Prospectus referred to in 2 above which may be used in connection with an
offering by American General Delaware, L.L.C. of its Series A Preferred
Securities.
<PAGE> 3
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus supplement *
* shall not constitute an offer to sell or the solicitation of an offer *
* to buy nor shall there be any sale of these securities in any State *
* in which such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED MARCH 30, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1995
(AMERICAN GENERAL LOGO)
PREFERRED SECURITIES
AMERICAN GENERAL DELAWARE, L.L.C.
PREFERRED SECURITIES, SERIES A
(LIQUIDATION PREFERENCE $ PER SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY,
AND CONVERTIBLE INTO COMMON STOCK OF,
AMERICAN GENERAL CORPORATION
---------------------
The Preferred Securities, Series A (the "Series A Preferred
Securities"), representing the preferred limited liability company interests
offered hereby, are being issued by American General Delaware, L.L.C., a
Delaware limited liability company ("American General Delaware"). All of the
common limited liability company interests in American General Delaware (the
"Common Securities") are owned directly by American General Corporation, a Texas
corporation ("American General" or the "Company"), which is the Manager of
American General Delaware. American General Delaware exists for the purpose of
issuing limited liability company interests and investing the proceeds thereof
in debt securities of American General. The proceeds from the offering of the
Series A Preferred Securities will be used by American General Delaware to
purchase from American General its % Series A Convertible Junior
Subordinated Debentures due 20 (the "Series A Junior Subordinated
Debentures") having the terms described herein and in the accompanying
Prospectus.
Holders of the Series A Preferred Securities will be entitled to receive
cumulative cash distributions ("dividends") from American General Delaware at an
annual rate of % of the liquidation preference of $ per Series A
Preferred Security, accruing from the date of original issuance and payable
monthly in arrears on the last day of each calendar month of each year,
commencing , 1995. See "Description of the Series A Preferred
Securities -- Dividends."
(continued on next page)
---------------------
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN MATERIAL RISKS
TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES A PREFERRED
SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH
PAYMENTS ON THE SERIES A PREFERRED SECURITIES AND THE SERIES A JUNIOR
SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED FEDERAL INCOME TAX
CONSIDERATIONS.
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 ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PROCEEDS TO
INITIAL PUBLIC UNDERWRITING AMERICAN GENERAL
OFFERING PRICE COMMISSION(1) DELAWARE(2)(3)
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<S> <C> <C> <C>
Per Series A Preferred Security........ $ (2) $
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Total(4)............................... $ (2) $
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</TABLE>
(1) American General Delaware and American General have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Series A Preferred
Securities will ultimately be used by American General Delaware to purchase
the Series A Junior Subordinated Debentures of American General, the
Underwriting Agreement provides that American General will pay to the
Underwriters, as compensation ("Underwriters' Compensation"), $ per
Series A Preferred Security (or $ in the aggregate). See
"Underwriting."
(3) Expenses of the offering, which are payable by American General, are
estimated to be $ .
(4) American General Delaware and American General have granted the Underwriters
an option for 30 days to purchase up to an additional Series A
Preferred Securities at the initial public offering price per Series A
Preferred Security solely to cover over-allotments, if any. American General
will pay to the Underwriters, as Underwriters' Compensation, $ per
Series A Preferred Security purchased pursuant to this option. If such
option is exercised in full, the total initial public offering price,
underwriting commission and proceeds to American General Delaware will be
$ , $ and $ , respectively. See "Underwriting."
---------------------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Series A Preferred Securities will be made only in
book-entry form through the facilities of The Depository Trust Company on or
about , 1995.
---------------------
The date of this Prospectus Supplement is , 1995.
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SECURITIES OFFERED HEREBY AND AMERICAN GENERAL COMMON STOCK AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
(continued from previous page)
In the event of the liquidation, dissolution or winding-up of American
General Delaware, holders of Series A Preferred Securities will be entitled to
receive for each Series A Preferred Security a liquidation preference of
$ plus accumulated and unpaid dividends to the date of payment, subject
to certain limitations. See "Description of the Series A Preferred
Securities -- Liquidation Rights."
Each Series A Preferred Security is convertible in the manner described
herein at the option of the holder, at any time prior to the Conversion
Expiration Date (as hereinafter defined), into shares of Common Stock, par value
$.50 per share, of American General ("American General Common Stock"), at the
rate of shares of American General Common Stock for each Series A
Preferred Security (equivalent to a conversion price of $ per share of
American General Common Stock), subject to adjustment in certain circumstances.
See "Description of the Series A Preferred Securities -- Conversion Rights." The
last reported sale price of American General Common Stock, which is listed under
the symbol "AGC" on the New York Stock Exchange ("NYSE"), on , 1995,
was $ per share. See "Market Prices of American General Common Stock
and Dividends." On and after , 199 , American General Delaware may,
at its option, cause the conversion rights of holders of the Series A Preferred
Securities to expire. American General Delaware may exercise this option only if
(i) American General Delaware is then current in the payment of dividends on the
Series A Preferred Securities and (ii) if for 20 trading days within any period
of 30 consecutive trading days, including the last trading day of such period,
the Current Market Price (as defined herein) of American General Common Stock
has exceeded 120% of the conversion price of the Series A Preferred Securities,
subject to adjustment in certain circumstances. In order to exercise its
conversion expiration option, American General Delaware must issue a press
release announcing the date upon which conversion rights will expire (the
"Conversion Expiration Date") prior to the opening of business on the second
trading day after a period in which the conditions in the preceding sentence
have been met, but in no event prior to , 199 . The Conversion
Expiration Date shall be a date not less than 30 and not more than 60 calendar
days following the issuance of the press release described above. See
"Description of the Series A Preferred Securities -- Conversion Rights."
The Series A Preferred Securities are also subject to exchange in the
manner described herein, in whole but not in part, into shares of Series A
Cumulative Convertible Preferred Stock, par value $1.50 per share, of American
General ("American General Series A Preferred Stock"), at the rate of one share
of American General Series A Preferred Stock for each Series A Preferred
Security, upon a vote of the holders of a majority of the aggregate liquidation
preference of all outstanding Series A Preferred Securities following the
failure of holders of Series A Preferred Securities to receive dividends in full
for 15 consecutive months. The American General Series A Preferred Stock will
have dividend, liquidation, optional redemption and conversion provisions and
other terms substantially similar to those of the Series A Preferred Securities
but will not be subject to mandatory redemption. See "Description of the Series
A Preferred Securities -- Optional Exchange for American General Series A
Preferred Stock."
In the event that, at any time after the Conversion Expiration Date, less
than 10% of the Series A Preferred Securities remain outstanding, such Series A
Preferred Securities shall be redeemable at the option of American General
Delaware, in whole but not in part, at a redemption price equal to the
liquidation preference for such Series A Preferred Securities plus accumulated
and unpaid dividends (whether or not earned or declared). The Series A Preferred
Securities have no maturity date, although they are subject to mandatory
redemption upon repayment of the principal of the Series A Junior Subordinated
Debentures at maturity or as a result of acceleration thereof. See "Description
of the Series A Preferred Securities -- Redemption."
(continued on next page)
S-2
<PAGE> 5
(continued from previous page)
American General will irrevocably and unconditionally guarantee, on a
subordinated basis and to the extent set forth herein and in the accompanying
Prospectus, the payment of dividends by American General Delaware on the Series
A Preferred Securities (but only if and to the extent declared from funds of
American General Delaware legally available therefor), the Redemption Price (as
defined herein) payable with respect to Series A Preferred Securities (but only
to the extent payable out of funds legally available therefor) and payments on
liquidation, dissolution or winding-up with respect to the Series A Preferred
Securities (but only to the extent that assets of American General Delaware are
available for distribution to holders of the Series A Preferred Securities) (the
"Guarantee"). The Guarantee will be unsecured and will be subordinate to all
liabilities of American General and will rank pari passu with the most senior
preferred stock now or hereafter issued by American General. Given such
subordination, if American General is unable to make timely payments on the
Series A Junior Subordinated Debentures, there is a substantial likelihood that
it would also be unable to make timely payments on the Guarantee. See
"Description of the Guarantees" in the accompanying Prospectus.
American General Delaware's ability to pay amounts due on the Series A
Preferred Securities is solely dependent upon American General's ability to make
payments on the Series A Junior Subordinated Debentures. Interest on the Series
A Junior Subordinated Debentures is payable monthly in arrears but such payment
period may be extended from time to time by American General to a period not
exceeding 60 consecutive months (an "Extension Period"), in which event monthly
dividend payments on the Series A Preferred Securities by American General
Delaware would be deferred (but would continue to compound monthly). Prior to
the termination of any such Extension Period, American General may further defer
interest payments, provided that all such deferrals in an Extension Period may
not exceed 60 consecutive months in the aggregate, and provided further that no
such deferral may extend the stated maturity date or date of redemption of the
Series A Junior Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all accrued and unpaid interest (including compound
interest), American General may select a new Extension Period, subject to the
preceding sentence. No interest during an Extension Period, except at the end
thereof, shall be due and payable. At the end of any such Extension Period,
American General is required to pay all accrued and unpaid interest (including
compound interest) and upon such payment American General Delaware should be
able to pay all accumulated and unpaid dividends on the Series A Preferred
Securities (including Additional Dividends, as defined herein). If American
General does not make interest payments on the Series A Junior Subordinated
Debentures, American General Delaware will not have sufficient funds to pay the
dividends, on the Series A Preferred Securities. The failure of holders of the
Series A Preferred Securities to receive dividends in full for 15 consecutive
months would trigger the right of such holders to obtain American General Series
A Preferred Stock in the manner described herein. See "Description of the Series
A Preferred Securities -- Dividends" and "Description of the Series A Junior
Subordinated Debentures."
The Series A Junior Subordinated Debentures are subordinated in right of
payment to all Senior Indebtedness (as defined under "Description of the Junior
Subordinated Debentures -- Subordination" in the accompanying Prospectus) of
American General. As of , 199 , American General had approximately
$ of indebtedness constituting Senior Indebtedness and no indebtedness
that would rank equally with the Series A Junior Subordinated Debentures.
Application has been made to list the Series A Preferred Securities on the
NYSE under the symbol " ."
The Series A Preferred Securities will be represented by a global
certificate or certificates registered in the name of The Depository Trust
Company ("DTC") or its nominee. Beneficial interests in the Series A Preferred
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the participants in DTC. Except as described
herein, Series A Preferred Securities in certificated form will not be issued in
exchange for the global certificate or certificates. See "Description of the
Preferred Securities -- Book-Entry-Only Issuance -- The Depository Trust
Company" in the accompanying Prospectus.
S-3
<PAGE> 6
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by, and should be read
in connection with, the more detailed information and financial data appearing
elsewhere in this Prospectus Supplement, including the information under
"Investment Considerations," and in the accompanying Prospectus.
AMERICAN GENERAL CORPORATION
American General is the parent company of one of the nation's largest
consumer financial services organizations. American General is headquartered in
Houston, Texas and operates through its subsidiaries in all 50 states, the
District of Columbia, Canada, Puerto Rico, and the U.S. Virgin Islands. American
General was incorporated as a general business corporation in Texas in 1980 and
is the successor to American General Insurance Company, incorporated in Texas in
1926.
American General's operations are classified into three business segments:
Retirement Annuities, which specializes in providing tax-deferred retirement
plans and annuities to employees of educational, health care and other
not-for-profit organizations; Consumer Finance, which offers consumer and home
equity loans, credit cards, and credit-related insurance to individuals through
more than 1,300 branch offices; and Life Insurance, which provides traditional
and interest-sensitive life insurance and both fixed and variable annuity
products through 14,000 sales representatives and general agents.
AMERICAN GENERAL DELAWARE, L.L.C.
American General Delaware is a special purpose limited liability company
recently formed under the laws of the State of Delaware. All of its common
limited liability company interests are owned directly by American General.
American General Delaware has no board of directors, and all of its business and
affairs are managed by American General, as Manager.
American General Delaware exists for the sole purpose of issuing its
limited liability company interests and lending substantially all of the
proceeds thereof to American General, and may not engage in other activities.
The Series A Preferred Securities constitute a series of American General
Delaware's Preferred Securities and the proceeds of the sale of the Series A
Preferred Securities will be invested by American General Delaware in American
General's Series A Junior Subordinated Debentures. The payment by American
General Delaware of dividends due on the Series A Preferred Securities is solely
dependent on its receipt of interest payments from American General on the
Series A Junior Subordinated Debentures.
THE OFFERING
Securities Offered......... of American General Delaware's
Preferred Securities, Series A. Additionally,
American General Delaware has granted the
Underwriters an option for 30 days to purchase up
to an additional Series A Preferred
Securities at the initial public offering price
solely to cover over-allotments, if any.
Dividends.................. Dividends on the Series A Preferred Securities will
be cumulative from the date of original issuance of
the Series A Preferred Securities and will be
payable at the annual rate of $ , or
% of the liquidation preference of $
per Series A Preferred Security. Subject to the
dividend deferral provisions described below,
dividends will be payable monthly in arrears on the
last day of each calendar month, commencing
, 1995. Payment of dividends is limited
to the funds held by American General Delaware and
legally available for distribution to the holders
of the Series A Preferred Securities.
S-4
<PAGE> 7
Dividend Deferral
Provisions............... The ability of American General Delaware to pay
dividends on the Series A Preferred Securities is
solely dependent on its receipt of interest
payments from American General on the Series A
Junior Subordinated Debentures. American General
has the right, at any time and from time to time,
to extend the interest payment period on the Series
A Junior Subordinated Debentures for an Extension
Period not exceeding 60 consecutive months. Monthly
dividends on the Series A Preferred Securities
would be deferred by American General Delaware (but
would continue to compound monthly) during any such
Extension Period. No deferral of dividend payments
may extend beyond the stated maturity date or date
of redemption of the Series A Junior Subordinated
Debentures. Upon the termination of any Extension
Period and the payment of all accrued and unpaid
interest, American General may select a new
Extension Period, subject to the above limitations.
American General Delaware will give written notice
of American General's extension of an interest
payment period to the holders of the Series A
Preferred Securities no later than the last date on
which it would be required to notify the NYSE of
the record or payment date of the related dividend,
which is currently 10 days prior to such record or
payment date. See "Investment
Considerations -- Option to Extend Interest Payment
Period (Deferral of Dividends on Series A Preferred
Securities)," "Description of the Series A
Preferred Securities -- Dividends" and "Description
of the Series A Junior Subordinated
Debentures -- Option to Extend Interest Payment
Period." If an extension of an interest payment
period occurs, American General Delaware, except in
very limited circumstances, will continue to accrue
income for United States income tax purposes which
will be allocated, but not distributed, to the
holders of Series A Preferred Securities in advance
of any corresponding cash distribution. See
"Investment Considerations -- Tax Considerations of
Extended Interest Payment Period (Deferral of
Dividends on the Series A Preferred Securities)"
and "Certain Federal Income Tax
Considerations -- Original Issue Discount."
Rights Upon Deferral of
Dividends................ During any deferral of interest payments on the
Series A Junior Subordinated Debentures, interest
on the Series A Junior Subordinated Debentures will
compound monthly and additional dividends, intended
to provide monthly compounding on dividend
arrearages, will continue to accumulate on the
Series A Preferred Securities. The failure of
holders of the Series A Preferred Securities to
receive dividends in full for 15 consecutive months
would trigger the rights of such holders to obtain
American General Series A Preferred Stock in the
manner described below under "Optional Exchange for
American General Series A Preferred Stock."
Additionally, American General has agreed, among
other things, not to declare or pay any dividend on
any of its common or preferred stock during any
such deferral period.
Conversion into American
General Common Stock..... Each Series A Preferred Security is convertible at
the option of the holder, at any time prior to the
Conversion Expiration Date, into shares of American
General Common Stock, at the rate of shares of
American General Common Stock for each Series A
Preferred Security (equivalent to a conversion
price of $ per share of American General
Common Stock), subject to adjustment in certain
circum-
S-5
<PAGE> 8
stances. The last reported sale price of American
General Common Stock on the NYSE on ,
1995, was $ per share. A holder of a
Series A Preferred Security wishing to exercise its
conversion right must surrender such Series A
Preferred Security, together with a conversion
notice, to a conversion agent (the "Conversion
Agent"), which shall exchange such Series A
Preferred Security for the appropriate principal
amount of the Series A Junior Subordinated
Debentures held by American General Delaware and
immediately convert such Series A Junior
Subordinated Debentures into American General
Common Stock. On and after , 199 ,
American General Delaware may, at its option, cause
the conversion rights of the holders of the Series
A Preferred Securities to expire. American General
Delaware may exercise this option if it is current
in the payment of dividends on the Series A
Preferred Securities and if for 20 trading days
within any period of 30 consecutive trading days,
including the last trading day of such period, the
current market price of American General Common
Stock has exceeded 120% of the conversion price of
the Series A Preferred Securities, subject to
adjustment in certain circumstances. To exercise
its conversion expiration option, American General
Delaware must issue a press release for publication
on the Dow Jones News Service announcing the date
upon which conversion rights will expire (the
"Conversion Expiration Date") prior to the opening
of business on the second trading day after a
period in which the condition in the preceding
sentence have been met. The Conversion Expiration
Date shall be a date not less than 30 and not more
than 60 calendar days following the date of such
press release or, if American General Delaware has
not exercised its conversion expiration option, the
earlier of the date of an exchange election
described below under "Optional Exchange for
American General Series A Preferred Stock" or two
business days prior to the scheduled date for the
mandatory redemption of the Series A Preferred
Securities. See "Description of the Series A
Preferred Securities -- Conversion Rights."
Optional Exchange for
American General Series A
Preferred Stock.......... Upon the failure of holders of the Series A
Preferred Securities to receive, for 15 consecutive
months, the full amount of dividend payments
(including any arrearages), the holders of a
majority of the aggregate liquidation preference of
Series A Preferred Securities then outstanding,
voting at a special meeting called for such purpose
or by written consent, may, at their option, direct
the Conversion Agent to exchange all (but not less
than all) Series A Preferred Securities for the
Series A Junior Subordinated Debentures held by
American General Delaware and to immediately
exchange the Series A Junior Subordinated
Debentures on behalf of such holders for shares of
American General Series A Preferred Stock at the
rate of one share of American General Series A
Preferred Stock for each Series A Preferred
Security. The American General Series A Preferred
Stock will have dividend, conversion, liquidation
preference, optional redemption and other terms
substantially similar to the terms of the Series A
Preferred Securities, except that, among other
things, the holders of American General Series A
Preferred Stock will have the right (voting
separately as a class together with the holders of
any Dividend Parity Securities (as hereinafter
defined) on which like
S-6
<PAGE> 9
voting rights have been conferred and are
exercisable) to elect two additional directors of
American General whenever dividends on the American
General Series A Preferred Stock are in arrears for
18 or more consecutive months (including for this
purpose any arrearage with respect to the Series A
Preferred Securities) and the American General
Series A Preferred Stock will not be subject to
mandatory redemption. If the Series A Preferred
Securities are exchanged for American General
Series A Preferred Stock, American General will use
its best efforts to have the American General
Series A Preferred Stock listed on the NYSE or
other exchange on which the Series A Preferred
Securities may then be listed. See "Description of
the Series A Preferred Securities -- Optional
Exchange for American General Series A Preferred
Stock." Certain tax consequences of an exchange,
including the possibility of additional income tax
to the extent accrued interest on the Series A
Junior Subordinated Debentures is converted into
accumulated dividends on American General Series A
Preferred Stock, are described under "Certain
Federal Income Tax Considerations -- Exchange of
Series A Preferred Securities for American General
Stock."
Liquidation Preference..... $ per Series A Preferred Security, plus an
amount equal to any accumulated and unpaid
dividends. See "Description of the Series A
Preferred Securities -- Liquidation Rights."
Redemption................. If, at any time following the Conversion Expiration
Date, less than 10% of the Series A Preferred
Securities remains outstanding, then such Series A
Preferred Securities will be redeemable at the
option of American General Delaware, as a whole but
not in part, at a redemption price equal to the
liquidation preference for each Series A Preferred
Security together with accumulated and unpaid
dividends (whether or not earned or declared). The
Series A Preferred Securities have no maturity
date, although they are subject to mandatory
redemption upon the repayment of the Series A
Junior Subordinated Debentures at stated maturity
( ) or otherwise, including as a
result of acceleration thereof. The Series A
Preferred Securities are not otherwise redeemable
for any reason, including in the event that
American General Delaware should become subject to
federal or state taxation. To the extent that such
taxation or other events cause American General
Delaware to have insufficient funds to pay full
dividends on the Series A Preferred Securities, the
holders will have available to them the exchange
option described above. See "Description of the
Series A Preferred Securities -- Redemption."
Guarantee.................. American General will irrevocably guarantee, on a
subordinated basis and to the extent set forth in
the accompanying Prospectus, the payment in full of
(a) the dividends on the Series A Preferred
Securities if and to the extent declared from funds
of American General Delaware legally available
therefor, (b) the Redemption Price (including all
accumulated and unpaid dividends) of the Series A
Preferred Securities, to the extent of funds of
American General Delaware legally available
therefor, and (c) the liquidation preference of the
Series A Preferred Securities to the extent of the
assets of American General Delaware available for
distribution to holders of Series A Preferred
Securities. The Guarantee will be unsecured and
will be subordinate to all liabilities of American
General and will rank pari passu with the most
senior preferred stock issued by
S-7
<PAGE> 10
American General and pari passu with any guarantee
now or hereafter entered into by American General
in respect of any preferred stock of any affiliate
of American General. Upon the, liquidation,
dissolution or winding-up of American General, its
obligations under the Guarantee will rank junior to
all of its other liabilities and, therefore, funds
may not be available for payment under the
Guarantee. Additionally, if American General is
unable to make timely payments on the Series A
Junior Subordinated Debentures, then it is unlikely
that it will be able to make timely payments on the
Guarantee. See "Investment Considerations --
Subordinate Obligations Under Guarantee and Series
A Junior Subordinated Debentures" and "Investment
Considerations -- Dependence on Series A Junior
Subordinated Debenture Payments." Also see
"Description of the Guarantees" in the accompanying
Prospectus.
Voting Rights.............. Generally, holders of the Series A Preferred
Securities will not have any voting rights.
However, upon a failure of American General
Delaware to pay dividends in full (including any
arrearages) on the Series A Preferred Securities
for 15 consecutive months (other than as a result
of a deferral by American General of interest
payments on the Junior Subordinated Debentures), an
Event of Default under the Series A Junior
Subordinated Debentures, or a default by American
General under the Guarantee, the holders of the
Series A Preferred Securities will be entitled to
appoint and authorize a Special Trustee to enforce
American General Delaware's rights under the Series
A Junior Subordinated Debentures, enforce American
General's obligations under the Guarantee and
declare and pay dividends on the Series A Preferred
Securities to the extent funds of American General
Delaware are legally available therefor. In
addition, if for any reason (including a deferral
by American General of interest payments on the
Series A Junior Subordinated Debentures) holders of
Series A Preferred Securities fail to receive, for
15 consecutive months, the full amount of dividend
payments (including any arrearages), the holders of
the Series A Preferred Securities will be entitled
to call a special meeting for the purpose of
deciding whether to exchange all Series A Preferred
Securities then outstanding for shares of American
General Series A Preferred Stock, as described
above under "Optional Exchange for American General
Series A Preferred Stock." See "Description of the
Series A Preferred Securities -- Voting Rights."
Series A Subordinated
Debentures............... The Series A Junior Subordinated Debentures will
mature on , 20 and will bear interest
at the rate of % per annum, payable monthly in
arrears. American General has the right to extend
such interest payment period (during which period
interest will compound monthly) for up to 60
consecutive months. Prior to the end of any such
extension of an interest payment period, American
General may further extend the interest payment
period as long as the extension period, as further
extended, may not exceed 60 consecutive calendar
months. No interest shall be due during an
extension period until the end of the period. After
American General has paid all accrued interest
(including compound interest) following the
expiration of an extended interest payment period,
it may again defer, on one or more occasions,
interest payments for up to 60 consecutive months.
An extended interest payment period may, however,
not extend beyond the stated maturity
S-8
<PAGE> 11
date or date of redemption of the Series A Junior
Subordinated Debentures. If American General
extends an interest payment period, it will be
prohibited from paying dividends on any of its
capital stock and making certain other restricted
payments until monthly interest payments are
resumed and all accumulated and unpaid interest
(including any interest payable to effect monthly
compounding) on the Series A Junior Subordinated
Debentures is brought current. The Series A Junior
Subordinated Debentures are convertible into shares
of American General Common Stock at the option of
the holder thereof and, in certain events, are
exchangeable for American General Series A
Preferred Stock as described above under "Optional
Exchange for American General Series A Preferred
Stock." The payment of the principal of and
interest on the Series A Junior Subordinated
Debentures will be subordinated in right of payment
to all Senior Indebtedness (as defined below) of
American General. As of , American
General had approximately $ of
indebtedness constituting Senior Indebtedness and
no indebtedness that would rank equally with the
Series A Junior Subordinated Debentures. See
"Description of the Series A Junior Subordinated
Debentures."
Use of Proceeds............ American General Delaware will invest 99% of the
proceeds received from the sale of the Series A
Preferred Securities and the Common Securities in
the Series A Junior Subordinated Debentures of
American General and the remaining 1% of such
proceeds will be invested in Eligible Investments
(as defined in the Limited Liability Company
Agreement of American General Delaware). After
paying the expenses associated with the offering
made hereby, American General will add such funds
received by it to its general corporate funds,
which may be used to repay indebtedness or for
general corporate purposes. See "Use of Proceeds."
Book Entry................. The Series A Preferred Securities will be
represented by a global certificate or certificates
registered in the name of The Depository Trust
Company or its nominee. Beneficial interests in the
Series A Preferred Securities will be evidenced by,
and transfers thereof will be effected only
through, records maintained by the participants in
The Depository Trust Company. See "Description of
the Series A Preferred Securities -- Book Entry
Only Issuance -- The Depository Trust Company" in
the accompanying Prospectus.
S-9
<PAGE> 12
SUMMARY FINANCIAL INFORMATION OF AMERICAN GENERAL
The following table sets forth summary financial information, on a
consolidated basis, of American General for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
(IN MILLIONS) 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Operating Results
Revenues.................................................. $ 4,841 $ 4,829 $ 4,602
======= ======= =======
Business Segment Earnings
Retirement Annuities.................................... $ 187 $ 162 $ 130
Consumer Finance........................................ 245 206 161
Life Insurance.......................................... 257 (9)(a) 323
------- ------- -------
Total business segments......................... 689 359 614
------- ------- -------
Corporate Operations
Net interest on corporate debt.......................... (76) (81) (85)
Expenses not allocated to segments...................... (29) (25) (28)
Earnings on corporate assets............................ 43 21 23
Net realized investment gains (losses).................. (114) 6 9
------- ------- -------
Total corporate operations...................... (176) (79) (81)
------- ------- -------
Income before cumulative effect and tax rate related
adjustment.............................................. 513(b) 280(a) 533
Cumulative effect of accounting changes................... -- (46) --
Tax rate related adjustment............................... -- (30) --
------- ------- -------
Net income................................................ $ 513 $ 204 $ 533
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Financial Position
Assets.................................................... $46,295(c) $43,982(c) $39,742
Debt
Corporate............................................... 1,475 1,257 1,371
Real Estate............................................. 361 429 616
Consumer Finance........................................ 7,090 5,843 5,484
Redeemable equity......................................... 47 -- --
Shareholders' equity...................................... 3,457(c) 5,137(c) 4,616
</TABLE>
------------
(a) Includes $300 million write-down of goodwill. Additional information is
incorporated herein by reference from the section "1993 Significant Events"
within Item 7 of American General's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
(b) Includes net realized investment losses of $114 million. Net realized
investment gains for 1993 and 1992 were immaterial.
(c) Includes $986 million and $950 million decrease in assets and shareholders'
equity, respectively, at December 31, 1994, and $1.0 billion and $676
million increase in assets and shareholders' equity, respectively, at
December 31, 1993, due to the effect of SFAS 115, "Accounting for Certain
Investments in Debt and Equity Securities." Additional information is
incorporated herein by reference from the section "Effect of SFAS 115"
within Item 7 and Note 1.2 within Item 8 of American General's Annual Report
on Form 10-K for the year ended December 31, 1994.
S-10
<PAGE> 13
AMERICAN GENERAL
American General is the parent company of one of the nation's largest
consumer financial services organizations. American General is headquartered in
Houston, Texas and operates through its subsidiaries in all 50 states, the
District of Columbia, Canada, Puerto Rico, and the U.S. Virgin Islands. American
General was incorporated as a general business corporation in Texas in 1980 and
is the successor to American General Insurance Company, incorporated in Texas in
1926.
American General's operations are classified into three business segments:
Retirement Annuities, which specializes in providing tax-deferred retirement
plans and annuities to employees of educational, health care and other
not-for-profit organizations; Consumer Finance, which offers consumer and home
equity loans, credit cards, and credit-related insurance to individuals through
more than 1,300 branch offices; and Life Insurance, which provides traditional
and interest-sensitive life insurance and both fixed and variable annuity
products through 14,000 sales representatives and general agents.
The principal executive offices of American General are located at 2929
Allen Parkway, Houston, Texas 77019-2155, and its telephone number is (713)
522-1111.
AMERICAN GENERAL DELAWARE
American General Delaware, L.L.C. is a limited liability company formed in
March 1995 under the laws of the State of Delaware. American General owns all of
the common limited liability interests (the "Common Securities") of American
General Delaware, which securities are nontransferable. American General
Delaware is managed by American General, as manager (the "Manager"), in
accordance with the Limited Liability Company Agreement of American General
Delaware, as amended (the "LLC Agreement"). American General Delaware exists
solely for the purpose of issuing Preferred Securities and Common Securities and
investing 99% of the proceeds thereof in Junior Subordinated Debentures. The
remaining 1% of such proceeds will be invested in Eligible Investments (as
defined in the LLC Agreement). See "Use of Proceeds." The principal executive
offices of American General Delaware are located c/o the Manager at the address
set forth under "American General."
S-11
<PAGE> 14
INVESTMENT CONSIDERATIONS
Prospective purchasers of Series A Preferred Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and the
accompanying Prospectus and should particularly consider the following matters:
SUBORDINATE OBLIGATIONS UNDER GUARANTEE AND SERIES A JUNIOR SUBORDINATED
DEBENTURES
American General's obligations under the Series A Junior Subordinated
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness of American General. American General's obligations under the
Guarantee are subordinate to all liabilities of American General and will rank
pari passu with the most senior preferred stock hereafter issued by American
General and pari passu with any guarantee now or hereafter executed by American
General in respect of any preferred stock of any affiliate of American General.
As of , 199 , American General had approximately $ of
Senior Indebtedness outstanding. There are no terms in the Series A Preferred
Securities, the Series A Junior Subordinated Debentures, the Junior Subordinated
Indenture (as defined herein) or the Guarantee that limit American General's
ability to incur additional indebtedness, including indebtedness that ranks
senior to the Series A Junior Subordinated Debentures and the Guarantee, or the
ability of its subsidiaries to incur additional indebtedness. In addition,
because 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 Series A Junior Subordinated
Debentures and, to the extent of the Guarantee, the holders of Series A
Preferred 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. Further, certain non-insurance subsidiaries are similarly
restricted in their ability to make dividend payments by long-term debt
agreements. At December 31, 1994, the amount available to American General for
dividends from subsidiaries not limited by such restrictions was $1.1 billion.
The Guarantee guarantees payment to the holders of the Series A Preferred
Securities of accumulated and unpaid monthly dividends (to the extent declared
by American General Delaware), amounts payable on redemption, and amounts
payable upon the liquidation, dissolution or winding-up of American General
Delaware. In each case, however, such amount is guaranteed only to the extent
that American General Delaware has funds on hand legally available therefor and
payment thereof does not otherwise violate applicable law. If American General
were to default on its obligation to pay interest or amounts payable on
redemption or maturity of the Series A Junior Subordinated Debentures, American
General Delaware would lack legally available funds for the payment of dividends
or amounts payable on redemption of the Series A Preferred Securities, and in
such event holders of the Series A Preferred Securities would not be able to
rely upon the Guarantee for payment of such amounts. Upon the liquidation,
dissolution or winding-up of American General, its obligations under the
Guarantee would rank junior to all of its liabilities and, therefore, funds may
not be available for payment under the Guarantee. See "Description of the
Guarantees" and "Description of the Junior Subordinated
Debentures -- Subordination" in the accompanying Prospectus.
DEPENDENCE ON SERIES A JUNIOR SUBORDINATED DEBENTURE PAYMENTS
American General Delaware's ability to pay amounts due on the Series A
Preferred Securities is solely dependent upon American General's ability to make
payments on the Series A Junior Subordinated Debentures as and when required.
Since American General is also the guarantor of the Series A Preferred
Securities, in the event that American General Delaware is unable to make
payments on the Series A Preferred Securities as and when required, there is a
substantial likelihood that American General would be unable to make payments on
the Guarantee as and when required.
S-12
<PAGE> 15
OPTION TO EXTEND INTEREST PAYMENT PERIOD (DEFERRAL OF DIVIDENDS ON SERIES A
PREFERRED SECURITIES)
American General has the right to extend the interest payment period on the
Series A Junior Subordinated Debentures from time to time to a period not
exceeding 60 consecutive months, in which event monthly dividend payments on the
Series A Preferred Securities by American General Delaware would be deferred
(but would continue to compound monthly). Prior to the termination of any such
Extension Period, American General may further defer interest payments, provided
that all such deferrals in an Extension Period may not exceed 60 consecutive
months in the aggregate, and provided further that no such deferral may extend
the stated maturity date or date of redemption of the Series A Junior
Subordinated Debentures. Upon the termination of any Extension Period and the
payment of all accrued and unpaid interest (including compound interest),
American General may select a new Extension Period, subject to the preceding
sentence. No interest during an Extension Period, except at the end thereof,
shall be due and payable. During any Extension Period, American General shall
not declare or pay any dividend on, and, subject to certain exceptions, American
General shall not, and American General shall not permit any of its
majority-owned subsidiaries to, redeem, purchase, acquire or make a liquidation
payment with respect to, any of American General's capital stock or make any
guarantee payments with respect to the foregoing. See "Description of the Series
A Junior Subordinated Debentures -- Option to Extend Interest Payment Period."
TAX CONSIDERATIONS OF EXTENDED INTEREST PAYMENT PERIOD (DEFERRAL OF DIVIDENDS ON
SERIES A PREFERRED SECURITIES)
Should an extension of the interest payment period occur, American General
Delaware, except in very limited circumstances, would continue to accrue income
for United States federal income tax purposes, which would be allocated, but not
distributed, to holders of record of Series A Preferred Securities. As a result,
such holders would be required to include such interest in gross income for
United States federal income tax purposes in advance of the receipt of cash and
would not receive the cash related to such income if such a holder disposed of
its Series A Preferred Securities prior to the record date for payment of
dividends. See "Certain Federal Income Tax Considerations -- Original Issue
Discount."
TAX CONSIDERATIONS OF AN EXCHANGE FOR AMERICAN GENERAL SERIES A PREFERRED STOCK
In the event of a deferral of monthly dividends on the Series A Preferred
Securities for more than 15 consecutive months, the holders of a majority of the
aggregate liquidation preference of the Series A Preferred Securities then
outstanding may cause the exchange of all of the Series A Preferred Securities
for shares of American General Series A Preferred Stock. For a discussion of
certain of the tax consequences of such an exchange to holders, including the
possibility that holders who exchange their Series A Preferred Securities for
American General Series A Preferred Stock may be subject to additional income
tax to the extent accrued but unpaid interest on the Series A Junior
Subordinated Debentures is converted into accumulated and unpaid dividends on
the American General Series A Preferred Stock received in exchange for the
Series A Preferred Securities, see "Certain Federal Income Tax
Considerations -- Exchange of Series A Preferred Securities for American General
Stock."
EXPIRATION OF CONVERSION RIGHTS
On and after , 199 , American General Delaware may, subject to
certain conditions, at its option, cause the conversion rights of holders of
Series A Preferred Securities to expire, provided that American General Delaware
is then current in the payment of dividends on the Series A Preferred Securities
and the Current Market Price (as defined herein) of American General Common
Stock has exceeded 120% of the conversion price of the Series A Preferred
Securities for a specified period. See "Description of the Series A Preferred
Securities -- Conversion Rights -- Expiration of Conversion Rights."
S-13
<PAGE> 16
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of American General as of December 31, 1994, as adjusted to
reflect the acquisition of American Franklin Company and as further adjusted to
reflect the application of the estimated net proceeds from the sale of the
Series A Preferred Securities. See "Use of Proceeds."
<TABLE>
<CAPTION>
DECEMBER 31, 1994
----------------------------------------
PRO
FORMA
REFLECTING PRO
AMERICAN FORMA,
FRANKLIN ADJUSTED
COMPANY FOR
(IN MILLIONS) HISTORICAL ACQUISITION(1) FINANCING
------------- ---------- -------------- ---------
<S> <C> <C> <C>
Short-term debt:
Corporate........................................ $ 639 $ $
Real Estate...................................... 361
Consumer Finance................................. 2,777
------ ------ ------
Total short-term debt.................... $3,777 $ $
====== ====== ======
Long-term debt:
Corporate........................................ 836 836
Consumer Finance................................. 4,313 4,313 4,313
------ ------ ------
Total long-term debt..................... 5,149 5,149
------ ------ ------
Preferred stock of subsidiary...................... -- --
Common Stock subject to put contracts.............. 47 47 47
------ ------ ------
Shareholders' equity
Common stock..................................... 364 364 364
Net unrealized gains (losses) on securities(2)... (935) (935) (935)
Retained earnings................................ 4,495 4,495 4,495
Cost of treasury stock........................... (467) (467) (467)
------ ------ ------
Total shareholders' equity............... 3,457 3,457 3,457
------ ------ ------
Total capitalization (excluding
short-term debt)....................... $8,653 $8,653 $
====== ====== ======
</TABLE>
---------------
(1) Effective January 31, 1995, the Company acquired American Franklin Company.
The historical balances at December 31, 1994 are adjusted to reflect the
acquisition as though it occurred on December 31, 1994.
(2) Includes a $950 million unrealized loss at December 31, 1994, due to the
effect of SFAS 115, "Accounting for Certain Investments in Debt and Equity
Securities." Additional information is incorporated herein by reference
from the section "Effect of SFAS 115" within Item 7 and Note 1.2 within
Item 8 of American General's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
USE OF PROCEEDS
American General Delaware will invest 99% of the proceeds received from the
sale of the Series A Preferred Securities and the Common Securities in the
Series A Junior Subordinated Debentures of American General and the remaining 1%
of such proceeds will be invested in Eligible Investments (as defined in the LLC
Agreement). After paying the expenses associated with the offering made hereby,
American General will add such funds received by it to its general corporate
funds, which may be used to repay indebtedness or for general corporate
purposes.
S-14
<PAGE> 17
MARKET PRICES OF AMERICAN GENERAL COMMON STOCK AND DIVIDENDS
The American General Common Stock is listed on the NYSE and Pacific, London
and Swiss stock exchanges. The following table sets forth, for the periods
indicated, the reported high and low sale prices of the American General Common
Stock on the NYSE composite tape and the respective cash dividends paid per
share of American General Common Stock:
<TABLE>
<CAPTION>
PER
SHARE
CASH
DIVIDENDS
PERIOD HIGH LOW PAID
------ ------- ----- ----------
<S> <C> <C> <C>
1993
1st Quarter......................................... $32.88 $27.31 $ .275
2nd Quarter......................................... 33.25 27.75 .275
3rd Quarter......................................... 36.50 30.13 .275
4th Quarter......................................... 34.75 26.25 .275
1994
1st Quarter......................................... $29.63 $25.50 $ .29
2nd Quarter......................................... 29.38 24.88 .29
3rd Quarter......................................... 30.50 26.88 .29
4th Quarter......................................... 28.88 25.63 .29
1995
1st Quarter......................................... $ $ $
</TABLE>
The closing price of the American General Common Stock on the NYSE on
1995 was $ .
American General has paid cash dividends on its outstanding Common Stock in
each year since 1929. American General currently pays cash dividends quarterly
at an annual rate of $1.24 per share. Future payment of dividends on the
American General Common Stock will depend on earnings, financial condition,
capital requirements and other relevant factors. Because American General is a
holding company, its capacity to pay dividends is limited by the ability of its
subsidiaries to pay dividends. In addition, since many of American General's
subsidiaries are insurance companies subject to regulatory control by state
agencies, the ability of such subsidiaries to pay dividends to American General
is limited by applicable laws and regulations. See "American General" in the
accompanying Prospectus. At December 31, 1994, the amount available to American
General for dividends from subsidiaries not limited by such restrictions was
$1.1 billion.
S-15
<PAGE> 18
DESCRIPTION OF THE SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series A
Preferred Securities supplements the description of the terms and provisions of
the Preferred Securities set forth in the accompanying Prospectus under the
heading "Description of the Preferred Securities," to which description
reference is hereby made. Capitalized terms used and not defined in this
Prospectus Supplement have the meanings ascribed to them in the accompanying
Prospectus. The Series A Preferred Securities constitute a series of Preferred
Securities of American General Delaware having such dividend terms, liquidation
preferences per share, voting rights, redemption provisions, conversion or
exchange rights and other rights, preferences, privileges, limitations and
restrictions as are set forth in the LLC Agreement, the Delaware Limited
Liability Company Act (the "LLC Act") and the amendment to the LLC Agreement
adopted or to be adopted by the Manager relating to the Series A Preferred
Securities (the "Series A Declaration"). The summary of certain terms and
provisions of the Series A Preferred Securities set forth below does not purport
to be complete and is subject to, and qualified in its entirety by reference to,
the LLC Agreement and the Series A Declaration. The LLC Agreement is filed as an
exhibit to the Registration Statement of which the accompanying Prospectus is a
part. A copy of the Series A Declaration will be included as an exhibit to a
Current Report on Form 8-K to be filed by American General at or prior to the
closing of the sale of the Series A Preferred Securities offered hereby.
DIVIDENDS
General. Holders of the Series A Preferred Securities will be entitled to
receive cumulative cash dividends from American General Delaware, accruing from
the date of original issuance and payable monthly in arrears on the last day of
each calendar month of each year, commencing , 1995, except as
otherwise described below. The dividends payable on each Series A Preferred
Security will be fixed at a rate per annum of $ , or % of the
liquidation preference thereof of $ . The amount of dividends payable
for any period will be computed on the basis of twelve 30-day months and a
360-day year and, for any period shorter than a full month, will be computed on
the basis of the actual number of days elapsed in such period. Payment of
dividends is limited to the funds held by American General Delaware and legally
available for distribution to holders of Series A Preferred Securities. See
"Description of the Series A Junior Subordinated Debentures -- Interest."
Dividends on the Series A Preferred Securities must be declared monthly and
paid on the last day of each calendar month to the extent that American General
Delaware has funds legally available for the payment of such dividends and cash
on hand sufficient to make such payments. It is anticipated that the funds of
American General Delaware will be limited principally to payments received from
American General under the Series A Junior Subordinated Debentures. If American
General fails to make interest payments on the Series A Junior Subordinated
Debentures, American General Delaware will not have sufficient funds to pay
dividends on the Series A Preferred Securities. The payment of dividends (but
only if and to the extent declared from funds of American General Delaware
legally available therefor) will be guaranteed by American General as and to the
extent set forth under "Description of the Guarantees" in the accompanying
Prospectus.
American General has the right under the Series A Junior Subordinated
Debentures to extend, from time to time, the interest payment period on the
Series A Junior Subordinated Debentures for up to 60 consecutive months on one
or more occasions, subject to the stated maturity date or earlier redemption
date thereof. Monthly dividends on the Series A Preferred Securities would be
deferred (but Additional Dividends would continue to accumulate monthly) by
American General Delaware during any such deferral of interest payments.
American General Delaware will give written notice of American General's
deferral of interest payments to the holders of the Series A Preferred
Securities no later than the last date on which it would be required to notify
the NYSE of the record or payment date of the related dividend, which is
currently 10 days prior to such record or payment date. See "-- Additional
Dividends" and "Description of the Series A Junior Subordinated
Debentures -- Option to Extend Interest Payment Period." Any failure by American
General to
S-16
<PAGE> 19
make interest payments on the Series A Junior Subordinated Debentures in the
absence of a deferral would constitute an Event of Default (as defined under
"Description of the Junior Subordinated Debentures -- Events of Default" in the
accompanying Prospectus) under the Junior Subordinated Indenture with respect to
the Series A Junior Subordinated Debentures.
Dividends declared on the Series A Preferred Securities will be payable to
the holders thereof as they appear on the books and records of American General
Delaware on the relevant record dates, which, if and so long as the Series A
Preferred Securities are in book-entry form, will be one Business Day (as
defined below) prior to the relevant payment dates. Subject to any applicable
laws and regulations and the LLC Agreement and the Series A Declaration, each
such payment will be made as described under "Description of the Preferred
Securities -- Book-Entry-Only Issuance -- The Depository Trust Company" in the
accompanying Prospectus. In the event that the Series A Preferred Securities
shall not continue to remain in book-entry form, the Manager shall have the
right to select relevant record dates which shall be more than one Business Day
prior to the relevant payment dates. If any date on which dividends are payable
on the Series A Preferred Securities is not a Business Day, then payment of the
dividend payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such Business Day is in the next succeeding calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. A "Business
Day" means any day other than a Saturday, Sunday or other day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
The failure of holders of the Series A Preferred Securities to receive
dividends thereon in full (including arrearages) for 15 consecutive months
(including any such failure caused by a deferral of interest payments on the
Series A Junior Subordinated Debentures) would trigger the right of holders of a
majority of the aggregate liquidation preference of the Series A Preferred
Securities then outstanding, voting at a special meeting called for such purpose
or by written consent, to direct , as the conversion and
exchange agent for the Series A Preferred Securities (the "Conversion Agent"),
to exchange all of the Series A Preferred Securities then outstanding for Series
A Junior Subordinated Debentures and, immediately thereafter, to exchange such
Series A Junior Subordinated Debentures, on behalf of the holders, for shares of
American General Series A Preferred Stock, at the Exchange Price. "Exchange
Price" means one share of American General Series A Preferred Stock for each
$ principal amount of Series A Junior Subordinated Debentures (which rate of
exchange is equivalent to one share of American General Series A Preferred Stock
for each Series A Preferred Security). See "-- Optional Exchange for American
General Series A Preferred Stock."
Additional Dividends. Upon any dividend arrearages in respect of the Series
A Preferred Securities, American General Delaware shall be required to declare
and pay additional dividends on the Series A Preferred Securities in order to
provide, in effect, monthly compounding on such dividend arrearages. The amounts
payable to effect such monthly compounding on dividend arrearages in respect of
the Series A Preferred Securities is referred to herein as "Additional
Dividends."
Certain Restrictions on American General Delaware. If accumulated and
unpaid dividends have not been paid in full on the Series A Preferred
Securities, American General Delaware may not:
(i) pay, or declare and set aside for payment, any dividends on the
Preferred Securities of any other series or any other limited liability
company interests in American General Delaware, ranking pari passu with the
Series A Preferred Securities as to the payment of dividends ("Dividend
Parity Securities"), unless the amount of any dividends declared on such
Dividend Parity Securities is paid on such Dividend Parity Securities and
the Series A Preferred Securities on a pro rata basis on the date such
dividends are paid on such Dividend Parity Securities, so that the ratio of
(x)(A) the aggregate amount paid as dividends on the Series A Preferred
Securities to (B)the aggregate amount paid as dividends on such Dividend
Parity Securities is the same as the ratio of (y)(A) the aggregate amount
of all accumulated arrears of unpaid dividends on the Series A Preferred
Securities to (B) the aggregate amount of all accumulated arrears of unpaid
dividends on such Dividend Parity Securities;
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(ii) pay, or declare and set aside for payment, any dividends on any
limited liability company interests in American General Delaware ranking
junior to the Series A Preferred Securities as to the payment of dividends
("Dividend Junior Securities"); or
(iii) redeem, purchase, or otherwise acquire any Dividend Parity
Securities or Dividend Junior Securities;
until, in each case, such time as all accumulated and unpaid dividends on all of
the Series A Preferred Securities shall have been paid in full for all dividend
periods terminating on or prior to, in the case of clauses (i) and (ii), the
date of such payment, and in the case of clause (iii), the date of such
redemption, purchase, or other acquisition.
CONVERSION RIGHTS
General. The Series A Preferred Securities will be convertible at any time
prior to the Conversion Expiration Date, at the option of the holders thereof
and in the manner described below, into shares of American General Common Stock
at an initial conversion rate of shares of American General Common
Stock for each Series A Preferred Security (equivalent to a conversion price of
$ per share of American General Common Stock), subject to adjustment as
described under "-- Conversion Price Adjustments" below. A holder of a Series A
Preferred Security wishing to exercise its conversion right shall surrender such
Series A Preferred Security, together with an irrevocable conversion notice, to
the Conversion Agent, which shall, on behalf of such holder, exchange the Series
A Preferred Security for the appropriate principal amount of the Series A Junior
Subordinated Debentures and immediately convert such Series A Junior
Subordinated Debentures into American General Common Stock. Holders may obtain
copies of the required form of the conversion notice from the Conversion Agent.
Conversion rights will terminate at the close of business on the Conversion
Expiration Date.
Holders of Series A Preferred Securities at the close of business on a
dividend record date will be entitled to receive any declared dividend on such
Series A Preferred Securities with respect to the corresponding dividend payment
date notwithstanding the conversion of such Series A Preferred Securities
following such dividend record date but prior to such dividend payment date.
Except as provided in the immediately preceding sentence, American General
Delaware will make no payment or allowance for accumulated and unpaid dividends,
whether or not in arrears, on converted Series A Preferred Securities. American
General will make no payment or allowance for dividends on the shares of
American General Common Stock issued upon such conversion, except to the extent
that such shares of American General Common Stock are held of record on the
record date for any such dividends. Each conversion will be deemed to have been
effected immediately prior to the close of business on the day on which notice
was received by American General Delaware.
No fractional shares of American General Common Stock will be issued as a
result of conversion, but in lieu thereof such fractional interest will be paid
in cash.
Expiration of Conversion Rights. On and after , 199 , American
General Delaware may, at its option, cause the conversion rights of holders of
Series A Preferred Securities to expire if (i) American General Delaware is then
current in the payment of dividends on the Series A Preferred Securities and
(ii) for 20 trading days within any period of 30 consecutive trading days,
including the last trading day of such period, the Current Market Price of
American General Common Stock shall have exceeded 120% of the conversion price,
subject to adjustment in certain circumstances. In order to exercise its
conversion expiration option, American General Delaware must issue a press
release for publication on the Dow Jones News Service announcing the Conversion
Expiration Date prior to the opening of business on the second trading day after
a period in which the conditions in the preceding sentence have been met, but in
no event prior to , 199 . The press release shall announce the
Conversion Expiration Date (as determined in the manner set forth below) and
provide the current conversion price and the then Current Market Price of
American General Common Stock, in each case as of the close of business on the
trading day next preceding the date of the press release.
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Notice of the expiration of conversion rights will be given by first-class
mail to the holders of Series A Preferred Securities not more than four Business
Days after American General Delaware issues the press release. The "Conversion
Expiration Date" will be a date selected by American General Delaware not less
than 30 nor more than 60 calendar days after the date on which American General
Delaware issues the press release announcing its intention to terminate
conversion rights of the holders of Series A Preferred Securities. In the event
that American General Delaware does not exercise its conversion expiration
option, the Conversion Expiration Date with respect to the Series A Preferred
Securities will be the earlier of (i) the date of an Exchange Election referred
to below under "-- Optional Exchange for American General Series A Preferred
Stock" and (ii) two Business Days preceding the date set for mandatory
redemption of the Series A Preferred Securities.
The term "Current Market Price" of American General Common Stock for any
day means the last reported sale price, regular way, on such day, or, if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Consolidated Transaction Tape, or, if the American General Common Stock is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which the American General Common Stock is listed or admitted to
trading, or if the American General Common Stock is not listed or admitted to
trading on a national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc., or, if the American General
Common Stock is not quoted or admitted to trading on such quotation system, on
the principal quotation system on which the American General Common Stock is
listed or admitted to trading or quoted, or, if not listed or admitted to
trading or quoted on any national securities exchange or quotation system, the
average of the closing bid and asked prices of the American General Common Stock
in the over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors of
American General for that purpose or, if not so available in such manner, as
otherwise determined in good faith by such Board of Directors.
Conversion Price Adjustments -- General. The conversion price will be
subject to adjustment in certain events including, without duplication: (i) the
payment of dividends (and other distributions) payable in American General
Common Stock on any class of capital stock of American General; (ii) the
issuance to all holders of American General Common Stock of rights or warrants
entitling holders of such rights or warrants to subscribe for or purchase
American General Common Stock at less than the then Current Market Price; (iii)
subdivisions and combinations of American General Common Stock; (iv) the payment
of dividends (and other distributions) to all holders of American General Common
Stock consisting of evidences of indebtedness of American General, securities or
capital stock, cash, or assets (including securities, but excluding (x) those
dividends, distributions, rights and warrants, referred to in clauses (i) and
(ii), (y) cash dividends that do not exceed the per share amount of the
immediately preceding regular cash dividend (as adjusted to reflect any of the
other events referred to in this sentence), and (z) dividends if the annualized
per share amount thereof does not exceed 15% of the Current Market Price of
American General Common Stock on the trading day immediately preceding the date
of declaration of such dividend); and (v) payment to holders of American General
Common Stock in respect of a tender or exchange offer (other than an odd-lot
offer) by American General or any subsidiary of American General for American
General Common Stock at a price in excess of 110% of the Current Market Price of
American General Common Stock on the trading day next succeeding the last date
tenders or exchanges may be made pursuant to such tender or exchange offer.
American General from time to time may reduce the conversion price of the
Series A Preferred Securities by any amount selected by American General for any
period of at least 20 days, in which case American General shall give at least
15 days' notice of such reduction. American General may, at its option, make
such reductions in the conversion price, in addition to those set forth above,
as the Board of Directors deems advisable to avoid or diminish any income tax to
holders of American General Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. See "Certain Federal Income Tax
Considerations -- Adjustment of Conversion Price."
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No adjustment of the conversion price will be made upon the issuance of any
shares of American General Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
American General and the investment of additional optional amounts in shares of
American General Common Stock under any such plan, or the issuance of any shares
of American General Common Stock or options or rights to purchase such shares
pursuant to any present or future employee benefit plan or program of American
General or pursuant to any option, warrant, right, or exercisable, exchangeable
or convertible security outstanding as of the date the Series A Preferred
Securities were first designated. There shall also be no adjustment of the
conversion price in case of the issuance of any American General Common Stock
(or securities convertible into or exchangeable for American General Common
Stock), except as specifically described above. If any action would require
adjustment of the conversion price pursuant to more than one of the
anti-dilution provisions, only one adjustment shall be made and such adjustment
shall be the amount of adjustment that has the highest absolute value to holders
of the Series A Preferred Securities. No adjustment in the conversion price will
be required unless such adjustment would require an increase or decrease of at
least 1% of the conversion price, but any adjustment that would otherwise be
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
American General. In the event that American General is a party to any
transaction (including, without limitation, a merger, consolidation, sale of all
or substantially all of the assets of American General, recapitalization or
reclassification of American General Common Stock or any compulsory share
exchange (each of the foregoing being referred to as a "Transaction")), in each
case, as a result of which shares of American General Common Stock shall be
converted into the right (i) in the case of any Transaction other than a
Transaction involving a Common Stock Fundamental Change (as defined below), to
receive securities, cash or other property, each Series A Preferred Security
shall thereafter be convertible into the kind and amount of securities, cash and
other property receivable upon the consummation of such Transaction by a holder
of that number of shares of American General Common Stock into which a Series A
Preferred Security was convertible immediately prior to such Transaction, or
(ii) in the case of a Transaction involving a Common Stock Fundamental Change,
to receive common stock of the kind received by holders of American General
Common Stock (but in each case after giving effect to any adjustment discussed
below relating to a Fundamental Change if such Transaction constitutes a
Fundamental Change). The holders of Series A Preferred Securities will have no
voting rights with respect to any Transaction described in this section.
If any Fundamental Change occurs, then the conversion price in effect will
be adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change, each Series A
Preferred Security shall be convertible solely into common stock of the kind
received by holders of American General Common Stock as a result of such Common
Stock Fundamental Change.
The conversion price in the case of any Transaction involving a Fundamental
Change will be adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined below),
the conversion price of the Series A Preferred Securities will thereupon
become the lower of (A) the conversion price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments, and (B) the result obtained by multiplying the greater
of the Applicable Price (as defined below) or the then applicable Reference
Market Price (as defined below) by a fraction of which the numerator will
be $ and the denominator will be an amount per Series A Preferred
Security determined by the Manager in its sole discretion, after
consultation with an investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the Series
A Preferred Securities had been redeemable during such period; and
(ii) in the case of a Common Stock Fundamental Change, the conversion
price of the Series A Preferred Securities in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any other
prior adjustments, will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator will be the Purchaser
Stock Price (as defined below) and the denominator will be the Applicable
Price; provided, however, that in the event of a Common Stock
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Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of American General Common Stock is common stock of
the successor, acquiror, or other third party (and cash, if any, is paid
only with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of the
American General Common Stock will have been exchanged for, converted into,
or acquired for common stock (and cash with respect to fractional
interests) of the successor, acquiror, or other third party, the conversion
price of the Series A Preferred Securities in effect immediately prior to
such Common Stock Fundamental Change will thereupon be adjusted by
multiplying such conversion price by a fraction of which the numerator will
be one and the denominator will be the number of shares of common stock of
the successor, acquiror, or other third party received by a holder of one
share of American General Common Stock as a result of such Common Stock
Fundamental Change.
In the absence of the Fundamental Change provisions, in the case of a
Transaction each Series A Preferred Security would become convertible into the
securities, cash, or property receivable by a holder of the number of shares of
American General Common Stock into which such Series A Preferred Security was
convertible immediately prior to such Transaction. This change could
substantially lessen or eliminate the value of the conversion privilege
associated with the Series A Preferred Securities. For example, if American
General were acquired in a cash merger, each Series A Preferred Security would
become convertible solely into cash and would no longer be convertible into
securities whose value would vary depending on the future prospects of American
General and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental
Change" transactions where all or substantially all the American General Common
Stock is converted into securities, cash, or property and not more than 50% of
the value received by the holders of American General Common Stock consists of
stock listed or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the National Market System of the National
Association of Securities Dealers, Inc. (a "Non-Stock Fundamental Change," as
defined below), to increase the securities, cash, or property into which each
Series A Preferred Security is convertible.
In a Non-Stock Fundamental Change transaction where the initial value
received per share of American General Common Stock (measured as described in
the definition of Applicable Price below) is lower than the then applicable
conversion price of the Series A Preferred Security but greater than or equal to
the Reference Market Price (as defined below), the conversion price will be
adjusted as described above with the effect that each Series A Preferred
Security will be convertible into securities, cash or property of the same type
received by the holders of American General Common Stock in the transaction but
in an amount per Series A Preferred Security determined by American General in
its sole discretion, after consultation with an investment banking firm, to be
the equivalent of the hypothetical redemption price that would have been
applicable if the Series A Preferred Securities had been redeemable during such
period.
In a Non-Stock Fundamental Change transaction where the initial value
received per share of American General Common Stock (measured as described in
the definition of Applicable Price below) is lower than both the conversion
price of a Series A Preferred Security and the Reference Market Price, the
conversion price will be adjusted as described above but calculated as though
such initial value had been the Reference Market Price.
In a Fundamental Change transaction where all or substantially all the
American General Common Stock is converted into securities, cash, or property
and more than 50% of the value received by the holders of American General
Common Stock consists of listed or National Market System traded common stock (a
"Common Stock Fundamental Change," as defined below), the forgoing adjustments
are designed to provide in effect that (a) where American General Common Stock
is converted partly into such common stock and partly into other securities,
cash, or property, each Series A Preferred Security will be convertible solely
into a number of shares of such common stock determined so that the initial
value of such shares (measured as described in the definition of Purchaser Stock
Price below) equals the value of the shares of American General Common Stock
into which such Series A Preferred Security was convertible immediately before
the transaction (measured as aforesaid) and (b) where American General Common
Stock is converted solely into
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<PAGE> 24
such common stock, each Series A Preferred Security will be convertible into the
same number of shares of such common stock receivable by a holder of the number
of shares of American General Common Stock into which such Series A Preferred
Security was convertible immediately before such transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holders of the American General Common Stock
receive only cash, the amount of cash received by the holder of one share of
American General Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average of the
Closing Prices for the American General Common Stock during the ten trading days
prior to and including the record date for the determination of the holders of
American General Common Stock entitled to receive such securities, cash, or
other property in connection with such Non-Stock Fundamental Change or Common
Stock Fundamental Change or, if there is no such record date, the date upon
which the holders of the American General Common Stock shall have the right to
receive such securities, cash, or other property (such record date or
distribution date being hereinafter referred to as the "Entitlement Date"), in
each case as adjusted in good faith by American General to appropriately reflect
any of the events referred to in clauses (i) through (vi) of the first paragraph
under "-- Conversion Price Adjustments -- General."
The term "Closing Price" means on any day the reported last sales price on
such day or in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Consolidated Transaction
Tape or, if the stock is not listed or admitted to trading on such exchange, on
the principal national securities exchange on which such stock is listed or
admitted to trading or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any NYSE member firm, selected by the Manager for that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of American General) of the consideration received by holders of
American General Common Stock consists of common stock that for each of the ten
consecutive trading days prior to the Entitlement Date has been admitted for
listing or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the National Market System of the National
Association of Securities Dealers, Inc.; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) American
General continues to exist after the occurrence of such Fundamental Change and
the outstanding Series A Preferred Securities continue to exist as outstanding
Series A Preferred Securities or (ii) not later than the occurrence of such
Fundamental Change, the outstanding Series A Preferred Securities are converted
into or exchanged for shares of convertible preferred stock of an entity
succeeding to the business of American General, which convertible preferred
stock has powers, preferences, and relative, participating, optional, or other
rights, and qualifications, limitations, and restrictions, substantially similar
to those of the Series A Preferred Securities.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the American General Common Stock shall be exchanged for, converted into,
acquired for, or constitute solely the right to receive securities, cash, or
other property (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification, recapitalization,
or otherwise), provided, that, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the conversion price,
such Fundamental Change shall be deemed to have occurred when substantially all
of the American General Common Stock shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash, or
other property, but the adjustment shall be based upon the highest weighted
average per share consideration that a holder of American General Common Stock
could have received in such transaction or event as a result of which more than
50% of the American General Common Stock shall have been exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
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The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the Entitlement Date, as adjusted in good faith by
American General to appropriately reflect any of the events referred to in
clauses (i) through (vi) of the first paragraph under "-- Conversion Price
Adjustments -- General."
The term "Reference Market Price" shall initially mean $ (which is an
amount equal to 66 2/3% of the reported last sale price for American General
Common Stock on the NYSE Consolidated Transaction Tape on , 1995)
and in the event of any adjustment to the conversion price other than as a
result of a Non-Stock Fundamental Change, the Reference Market Price shall also
be adjusted so that the ratio of the Reference Market Price to the conversion
price after giving effect to any such adjustment shall always be the same as the
ratio of $ to the initial conversion price of Series A Preferred
Securities.
OPTIONAL EXCHANGE FOR AMERICAN GENERAL SERIES A PREFERRED STOCK
Upon the occurrence of an Exchange Event (as defined below), the holders of
a majority of the aggregate liquidation preference of the Series A Preferred
Securities then outstanding, voting at a meeting of the holders of the Series A
Preferred Securities called for such purpose or by written consent, may, at
their option, direct the Conversion Agent to exchange all (but not less than
all) of the Series A Preferred Securities for Series A Junior Subordinated
Debentures and to immediately exchange such Series A Junior Subordinated
Debentures, on behalf of such holders, for shares of American General Series A
Preferred Stock at the Exchange Price. If the Series A Preferred Securities are
exchanged for American General Series A Preferred Stock, American General will
use its best efforts to have the American General Series A Preferred Stock
listed on the NYSE or other exchange on which the Series A Preferred Securities
may then be listed.
The American General Series A Preferred Stock issued upon any such exchange
will have dividend, optional redemption, liquidation and conversion provisions
and other terms substantially similar to the terms of the Series A Preferred
Securities, except that, among other things, the holders of American General
Series A Preferred Stock will be entitled (voting separately as a class together
with the holders of shares of any Dividend Parity Securities on which like
voting rights have been conferred and are exercisable) to elect two additional
directors of American General if dividends on such stock are in arrears for 18
or more consecutive months (including for this purpose any arrearage with
respect to the Series A Preferred Securities) and the American General Series A
Preferred Stock will not be subject to mandatory redemption. See "Description of
American General Series A Preferred Stock." The terms of the American General
Series A Preferred Stock provide that all accumulated and unpaid dividends
(including any Additional Dividends) on the Series A Preferred Securities that
are not paid at the time of making an Exchange Election (as defined below) shall
be treated as accumulated and unpaid dividends on the American General Series A
Preferred Stock. See "Description of American General Series A Preferred Stock."
For a discussion of the taxation of such an exchange to holders, including the
possibility that holders who exchange their Series A Preferred Securities for
American General Series A Preferred Stock may be subject to additional income
tax to the extent accrued but unpaid interest on the Series A Junior
Subordinated Debentures is converted into accumulated and unpaid dividends on
the American General Series A Preferred Stock received in exchange for the
Series A Preferred Securities, see "Certain Federal Income Tax
Considerations -- Exchange of Series A Preferred Securities for American General
Stock."
The failure of holders of Series A Preferred Securities to receive, for 15
consecutive months, the full amount of dividend payments (including arrearages)
on the Series A Preferred Securities will constitute an "Exchange Event." As
soon as practicable, but in no event later than 30 calendar days after the
occurrence of an Exchange Event, the Manager will, upon not less than 15
calendar days' written notice by first-class mail to the holders of Series A
Preferred Securities, convene a meeting of such holders (an "Exchange Election
Meeting") to determine whether or not to cause the Conversion Agent to exchange
all Series A Preferred Securities then outstanding for shares of American
General Series A Preferred Stock in the manner described above. If the Manager
fails to convene such Exchange Election Meeting within such 30-day period, the
holders of at least 10% of the aggregate liquidation preference of the Series A
Preferred Securities then outstanding will be entitled to convene such Exchange
Election Meeting. Upon the affirmative vote of the
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<PAGE> 26
holders of not less than a majority of the aggregate liquidation preference of
the Series A Preferred Securities then outstanding at an Exchange Election
Meeting or, in the absence of such meeting, upon receipt by American General
Delaware of written consents signed by the holders of not less than a majority
of the aggregate liquidation preference of the Series A Preferred Securities
then outstanding, an election to exchange all outstanding Series A Preferred
Securities as described above (an "Exchange Election") will be deemed to have
been made.
Holders of Series A Preferred Securities, by purchasing such Series A
Preferred Securities, will be deemed to have agreed to be bound by these
optional exchange provisions in regard to the exchange of such Series A
Preferred Securities for American General Series A Preferred Stock on the terms
described above.
REDEMPTION
If at any time following the Conversion Expiration Date, less than 10% of
the Series A Preferred Securities remain outstanding, the Series A Preferred
Securities shall be redeemable at the option of American General Delaware, in
whole but not in part, at a redemption price equal to the liquidation preference
for each Series A Preferred Security, together with accumulated and unpaid
dividends (whether or not earned or declared), including any Additional
Dividends (the "Redemption Price").
Upon repayment by American General of the principal of the Series A Junior
Subordinated Debentures, including as a result of the acceleration of Series A
Junior Subordinated Debentures upon the occurrence of an Event of Default under
the Junior Subordinated Indenture with respect to the Series A Junior
Subordinated Debentures, the Series A Preferred Securities shall be subject to
mandatory redemption, in whole but not in part, by American General Delaware and
the proceeds from such repayment will be applied to redeem the Series A
Preferred Securities at the Redemption Price (unless such proceeds are used to
fund the aggregate Liquidation Distributions (as defined below) on the Series A
Preferred Securities in connection with the liquidation, dissolution or
winding-up of American General Delaware). In the case of such repayment, the
Series A Preferred Securities will only be redeemed when repayment of the Series
A Junior Subordinated Debentures has actually been received by American General
Delaware.
The Series A Preferred Securities are not otherwise redeemable for any
reason, including in the event that American General Delaware should become
subject to federal or state taxation. To the extent that such taxation or other
events cause American General Delaware to have insufficient funds to pay full
dividends on the Series A Preferred Securities, the holders thereof will have
available to them the exchange option described above.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution, or
winding-up of American General Delaware, the holders of Series A Preferred
Securities then outstanding will be entitled to receive out of the assets of
American General Delaware legally available for distribution to the holders of
limited liability company interests, before any distribution of assets is made
to holders of any Common Securities or any other class of limited liability
company interests in American General Delaware ranking junior to the Series A
Preferred Securities as to the distribution of assets upon liquidation,
dissolution or winding-up, but together with the holders of Preferred Securities
of any other series or any other limited liability company interests in American
General Delaware then outstanding ranking pari passu with the Series A Preferred
Securities as to the distribution of assets upon liquidation, dissolution or
winding-up ("Liquidation Parity Securities"), an amount equal to the liquidation
preference of $ per Series A Preferred Security plus all accumulated
and unpaid dividends (whether or not earned or declared), including any
Additional Dividends thereon, to the date of payment (the "Liquidation
Distribution").
If, upon any such liquidation, dissolution or winding-up, the Liquidation
Distributions can be paid only in part because American General Delaware has
insufficient assets available to pay in full the aggregate Liquidation
Distributions on the Series A Preferred Securities and the aggregate maximum
liquidation distributions on the Liquidation Parity Securities, then the amounts
payable directly by American General Delaware on the Series A Preferred
Securities and on such Liquidation Parity Securities shall be paid on a pro
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rata basis, so that the ratio of (x) the aggregate amount paid as Liquidation
Distributions on the Series A Preferred Securities to (y) the aggregate amount
paid as liquidation distributions on the Liquidation Parity Securities is the
same as the ratio of (i) the aggregate Liquidation Distributions on the Series A
Preferred Securities to (ii) the aggregate maximum liquidation distributions on
the Liquidation Parity Securities.
If, upon any liquidation, dissolution or winding-up of American General
Delaware, the holders of Series A Preferred Securities are paid in full the
Liquidation Distributions to which they are entitled, then such holders will not
be entitled to receive or share in any other assets of American General Delaware
thereafter available for distribution to any other holders of limited liability
company interests in American General Delaware.
Pursuant to the LLC Agreement, American General Delaware shall be dissolved
and its affairs shall be wound up upon the earliest to occur of (i) ,
20 (the expiration of the period fixed for the duration of American General
Delaware); (ii) the retirement, resignation, expulsion, dissolution or
bankruptcy of the Manager; (iii) the entry of a decree of a judicial dissolution
of American General Delaware; or (iv) upon the written consent thereto of all
holders of outstanding Common Securities and Preferred Securities of American
General Delaware.
VOTING RIGHTS
Except as provided below and under "Description of the
Guarantees -- Amendments and Assignment" and "Description of the Junior
Subordinated Debentures -- Modification of the Junior Subordinated Indenture" in
the accompanying Prospectus and as otherwise required by law and provided by the
LLC Agreement, the holders of the Series A Preferred Securities will have no
voting rights.
If (i) American General Delaware fails to pay dividends in full (including
any arrearages) on the Series A Preferred Securities for 15 consecutive months
(other than as a result of a determination by American General to defer interest
payments on the Series A Junior Subordinated Debentures as described under
"Description of the Series A Junior Subordinated Debentures -- Option to Extend
Interest Payment Period"); (ii) an Event of Default under the Junior
Subordinated Indenture with respect to the Series A Junior Subordinated
Debentures occurs and is continuing; or (iii) American General is in default
under any of its payment or other obligations under the Guarantee with respect
to the Series A Junior Subordinated Debentures, then the holders of outstanding
Series A Preferred Securities will be entitled by the vote of a majority in
aggregate liquidation preference of such holders to appoint and authorize a
special trustee (a "Special Trustee") to enforce American General Delaware's
rights under the Series A Junior Subordinated Debentures, enforce the
obligations undertaken by American General under the Guarantee and, to the
extent permitted by law, declare and pay dividends on the Series A Preferred
Securities. For purposes of determining whether American General Delaware has
failed to pay dividends in full for 15 consecutive months, dividends shall be
deemed to remain in arrears, notwithstanding any partial payments in respect
thereof, until all accumulated and unpaid dividends have been or
contemporaneously are paid. Not later than 30 calendar days after such right to
appoint a Special Trustee arises and upon not less than 15 calendar days'
written notice by first-class mail to the holders of Series A Preferred
Securities, the Manager will convene a meeting to elect a Special Trustee. If
the Manager fails to convene such meeting within such 30-day period, the holders
of at least 10% of the aggregate liquidation preference of the Series A
Preferred Securities will be entitled to convene such meeting. In the event
that, at any such meeting, holders of less than a majority in aggregate
liquidation preference of Series A Preferred Securities will be entitled to
convene such meeting. In the event that, at such meeting, holders of less than a
majority in aggregate liquidation preference of Series A Preferred Securities
vote for such appointment, no Special Trustee shall be appointed. Any Special
Trustee shall vacate office immediately if American General Delaware (or
American General pursuant to the Guarantee) shall have paid in full all
accumulated and unpaid dividends (and any Additional Dividends) on the Series A
Preferred Securities or such Event of Default under the Junior Subordinated
Indenture or such default under the Guarantee, as the case may be, shall have
been cured. Notwithstanding the appointment of any such Special Trustee,
American General will retain all rights as obligor under the Series A Junior
Subordinated Debentures, including the right to defer interest payments as
provided under "Description of the Series A Junior Subordinated
Debentures -- Option to Extend Interest Payment Period," and any such deferral
would
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not constitute an Event of Default under the Junior Subordinated Indenture with
respect to the Series A Junior Subordinated Debentures or enable a holder of
Series A Preferred Securities to require the payment of a dividend that has not
theretofore been declared.
In furtherance of the foregoing, and without limiting the powers of any
Special Trustee so appointed and for the avoidance of any doubt concerning the
powers of the Special Trustee, any Special Trustee, in its own name and as
Special Trustee of an express trust, may institute a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce American General Delaware's creditor
rights directly against American General to the same extent as American General
Delaware and on behalf of American General Delaware, and may prosecute such
proceeding to judgment or final decree, and enforce the same against American
General and collect, out of the property, wherever situated, of American General
the monies adjudged or decreed to be payable in the manner and to the extent
provided by law.
If any proposed amendment to the LLC Agreement or the Series A Declaration
provides for, or the Manager otherwise proposes to effect, (i) any action that
would materially adversely affect the powers, preferences or special rights of
the Series A Preferred Securities, whether by way of amendment to the LLC
Agreement, the Series A Declaration or otherwise, including, without limitation,
the authorization or issuance of any limited liability company interests of
American General Delaware ranking, as to payment of dividends or distribution of
assets upon liquidation, dissolution or winding-up, senior to the Series A
Preferred Securities, or (ii) the liquidation, dissolution or winding-up of
American General Delaware (in either case, other than in connection with the
exchange of Series A Preferred Securities for American General Series A
Preferred Stock upon the occurrence of an Exchange Event, or as described under
"-- Merger, Consolidation or Sale of Assets of American General Delaware" or as
described in the proviso to the next succeeding sentence), then the holders of
outstanding Series A Preferred Securities will be entitled to vote on such
amendment or action of the Manager (but not on any other amendment or action).
In the case of an amendment described in clause (i) which would equally
adversely affect the rights, preferences or privileges of any Dividend Parity
Securities or any Liquidation Parity Securities, such Dividend Parity Securities
or Liquidation Parity Securities, as the case may be, or, in the case of an
amendment described in clause (ii), all Liquidation Parity Securities, will vote
with the holders of the Series A Preferred Securities, together as a class, on
such amendment or action of the Manager and such amendment or action shall not
be effective except with the approval of the holders of 66 2/3% in aggregate
liquidation preference of such outstanding securities; provided, however, that
no such approval shall be required if the liquidation, dissolution, or winding-
up is proposed or initiated upon the occurrence of any of the events resulting
in liquidation, dissolution, or winding-up pursuant to the LLC Agreement. See
"-- Liquidation Rights."
The powers, preferences or special rights attached to the Series A
Preferred Securities will be deemed not to be adversely affected by the creation
or issue of, and no vote will be required for the creation or issue of, any
further limited liability company interests of American General Delaware ranking
junior to or pari passu with the Series A Preferred Securities with regard to
payment of dividends or distribution of assets upon liquidation, dissolution, or
winding-up.
So long as any Series A Junior Subordinated Debentures are held by American
General Delaware, the Manager shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Special Trustee, or
exercising any trust or power conferred on the Special Trustee with respect to
the Series A Junior Subordinated Debentures, (ii) waive compliance with, or any
past default under, the Series A Junior Subordinated Debentures or the Junior
Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of the Series A Junior Subordinated Debentures
shall be due and payable, (iv) consent to any amendment, modification or
termination of the Series A Junior Subordinated Debentures or of the Junior
Subordinated Indenture without, in each case, obtaining the prior approval of
the holders of at least 66 2/3% of the aggregate liquidation preference of the
Series A Preferred Securities; provided, however, that where a consent under the
Series A Junior Subordinated Debentures would require the consent of each holder
affected thereby, no such consent shall be given by the Manager without the
prior consent of each holder of the Series A Preferred Securities. The Manager
shall not revoke any action previously authorized or approved by a vote of
holders of the Series A Preferred Securities, without the approval of
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holders of at least 66 2/3% of the aggregate liquidation preference of the
Series A Preferred Securities then outstanding (or, if such action required the
approval of each holder, then only with the approval of each holder). The
Manager shall notify all holders of the Series A Preferred Securities of any
notice of default received from the Junior Subordinated Trustee under the Junior
Subordinated Indenture.
Any required approval of holders of the Series A Preferred Securities may
be given at a meeting of such holders convened for such purpose or pursuant to
written consent. American General Delaware will cause a notice of any meeting at
which holders of the Series A Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be mailed to each holder of the Series A Preferred Securities. Each such
notice will include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description of any matter
on which such holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents.
Notwithstanding that holders of Series A Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Series A Preferred Securities and any other series of Preferred Securities that
are entitled to vote or consent with such Series A Preferred Securities as a
single class at such time that are owned by American General or by any entity
more than 50% of which is owned by American General, either directly or
indirectly, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
TRANSFER AGENT, REGISTRAR AND PAYING AGENT, AND CONVERSION AGENT
will act as Transfer Agent, Registrar and Paying Agent,
and Conversion Agent for the Series A Preferred Securities. Registration of
transfers of Series A Preferred Securities will be effected without charge by or
on behalf of American General Delaware, but upon payment in respect of any tax
or other governmental charges which may be imposed in relation to it.
MERGER, CONSOLIDATION OR SALE OF ASSETS OF AMERICAN GENERAL DELAWARE
American General Delaware may not consolidate with, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any entity, except as described
below. American General Delaware may, in order to avoid federal income tax or
Investment Company Act of 1940 (the "1940 Act") considerations adverse to
American General or American General Delaware or to the holders of the Series A
Preferred Securities, without the consent of the holders of the Series A
Preferred Securities, consolidate with, merge with or into, or be replaced by a
limited partnership or trust organized as such under the laws of any state of
the United States of America, provided that (i) such successor entity either (x)
expressly assumes all of the obligations of American General Delaware under the
Series A Preferred Securities or (y) substitutes for the Series A Preferred
Securities other securities having substantially the same terms as the Series A
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank, with respect to participation in the profits or assets of the
successor entity, at least as high as the Series A Preferred Securities rank
with respect to payment of dividends and distribution of assets upon the
liquidation, dissolution or winding-up of American General Delaware, (ii)
American General expressly acknowledges such successor entity as the holder of
the Series A Junior Subordinated Debentures and its obligations under the
Guarantee with respect to the Successor Securities, (iii) such merger,
consolidation, or replacement does not cause the Series A Preferred Securities
(or any Successor Securities) to be delisted by any national securities exchange
or other organization on which the Series A Preferred Securities are then
listed, (iv) such merger, consolidation or replacement does not cause the Series
A Preferred Securities (or any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation or replacement does not adversely affect the powers, preferences
and other special rights of the holders of the Series A Preferred Securities (or
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity), and (vi) prior to such
merger, consolidation or replacement, American General has received an opinion
of nationally recognized independent counsel to American General Delaware
experienced in such matters to the effect that (x) such successor entity will be
treated as a partnership or as a trust, as appropriate,
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for federal income tax purposes, (y) following such merger, consolidation or
replacement, American General and such successor entity will be in compliance
with the 1940 Act without registering thereunder as an investment company and
(z) such merger, consolidation or replacement will not adversely affect the
limited liability of the holders of the Series A Preferred Securities or
Successor Securities.
MISCELLANEOUS
The Manager is authorized and directed to conduct its affairs and to
operate American General Delaware in such a way that American General Delaware
will not be deemed to be an "investment company" required to be registered under
the 1940 Act or taxed as a corporation for federal income tax purposes and so
that the Series A Junior Subordinated Debentures will be treated as indebtedness
of American General for federal income tax purposes. In this connection, the
Manager is authorized to take any action not inconsistent with applicable law,
the LLC Agreement or the Series A Declaration that does not adversely affect the
interests of the holders of the Series A Preferred Securities and that the
Manager determines in its discretion to be necessary or desirable for such
purposes.
DESCRIPTION OF AMERICAN GENERAL SERIES A PREFERRED STOCK
As described under "Description of the Series A Preferred
Securities -- Optional Exchange for American General Series A Preferred Stock"
above, the Series A Preferred Securities may be exchanged in certain
circumstances for Series A Junior Subordinated Debentures held by American
General Delaware, which will then be immediately converted into shares of
American General Series A Preferred Stock. The following summary of the terms
and provisions of the American General Series A Preferred Stock supplements the
description of the terms of American General Preferred Stock set forth in the
accompanying Prospectus under the heading "Description of American General
Preferred Stock," to which description reference is hereby made. The summary of
certain terms and provisions of the American General Series A Preferred Stock
set forth below does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the Restated Articles of Incorporation, as
amended (the "Articles"), of American General and the series designation (the
"American General Series A Designation") approved by the Board of Directors of
American General, or an authorized committee thereof. The Articles are filed as
an exhibit to the Registration Statement of which this Prospectus Supplement is
a part. A copy of the American General Series A Designation will be included as
an exhibit to a Current Report on Form 8-K to be filed by American General at or
prior to the closing of the sale of the Series A Preferred Securities offered
hereby.
In connection with the offering of the Series A Preferred Securities, the
Board of Directors of American General, or an authorized committee thereof, will
designate, and American General will keep available, shares
( shares if the Underwriters' over-allotment option is exercised in
full) of American General Series A Preferred Stock for issuance upon exchange of
the Series A Preferred Securities as described under "Description of the Series
A Preferred Securities -- Optional Exchange for American General Series A
Preferred Stock." At the time the Series A Preferred Securities are issued, all
corporate action required to be taken by American General in connection with the
issuance of the American General Series A Preferred Stock upon the making of an
Exchange Election by the holders of the Series A Preferred Securities will have
been taken by American General. The terms of the American General Series A
Preferred Stock (including as to dividends, optional redemption, conversion and
liquidation preference) will be substantially similar to those of the Series A
Preferred Securities with the following principal exceptions:
(a) Accumulated and unpaid dividends (including any Additional
Dividends thereon), if any, on the Series A Preferred Securities at the
time of the making of an Exchange Election will become accumulated and
unpaid dividends on the American General Series A Preferred Stock;
(b) If dividends are not paid on the American General Series A
Preferred Stock for 18 consecutive monthly dividend periods (including for
this purpose any arrearage with respect to the Series A Preferred
Securities), the number of directors of American General shall be increased
by two persons and the holders of American General Series A Preferred Stock
will be entitled (voting separately as a class together with the holders of
shares of any one or more other series of capital stock of American General
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<PAGE> 31
ranking on a parity with the American General Series A Preferred Stock as
to the payment of dividends on which like voting rights have been conferred
and are exercisable) to elect such directors;
(c) Dividends on the American General Series A Preferred Stock are not
subject to a deferral option; however, such dividends need not be declared
even if American General has funds legally available therefor and cash on
hand sufficient to pay dividends. In the event that American General fails
to declare dividends on the American General Series A Preferred Stock, no
dividends will be payable on any other securities of American General
ranking pari passu with or junior to such American General Series A
Preferred Stock; and
(d) The American General Series A Preferred Stock will not be subject
to mandatory redemption.
On and after , 199 , American General may, at its option,
cause the conversion rights of holders of American General Series A Preferred
Stock to expire if (i) American General is then current in the payment of
dividends on the American General Series A Preferred Stock and (ii) for 20
trading days within any period of 30 consecutive trading days, including the
last trading day of such period, the Current Market Price of American General
Common Stock has exceeded 120% of the conversion price of the American General
Series A Preferred Stock, subject to adjustment in certain circumstances. In
order to exercise its conversion expiration option, American General must issue
a press release announcing the Conversion Expiration Date and give notice by
first-class mail to holders of the American General Series A Preferred Stock in
the manner provided for holders of Series A Preferred Securities under
"Description of the Series A Preferred Securities -- Conversion
Rights -- Expiration of Conversion Rights." The "Conversion Expiration Date"
will be a date selected by American General which is not less than 30 and not
more than 60 calendar days after the date on which American General issues the
press release announcing its intention to terminate conversion rights of holders
of American General Series A Preferred Stock. If at any time following the
Conversion Expiration Date, less than 10% of the shares of American General
Series A Preferred Stock remains outstanding, such shares of American General
Series A Preferred Stock shall be redeemable, in whole but not in part, at the
option of American General at the Redemption Price.
The American General Series A Preferred Stock will rank senior to the
American General Common Stock with respect to the payment of dividends and
distribution of assets upon liquidation, dissolution or winding-up.
In the event of a voluntary or involuntary liquidation, dissolution or
winding-up of American General, the holders of the American General Series A
Preferred Stock will be entitled to receive out of the net assets of American
General, but before any distribution is made on any class of securities ranking
junior to the American General Series A Preferred Stock, $ per share in
cash plus accumulated and unpaid dividends (whether or not earned or declared)
to the date of final distribution to such holders. After payment of the full
amount of the liquidation distribution to which they are entitled, the holders
of shares of the American General Series A Preferred Stock will not be entitled
to any further participation in any distribution of assets of American General.
In the event that the assets available for distribution are insufficient to pay
in full the liquidation preference to the holders of the American General Series
A Preferred Stock and any securities ranking pari passu with the American
General Series A Preferred Stock as to the distribution of assets upon
liquidation, dissolution or winding-up, such holders will share in the remaining
assets based on the proportion of their respective liquidation preferences to
the aggregate amount of unpaid liquidation preferences.
So long as the Series A Preferred Securities are exchangeable for shares of
American General Series A Preferred Stock, American General may not authorize or
issue any other preferred stock ranking senior to the American General Series A
Preferred Stock as to the payment of dividends or distribution of assets upon
liquidation, dissolution or winding-up without the approval of the holders of
not less than 66 2/3% of the aggregate liquidation preference of the Series A
Preferred Securities then outstanding. However, no such vote shall be required
for the issuance by American General of additional preferred stock ranking pari
passu with or junior to the American General Series A Preferred Stock as to the
payment of dividends and distribution of assets upon liquidation, dissolution or
winding-up.
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American General is a holding company and a substantial portion of its
revenues are derived from dividends and other payments from its subsidiaries.
For a description of certain restrictions on the ability of certain subsidiaries
of American General to pay dividends, and other consequences of the holding
company structure, see "Investment Considerations -- Subordinate Obligations
Under Guarantee and Series A Junior Subordinated Debentures."
DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Series A
Junior Subordinated Debentures in which American General Delaware will invest
(i) the proceeds of the issuance and sale of the Series A Preferred Securities
and (ii) substantially all of the purchase price paid by American General for
the Common Securities and its related capital contribution (the "Manager's
Payment"). This description supplements the description of the general terms and
provisions of the Junior Subordinated Debentures set forth in the accompanying
Prospectus under the caption "Description of the Junior Subordinated
Debentures." The indenture supplemental to the Junior Subordinated Indenture or
the resolution of American General's Board of Directors or a special committee
thereof establishing the Series A Junior Subordinated Debenture will be included
as an exhibit to a Current Report on Form 8-K to be filed by American General at
or prior to the closing of the sale of the Series A Preferred Securities offered
hereby.
GENERAL
The Series A Junior Subordinated Debentures will be limited in aggregate
principal amount to the sum of the aggregate amount of the proceeds received by
American General Delaware from the offering hereby of the Series A Preferred
Securities and the Manager's Payment less 1% of such sum.
The entire principal amount of the Series A Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, including Additional Interest (as hereinafter defined), if any, on the
earlier of (i) , 20 or (ii) the date upon which American
General Delaware is liquidated, dissolved or wound-up.
INTEREST
Each Series A Junior Subordinated Debenture will bear interest at the rate
of % per annum from the original date of issuance, payable monthly in
arrears on the last day of each calendar month of each year (each, an "Interest
Payment Date"), commencing , 1995. Interest will compound monthly and
will accrue at the annual rate of % on any interest installment not paid
when due.
The amount of interest payable for any period will be computed on the basis
of a 360-day year consisting of twelve 30-day months and, for any period shorter
than a full month, will be computed on the basis of the actual number of days
elapsed in such period. In the event that any date on which principal or
interest is payable on the Series A Junior Subordinated Debentures is not a
Business Day, then the required payment to be made on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. A "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
American General shall have the right at any time and from time to time
during the term of the Series A Junior Subordinated Debentures to extend the
interest payment period to a period not exceeding 60 consecutive months, but in
no event beyond the stated maturity date or date of redemption of the Series A
Junior Subordinated Debentures (the "Extension Period"). At the end of any such
Extension Period, American General shall pay all interest then accrued and
unpaid (together with any Additional Interest thereon to the
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extent permitted by applicable law). Prior to the termination of any such
Extension Period of less than 60 consecutive months, American General may
further extend the interest payment period, provided that such Extension Period
may not exceed 60 consecutive months. Upon the termination of any Extension
Period and the payment of all amounts then due, American General may select a
new Extension Period subject to the above requirements. No interest during an
Extension Period, except at the end thereof, shall be due and payable. During
any such Extension Period, American General has agreed not to take, and to cause
its majority-owned subsidiaries not to take, certain actions as described under
"Description of the Junior Subordinated Debentures -- Certain Covenants of
American General" in the accompanying Prospectus. American General shall give
American General Delaware, as holder of the Series A Junior Subordinated
Debentures, notice of its selection of any Extension Period one Business Day
prior to the earlier of (i) the date the dividends on the Series A Preferred
Securities are payable or (ii) the date American General Delaware is required to
give notice to the NYSE or other applicable self-regulatory organization or to
holders of the Series A Preferred Securities of the record date or the date such
dividend is payable (which is currently 10 days prior to such date), but in any
event not less than one Business Day prior to such record date. American General
shall cause American General Delaware to give notice of American General's
selection of such Extension Period to the holders of the Series A Preferred
Securities.
ADDITIONAL INTEREST
American General shall be required to pay interest at the rate of % per
annum upon interest that has not been paid on the Series A Junior Subordinated
Debentures monthly. Accordingly, in such circumstances, American General will
pay interest upon interest in order to provide for monthly compounding on the
Series A Junior Subordinated Debentures. The amounts of interest payable to
effect monthly compounding on the Series A Junior Subordinated Debentures is
referred to herein as "Additional Interest."
CONVERSION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
The Series A Junior Subordinated Debentures will be convertible into
American General Common Stock at the option of the holders of the Series A
Junior Subordinated Debentures at any time on or before the close of business on
the stated maturity date thereof at the initial conversion price set forth on
the cover page of this Prospectus Supplement, subject to the conversion price
adjustments described under "Description of the Series A Preferred
Securities -- Conversion Rights." American General Delaware will covenant not to
convert Series A Junior Subordinated Debentures except pursuant to a notice of
conversion delivered to the Conversion Agent by a holder of Series A Preferred
Securities. Upon surrender of Series A Preferred Securities by a holder thereof
to the Conversion Agent for conversion, American General Delaware will
distribute $ principal amount of the Series A Junior Subordinated
Debentures to the Conversion Agent with respect to each Series A Preferred
Security so to be converted, whereupon the Conversion Agent will convert such
Series A Junior Subordinated Debentures to American General Common Stock on
behalf of the holder of such Series A Preferred Securities. American General's
delivery to the holders of the Series A Junior Subordinated Debentures (through
the Conversion Agent) of the fixed number of shares of American General Common
Stock into which the Series A Junior Subordinated Debentures so delivered are
convertible (together with the cash payment, if any, in lieu of fractional
shares) will be deemed to satisfy American General's obligation to pay the
principal amount of such Series A Junior Subordinated Debentures, and the
accrued and unpaid interest attributable to the period from the last date to
which interest has been paid or duly provided for; provided, however, that if
any Series A Junior Subordinated Debenture is converted between a record date
for the payment of interest and the related interest payment date, the interest
payable on such succeeding interest payment date with respect to such Series A
Junior Subordinated Debenture shall be paid despite such conversion.
EXCHANGE OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
The Series A Junior Subordinated Debentures will be exchanged for American
General Series A Preferred Stock upon an Exchange Election on or before the
close of business on the stated maturity date thereof at the rate of one share
of American General Series A Preferred Stock for each $ principal
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amount of the Series A Junior Subordinated Debentures (equivalent to an exchange
rate of one share of American General Series A Preferred Stock for each Series A
Preferred Security). Accumulated and unpaid dividends (including Additional
Dividends, if any) on the Series A Preferred Securities will be treated as
accumulated and unpaid dividends on the American General Series A Preferred
Stock. See "Description of Series A Preferred Securities -- Optional Exchange
for American General Series A Preferred Stock."
MANDATORY PREPAYMENT
If American General Delaware redeems the Series A Preferred Securities in
accordance with the terms thereof, the Series A Junior Subordinated Debentures
will become due and payable in a principal amount equal to the aggregate
liquidation preference of the Series A Preferred Securities so redeemed,
together with any accrued and unpaid interest thereon, including Additional
Interest, if any. Any payment pursuant to this provision shall be made prior to
12:00 noon, New York time, on the date of such redemption or at such other time
on such earlier date as the parties thereto shall agree.
SET-OFF
Notwithstanding anything to the contrary in the Junior Subordinated
Indenture, American General shall have the right to set-off any payment it is
otherwise required to make thereunder with and to the extent American General
has theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
ENFORCEMENT OF CERTAIN RIGHTS BY SPECIAL TRUSTEE
If (i) American General Delaware fails to pay dividends in full (including
arrearages) on the Series A Preferred Securities for 15 consecutive months
(other than as a result of a determination by American General to defer interest
payments on the Series A Junior Subordinated Debentures as described under
"Description of the Series A Junior Subordinated Debentures -- Option to Extend
Interest Payment Period"); (ii) an Event of Default under the Junior
Subordinated Indenture with respect to the Series A Junior Subordinated
Debentures occurs and is continuing; or (iii) American General is in default
under any of its payment or other obligations under the Guarantee, then, under
the terms of the Series A Preferred Securities, the holders of outstanding
Series A Preferred Securities will have the rights referred to under
"Description of the Series A Preferred Securities -- Voting Rights," including
the right to appoint a Special Trustee, which Special Trustee shall be
authorized to exercise American General Delaware's right to accelerate the
principal amount of the Series A Junior Subordinated Debentures and to enforce
American General Delaware's other creditor rights under the Series A Junior
Subordinated Debentures. Notwithstanding the appointment of any such Special
Trustee, American General shall continue as Manager and shall retain all rights
under the Junior Subordinated Indenture, including the right to extend the
interest payment period from time to time as described above under the caption
"-- Option to Extend Interest Payment Period."
MISCELLANEOUS
For restrictions on certain actions of American General with respect to the
Series A Junior Subordinated Debentures held by American General Delaware, see
"Description of the Series A Preferred Securities -- Voting Rights."
S-32
<PAGE> 35
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of the material federal income tax
considerations relevant to the purchase, ownership and disposition of the Series
A Preferred Securities, and in the opinion of Vinson & Elkins L.L.P., counsel to
American General and American General Delaware, is accurate insofar as it
expresses conclusions of law. However, this summary does not address all federal
income tax aspects of the Series A Preferred Securities, or the tax
considerations to certain types of holders subject to special treatment under
the federal income tax laws (for example, banks, life insurance companies,
securities or other dealers, or foreign persons and foreign entities). This
discussion is based upon current provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder,
judicial decisions and Internal Revenue Service ("IRS") rulings and notices; all
of these authorities, however, are subject to change, which may alter the
opinions expressed herein and adversely affect investors in the Series A
Preferred Securities. Moreover, the transactions described in this Prospectus
Supplement and the accompanying Prospectus raise a number of novel tax issues
which have not been ruled on by the courts or the IRS in similar transactions.
As a result, there can be no assurance that the IRS will not audit these
transactions and, if it does so, that the IRS will agree with the conclusions
set forth below or the positions taken by American General and American General
Delaware in conformity therewith. See "-- American General Delaware Information
Returns and Audit Procedures" below. Unless otherwise indicated, the information
below is directed at United States Holders (as defined below) who purchase
Series A Preferred Securities on their original issue at their initial offering
price, and that hold such Series A Preferred Securities as capital assets
(generally property held for investment). For purposes of this discussion, a
"Holder" is a beneficial owner of a Series A Preferred Security who or that is
(i) a citizen or resident of the United States, (ii) a domestic corporation,
partnership, estate or trust, or (iii) otherwise subject to United States
federal income taxation on a net income basis in respect of a Series A Preferred
Security.
PROSPECTIVE PURCHASERS OF SERIES A PREFERRED SECURITIES ARE ADVISED TO
CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES OR OTHER TAX
CONSIDERATIONS OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A PREFERRED
SECURITIES, INCLUDING THE EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
TAX CLASSIFICATION
Vinson & Elkins L.L.P. is of the opinion that (i) American General Delaware
will be, upon issuance of the Series A Preferred Securities, classified as a
partnership for federal income tax purposes and not as an association taxable as
a corporation and (ii) the Series A Junior Subordinated Debentures should be
classified as indebtedness for federal income tax purposes. The following
discussion assumes such classifications.
INCOME FROM SERIES A PREFERRED SECURITIES
Each Holder of Series A Preferred Securities will be required to include in
gross income its distributive share of the net income of American General
Delaware, which net income generally will be equal to the amount of interest
received or accrued by American General Delaware on the Series A Junior
Subordinated Debentures. Such income will not exceed dividends received on a
Series A Preferred Security, except in limited circumstances. See "-- Original
Issue Discount" and "-- Adjustment of Conversion Price" below. Any amount so
included in a Holder's gross income will increase its tax basis in the Series A
Preferred Securities, and the amount of distributions of cash or other property
by American General Delaware to a Holder will reduce such Holder's tax basis in
the Series A Preferred Securities. No portion of the amounts received on the
Series A Preferred Securities will be eligible for the dividends received
deduction.
S-33
<PAGE> 36
ORIGINAL ISSUE DISCOUNT
Under Treasury Regulations, the stated interest payments on the Series A
Junior Subordinated Debentures will be treated as "original issue discount"
because of the option that American General has, under the terms of the Series A
Junior Subordinated Debentures, to defer interest payments for periods of up to
60 consecutive months. Under the Code, a Holder of debt with original issue
discount must include that discount in income on an economic accrual basis and
before the receipt of cash attributable to the income regardless of its method
of tax accounting. The amount of original issue discount that accrues in any
month will approximately equal the amount of the interest that accrues in that
month at the stated interest rate. In the event that the interest payment period
is extended, however, American General Delaware will accrue additional original
issue discount approximately equal to the amount of the additional interest
payment due at the end of the extended interest payment period on an economic
accrual basis over the length of the extended interest period.
Accrued income in respect of deferred interest will be allocated, but the
corresponding cash will not be distributed, to Holders of record on the Business
Day preceding the last day of each calendar month. As a result, Holders of
record during a deferred interest payment period will include interest in gross
income in advance of the receipt of cash, and any such Holder who disposes of
Series A Preferred Securities prior to the record date for the payment of
dividends following such deferred interest payment period will include such
Holder's allocable share of such interest in gross income but will not receive
any cash related thereto from American General Delaware. The tax basis of a
Series A Preferred Security will be increased by the amount of any interest that
is included in income without a corresponding receipt of cash and will be
decreased when and if such cash is subsequently received from American General
Delaware.
American General Delaware does not presently intend to make an election
under section 754 of the Code. Accordingly, a subsequent purchaser of Series A
Preferred Securities will not be permitted to adjust the tax basis in its
allocable share of American General Delaware's assets so as to reflect any
difference between its purchase price for the Series A Preferred Securities and
its share of American General Delaware's underlying tax basis in its assets. As
a result, a holder of Series A Preferred Securities may be required to report a
larger or smaller amount of income from holding the Series A Preferred
Securities than would otherwise be appropriate based upon the holder's purchase
price for the Series A Preferred Securities.
DISPOSITION OF SERIES A PREFERRED SECURITIES
Generally, capital gain or loss will be recognized on a sale (including a
complete redemption for cash) of Series A Preferred Securities equal to the
difference between the amount realized and the Holder's tax basis in the Series
A Preferred Securities sold. Gain or loss recognized by a Holder on the sale or
exchange of a Series A Preferred Security held for more than one year generally
will be taxable as long-term capital gain or loss. The adjusted tax basis of the
Series A Preferred Securities sold will equal the amount paid for the Series A
Preferred Securities, increased by accrued but unpaid original issue discount
and other income, if any, as described herein allocated to such Holder, and
reduced by any cash or other property distributed to such Holder by American
General Delaware. A Holder who acquires Series A Preferred Securities at
different prices may be required to maintain a single aggregate adjusted tax
basis in all of its Series A Preferred Securities and, upon sale or other
disposition of some of such Series A Preferred Securities, to allocate a pro
rata portion of such aggregate tax basis to the Series A Preferred Securities
sold (rather than maintaining a separate tax basis in each Series A Preferred
Security for purposes of computing gain or loss on a sale of that Series A
Preferred Security).
EXCHANGE OF SERIES A PREFERRED SECURITIES FOR AMERICAN GENERAL STOCK
A Holder should not recognize gain or loss upon the exchange, through the
Conversion Agent, of Series A Preferred Securities for a proportionate share of
the Series A Junior Subordinated Debentures held by American General Delaware or
upon the conversion, through the Conversion Agent, of such Series A Subordinated
Debentures for American General Common Stock. Similarly, a Holder should not
recognize gain or loss upon the exchange, through the Conversion Agent, of
Series A Junior Subordinated Debentures
S-34
<PAGE> 37
for American General Series A Preferred Stock. However, to the extent that
accrued but unpaid interest on the Series A Junior Subordinated Debentures is
converted into accumulated and unpaid dividends on the American General Series A
Preferred Stock, receipt of cash from American General in respect of such
dividends will generally result in taxable income whereas, had the exchange not
been effected, reseipt of cash from American General Delaware in respect of the
corresponding accrued interest would not have been taxable. Moreover, in the
case of a Holder's receipt of cash in lieu of a fractional share of either
American General Common Stock or American General Series A Preferred Stock, the
Holder will recognize taxable gain equal to the amount of cash received less the
Holder's tax basis in such fractional share.
A Holder's tax basis in the American General Common Stock or the American
General Series A Preferred Stock received upon exchange and conversion should
generally be equal to the Holder's tax basis in the Series A Preferred
Securities delivered to the Conversion Agent for exchange, plus any gain
recognized on the exchange, and less any cash received. In the case of an
exchange for less than all of a Holder's Series A Preferred Securities, the
Holder's tax basis in the shares of American General Common Stock received will
be the lesser of the Holder's tax basis in all of such Holder's Series A
Preferred Securities immediately before such exchange or American General
Delaware's tax basis in the portion of the Series A Junior Subordinated
Debentures converted for those shares of American General Common Stock,
increased in either case by any gain recognized on conversion in respect of any
fractional share interest redeemed by American General and decreased by any cash
received in connection therewith. In such case, the Holder's aggregate tax basis
in its remaining Series A Preferred Securities will be its aggregate tax basis
in such Holder's Series A Preferred Securities immediately before such exchange,
reduced (but not below zero) by its tax basis in the shares of American General
Common Stock delivered in such exchange, determined as described above, and the
amount of cash paid to the Holder in lieu of a fractional share interest, if
any. A Holder's holding period in the American General Common Stock or the
American General Series A Preferred Stock received upon exchange and conversion
should generally begin on the date the Holder acquired the Series A Preferred
Securities delivered to the Conversion Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under section 305 of the Code would treat
American General Delaware (and, thus, Holders of Series A Preferred Securities)
as having received a constructive distribution from American General in the
event the conversion ratio of the Series A Junior Subordinated Debentures were
adjusted if (i) as a result of such adjustment, the proportionate interest
(measured by the quantum of American General stock into or for which the Series
A Junior Subordinated Debentures are convertible or exchangeable) of American
General Delaware in the assets or earnings and profits of American General were
increased, and (ii) the adjustment was not made pursuant to a bona fide,
reasonable antidilution formula. An adjustment in the conversion ratio would not
be considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the stock into or
for which the Series A Junior Subordinated Debentures are convertible or
exchangeable. Thus, under certain circumstances, a reduction in the conversion
price for the Series A Junior Subordinated Debentures is likely to be taxable to
American General Delaware as a constructive dividend to the extent of the
current or accumulated earnings and profits of American General. Holders of the
Series A Preferred Securities would be required to include their allocable share
of such constructive dividend in gross income but will not receive any cash
related thereto. In addition, the failure to fully adjust the conversion price
of the Series A Junior Subordinated Debentures to reflect distributions of stock
dividends with respect to American General Common Stock may result in a taxable
dividend to Holders of American General Common Stock.
Similarly, under section 305 of the Code, adjustments to the conversion
price of the American General Series A Preferred Stock, which may occur under
certain circumstances, may result in deemed dividend income to Holders of the
American General Series A Preferred Stock if such adjustments are not made
pursuant to a bona fide, reasonable antidilution formula, and failure to make
such adjustments to the conversion price of the American General Series A
Preferred Stock may result in deemed dividend income to Holders of American
General Common Stock.
S-35
<PAGE> 38
AMERICAN GENERAL DELAWARE INFORMATION RETURNS AND AUDIT PROCEDURES
The Manager of American General Delaware will furnish each Holder with a
Schedule K-1 each year setting forth such Holder's allocable share of income for
the prior calendar year, as soon as practicable following the end of the taxable
year but in any event prior to March 15th of each succeeding year.
Any person who holds Series A Preferred Securities as nominee for another
person is required to furnish to American General Delaware a written statement
containing: (a) the name, address and taxpayer identification number of the
beneficial owner and of the nominee; (b) information as to whether the
beneficial owner is (i) a person that is not a United States person, (ii) a
foreign government, an international organization or any wholly-owned agency or
instrumentality of either, or (iii) a tax-exempt entity; and (c) a description
of the Series A Preferred Securities held, acquired or transferred for the
beneficial owner, including the dates of acquisitions and transfers, the methods
and costs of acquisitions, and the net proceeds from transfers. Brokers and
financial institutions are also required to furnish written statements
containing similar information with respect to Series A Preferred Securities
they hold for their own accounts. A penalty of $50 per failure (up to a maximum
of $100,000 per calendar year) is imposed by the Code for failure to report such
information to American General Delaware. The nominee is required to supply the
beneficial owners of the Series A Preferred Securities with the information
furnished to American General Delaware.
The Manager, as the tax matters partner, will be responsible for
representing American General Delaware (and, indirectly, the Holders) in any
dispute with the IRS involving the partnership information returns filed by
American General Delaware. The Code provides for administrative examination of
such returns as if American General Delaware (which is treated as a partnership)
were a separate and distinct taxpayer. Generally, the statute of limitations for
partnership items reflected or required to be reflected on a partnership
information return does not expire until three years after the later of the
filing or the last date for filing of such return. Any adverse determination
following an audit of a return of American General Delaware by the appropriate
taxing authorities could result in an adjustment of the returns of the Holders,
and, under certain circumstances, a Holder may be precluded from separately
litigating a proposed adjustment to the items of American General Delaware. An
adjustment could also result in an audit of a Holder's return and adjustments of
items not related to the income and losses of American General Delaware.
FOREIGN HOLDERS
Ownership of Series A Preferred Securities by nonresident aliens, foreign
corporations and other foreign persons raises tax considerations unique to such
persons and may have substantially adverse tax considerations to them.
Therefore, prospective investors who are foreign persons or which are foreign
entities are urged to consult with their U.S. tax advisors as to whether an
investment in Series A Preferred Securities represents an appropriate investment
in light of those unique tax considerations and possible adverse tax
considerations.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
dividends on, and payments of the proceeds of the sale of, Series A Preferred
Securities, American General Series A Preferred Stock or American General Common
Stock within the United States to noncorporate Holders, and "backup withholding"
at a rate of 31% will apply to such payments if the Holder fails to provide an
accurate taxpayer identification number.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSIDERATIONS TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SERIES
A PREFERRED SECURITIES, INCLUDING THE TAX CONSIDERATIONS UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
S-36
<PAGE> 39
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, American
General Delaware has agreed to sell to each of the Underwriters named below, and
each of such Underwriters, for whom is acting as
representative, has severally agreed to purchase from American General Delaware,
the respective number of Series A Preferred Securities set forth opposite its
name below:
<TABLE>
<CAPTION>
NUMBER
OF
SERIES A
PREFERRED
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
----------
Total..........................................................
==========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all such Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $ per Series A Preferred Security.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per Series A Preferred Security to certain brokers and dealers.
After the Series A Preferred Securities are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities will be used by American General Delaware to purchase the
Series A Junior Subordinated Debentures of American General, the Underwriting
Agreement provides that American General will pay, as compensation to the
Underwriters, a commission of $ per Series A Preferred Security.
American General Delaware has granted the Underwriters an option
exercisable for 30 days after the date of this Prospectus Supplement to purchase
up to an aggregate of additional Series A Preferred Securities solely to
cover over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of Series
A Preferred Securities to be purchased by each of them, as shown in the
foregoing table, bears to the total Series A Preferred Securities offered.
American General and American General Delaware have agreed not to offer,
sell, contract to sell, or otherwise dispose of any shares of American General
Common Stock, American General Series A Preferred Stock, any other capital stock
of American General, any other security convertible into or exercisable or
exchangeable for American General Common Stock or any such other capital stock
or debt securities substantially similar to the Series A Junior Subordinated
Debentures for a period of days after the date of this Prospectus Supplement
without the prior written consent of the representative, except for (i) the
Series A Preferred Securities offered hereby, (ii) American General Common Stock
or American General Series A Preferred Stock issued or delivered upon conversion
or exchange of the Series A Junior Subordinated Debentures, (iii) securities
issued or delivered upon conversion, exchange or exercise of any other
securities of American General outstanding on the date of this Prospectus
Supplement, (iv) securities issued pursuant to
S-37
<PAGE> 40
American General's stock option or other benefit or incentive plans maintained
for its officers, directors or employees, and (v) securities issued in
connection with mergers, acquisitions or similar transactions.
Certain of the Underwriters are customers of, or engage in transactions
with, and from time to time have performed services for, American General and
its subsidiaries and associated companies in the ordinary course of business.
Prior to the Offering made hereby, there has been no public market for the
Series A Preferred Securities. Application has been made to list the Series A
Preferred Securities on the NYSE under the symbol " ." In order to
meet one of the requirements for listing the Series A Preferred Securities on
the NYSE, the Underwriters have undertaken to sell lots of 100 or more Series A
Preferred Securities to a minimum of 400 beneficial holders.
American General and American General Delaware have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
S-38
<PAGE> 41
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 AMERICAN GENERAL DELAWARE, L.L.C.,
AMERICAN GENERAL CORPORATION OR THE UNDERWRITERS. THIS PROPECTUS 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 AMERICAN GENERAL DELAWARE,
L.L.C. OR AMERICAN GENERAL CORPORATION SINCE SUCH DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Prospectus Supplement Summary........ S-4
Summary Financial Information........ S-10
American General..................... S-11
American General Delaware............ S-11
Investment Considerations............ S-12
Capitalization....................... S-14
Use of Proceeds...................... S-14
Market Price of American General
Common Stock and Dividends......... S-15
Description of the Series A Preferred
Securities......................... S-16
Description of American General
Series A Preferred Stock........... S-28
Description of the Series A Junior
Subordinated Debentures............ S-30
Certain Federal Income Tax
Considerations..................... S-33
Underwriting......................... S-37
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
American General LLCs................ 3
American General..................... 3
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividend Requirements.............. 3
Use of Proceeds...................... 4
Description of the Preferred
Securities......................... 4
Description of the Guarantees........ 7
Description of the Junior
Subordinated Debentures............ 10
Description of American General
Preferred Stock.................... 17
Description of American General
Common Stock....................... 20
Plan of Distribution................. 22
Legal Opinions....................... 23
Experts.............................. 23
</TABLE>
AMERICAN GENERAL
DELAWARE, L.L.C.
PREFERRED SECURITIES, SERIES A
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY, AND CONVERTIBLE
INTO COMMON STOCK OF,
AMERICAN GENERAL CORPORATION
(AMERICAN GENERAL LOGO)
Prospectus Supplement
Dated , 1995
<PAGE> 42
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED MARCH 30, 1995
PROSPECTUS
(AMERICAN GENERAL LOGO)
$1,250,000,000
AMERICAN GENERAL CORPORATION
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
PREFERRED STOCK AND PREFERRED STOCK WARRANTS
COMMON STOCK AND COMMON STOCK WARRANTS
------------------------
American General Corporation ("American General" or the "Company") may issue
from time to time hereunder, together or separately, (i) one or more series of
its unsecured debt securities ("Debt Securities") which may be either senior
(the "Senior Securities") or senior subordinated (the "Subordinated Securities")
in priority of payment, both of which may be convertible or exchangeable into
common stock, par value $.50 per share, of the Company ("Common Stock"),
preferred stock, par value $1.50 per share, of the Company ("Preferred Stock"),
other Debt Securities, Debt Warrants, Common Stock Warrants or Preferred Stock
Warrants (each as herein defined); (ii) warrants to purchase Debt Securities
("Debt Warrants"); (iii) shares of Preferred Stock, which may be convertible
into shares of Common Stock or exchangeable for Debt Securities; (iv) warrants
to purchase Preferred Stock ("Preferred Stock Warrants"); (v) shares of Common
Stock and (vi) warrants to purchase Common Stock ("Common Stock Warrants"), in
amounts, at prices and on terms to be determined at the time of the offering.
The Debt Securities, Debt Warrants, Preferred Stock, Preferred Stock Warrants,
Common Stock and Common Stock Warrants are collectively referred to herein as
the "Securities."
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
unsecured and subordinated as described under "Description of Debt
Securities -- Subordination."
When a particular series of Securities is offered, a supplement to this
Prospectus (a "Prospectus Supplement") setting forth certain terms of the
offered Securities will be delivered together with this Prospectus. The
applicable Prospectus Supplement, among other things and where applicable, will
include: (i) with regard to Debt Securities, the specific designation, priority,
aggregate principal amount, rate (which may be fixed or variable) and time of
payment of any interest, authorized denominations, maturity, offering price,
place or places of payment, redemption terms at the option of the Company, terms
of any repayment at the option of the holder, terms for sinking fund payments,
terms for conversion or exchange into other securities, provisions regarding
original issue discount securities, any listing on a securities exchange and
other terms of such Debt Securities; (ii) with regard to Preferred Stock, the
specific designation, number of shares, title, stated value and liquidation
preference of each share, issuance price, dividend rate or method of
calculation, dividend periods, dividend payment dates, any redemption or sinking
fund provisions, any conversion or exchange provisions, any voting rights, any
listing on a securities exchange and other specific terms thereof; (iii) with
respect to Common Stock, the number of shares, issuance price and other terms
thereof; and (iv) with regard to Debt Warrants, Preferred Stock Warrants and
Common Stock Warrants, where applicable, the duration, amount, offering price,
exercise price, terms of the securities for which they are exercisable, any
voting rights, any listing on a securities exchange, detachability and other
terms thereof. The applicable Prospectus Supplement may also contain applicable
information about certain federal income tax, accounting and other
considerations relating to the Securities covered by such Prospectus Supplement.
The aggregate initial public offering price of all Securities which may be
sold under this Prospectus shall not exceed $1,250,000,000, less the aggregate
initial public offering price of any securities of certain American General
funding entities which are sold under a separate prospectus which also
constitutes a part of the Registration Statement of which this Prospectus
constitutes a part. See "Available Information."
The Company may sell the Securities directly, through agents, underwriters
or dealers as designated from time to time, or through a combination of such
methods. If any such agents, underwriters or dealers are involved in the sale of
the Securities in respect of which this Prospectus is being delivered, the names
of such agents, underwriters or dealers and any applicable agent's commission,
underwriter's discount or dealer's purchase price and the net proceeds to the
Company from such sale will be set forth in, or may be calculated on the basis
set forth in, the applicable Prospectus Supplement. See "Plan of Distribution"
for possible indemnification arrangements for any such agents, underwriters and
dealers.
This Prospectus may not be used to consummate sales of the Securities unless
accompanied by a 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. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1995.
<PAGE> 43
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, 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 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 500
West Madison Street, 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.,
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, American General Delaware, L.L.C. and American General
Capital, L.L.C. have 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, 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.
In addition to this Prospectus, the Registration Statement contains another
prospectus which relates to the offer and sale from time to time of "Preferred
Securities" (as defined therein) of American General Delaware, L.L.C. and
American General Capital, L.L.C. Certain payment obligations of such companies
under any such Preferred Securities would be guaranteed by the Company to the
extent set forth in such prospectus and any applicable prospectus supplement
thereto. The $1,250,000,000 aggregate maximum initial public offering price of
Securities which may be sold under this Prospectus will be reduced by the amount
of the aggregate initial public offering price of any Preferred Securities sold
under such other prospectus.
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 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:
- the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
- the Company's Current Report on Form 8-K dated February 14, 1995; and
- the Company's Current Report on Form 8-K dated March 22, 1995.
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.
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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, 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 77019-2155, Attention: Treasury Department, telephone (713)
831-1949.
THE COMPANY
American General is the parent company of one of the nation's largest
consumer financial services organizations. The Company is headquartered in
Houston, Texas and operates through its subsidiaries in all 50 states, the
District of Columbia, Canada, Puerto Rico, and the U.S. Virgin Islands. The
Company was incorporated as a general business corporation in Texas in 1980 and
is the successor to American General Insurance Company, incorporated in Texas in
1926.
American General's operations are classified into three business segments:
Retirement Annuities, which specializes in providing tax-deferred retirement
plans and annuities to employees of educational, health care and other
not-for-profit organizations; Consumer Finance, which offers consumer and home
equity loans, credit cards, and credit-related insurance to individuals through
more than 1,300 branch offices; and Life Insurance, which provides traditional
and interest-sensitive life insurance and both fixed and variable annuity
products through 14,000 sales representatives and general agents.
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 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. Further,
certain non-insurance subsidiaries are similarly restricted in their ability to
make dividend payments by long-term debt agreements. At December 31, 1994, the
amount available to the Company for dividends from subsidiaries not limited by
such restrictions was $1.1 billion.
The principal executive offices of American General are located at 2929
Allen Parkway, Houston, Texas 77019-2155, 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 or sales of the 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 or for general corporate purposes.
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RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges, including and excluding the
Company's wholly-owned consumer finance subsidiary, American General Finance,
Inc. ("AGF"), has been calculated by dividing fixed charges into earnings
available for fixed charges. Earnings available for fixed charges is the sum of
income before income tax expense and the cumulative effect of accounting
changes, and fixed charges. Fixed charges consist of interest expense,
capitalized interest and a portion of rental expense. Because no preferred stock
dividends were paid in the periods reported (other than immaterial preferred
stock dividends paid by a subsidiary of AGF in 1990), the ratio of earnings to
combined fixed charges and preferred stock dividends is the same as the ratio of
earnings to fixed charges.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1994 1993 1992 1991 1990
--- ---- --- --- ---
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Consolidated operations................................. 2.4 2.1 2.4 2.1 2.2
Consolidated operations, corporate fixed charges only
(excluding AGF)...................................... 7.6 6.0 7.2 5.8 5.3
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Senior Securities are to be issued under a Senior Indenture dated as of
March , 1995 (the "Senior Indenture") between the Company and Chemical Bank,
as trustee, and the Subordinated Securities are to be issued under a Senior
Subordinated Indenture dated as of March , 1995 (the "Subordinated Indenture")
between the Company and Chemical Bank, as trustee. Chemical Bank, in its
capacity as trustee under the Senior Indenture and the Subordinated Indenture,
is referred to herein as the "Trustee."
The forms of the Senior Indenture and the Subordinated Indenture (being
sometimes referred to herein collectively as the "Indentures" and each
individually as an "Indenture") are filed as exhibits to the Registration
Statement of which this Prospectus is a part. The statements and descriptions in
this Prospectus or in any Prospectus Supplement regarding provisions of the Debt
Securities and the Indentures 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 Indentures and the Debt Securities, including
the definitions therein of certain terms. Certain capitalized terms used herein
are defined in the Indentures. Wherever particular sections of the Indentures or
terms that are defined in the Indentures 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 Indentures allow 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 Indentures relating to such Debt Securities are not described
herein.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Subordinated Securities will be subordinated
in right of payment to the prior payment in full of the Superior Indebtedness of
the Company as described under "-- Subordination."
The Debt Securities 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 terms of the
particular series of Debt Securities being offered thereby, including but not
limited to the following: (1) the title of such Debt Securities and the
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<PAGE> 46
series in which such Debt Securities shall be included; (2) any limit on the
aggregate principal amount of such Debt Securities; (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 the
principal of such Debt Securities is payable 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 or upon the
occurrence of a specified event); (8) whether such Debt Securities shall be
convertible or exchangeable for other securities and, if so, the terms of any
such conversion or exchange and the terms of such other securities; (9) 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; (10) any deletions from, modification of
or additions to the Events of Default or covenants of the Company with respect
to such Debt Securities; and (11) any other terms of such Debt Securities. Debt
Securities may also be issued under the Indentures upon the exercise of Debt
Warrants. See "Description of Warrants -- Debt Warrants."
The Indentures do not limit the aggregate principal amount of Debt
Securities that may be issued thereunder or of any particular series of such
Debt Securities and provide 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 each Indenture) All Debt Securities issued under an
Indenture will rank equally and ratably with any additional Debt Securities
issued thereunder.
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 each Indenture)
Some of the Debt Securities may be issued under the Indentures 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 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,
subject to certain limitations, 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. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on a Debt Security will be made to the
person in whose name such Debt Security is registered at the close of business
on the record date for such interest. 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 each Indenture)
The Indentures do not contain any provision that limits the ability of the
Company to incur indebtedness (either directly or through merger or
consolidation) 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
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<PAGE> 47
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 Indentures, 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 Senior Indenture provides that the Company will not, and will not
permit any Designated Subsidiary (as defined below) to, directly or indirectly,
create, issue, assume, incur or guarantee any indebtedness for money borrowed
which is secured by a mortgage, pledge, lien, security interest 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 Senior
Securities and, if the Company so elects, any other indebtedness of the Company
ranking at least pari passu with the Senior Securities, shall be secured equally
and ratably with (or prior to) such other secured indebtedness for money
borrowed so long as it is outstanding. (Section 1009 of the Senior Indenture)
The Subordinated Indenture does not contain a comparable provision.
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 December 31, 1994, 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, NOTICE AND WAIVER
If an Event of Default with respect to any Debt Securities of any series
Outstanding under either of the Indentures shall occur and be continuing, the
Trustee under such Indenture 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 applicable 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 each 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 either 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 such 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 each
Indenture)
Unless the Prospectus Supplement relating to a particular issuance of Debt
Securities specifies otherwise, each of the following constitutes an Event of
Default with respect to each series of Debt Securities under each Indenture: (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,
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<PAGE> 48
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 applicable Indenture for
the benefit of such series or in the Debt Securities of such series, and the
continuance of such default or breach for 90 days after written notice has been
given as provided in such Indenture; (e) acceleration of the maturity of any
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 15 days after written notice as provided in such 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 each 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 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 each 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 Indentures at the request of
the Holders of the Debt Securities of such series. (Sections 601 and 603 of each
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 under either Indenture 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 each Indenture)
No Holder of a Debt Security of any series may institute any action against
the Company under either of the Indentures (except actions for payment of
overdue principal of, premium, if any, or interest on such Debt Securities)
unless the Holders of at least 25% in principal amount of the Debt Securities of
that series then Outstanding under such 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 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 each Indenture)
The Company is required to furnish annually to the Trustee statements as to
the Company's compliance with all conditions and covenants under each Indenture.
(Section 1007 of each Indenture)
MERGER AND CONSOLIDATION
The Company may consolidate or merge with or into any other corporation,
and the Company may sell or convey all or substantially all of its assets to
another corporation, provided that (a) (i) in the case of a merger, the Company
is the surviving company in the merger, or (ii) the corporation surviving the
merger, formed by such consolidation or which acquires such assets shall be a
corporation organized and existing under the laws of The United States of
America or a state thereof and shall expressly 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 Indentures 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. The Senior Indenture also
provides an additional condition that the Company or such successor corporation
shall not immediately after such consolidation, merger or sale have outstanding
(or otherwise be liable for) any indebtedness for money borrowed secured by a
mortgage, pledge, lien, security interest or other encumbrance prohibited by the
provisions of the Senior Indenture relating to
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<PAGE> 49
limitations on liens or shall have secured the Outstanding Senior Securities
equally and ratably with (or prior to) such other secured indebtedness for money
borrowed so long as it is outstanding. (Section 801 of each Indenture)
MODIFICATION AND WAIVER
Modification and amendment of each of the Indentures may be made by the
Company and the Trustee with the consent of the Holders of a majority 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 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 in principal amount of Outstanding Debt
Securities of any series necessary to modify or amend the Indentures with
respect to any 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
certain requirements of the Indentures for quorum or voting; or (h) modify the
provisions of the Indentures described in this paragraph or those regarding
waiver of compliance with certain provisions of, or certain defaults and their
consequences under, the Indentures, except to increase the percentage of
Outstanding Debt Securities necessary to modify and amend each Indenture or to
give any such waiver, and except to provide that certain other provisions of
each 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 each Indenture)
Modification and amendment of each of the Indentures 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 Indentures, provided
that no Outstanding Debt Security of any series then entitled to the benefit of
such provision is adversely affected thereby; (f) to secure the Debt Securities
pursuant to the requirements of Sections 801 or 1009 of the Indentures 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 Indentures by more than one Trustee;
(i) to change the conditions, limitations and restrictions on the authorized
amount, terms or provisions of issuance, authentication and delivery of the Debt
Securities as set forth in the Indentures, the Debt Securities and the
Prospectus Supplement relating thereto; or (j) to cure any ambiguity, defect or
inconsistency in the Indentures, 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 each Indenture)
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<PAGE> 50
DEFEASANCE AND DISCHARGE
Unless the Prospectus Supplement relating to a particular issuance of Debt
Securities specifies otherwise, 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 irrevocable deposit with the Trustee under
the applicable Indenture, 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 or Redemption Date of such payments in accordance with the terms of the
applicable Indenture and such Debt Securities. Such a supplemental indenture may
only be executed if certain conditions have been satisfied, including that 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 each Indenture)
Each of the Indentures provides that, when the conditions set forth in
Section 401 thereof have been satisfied, upon the request of the Company, such
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 therein). Such conditions include that (i) all Debt Securities issued under
such 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 such 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 or Redemption Date of such payments in accordance with such
Indenture. (Section 401 of each Indenture)
DEFEASANCE OF CERTAIN COVENANTS
Unless otherwise provided in the Prospectus Supplement relating to a series
of Debt Securities, the terms of the Debt Securities of each series will provide
the Company with the option to omit to comply with the covenants described under
"-- Limitations on Liens" above, if applicable, and any additional covenants not
included in the original applicable Indenture that may be specified as
applicable to such series in the Prospectus Supplement with respect thereto. The
Company, in order to exercise such option, will be required to irrevocably
deposit with the Trustee under the applicable Indenture, 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 or Redemption Date of such payments in
accordance with the terms of the applicable Indenture and such Debt Securities.
The Company will also be required to deliver to the Trustee under the applicable
Indenture 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 in certain circumstances, including,
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 each Indenture) The Prospectus
Supplement relating to a particular issuance of Debt Securities may describe
further provisions, if any, permitting such an omission to comply.
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<PAGE> 51
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.
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 applicable 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 applicable 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
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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.
SUBORDINATION
In the event of any distribution, division or application of all or any
part of the assets of the Company, or the proceeds thereof, occurring by reason
of the liquidation, dissolution or other winding up of the Company, or by reason
of any execution, sale, receivership, insolvency or bankruptcy proceedings, or
proceedings for reorganization, or readjustment of the Company or its
properties, payment or distribution of any kind upon the Subordinated Securities
of each series Outstanding (other than from the defeasance funds referred to
below) will be subordinated to the prior payment in full of all Superior
Indebtedness (including the payment of any interest accruing thereon after the
commencement of any such proceedings). (Sections 1601 and 1602 of the
Subordinated Indenture) The Subordinated Indenture also provides that in the
event of the acceleration of the principal amount of the Subordinated Securities
of any series (or, in the case of Original Issue Discount Securities, such
portion of the principal amount thereof as may be specified in the terms
thereof) as a result of the occurrence of an Event of Default with respect to
such series under the Subordinated Indenture, the holders of Superior
Indebtedness will be entitled to declare such Superior Indebtedness due and
payable and in such event to receive payment in full of all principal, premium
and interest on all Superior Indebtedness before the Holders of the Subordinated
Securities of such series are entitled to receive any payment. The Subordinated
Indenture further provides that in the event of a default in the payment of the
principal of or any premium or interest on any Superior Indebtedness, so long as
such payment shall not have been made or provided for, or in the event of the
acceleration of the maturity of any Superior Indebtedness which has not been
rescinded and annulled, no payment of principal or any premium or interest will
be made on the Subordinated Securities (other than, if applicable, payment from
funds which were deposited to defease the Subordinated Securities at a time when
no default in the payment of the Superior Indebtedness existed). (Sections 1602
and 1603 of the Subordinated Indenture) The Holders of the Subordinated
Securities of each series will be subrogated to the rights of the holders of the
Superior Indebtedness to the extent of payments made to the holders of Superior
Indebtedness upon any distribution of assets in any such proceedings out of the
distributive share of the Subordinated Securities. (Section 1602 of the
Subordinated Indenture) As a result of such subordination, upon the distribution
of assets upon insolvency, certain general creditors of the Company may recover
more, ratably, than Holders of the Subordinated Securities.
Superior Indebtedness is defined in the Subordinated Indenture as the
principal of, and premium, if any, and interest on, and any other payment due
pursuant to, any of the following, whether outstanding at the date of execution
of the Subordinated Indenture or thereafter incurred, created or assumed:
(a) all obligations of the Company for money borrowed;
(b) all obligations of the Company evidenced by notes, debentures,
bonds or other securities, including obligations incurred in connection
with the acquisition of property, assets or businesses;
(c) all capitalized lease obligations of the Company;
(d) all reimbursement obligations of the Company with respect to
letters of credit, bankers acceptance or similar facilities issued for the
account of the Company;
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(e) all obligations of the Company issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business);
(f) all payment obligations of the Company under interest rate swap or
similar agreements or foreign currency hedge, exchange or similar
agreements at the time of determination, including any such obligations
incurred by the Company solely to act as a hedge against increases in
interest rates that may occur under the terms of other outstanding variable
or floating rate indebtedness of the Company;
(g) all obligations of the type referred to in clauses (a) through (f)
above of another person and all dividends of another person, the payment of
which, in either case, the Company has assumed or guaranteed, or for which
the Company is responsible or liable, directly or indirectly, jointly or
severally, as obligor, guarantor or otherwise; and
(h) all amendments, modifications, renewals, extensions, refinancings,
replacements and refundings by the Company of any such indebtedness
referred to in clauses (a) through (g) above (and of any such amended,
modified, renewed, extended, refinanced, refunded or replaced indebtedness
or obligations);
other than (i) any particular indebtedness, renewal, extension, refunding,
obligation, assumption or guarantee that expressly provides, or the instrument
creating or evidencing the same or the assumption or guarantee of the same
expressly provides, that such indebtedness, renewal, extension, refunding,
obligation, assumption or guarantee is junior in right of payment to or is pari
passu with the Subordinated Securities; (ii) any guarantee of the payment
obligations of American General Delaware, L.L.C. or American General Capital,
L.L.C. with respect to their preferred securities, (iii) any junior subordinated
debentures of the Company issued under the Junior Subordinated Indenture dated
as of March , 1995 between the Company and Chemical Bank, as trustee, and
(iv) interest accruing on Superior Indebtedness after the filing of a petition
initiating certain bankruptcy or insolvency proceedings unless such interest is
an allowed claim enforceable against the Company in a bankruptcy proceeding.
(Section 101 of the Subordinated Indenture)
As of December 31, 1994, an aggregate of $ billion of Superior
Indebtedness was outstanding. The Subordinated Indenture does not limit the
amount of Superior Indebtedness that may be incurred by the Company in the
future.
The Subordinated Indenture may be modified or amended as provided under
"-- Modification and Waiver," provided that no such modification or amendment
may, without the consent of the Holder of each Outstanding Subordinated Security
affected thereby, modify any of the provisions of the Subordinated Indenture
relating to the subordination of the Subordinated Securities in a manner adverse
to such Holder. (Section 902 of the Subordinated Indenture)
CONVERSION
Certain Debt Securities may be convertible into other Securities of the
Company (the "Convertible Debt Securities"). The holders of such Convertible
Debt Securities of a specified series may be entitled (subject to prior
redemption, repayment or repurchase, if applicable), if so provided in the
applicable Prospectus Supplement, to convert any Convertible Debt Securities of
such series (in denominations set forth in the applicable Prospectus Supplement)
into another series of Debt Securities, Debt Warrants, Preferred Stock,
Preferred Stock Warrants, Common Stock or Common Stock Warrants, as the case may
be (collectively, the foregoing securities into which the Convertible Debt
Securities may be converted are referred to herein as "Conversion Securities"),
at the conversion price set forth in the applicable Prospectus Supplement,
subject to adjustment as described below or in the applicable Prospectus
Supplement. The relevant provisions for each series of Convertible Debt
Securities will be set forth in the applicable Prospectus Supplement. Except as
described below or in the applicable Prospectus Supplement, no adjustment will
be made upon conversion of any Convertible Debt Securities for interest accrued
thereon or for dividends on any Conversion Securities issued. If any Convertible
Debt Securities not called for redemption are converted between a record date
for the payment of interest and the next succeeding interest payment date, such
Convertible Debt Securities must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the
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principal amount so converted. The Company is not required to issue fractional
shares of Preferred Stock or Common Stock upon conversion of Convertible Debt
Securities that are convertible into Preferred Stock or Common Stock,
respectively, and, in lieu thereof, will pay a cash adjustment, in the case of
Convertible Debt Securities convertible into Preferred Stock, based upon the
liquidation preference of such series of Preferred Stock unless otherwise
specified in the Prospectus Supplement, and in the case of Common Stock, based
upon the market value of the Common Stock. In the case of Convertible Debt
Securities convertible into securities other than Preferred Stock or Common
Stock, such adjustment will be based on such method as is set forth in the
applicable Prospectus Supplement.
If the conversion price for a series of Convertible Debt Securities that
are convertible into Common Stock, Preferred Stock or another Security is
subject to adjustment upon the occurrence of certain events, the formulas for
such adjustment will be described in the applicable Prospectus Supplement.
TRUSTEE UNDER THE INDENTURES
The Company and certain of its affiliates maintain banking and borrowing
relations with Chemical Bank and certain of its affiliates. Chemical Bank and
one of its affiliates also serve as trustees under other indentures maintained
by the Company.
The Indentures provide 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 THE PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which an
applicable Prospectus Supplement may relate. Certain other terms of any series
of Preferred Stock offered by an applicable Prospectus Supplement will be
specified in such Prospectus Supplement. If so specified in the applicable
Prospectus Supplement, the terms of any series of Preferred Stock may differ
from the terms set forth below. The description of the terms of the Preferred
Stock set forth below and in an applicable Prospectus Supplement does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Certificate of Designation relating to the applicable series of
Preferred Stock, which will be filed as an exhibit to, or incorporated by
reference in, the Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the Restated Articles of Incorporation of the Company, as
amended (the "Articles"), the Bylaws of the Company, and applicable Texas law,
the Board of Directors of the Company, or an authorized committee thereof, has
the authority, without further shareholder action, to issue up to 60,000,000
shares of Preferred Stock, $1.50 par value, in one or more series and in such
amounts and for such consideration, as may be determined from time to time by
resolution of the Board of Directors of the Company, or an authorized committee
thereof, and to fix before the issuance of any shares of Preferred Stock of a
particular series, the number of shares constituting that series and the
distinctive designation of that series; the dividend rate (or method of
determining the same); the voting rights; conversion privileges; redemption
rights; repurchase obligations; sinking fund availability; rights upon
liquidation, dissolution or winding up and the priority thereof; restrictions
upon the Company with respect to the creation of debt or the issuance of
additional Preferred Stock or other stock ranking prior to or on a parity
therewith with respect to dividends or upon liquidation; restrictions on the
Company with respect to the issuance of, payment of dividends upon, or the
making of other distributions with respect to, or the acquisition or redemption
of, shares ranking junior to the Preferred Stock; the priority of each series of
Preferred Stock in relation to other series of Preferred Stock; and any other
designations, powers, preferences and rights, including, without limitation, any
qualifications, limitations or restrictions thereof. The holders of any series
of Preferred Stock shall not have any preemptive rights to acquire any shares or
securities of any class which may at any time be issued, sold or offered for
sale by the Company.
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As of March 1, 1995, the Company had no Preferred Stock outstanding. As of
such date, the Company did have Preferred Share Purchase Rights outstanding. A
description of these rights is provided under "Description of Common Stock --
Preferred Share Purchase Rights."
DIVIDENDS
The holders of the Preferred Stock of each series will be entitled to
receive, when, as and if declared by the Board of Directors of the Company, out
of funds legally available therefor, dividends at such rates and on such dates
as will be specified in the applicable Prospectus Supplement. Such rates may be
fixed or variable or both. If variable, the formula used for determining the
dividend rate for each dividend period will be specified in the applicable
Prospectus Supplement. Dividends will be payable to the holders of record as
they appear on the stock books of the Company on such record dates as will be
fixed by the Board of Directors of the Company.
Unless otherwise indicated in an applicable Prospectus Supplement, all
series of Preferred Stock will be senior in right as to dividends and in
liquidation to the Common Stock and any other class of stock of the Company
ranking junior to the Preferred Stock.
VOTING RIGHTS
Except as indicated in the applicable Prospectus Supplement or as expressly
required by applicable law, the holders of the Preferred Stock will not be
entitled to vote. In the event the Company issues a series of Preferred Stock
with voting rights, unless otherwise specified in the Prospectus Supplement
relating to such series, each such share will be entitled to one vote on matters
on which holders of such series of the Preferred Stock are entitled to vote.
Since each full share of any series of Preferred Stock of the Company shall be
entitled to one vote, the voting power of such series, on matters on which
holders of such series and holders of other series of Preferred Stock are
entitled to vote as a single class, shall depend on the number of shares in such
series, not the aggregate stated value, liquidation preference or initial
offering price of the shares of such series of Preferred Stock.
CONVERSION AND EXCHANGE
The Prospectus Supplement relating to a series of the Preferred Stock will
set forth the conditions or terms, if any, upon which any such series will be
convertible or exchangeable, and the terms of the securities into which such
series will be convertible or exchangeable.
REDEMPTION RIGHTS
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of the Company or any holder thereof, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms, at
the times and at the redemption prices specified in the applicable Prospectus
Supplement and subject to the rights of holders of other securities of the
Company. Preferred Stock redeemed by the Company will be restored to the status
of authorized but unissued preferred shares.
If less than all outstanding shares of a series are to be redeemed, the
shares to be redeemed will be selected ratably or by lot in such manner as may
be prescribed by resolution of the Board of Directors. The notice of redemption
will set forth the designation of the series or part of the series of shares to
be redeemed, the date fixed for redemption, the redemption price, the place at
which the shareholders may obtain payment of the redemption price upon surrender
of their respective share certificates and a statement with respect to the
existence of any right of conversion with respect to the shares to be redeemed
and the period within which such right may be exercised. Such notice will be
given to each holder of shares being called, either personally or by mail, not
less than 20 nor more than 60 days before the date fixed for redemption. If
mailed, such notice will be deemed to be delivered when deposited in the United
States mail addressed to the shareholder at such shareholder's address as it
appears on the stock transfer book of the Company, with postage thereon prepaid.
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The Company may, on or prior to the date fixed for redemption of the series
of Preferred Stock, deposit with any bank or trust company in Texas, or any bank
or trust company in the United States duly appointed and acting as transfer
agent for the Company, as a trust fund, a sum sufficient to redeem shares called
for redemption, with irrevocable instructions and authority to such bank or
trust company to give or complete the notice of redemption thereof and to pay,
on or after the date fixed for such redemption, to the respective holders of
shares, as evidenced by a list of holders of such shares certified by an officer
of the Company, the redemption price upon surrender of their respective share
certificates. From and after the date fixed for redemption, such shares shall be
deemed to be redeemed and dividends thereon shall cease to accrue. Such deposit
will be deemed to constitute full payment of such shares to their holders. From
and after the date such deposit is made and such instructions are given, such
shares shall no longer be deemed to be outstanding, and the holders thereof
shall cease to be shareholders with respect to such shares, and shall have no
rights with respect thereto except the right to receive from the bank or trust
company payment of the redemption price of such shares, without interest (and,
in the case of holders of certificated shares, upon the surrender of their
respective certificates therefor), and any right to convert such shares which
may exist. In case the holders of such shares shall not, within six years after
such deposit, claim the amount deposited for redemption thereof, such bank or
trust company shall upon demand pay over to the Company the balance of such
amount so deposited to be held in trust and such bank or trust company shall
thereupon be relieved of all responsibility to the holders thereof.
REPURCHASE OBLIGATION
The Prospectus Supplement relating to a series of the Preferred Stock will
state the conditions and terms, if any, upon which such series shall be subject
to repurchase by the Company.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock shall
be entitled to receive out of the assets of the Company available for
distribution to shareholders, before any distribution of assets is made to
holders of Common Stock or any other class or series of shares ranking junior to
such Preferred Stock upon liquidation, a liquidating distribution in the amount
per share as set forth in the Prospectus Supplement relating to such series of
Preferred Stock plus accrued and unpaid dividends. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company the amounts
payable with respect to Preferred Stock of any series and any other shares of
the Company ranking as to any such distribution on a parity with such Preferred
Stock of such series are not paid in full, the holders of such Preferred Stock
of such series and of such other shares will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts to which they are entitled. Neither the sale of all or
substantially all of the property or business of the Company nor the merger or
consolidation of the Company into or with any other corporation shall be deemed
to be a dissolution, liquidation or winding up, voluntary or involuntary, of the
Company. After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of Preferred Stock of any series will not
be entitled to any further participation in any distribution of assets by the
Company.
CONDITIONS AND RESTRICTIONS UPON THE COMPANY
The Prospectus Supplement relating to a series of the Preferred Stock will
describe any conditions or restrictions upon the Company which are for the
benefit of such series, including restrictions upon the creation of debt or
other series of Preferred Stock; payment of dividends; or distributions,
acquisitions or redemptions of shares ranking junior to such series.
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DESCRIPTION OF COMMON STOCK
GENERAL
The Company is authorized to issue 300,000,000 shares of Common Stock, par
value $.50 per share. As of March 1, 1995, there were outstanding 204,766,121
shares of the Company's Common Stock.
Holders of the Company's Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors of the Company out of any
funds legally available therefor, and are entitled upon liquidation, after
claims of creditors and preferences of any series of the Company's Preferred
Stock, to receive pro rata the net assets of the Company.
The holders of the Common Stock are entitled to one vote for each share
held and are vested with all of the voting power, except as the Board of
Directors of the Company or an authorized committee thereof may provide in the
future with respect to any series of Preferred Stock. Directors of the Company
are elected for a one-year term expiring upon the annual meeting of stockholders
of the Company. The holders of the Common Stock do not have cumulative voting
rights.
The holders of Common Stock do not have any preemptive rights to acquire
any shares or other securities of any class which may at any time be issued,
sold or offered for sale by the Company. The holders of Common Stock have no
conversion rights and the Common Stock is not subject to redemption by either
the Company or a stockholder.
The Company's Common Stock is listed on the New York, Pacific, London and
Swiss Stock Exchanges. First Chicago Trust Company of New York is the transfer
agent, registrar and dividend disbursing agent for the Common Stock.
PREFERRED SHARE PURCHASE RIGHTS
On July 27, 1989, the Board of Directors of the Company authorized the
issuance of one preferred share purchase right (a "Right") for each share of
Common Stock outstanding on August 7, 1989 and for each share of Common Stock
issued thereafter but prior to the earlier of the Distribution Date and the
Termination Date (as each such term is defined below). A Right is attached to
each share of Common Stock and entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $1.50 per share, of the Company (the "Junior
Preferred Shares"), at a price of $120 per one one-hundredth of a Junior
Preferred Share, subject to certain adjustments.
The Rights will expire on August 7, 1999, unless the expiration date is
extended or the Rights are redeemed earlier (any such date being the
"Termination Date"). The Rights are not exercisable or transferable separately
from the shares of Common Stock until the "Distribution Date" which will occur
on the earlier of (i) 10 business days following the first public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
Common Stock and any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote in respect of
any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up of the Company (the "Voting
Stock") or (ii) 10 business days following the commencement of, or the first
public announcement of an intention to commence, a tender or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of affiliated or associated persons of 25% or more of the then outstanding
Voting Stock.
In the event the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earnings
power should be sold or otherwise transferred, each holder of a Right will have
the right to receive, upon payment of the Right's then current exercise price,
common stock of the acquiring company which has a market value of two times the
exercise price of the Right. In the event that any person becomes an Acquiring
Person, each holder of a Right will thereafter have the right to receive upon
exercise thereof that number of shares of Common Stock (or under certain
circumstances, Common Stock-equivalent Junior Preferred Shares) having a market
value of two times the exercise price of the Rights.
At any time 10 business days after a person or group of affiliated or
associated persons has become an Acquiring Person and prior to the acquisition
by any person or group of 50% or more of the outstanding Voting
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Stock, the Board of Directors of the Company may exchange the Rights (other than
Rights acquired or beneficially owned by such Acquiring Person, which Rights
held by such Acquiring Person shall then be null and void), in whole or in part,
at an exchange ratio of one share of Common Stock (or one one-hundredth of a
share of Junior Preferred Stock), appropriately adjusted to reflect any stock
split, stock dividend or similar transaction, for each two shares of Common
Stock for which the Right is then exercisable.
At any time prior to the close of business on the tenth day following the
first public announcement that a person or group of affiliated or associated
persons has become an Acquiring Person, the Board of Directors of the Company
may redeem the then outstanding Rights in whole, but not in part, at a price of
$.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction (the "Rights Redemption Price"). Any such
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors of the Company in its sole
discretion may establish.
The purchase price payable, and the number of Junior Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Junior
Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths of a
Junior Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of reclassification of securities, or recapitalization
or reorganization of the Company or other transaction involving the Company
which has the effect, directly or indirectly, of increasing by more than one
percent the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its subsidiaries beneficially owned by any
Acquiring Person, in any such case, prior to an exchange by the Company as
described above.
The terms of the Rights may be amended, including extending the expiration
date, by the Board of Directors of the Company without the consent of the
holders of the Rights, except in certain circumstances.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors of the Company. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors of the Company since the Rights may be redeemed by the
Company at the Rights Redemption Price prior to the time that a person or group
has acquired beneficial ownership of 50% or more of the Voting Stock.
The Junior Preferred Shares will be non-redeemable and rank junior to all
other series of the Company's Preferred Stock. Each whole Junior Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount equal
to the greater of (i) $0.25 or (ii) subject to certain adjustments, 100 times
the dividend declared on each share of Common Stock. In the event of the
liquidation, dissolution or winding up of the Company, each whole Junior
Preferred Share will be entitled to receive a preferential liquidation payment
in an amount equal to the greater of (i) $1.50, or (ii) 100 times the aggregate
amount to be distributed per share to holders of Common Stock, plus, in either
case, an amount equal to all accrued and unpaid dividends thereon. In the event
of any merger, consolidation or other transaction in which Common Stock is
exchanged for or changed into other stock or securities, cash or other property,
each whole Junior Preferred Share will be entitled to receive 100 times the
amount received per each share of Common Stock. Each whole Junior Preferred
Share will be entitled to 100 votes on all matters submitted to a vote of the
shareholders of the Company, and Junior Preferred Shares will generally vote
together as one class with the Common Stock and any other voting capital stock
of the Company on all matters submitted to a vote of shareholders of the
Company.
If such registration is then required by applicable law, the Company will
use its best efforts to cause the offer and sale of Junior Preferred Shares
issuable upon exercise of the Rights to be registered pursuant to the Securities
Act at any such time as the Rights become exercisable.
The foregoing description of the Rights and the Junior Preferred Shares
does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement, as amended, which is an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Certificate of
Designation, Preferences and Rights for the Junior Preferred Shares.
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<PAGE> 59
DESCRIPTION OF WARRANTS
The Company may issue Debt Warrants, Preferred Stock Warrants, and Common
Stock Warrants (collectively, the "Warrants"). Each Debt Warrant will entitle
the holder thereof to purchase a series of Debt Securities at such exercise
price as shall be set forth in, or be determinable as set forth in, the
Prospectus Supplement relating to the Debt Warrants offered thereby. Similarly,
each Preferred Stock Warrant and Common Stock Warrant (collectively, the "Stock
Warrants") will entitle the holder thereof to purchase such number of shares of
Preferred Stock of a particular series or of Common Stock, as the case may be,
and at such exercise price, as shall be set forth in, or calculable from, the
applicable Prospectus Supplement. Warrants may be issued independently or
together with other Securities offered by a Prospectus Supplement and may be
attached to or separate from such other Securities. Each series of Warrants may
be issued under a separate warrant agreement (each a "Warrant Agreement") to be
entered into between the Company and such bank or trust company as shall be
designated in the applicable Prospectus Supplement as warrant agent (the
"Warrant Agent"). Each Warrant Agent will act solely as the agent of the Company
in connection with the applicable Warrants and will not assume any obligation or
relationship of agency or trust for or with holders or beneficial owners of such
Warrants.
The following describes the type of information that will be set forth in a
Prospectus Supplement relating to a series of Warrants.
DEBT WARRANTS
If Debt Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Debt Warrants, the Warrant Agreement relating to such
Debt Warrants and the certificates, if any, representing such Debt Warrants,
including the following, where applicable: (1) the specific designation and
number of such Debt Warrants; (2) the offering price, if any, of such Debt
Warrants; (3) the designation, aggregate principal amount, denominations and
terms of the series of Debt Securities purchasable upon exercise of such Debt
Warrants and the procedures and conditions relating to the exercise of such Debt
Warrants; (4) the designation and terms of any related series of Securities with
which such Debt Warrants are issued and the number of such Debt Warrants issued
with each such Security; (5) the date, if any, on and after which such Debt
Warrants and the related Securities will be separately transferable; (6) the
principal amount of the series of Debt Securities purchasable upon exercise of
each such Debt 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; (7) the date on which the
right to exercise such Debt Warrants shall commence and the date on which such
right shall expire; (8) any anti-dilution provisions of such Debt Warrants; (9)
any redemption or call provisions applicable to such Debt Warrants; (10) if the
series of Debt Securities purchasable upon exercise of such Debt Warrants are
Original Issue Discount Securities, a discussion of certain Federal income tax
considerations applicable thereto; (11) where the certificates, if any,
representing such Debt Warrants may be transferred and registered; (12)
information with respect to any book-entry procedures, if any; and (13) any
other terms of such Debt Warrants.
STOCK WARRANTS
If Stock Warrants are offered, the applicable Prospectus Supplement will
describe the terms of such Stock Warrants, the Warrant Agreement relating to
such Stock Warrants and the certificates, if any, representing such Stock
Warrants, including the following, where applicable: (1) the designation and
aggregate number of such Stock Warrants; (2) the offering price, if any, of such
Stock Warrants; (3) in the case of Preferred Stock Warrants, the designation and
terms of the series of Preferred Stock purchasable upon exercise of such
Preferred Stock Warrants and whether such series of Preferred Stock is
convertible or exchangeable for other Securities; (4) the aggregate number of
shares of Common Stock or such series of Preferred Stock purchasable upon
exercise of such Stock Warrants and the minimum number of Stock Warrants that
are exercisable; (5) the terms of the Securities with which such Stock Warrants
are being offered and the number of such Stock Warrants being offered with each
such Security; (6) the date on and after which such Stock Warrants and the
related Security will be transferable separately; (7) the number of shares of
Common Stock or Preferred Stock purchasable upon exercise of each such Stock
Warrant and the
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<PAGE> 60
price at which such number of shares of Common Stock or Preferred Stock may be
purchased upon such exercise; (8) the date on which the right to exercise such
Stock Warrants shall commence and the date on which such right shall expire; (9)
any anti-dilution provisions of such Stock Warrants; (10) any redemption or call
provisions applicable to such Stock Warrants; (11) where the certificates, if
any, representing such Stock Warrants may be transferred and registered; (12)
whether the Stock Warrants represented by the warrant certificates will be
issued in registered or bearer form; (13) information with respect to book-entry
procedures, if any; and (14) any other terms of such Stock Warrants.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters or dealers;
directly to other purchasers; through agents; or through a combination of any
such methods of sale. Any such underwriter, dealer or agent involved in the
offer and sale of the offered 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 and to reimbursement for certain expenses.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with and perform services for the Company
or one or more of its affiliates in the ordinary course of business.
The specific terms and manner of sale, including the place and time of
delivery, of the Securities in respect of which this Prospectus is being
delivered will be set forth or summarized in the applicable Prospectus
Supplement.
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 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 purchases by 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
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<PAGE> 61
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 Vinson & Elkins
L.L.P., Houston, Texas, and certain legal matters relating to the Securities
offered hereby will be passed upon for any underwriters, dealers or agents of a
particular issue of Securities by Brown & Wood, New York, New York. Brown & Wood
may rely as to matters of Texas law on the opinion of Vinson & Elkins L.L.P. 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 the Company and its
subsidiaries appearing in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference." Such financial statements and schedules are, and audited financial
statements and schedules 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.
The consolidated financial statements of American Franklin Company and
subsidiaries as of December 31, 1993, and for the year then ended, appearing in
the Company's Current Report on Form 8-K dated February 14, 1995, have been
audited by Coopers & Lybrand L.L.P., independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. See
"Incorporation of Certain Documents by Reference." Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE> 62
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may not *
* be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any State in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* State. *
* *
***************************************************************************
SUBJECT TO COMPLETION, DATED MARCH 30, 1995
PROSPECTUS
(AMERICAN GENERAL LOGO)
$1,250,000,000
AMERICAN GENERAL DELAWARE, L.L.C.
AMERICAN GENERAL CAPITAL, L.L.C.
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
AMERICAN GENERAL CORPORATION
------------------------
American General Delaware, L.L.C. and American General Capital, L.L.C., each
a Delaware limited liability company (each, an "American General LLC" and,
together, the "American General LLCs"), may separately offer from time to time,
in one or more series, their preferred limited liability company interests (the
"Preferred Securities"). The payment of periodic cash distributions
("dividends") with respect to Preferred Securities of each of the American
General LLCs, and payments on liquidation and redemption with respect to such
Preferred Securities will be guaranteed by American General Corporation, a Texas
corporation ("American General" or the "Company"), to the extent described
herein (each, a "Guarantee"). See "Description of the Guarantees." American
General's obligations under the Guarantees will be subordinate and junior in
right of payment to all other liabilities of American General and pari passu
with the most senior preferred stock issued by American General. Concurrent with
the issuance of each series of Preferred Securities, the American General LLC
issuing such Preferred Securities will invest the proceeds thereof in a series
of American General's junior subordinated debentures (the "Junior Subordinated
Debentures"), which will bear interest at the same rate as the dividend rate on
such Preferred Securities. If and to the extent set forth in the Prospectus
Supplement pertaining to the particular series of Preferred Securities in
respect of which this Prospectus is being delivered (the "Prospectus
Supplement"), such Junior Subordinated Debentures subsequently may be
distributed to holders of such series of Preferred Securities in connection with
the dissolution of the related American General LLC upon the occurrence of
certain events. The Junior Subordinated Debentures will be unsecured and
subordinate and junior in right of payment to Senior Indebtedness (as defined
herein) of American General. See "Description of the Junior Subordinated
Debentures."
The specific terms of the Preferred Securities of any particular series in
respect of which this Prospectus is being delivered will be set forth in the
Prospectus Supplement which will describe, without limitation and to the extent
applicable, the following: the specific designation, number of Preferred
Securities, dividend rate (or the method of determining such rate), dates on
which dividends will be payable, liquidation preference, voting rights, any
redemption provisions, terms for any conversion or exchange into common stock,
par value $.50 per share, of American General ("American General Common Stock"),
preferred stock, par value $1.50 per share, of American General ("American
General Preferred Stock"), or other securities, the initial public offering
price, any listing on a securities exchange, and any other rights, preferences,
privileges, limitations and restrictions thereof. The specific terms of the
related series of Junior Subordinated Debentures will also be described in such
Prospectus Supplement.
The Preferred Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Preferred Securities sold hereunder may not
exceed $1,250,000,000, less the aggregate initial public offering price of all
securities of American General which are sold under a separate prospectus which
also constitutes a part of the Registration Statement of which this Prospectus
constitutes a part. See "Available Information."
The Prospectus Supplement relating to any series of Preferred Securities
will contain information concerning certain United States federal income tax
considerations applicable to such Preferred Securities and the related series of
Junior Subordinated Debentures.
The Preferred Securities may be sold directly, through agents, underwriters
or dealers as designated from time to time, or through a combination of such
methods. If any such agents, underwriters or dealers are involved in the sale of
the Preferred Securities in respect of which this Prospectus is being delivered,
the names of such agents, underwriters or dealers and any applicable agent's
commission, underwriter's discount or dealer's purchase price and the net
proceeds to the applicable American General LLC from such sale will be set forth
in, or may be calculated on the basis set forth in, the applicable Prospectus
Supplement. See "Plan of Distribution" for possible indemnification arrangements
for any such agents, underwriters and dealers.
This Prospectus may not be used to consummate sales of the Preferred
Securities unless accompanied by a 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. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The date of this Prospectus is , 1995.
<PAGE> 63
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
American General 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 American General may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices at 500 West Madison Street, 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., 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 American General LLCs and American General have 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,
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.
In addition to this Prospectus, the Registration Statement contains another
prospectus which relates to the offer and sale from time to time of various
securities of American General. The $1,250,000,000 aggregate maximum initial
public offering price of Preferred Securities which may be sold under this
Prospectus will be reduced by the amount of the aggregate initial public
offering price of any securities sold under such other prospectus.
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.
No separate financial statements of either of the American General LLCs
have been included herein. American General and the American General LLCs do not
consider that such financial statements would be material to holders of the
Preferred Securities because each American General LLC is a newly formed special
purpose entity, has no operating history, has no independent operations and is
not engaged in, and does not propose to engage in, any activity other than as
set forth below, and because American General will guarantee the obligations of
each American General LLC under the terms of the Preferred Securities to the
extent set forth herein. See "American General LLCs" and "Description of the
Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by American General with the
Commission pursuant to the Exchange Act (File No. 1-7981), are incorporated
herein by reference:
- American General's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
- American General's Current Report on Form 8-K dated February 14, 1995;
and
- American General's Current Report on Form 8-K dated March 22, 1995.
Each document filed by American General 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 Preferred 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.
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<PAGE> 64
AMERICAN GENERAL LLCs
American General Delaware, L.L.C. and American General Capital, L.L.C. are
each a limited liability company formed in March 1995 under the laws of the
State of Delaware. American General owns directly or indirectly all of the
common limited liability interests (the "Common Securities") of each American
General LLC, which securities are nontransferable. The American General LLCs
will be managed by American General, as manager (the "Manager"), in accordance
with their respective Limited Liability Company Agreements, as amended (each, an
"LLC Agreement"). Each American General LLC exists solely for the purpose of
issuing Preferred Securities and Common Securities and investing 99% of the
proceeds thereof in Junior Subordinated Debentures. The remaining 1% of such
proceeds will be invested by the applicable American General LLC in Eligible
Investments (as defined in the applicable LLC Agreement). See "Use of Proceeds."
The principal executive offices of the American General LLCs are located c/o the
Manager at the address set forth under "American General."
AMERICAN GENERAL
American General is the parent company of one of the nation's largest
consumer financial services organizations. American General is headquartered in
Houston, Texas and operates through its subsidiaries in all 50 states, the
District of Columbia, Canada, Puerto Rico, and the U.S. Virgin Islands. American
General was incorporated as a general business corporation in Texas in 1980 and
is the successor to American General Insurance Company, incorporated in Texas in
1926.
American General's operations are classified into three business segments:
Retirement Annuities, which specializes in providing tax-deferred retirement
plans and annuities to employees of educational, health care and other
not-for-profit organizations; Consumer Finance, which offers consumer and home
equity loans, credit cards, and credit-related insurance to individuals through
more than 1,300 branch offices; and Life Insurance, which provides traditional
and interest-sensitive life insurance and both fixed and variable annuity
products through 14,000 sales representatives and general agents.
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 securities or guarantees issued
by American General 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. Further, certain non-insurance subsidiaries are similarly
restricted in their ability to make dividend payments by long-term debt
agreements. At December 31, 1994, the amount available to American General for
dividends from subsidiaries not limited by such restrictions was $1.1 billion.
The principal executive offices of American General are located at 2929
Allen Parkway, Houston, Texas 77019-2155, and its telephone number is (713)
522-1111.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The ratio of earnings to combined fixed charges and preferred stock
dividend requirements, including and excluding American General's wholly-owned
consumer finance subsidiary, American General Finance, Inc. ("AGF"), has been
calculated by dividing combined fixed charges and preferred stock dividend
requirements into earnings available for the payment of fixed charges and
preferred stock dividend requirements. Earnings available for combined fixed
charges and preferred stock dividend requirements is the sum of (i) income
before income tax expense and the cumulative effect of accounting changes, (ii)
fixed charges, and (iii) preferred stock dividend requirements. Fixed charges
consist of interest expense, capitalized interest and
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<PAGE> 65
a portion of rental expense. Because no preferred stock dividends were paid in
the reported periods (other than immaterial preferred stock dividends paid by a
subsidiary of AGF in 1990), the ratio of earnings to fixed charges is the same
as the ratio of earnings to combined fixed charges and preferred stock dividend
requirements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1993 1992 1991 1990
--- ---- --- --- ---
<S> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges and preferred
stock dividend requirements:
Consolidated operations................................. 2.4 2.1 2.4 2.1 2.2
Consolidated operations, corporate fixed charges only
(excluding AGF)...................................... 7.6 6.0 7.2 5.8 5.3
</TABLE>
USE OF PROCEEDS
Each of the American General LLCs will invest 99% of the proceeds received
from the sale of Preferred Securities and Common Securities in Junior
Subordinated Debentures of American General and the remaining 1% of such
proceeds will be invested in Eligible Investments (as defined in the applicable
LLC Agreement). Unless otherwise specified in the applicable Prospectus
Supplement, the net proceeds to be received by American General from the sale of
Junior Subordinated Debentures will be added to American General's general
corporate funds and may be used for repayment of long- or short-term
indebtedness or for general corporate purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The following is a summary of certain terms and provisions of the Preferred
Securities. Reference is made to the LLC Agreement of the applicable American
General LLC and the amendment to such LLC Agreement adopted or to be adopted
establishing the rights, preferences, privileges, limitations and restrictions
relating to the Preferred Securities of each series (each, a "Declaration"). The
summaries set forth below and in the applicable Prospectus Supplement address
the material terms of the Preferred Securities of any particular series but do
not purport to be complete and are subject to, and qualified in their entirety
by reference to, the applicable LLC Agreement and Declaration. Capitalized terms
used in the summaries below and not otherwise defined herein have the respective
meanings set forth in the applicable LLC Agreement and Declaration.
GENERAL
Each American General LLC is authorized to issue, from time to time, Common
Securities and Preferred Securities, in one or more series, with such dividend
terms, liquidation preferences per share, voting rights, redemption provisions,
conversion or exchange rights and other rights, preferences, privileges,
limitations and restrictions as are set forth in its LLC Agreement and the
Declaration adopted or to be adopted with respect to each such series. All of
the Preferred Securities which may be issued in one or more series by either
American General LLC will rank pari passu with each other series issued by such
American General LLC with respect to the payment of dividends and distribution
of assets upon liquidation, dissolution or winding-up. Holders of Preferred
Securities will have no preemptive rights and will not have the right to remove
or replace the Manager of either American General LLC.
Reference is made to the Prospectus Supplement relating to the particular
series of Preferred Securities being offered thereby for the specific terms
thereof, including: (i) the initial public offering price of such series of
Preferred Securities; (ii) the particular American General LLC issuing such
series of Preferred Securities; (iii) the specific designation of such series of
Preferred Securities which shall distinguish it from other series; (iv) the
number of Preferred Securities included in such series, which number may be
increased or decreased from time to time unless otherwise provided by the
Manager in creating the series; (v) the annual dividend rate of Preferred
Securities of such series (or method of determining such rate) and when
dividends will
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<PAGE> 66
accrue and be payable; (vi) whether dividends on Preferred Securities of such
series shall be cumulative, and, if so, the date or dates or method of
determining the date or dates from which dividends on Preferred Securities of
such series shall be cumulative; (vii) the amount or amounts which shall be paid
out of the assets of such American General LLC to the holders of Preferred
Securities of such series upon voluntary or involuntary liquidation, dissolution
or winding up of such American General LLC; (viii) if applicable, the price or
prices at which, the date or dates on which, the period or periods within which
and the terms and conditions upon which Preferred Securities of such series may
be redeemed or purchased, in whole or in part, at the option of such American
General LLC or the Manager; (ix) the obligation, if any, of such American
General LLC to purchase or redeem Preferred Securities of such series and the
price or prices at which, the date or dates on which, the period or periods
within which and the terms and conditions upon which Preferred Securities of
such series shall be purchased or redeemed, in whole or in part, pursuant to
such obligation; (x) the voting rights, if any, of Preferred Securities of such
series in addition to those required by law, including the number of votes per
Preferred Security of such series and any requirement for the approval by the
holders of a certain specified percentage of Preferred Securities of such series
as a condition to specified action or amendments to the LLC Agreement of such
American General LLC or the applicable Declaration; (xi) the terms and
conditions, if any, under which Preferred Securities of such series may be
converted into shares of American General Common Stock, including the conversion
price per share and the circumstances, if any, under which any such conversion
right shall expire; (xii) the terms and conditions, if any, under which
Preferred Securities of such series may be exchanged for shares of a series of
American General Preferred Stock; (xiii) the terms and conditions, if any, upon
which the related series of Junior Subordinated Debentures may be distributed to
holders of Preferred Securities of such series; (xiv) if applicable, any
securities exchange upon which the Preferred Securities of such series shall be
listed; and (xv) any other rights, preferences, privileges, limitations or
restrictions of the Preferred Securities of such series (and such Prospectus
Supplement may state that any of the terms set forth herein are inapplicable to
Preferred Securities of such series or are modified to the extent described
therein). All Preferred Securities offered hereby will be guaranteed by American
General to the extent set forth below under "Description of the Guarantees."
Certain federal income tax considerations applicable to an investment in
Preferred Securities will be described in the Prospectus Supplement relating
thereto.
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. Each series of Preferred Securities will be issued
only as fully-registered securities registered in the name of Cede & Co. (as
nominee for DTC). One or more fully-registered global Preferred Security
certificates will be issued by the applicable American General LLC, representing
in the aggregate the total number of Preferred Securities of a series, and will
be deposited with or on behalf of DTC.
DTC 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 Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest
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of each actual purchaser of a Preferred Security ("Beneficial Owner") is in turn
to be recorded on the Direct or Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased the Preferred Securities. Transfers of ownership interests in
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in a series of
Preferred Securities, except upon a resignation of DTC, upon the occurrence of
an Event of Default (as defined below) under the Junior Subordinated Indenture
(as defined below) with respect to the related series of Junior Subordinated
Debentures or upon a decision by the applicable American General LLC, approved
by American General, to discontinue the book-entry system for such series of
Preferred Securities.
The laws of some jurisdictions require that certain purchasers take
physical delivery of securities in definitive form. Such laws may impair the
ability to transfer beneficial interests in a global Preferred Security.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct and
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices with respect to the Preferred Securities shall be sent
to Cede & Co. If less than all of a series of Preferred Securities are being
redeemed, DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such series to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the applicable American General
LLC as soon as possible after the record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose accounts
the Preferred Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Dividend payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of each
Participant and not of DTC, the American General LLCs or American General,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of dividends to DTC is the responsibility of the
applicable American General LLC, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred
Security will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC and the applicable Participants to exercise any rights under any series of
the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities or any series thereof at any time by giving
reasonable notice to each applicable American General LLC. Under such
circumstances, in the event that a successor depositary is not obtained,
certificates representing the applicable series of Preferred Securities will be
printed and delivered. If an Event of Default occurs under the Junior
Subordinated Indenture with respect to the related series of Junior Subordinated
Debentures or if an American General LLC (with the consent of American General)
decides to discontinue
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use of the system of book-entry transfers through DTC (or a successor
depositary), certificates representing the applicable series of Preferred
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that American General and the American General
LLCs believe to be reliable, but neither American General, either American
General LLC nor any agent, underwriter or dealer takes responsibility for the
accuracy thereof.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the separate
Guarantees which will be executed and delivered by American General to each
American General LLC. Each such Guarantee delivered to an American General LLC
will be for the benefit of the holders from time to time of the Preferred
Securities issued by the applicable American General LLC. The summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, each Guarantee, a form of which is
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part.
GENERAL
American General will execute separate Guarantees with respect to all
Preferred Securities, regardless of series, issued by each American General LLC.
Pursuant to each Guarantee, American General will irrevocably and
unconditionally agree, on a subordinated basis and to the extent set forth
therein, to pay in full to the holders of the Preferred Securities of each
series issued by the applicable American General LLC, the Guarantee Payments (as
defined below) (except to the extent previously paid by such American General
LLC), as and when due, regardless of any defense, right of set-off or
counterclaim that such American General LLC may have or assert. The following
payments with respect to any series of Preferred Securities issued by an
American General LLC, to the extent not paid by such American General LLC (the
"Guarantee Payments"), will be subject to the Guarantee relating to the
Preferred Securities of such American General LLC (without duplication): (a) any
accrued and unpaid dividends which are required to be paid on any such Preferred
Securities, to the extent that such dividends have been declared and such
American General LLC shall have funds legally available therefor; (b) the
redemption price, including all accrued and unpaid dividends (the "Redemption
Price"), but only to the extent payable out of funds legally available therefor,
with respect to any such Preferred Securities called for redemption by such
American General LLC; and (c) upon a voluntary or involuntary liquidation,
dissolution, or winding-up of such American General LLC, the lesser of (i) the
aggregate of the liquidation preference and all accrued and unpaid dividends on
any such Preferred Securities to the date of payment and (ii) the amount of
assets of such American General LLC available for distribution to holders of any
such Preferred Securities in liquidation, dissolution or winding-up of such
American General LLC. American General's obligation to make a Guarantee Payment
in respect of a series of Preferred Securities may be satisfied by American
General's direct payment of the required amounts to the holders of such series
of Preferred Securities or by causing the applicable American General LLC to pay
such amounts to such holders.
If American General fails to make interest or redemption payments on a
series of Junior Subordinated Debentures held by an American General LLC, such
American General LLC will have insufficient funds to pay dividends on, the
Redemption Price of, or the liquidation distribution with respect to, the
related series of Preferred Securities. The Guarantees do not cover payment of
dividends, the Redemption Price or the liquidation distribution when the
applicable American General LLC does not have sufficient funds legally available
to make such payments.
CERTAIN COVENANTS OF AMERICAN GENERAL
In each Guarantee, American General will covenant and agree that, so long
as any Preferred Securities subject to such Guarantee remain outstanding,
American General shall not declare or pay any dividend on, and American General
shall not, and American General shall not permit any of its majority-owned
subsidiaries to, redeem, purchase, acquire or make a liquidation payment with
respect to, any of American
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General's capital stock (other than (i) acquisitions of shares of American
General Common Stock in connection with the satisfaction by American General of
its obligations under any employee benefit plans or pursuant to any outstanding
put contracts, (ii) as a result of a reclassification of capital stock or the
exchange or conversion of one class or series of capital stock for another class
or series of capital stock or (iii) redemptions of any share purchase rights
issued by American General pursuant to the Rights Agreement (see "Description of
American General Common Stock -- Preferred Share Purchase Rights") or the
declaration of a dividend of similar share purchase rights in the future) or
make any guarantee payments with respect to the foregoing, if at such time
American General has exercised its option to defer interest payments on the
series of Junior Subordinated Debentures related to such Preferred Securities
and such deferral is continuing, American General is in default with respect to
its payment or other obligations under such Guarantee or there shall have
occurred any Event of Default under the Junior Subordinated Indenture with
respect to the series of Junior Subordinated Debentures related to such
Preferred Securities. American General will covenant to take all actions
necessary to ensure the compliance of its majority-owned subsidiaries with the
above covenant.
In each Guarantee, American General will also covenant that, so long as any
Preferred Securities subject to such Guarantee remain outstanding, it will (a)
maintain direct 100% ownership of the Common Securities and other limited
liability company interests in the applicable American General LLC other than
any series of Preferred Securities (except as permitted in the applicable LLC
Agreement), (b) cause at least 21% of the total value of such American General
LLC and, subject to the preferential rights of the holders of such Preferred
Securities as to dividends and liquidation distributions, at least 21% of all
interests in the capital, income, gain, loss, deduction and credit of such
American General LLC to be represented by Common Securities, (c) not voluntarily
liquidate, dissolve or wind-up itself or such American General LLC, (d) remain
the Manager and timely perform all of its duties as Manager of such American
General LLC (including the duty to cause such American General LLC to declare
and pay dividends on such Preferred Securities to the extent set forth in the
applicable LLC Agreement and Declaration), unless a permitted successor Manager
is appointed, and (e) subject to the terms of such Preferred Securities, use
reasonable efforts to cause such American General LLC to remain a Delaware
limited liability company and otherwise continue to be treated as a partnership
for United States federal income tax purposes.
In each Guarantee, American General will further agree to honor all its
obligations, if any, relating to the conversion or exchange of any Preferred
Securities subject to such Guarantee into or for American General Common Stock
or a series of American General Preferred Stock. Such obligations, if any, will
be described in the applicable Prospectus Supplement.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Guarantee may be amended with respect to each series of Preferred
Securities subject to such Guarantee and affected by such amendment only with
the prior approval of the holders of not less than 66 2/3% of the aggregate
liquidation preference of the outstanding Preferred Securities of such series.
The manner of obtaining any such approval of holders of such Preferred
Securities will be as set forth in the applicable Prospectus Supplement. All
provisions contained in a Guarantee will bind the successors, assigns,
receivers, trustees and representatives of American General and will inure to
the benefit of the holders of the Preferred Securities of the applicable
American General LLC then outstanding. Except in connection with any merger or
consolidation of American General into or with another entity or any sale or
transfer of all or substantially all of American General's assets to another
entity as permitted under "Description of the Junior Subordinated
Debentures -- Consolidation, Merger and Sale," American General may not assign
its rights or delegate its obligations under a Guarantee without the prior
approval of the holders of not less than 66 2/3% of the aggregate liquidation
preference of the outstanding Preferred Securities subject to such Guarantee.
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TERMINATION
Each Guarantee will terminate as to the Preferred Securities of any
particular series subject thereto upon (a) full payment of the Redemption Price
of all outstanding Preferred Securities of such series, (b) if applicable, the
conversion of all outstanding Preferred Securities of such series into shares of
American General Common Stock or other property, (c) if applicable, the exchange
of all outstanding Preferred Securities of such series for shares of the
applicable series of American General Preferred Stock or (d) if applicable, the
exchange of all outstanding Preferred Securities of such series for the related
series of Junior Subordinated Debentures. Each Guarantee will terminate
completely upon full payment of the amounts payable with respect to all
Preferred Securities subject to such Guarantee upon liquidation, dissolution or
winding-up of such American General LLC. Notwithstanding the foregoing, each
Guarantee will continue to be effective or will be reinstated, as the case may
be, with respect to the applicable Preferred Securities of any holder who has
been required to restore payment of any sums received on account of, or to
redeliver any securities received on account of, such Preferred Securities or
the Guarantee relating thereto.
STATUS OF THE GUARANTEES
The Guarantees will constitute unsecured obligations of American General
and will rank (i) subordinate and junior in right of payment to all liabilities
of American General, (ii) pari passu with the most senior preferred stock now or
hereafter issued by American General and with any guarantee now or hereafter
executed by American General in respect of any preferred stock of any affiliate
of American General and (iii) senior to American General Common Stock and any
other class or series of capital stock issued by American General which by its
express terms ranks junior to the Preferred Securities as to the payment of
dividends and distribution of assets upon liquidation, dissolution or
winding-up. The LLC Agreement of each American General LLC provides that each
holder of Preferred Securities issued by such American General LLC by acceptance
thereof agrees to the subordination provisions and other terms of the Guarantee
relating thereto.
The Guarantees will constitute a guarantee of payment and not of
collection. Each Guarantee will be deposited with the Manager of the applicable
American General LLC to be held for the benefit of the holders of Preferred
Securities issued by such American General LLC. In the event of the appointment
by the holders of a series of Preferred Securities of a special trustee (a
"Special Trustee"), the Special Trustee may enforce such Guarantee to the extent
it relates to such series. If no Special Trustee has been appointed to enforce
such Guarantee, the Manager of such American General LLC shall have the right to
enforce such Guarantee on behalf of the holders of such series of Preferred
Securities. The holders of not less than 10% in aggregate liquidation preference
of such series of Preferred Securities then outstanding shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of such Guarantee, including the giving of directions to
such Manager or Special Trustee, as the case may be. If such Manager or the
Special Trustee fails to enforce such Guarantee as above provided, any holder of
such series of Preferred Securities may institute a legal proceeding directly
against American General to enforce its rights under such Guarantee, without
first instituting a legal proceeding against the applicable American General LLC
or any other person or entity. Upon the liquidation, dissolution or winding-up
of American General, its obligations under the Guarantees will rank junior to
all of its other liabilities and, therefore, funds may not be available for
payment under the Guarantees.
GOVERNING LAW
The Guarantees will be governed by and construed in accordance with the
laws of the State of New York.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a summary of information concerning the Junior
Subordinated Debentures which will be issued from time to time in one or more
series under a Junior Subordinated Indenture, dated as of , 1995
(the "Junior Subordinated Indenture"), between American General and Chemical
Bank, as trustee (the "Junior Subordinated Trustee"). Concurrent with the
issuance of each series of Preferred Securities, the American General LLC
issuing such Preferred Securities will invest the proceeds thereof, together
with substantially all the proceeds from any related issuance of Common
Securities, in a series of the Junior Subordinated Debentures. The following
summary does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Junior
Subordinated Indenture, a form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Whenever
particular provisions or defined terms in the Junior Subordinated Indenture are
referred to herein or in a Prospectus Supplement, it is intended that such
provisions or defined terms are incorporated by reference herein or therein, as
the case may be.
GENERAL
The Junior Subordinated Debentures will be unsecured, subordinated
obligations of American General as hereinafter described. The Junior
Subordinated Indenture does not limit the aggregate principal amount of Junior
Subordinated Debentures which may be issued thereunder and provides that the
Junior Subordinated Debentures may be issued thereunder from time to time in one
or more series pursuant to an indenture supplemental to the Junior Subordinated
Indenture or a resolution of American General's Board of Directors or a special
committee thereof (each, a "Supplemental Junior Subordinated Indenture"). The
aggregate principal amount of Junior Subordinated Debentures relating to the
Preferred Securities of any series will be set forth in the Prospectus
Supplement for such series of Preferred Securities and will be equal to 99% of
the sum of the aggregate liquidation preference of the Preferred Securities for
such series and the capital contribution by American General to be made in
exchange for Common Securities of the applicable American General LLC in
connection with the issuance of such series of Preferred Securities.
Reference is made to the Prospectus Supplement relating to the particular
series of Preferred Securities being offered thereby for the specific terms of
the series of Junior Subordinated Debentures relating to such series of
Preferred Securities, including: (i) the specific title of such Junior
Subordinated Debentures; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Debentures; (iii) the date or dates on which the
principal of such Junior Subordinated Debentures is payable; (iv) the rate or
rates at which such Junior Subordinated Debentures will bear interest or the
method of determination of such rate or rates; (v) the date or dates from which
such interest shall accrue, the interest payment dates on which such interest
will be payable, or the manner of determination of such interest payment dates,
and the record dates for the determination of holders to whom interest is
payable on any such interest payment dates; (vi) the right, if any, of American
General to extend the interest payment periods of such Junior Subordinated
Debentures and the maximum duration of any such extension or extensions; (vii)
the date or dates on which, the period or periods within which, the price or
prices at which and the terms and conditions upon which such Junior Subordinated
Debentures may be redeemed, in whole or in part, at the option of American
General; (viii) the obligation, if any, of American General to redeem or
purchase such Junior Subordinated Debentures pursuant to any sinking fund or
analogous provisions or at the option of the holder thereof and the date or
dates on which, the period or periods within which, the price or prices at which
and the terms and conditions upon which such Junior Subordinated Debentures
shall be redeemed or purchased, in whole or part, pursuant to such obligation;
(ix) the terms and conditions, if any, upon which such Junior Subordinated
Debentures may be distributed to holders of Preferred Securities of such series;
(x) the terms and conditions, if any, under which such Junior Subordinated
Debentures may be converted into shares of American General Common Stock,
including the conversion price per share and the circumstances under which any
such conversion right shall expire; (xi) the terms and conditions, if any, under
which such Junior Subordinated Debentures may be converted into shares of a
series of American General Preferred Stock; (xii) the form of such Junior
Subordinated Debentures, including whether such Junior Subordinated Debentures
are issuable as a global security, and in such case, the identity of the
depositary; (xiii) the denominations in which such Junior
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Subordinated Debentures shall be issuable; (xiv) the terms and conditions, if
any, under which the Junior Subordinated Indenture may be defeased with respect
to such Junior Subordinated Debentures; and (xv) any and all other terms of such
Junior Subordinated Debentures not described herein.
The Junior Subordinated Indenture does not contain any provisions that
limit American General's ability to incur indebtedness or that afford holders of
Junior Subordinated Debentures protection in the event of a highly leveraged or
similar transaction involving American General.
SUBORDINATION
The Junior Subordinated Indenture provides that the Junior Subordinated
Debentures are subordinate and junior in right of payment to all Senior
Indebtedness (as defined below) of American General.
Upon any payment or distribution of assets of American General to creditors
upon any liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors, marshalling of assets or liabilities or any
bankruptcy, insolvency or similar proceedings of American General, the holders
of Senior Indebtedness will be entitled to receive payment in full of all
amounts due on or to become due on or in respect of all Senior Indebtedness
(including any interest accruing thereon after commencement of such
proceedings), before the holders of the Junior Subordinated Debentures will be
entitled to receive any payment on account of the principal of or interest on
the Junior Subordinated Debentures or on account of any purchase, redemption or
other acquisition of the Junior Subordinated Debentures by American General. As
a result of such subordination, upon the distribution of assets upon insolvency,
certain general creditors of American General may recover more, ratably, than
holders of the Junior Subordinated Debentures. The holders of the Junior
Subordinated Debentures of each series will be subrogated to the rights of the
holders of the Senior Indebtedness to the extent of payments made to the holders
of Senior Indebtedness upon any distribution of assets in any such proceedings
out of the distributive share of such series of Junior Subordinated Debentures.
American General may not make any payments in respect of the Junior
Subordinated Debentures or on account of the purchase, redemption or other
acquisition of the Junior Subordinated Debentures, if there has occurred and is
continuing a default in the payment of the principal of (or premium, if any) or
interest on any Senior Indebtedness (a "Senior Payment Default"). In addition,
if any event of default (other than a Senior Payment Default), or any event
which after notice or lapse of time (or both) would become an event of default,
with respect to certain Senior Indebtedness, permitting after notice or lapse of
time (or both) the holders thereof (or a trustee or agent on behalf of the
holders thereof) to accelerate the maturity thereof has occurred and is
continuing (a "Senior Nonmonetary Default"), and American General and the Junior
Subordinated Trustee have received written notice thereof from the holder of
such certain Senior Indebtedness, then American General may not make any
payments in respect of the Junior Subordinated Debentures or on account of the
purchase, redemption or other acquisition of the Junior Subordinated Debentures,
for a period (a "blockage period") commencing on the date American General and
the Junior Subordinated Trustee receive such written notice and ending on the
earlier of (i) 179 days after such date and (ii) the date, if any, on which the
Senior Indebtedness to which such default relates is discharged or such default
is waived in writing or otherwise cured or ceases to exist and any acceleration
of certain Senior Indebtedness to which such Senior Nonmonetary Default relates
is rescinded or annulled.
In any event, not more than one blockage period may be commenced during any
period of 360 consecutive days, and there must be a period of at least 181
consecutive days in each period of 360 consecutive days when no blockage period
is in effect. Following the commencement of a blockage period, the holders of
such certain Senior Indebtedness will be precluded from commencing a subsequent
blockage period until the conditions set forth in the preceding sentence are
satisfied. No Senior Nonmonetary Default that existed or was continuing on the
date of commencement of any blockage period with respect to such certain Senior
Indebtedness initiating such blockage period will be, or can be, made the basis
for the commencement of a subsequent blockage period, unless such default has
been cured for a period of not less than 90 consecutive days.
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The term "Senior Indebtedness" shall mean the principal of, and premium, if
any, and interest on, and any other payment due pursuant to, any of the
following, whether outstanding at the date of execution of the Junior
Subordinated Indenture or thereafter incurred, created or assumed:
(a) all obligations of American General for money borrowed;
(b) all obligations of American General evidenced by notes,
debentures, bonds or other securities, including obligations incurred in
connection with the acquisition of property, assets or businesses;
(c) all capitalized lease obligations of American General;
(d) all reimbursement obligations of American General with respect to
letters of credit, bankers acceptance or similar facilities issued for the
account of American General;
(e) all obligations of American General issued or assumed as the
deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course of
business);
(f) all payment obligations of American General under interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements at the time of determination, including any such obligations
incurred by American General solely to act as a hedge against increases in
interest rates that may occur under the terms of other outstanding variable
or floating rate indebtedness of American General;
(g) all obligations of the type referred to in clauses (a) through (f)
above of another person and all dividends of another person, the payment of
which, in either case, American General has assumed or guaranteed, or for
which American General is responsible or liable, directly or indirectly,
jointly or severally, as obligor, guarantor or otherwise; and
(h) all amendments, modifications, renewals, extensions, refinancings,
replacements and refundings by American General of any such indebtedness
referred to in clauses (a) through (g) above (and of any such amended,
modified, renewed, extended, refinanced, refunded or replaced indebtedness
or obligations);
other than (i) any particular indebtedness, renewal, extension, refunding,
assumption, guarantee or other obligation which provides, or the instrument
creating or evidencing the same or the assumption or guarantee of the same
expressly provides, that such indebtedness, renewal, extension, refunding,
assumption, guarantee or other obligation is junior in right of payment to or is
pari passu with the Junior Subordinated Debentures; (ii) each Guarantee; and
(iii) interest accruing on Senior Indebtedness after the filing of a petition
initiating certain bankruptcy or insolvency proceedings unless such interest is
an allowed claim enforceable against American General in a bankruptcy
proceeding. Such Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
The Junior Subordinated Indenture does not limit the aggregate amount of
Senior Indebtedness which may be issued. As of December 31, 1994, Senior
Indebtedness of American General aggregated approximately $ .
CERTAIN COVENANTS OF AMERICAN GENERAL
In the Junior Subordinated Indenture, American General will covenant and
agree for the benefit of the holders of each series of Junior Subordinated
Debentures that, so long as the related series of Preferred Securities remain
outstanding, American General shall not declare or pay any dividend on, and
American General shall not, and American General shall not permit any of its
majority-owned subsidiaries to, redeem, purchase, acquire or make a liquidation
payment with respect to, any of American General's capital stock (other than (i)
acquisitions of shares of American General Common Stock in connection with the
satisfaction by American General of its obligations under any employee benefit
plans or pursuant to any outstanding put contracts, (ii) as a result of a
reclassification of capital stock or the exchange or conversion of one class or
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series of capital stock for another class or series of capital stock or (iii)
redemptions of any share purchase rights issued by American General pursuant to
the Rights Agreement (see "Description of American General Common Stock --
Preferred Share Purchase Rights") or the declaration of a dividend of similar
share purchase rights in the future) or make any guarantee payments with respect
to the foregoing, if at such time American General has exercised its option to
defer interest payments on the series of Junior Subordinated Debentures related
to such Preferred Securities and such deferral is continuing, American General
is in default with respect to its payment or other obligations under the
Guarantee related to such Preferred Securities or there shall have occurred any
event that constitutes an Event of Default under the Junior Subordinated
Indenture with respect to the series of Junior Subordinated Debentures related
to such Preferred Securities. American General will covenant to take all actions
necessary to ensure the compliance of its majority-owned subsidiaries with the
above covenant.
In the Junior Subordinated Indenture, American General will also covenant
and agree for the benefit of the holders of each series of Junior Subordinated
Debentures that, so long as the related series of Preferred Securities remain
outstanding, it will (a) maintain direct 100% ownership of the Common Securities
and other limited liability company interests in the applicable American General
LLC other than any series of Preferred Securities (except as permitted in the
applicable LLC Agreement), (b) cause at least 21% of the total value of such
American General LLC and, subject to the preferential rights of the holders of
Preferred Securities as to dividends and liquidation distributions, at least 21%
of all interests in the capital, income, gain, loss, deduction and credit of
such American General LLC to be represented by Common Securities, (c) not
voluntarily dissolve, wind-up or liquidate itself or such American General LLC,
(d) remain the Manager and timely perform all of its duties as Manager of such
American General LLC (including the duty to cause such American General LLC to
declare and pay dividends on such Preferred Securities to the extent set forth
in the applicable LLC Agreement and Declaration), unless a permitted successor
Manager is appointed, (e) subject to the terms of such Preferred Securities, use
reasonable efforts to cause such American General LLC to remain a Delaware
limited liability company and otherwise continue to be treated as a partnership
for United States federal income tax purposes, and (f) if so provided in the
Prospectus Supplement pertaining to such Preferred Securities, to deliver
American General Preferred Stock or American General Common Stock, as the case
may be, upon an election by the holders of such Preferred Securities to exchange
or convert such series of Junior Subordinated Debentures.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Junior Subordinated Debentures of each series will be issued in registered
form and in either certificated form or will be represented by one or more
global securities. If any Junior Subordinated Debentures of a series are
represented by one or more global securities, the applicable Prospectus
Supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such global securities may exchange such interests
for Junior Subordinated Debentures of such series in certificated form and of
like tenor and principal amount in any authorized denomination. Principal of and
any premium and interest on a global security will be payable in the manner
described in the Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by one
or more global securities will be described in the applicable Prospectus
Supplement.
If not represented by one or more global securities, Junior Subordinated
Debentures may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) or exchange, at the office of the
Debenture Registrar or at the office of any transfer agent designated by
American General for such purpose with respect to any series of Junior
Subordinated Debentures and referred to in the applicable Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the Junior Subordinated Indenture. Such transfer or
exchange will be effected upon the Debenture Registrar or such transfer agent,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. American General has appointed the Junior
Subordinated Trustee as Debenture Registrar with respect to the Junior
Subordinated Debentures. If a Prospectus Supplement refers to any transfer
agents (in addition to the Debenture Registrar) initially designated by
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American General with respect to any series of Junior Subordinated Debentures,
American General may at any time rescind the designation of any such transfer
agent or approve a change in the location through which any such transfer agent
acts, except that American General will be required to maintain a transfer agent
in each Place of Payment for such series. American General may at any time
designate additional transfer agents with respect to any series of Junior
Subordinated Debentures.
In the event of any redemption of a series of Junior Subordinated
Debentures in part, American General shall not be required to (i) issue,
register the transfer of or exchange such Junior Subordinated Debentures during
a period beginning at the opening of business 15 days before any selection for
redemption of such Junior Subordinated Debentures of like tenor and of the
series of which such Junior Subordinated Debenture is a part and ending at the
close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed or (ii) register the
transfer of or exchange any such Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any such
Junior Subordinated Debenture being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium (if any) on any series of Junior Subordinated
Debentures will be made only against surrender to the Paying Agent of such
Junior Subordinated Debentures. Unless otherwise indicated in the applicable
Prospectus Supplement, principal of and any premium, if any, and interest on
Junior Subordinated Debentures will be payable, subject to any applicable laws
and regulations, at the office of such Paying Agent or Paying Agents as American
General may designate from time to time, except that at the option of American
General payment of any interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Debenture
Register with respect to such Junior Subordinated Debentures. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of interest on a
Junior Subordinated Debenture on any interest payment date will be made to the
person in whose name such Junior Subordinated Debenture (or Predecessor
Security) is registered at the close of business on the record date for such
interest payment.
American General will act as Paying Agent with respect to the Junior
Subordinated Debentures. American General may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts, except that American
General will be required to maintain a Paying Agent in each Place of Payment for
each series of Junior Subordinated Debentures.
All monies paid by American General to a Paying Agent for the payment of
the principal of or any premium or interest on any Junior Subordinated Debenture
of any series which remain unclaimed at the end of two years after such
principal, premium or interest shall have become due and payable will be repaid
to American General and the holder of such Junior Subordinated Debenture will
thereafter look only to American General for payment thereof.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
The Junior Subordinated Indenture may be amended by American General and
the Junior Subordinated Trustee, with the consent of the holders of not less
than 66 2/3% in aggregate principal amount of the Junior Subordinated Debentures
of each series affected thereby, to modify the Junior Subordinated Indenture or
any supplemental indenture affecting that series or the rights of the holders of
that series of Junior Subordinated Debentures; provided, that no such
modification or amendment may, without the consent of the holder of each
outstanding Junior Subordinated Debenture affected thereby, (a) change the
maturity of the principal of, or any installment of interest on, any Junior
Subordinated Debenture, (b) reduce the principal amount of, or interest on, any
Junior Subordinated Debenture, (c) change the place or currency of payment of
principal of, or interest on, any Junior Subordinated Debenture, (d) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Junior Subordinated Debenture, (e) adversely affect any applicable
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right to convert Junior Subordinated Debentures, (f) adversely affect any
applicable redemption or exchange provisions relating to any Junior Subordinated
Debenture, (g) modify the subordination provisions in a manner adverse to the
holders of the Junior Subordinated Debentures, (h) reduce the above-stated
percentage of outstanding Junior Subordinated Debentures necessary to modify or
amend the Junior Subordinated Indenture or (i) reduce the percentage of
aggregate principal amount of outstanding Junior Subordinated Debentures
necessary for waiver of compliance with certain provisions of the Junior
Subordinated Indenture or for waiver of certain defaults.
So long as an American General LLC holds the Junior Subordinated Debentures
of any series, it may not waive compliance or waive any default in compliance by
American General with provisions of the Junior Subordinated Indenture or such
Junior Subordinated Debentures or modify or amend the Junior Subordinated
Indenture without the approval of the same percentage of the aggregate
liquidation preference of the holders of Preferred Securities of the related
series as would be required if the holders of such Preferred Securities then
held such Junior Subordinated Debentures.
In addition, American General and the Junior Subordinated Trustee may
execute, without the consent of any holder of Junior Subordinated Debentures,
any supplemental indenture for certain customary purposes including the creation
of any new series of Junior Subordinated Debentures.
EVENTS OF DEFAULT
The Junior Subordinated Indenture provides that any one or more of the
following events, which has occurred and is continuing, constitutes an "Event of
Default" with respect to any particular series of Junior Subordinated
Debentures:
(a) failure to pay any interest on the Junior Subordinated Debentures
of that series when due and such failure continues for a period of 10 days;
provided that a valid extension of the interest payment period by American
General shall not constitute a default in the payment of interest for this
purpose; or
(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debentures of that series when due, whether at maturity, upon
redemption or otherwise, or to make any sinking fund payment with respect
to that series; or
(c) if applicable, failure by American General to deliver shares of
the applicable series of American General Preferred Stock or American
General Common Stock upon an appropriate election by holders of the related
series of Preferred Securities to exchange or convert such Preferred
Securities; or
(d) failure by American General to observe or perform in any material
respect any other covenant (other than those specifically relating to
another series) contained in the Junior Subordinated Indenture or the
Junior Subordinated Debentures of that series continued for 90 days after
written notice to American General from the Junior Subordinated Trustee,
any holder of Junior Subordinated Debentures of such series or any holder
of Preferred Securities of the series related to such series of Junior
Subordinated Debentures; or
(e) the liquidation, dissolution or winding-up of the American General
LLC that holds such series of Junior Subordinated Debentures, except in
connection with any distribution of such Junior Subordinated Debentures to
the holders of Preferred Securities in liquidation, dissolution or
winding-up of such American General LLC and in connection with certain
mergers, consolidations or amalgamations permitted by the LLC Agreement; or
(f) certain events of bankruptcy, insolvency or reorganization of
American General.
If an Event of Default under the Junior Subordinated Indenture shall occur
and be continuing with respect to a particular series of Junior Subordinated
Debentures (other than an Event of Default described in clauses (e) and (f)
above, which shall result in the immediate acceleration of the maturity of such
series of Junior Subordinated Debentures), the Junior Subordinated Trustee or
the holders of not less than 25% in aggregate outstanding principal amount of
such series of the Junior Subordinated Debentures may declare the
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principal thereof due and payable immediately. The holders of a majority in
aggregate outstanding principal amount of such series (with the consent of the
holders of a majority in aggregate liquidation preference of the related series
of Preferred Securities if such series is then outstanding), however, may annul
such declaration if such Event of Default has been cured and a sum sufficient to
pay all matured principal, premium, if any, and interest has been deposited with
the Junior Subordinated Trustee.
The holders of a majority in aggregate outstanding principal amount of any
series of the Junior Subordinated Debentures will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Junior Subordinated Trustee for that series.
The holders of a majority in aggregate outstanding principal amount of each
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
past default, except a default in the payment of principal, premium, if any, or
interest. American General is required to file annually with the Junior
Subordinated Trustee a certificate as to whether or not American General is in
compliance with all the conditions and covenants under the Junior Subordinated
Indenture.
To the extent described in the applicable Prospectus Supplement, upon the
occurrence and continuance of an Event of Default with respect to a series of
Junior Subordinated Debentures, the holders of the related series of Preferred
Securities will have the right to appoint a Special Trustee to exercise certain
of the rights the applicable American General LLC has as holder of such series
of Junior Subordinated Debentures.
CONSOLIDATION, MERGER AND SALE
American General, without the consent of the holder or holders of any
Junior Subordinated Debentures, may consolidate with or merge into, or convey,
transfer or lease its assets as an entirety or substantially as an entirety to,
any corporation, partnership or trust organized and validly existing under the
laws of The United States of America or a state thereof, provided that the
successor assumes American General's obligations under the Junior Subordinated
Debentures, the Junior Subordinated Indenture and the Guarantees and that, after
giving effect to the transaction, no Event of Default, and no event which, after
notice or lapse of time, would become an Event of Default, shall have occurred
and be continuing.
DEFEASANCE AND DISCHARGE
If American General has the right to defease the Junior Subordinated
Indenture with respect to a particular series of Junior Subordinated Debentures
by depositing with the Junior Subordinated Trustee, in trust, monies or
government obligations in an amount sufficient to pay, when due, the principal
of, premium, if any, and interest on the Junior Subordinated Debentures of that
series, then the Prospectus Supplement relating to that series will describe
such provisions.
GOVERNING LAW
The Junior Subordinated Indenture and the Junior Subordinated Debentures
will be governed by, and construed in accordance with, the laws of the State of
New York.
INFORMATION CONCERNING THE JUNIOR SUBORDINATED TRUSTEE
The Junior Subordinated Trustee, prior to default, undertakes to perform
only such duties as are specifically set forth in the Junior Subordinated
Indenture and, after default, is required to exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provision, the Junior Subordinated Trustee is under no
obligation to exercise any of the powers vested in it by the Junior Subordinated
Indenture at the request of any holder of Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The Junior Subordinated Trustee is
not required to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the Junior Subordinated
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
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American General and certain of its affiliates from time to time borrow
money from, and maintain deposit accounts and conduct certain banking
transactions with, the Junior Subordinated Trustee in the ordinary course of
their business.
MISCELLANEOUS
American General will have the right at all times to assign any of its
rights or obligations under the Junior Subordinated Indenture to a direct or
indirect wholly-owned subsidiary of American General; provided, that, in the
event of any such assignment, American General will remain liable for all such
obligations. The Junior Subordinated Indenture provides that it may not
otherwise be assigned by the parties thereto. Subject to the foregoing, the
Junior Subordinated Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns.
DESCRIPTION OF AMERICAN GENERAL PREFERRED STOCK
If so indicated in a Prospectus Supplement relating to a particular series
of Preferred Securities, such series may, in certain events, be exchangeable for
shares of a series of American General Preferred Stock. The following sets forth
certain general terms and provisions of the American General Preferred Stock.
Certain other terms of any series of American General Preferred Stock that may
be issued upon exchange of a series of Preferred Securities offered by a
Prospectus Supplement will be specified in such Prospectus Supplement. If so
specified in the applicable Prospectus Supplement, the terms of any series of
American General Preferred Stock may differ from the terms set forth below. The
description of the terms of the American General Preferred Stock set forth below
and in an applicable Prospectus Supplement does not purport to be complete and
is subject to and qualified in its entirety by reference to the Certificate of
Designation relating to the applicable series of American General Preferred
Stock, which will be filed as an exhibit to, or incorporated by reference in,
the Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the Restated Articles of Incorporation of American General, as
amended (the "Articles"), the Bylaws of American General, and applicable Texas
law, the Board of Directors of American General, or an authorized committee
thereof, has the authority, without further shareholder action, to issue up to
60,000,000 shares of American General Preferred Stock, par value $1.50 per
share, in one or more series and in such amounts and for such consideration, as
may be determined from time to time by resolution of the Board of Directors of
American General, or an authorized committee thereof, and to fix before the
issuance of any shares of American General Preferred Stock of a particular
series, the number of shares constituting that series and the distinctive
designation of that series; the dividend rate (or method of determining the
same); the voting rights; conversion privileges; redemption rights; repurchase
obligations; sinking fund availability; rights upon liquidation, dissolution or
winding up and the priority thereof; restrictions upon American General with
respect to the creation of debt or the issuance of additional Preferred Stock or
other stock ranking prior to or on a parity therewith with respect to dividends
or upon liquidation; restrictions on American General with respect to the
issuance of, payment of dividends upon, or the making of other distributions
with respect to, or the acquisition or redemption of, shares ranking junior to
the American General Preferred Stock; the priority of each series of American
General Preferred Stock in relation to other series of American General
Preferred Stock; and any other designations, powers, preferences and rights,
including, without limitation, any qualifications, limitations or restrictions
thereof. The holders of any series of American General Preferred Stock shall not
have any preemptive rights to acquire any shares or securities of any class
which may at any time be issued, sold or offered for sale by American General.
As of March 1, 1995, American General had no Preferred Stock outstanding.
As of such date, the Company did have Preferred Share Purchase Rights
outstanding. A description of these rights is provided under "Description of
American General Common Stock -- Preferred Share Purchase Rights".
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DIVIDENDS
The holders of American General Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors of
American General, out of funds legally available therefor, dividends at such
rates and on such dates as will be specified in the applicable Prospectus
Supplement. Such rates may be fixed or variable or both. If variable, the
formula used for determining the dividend rate for each dividend period will be
specified in the applicable Prospectus Supplement. Dividends will be payable to
the holders of record as they appear on the stock books of American General on
such record dates as will be fixed by the Board of Directors of American
General.
Unless otherwise indicated in an applicable Prospectus Supplement, all
series of American General Preferred Stock are senior in right as to dividends
and in liquidation to the American General Common Stock and any other class of
stock of American General ranking junior to the American General Preferred
Stock.
VOTING RIGHTS
Except as indicated in the applicable Prospectus Supplement or as expressly
required by applicable law, the holders of American General Preferred Stock will
not be entitled to vote. In the event American General issues a series of
American General Preferred Stock with voting rights, unless otherwise specified
in the applicable Prospectus Supplement, each such share will be entitled to one
vote on matters on which holders of such series of the American General
Preferred Stock are entitled to vote. Since each full share of any series of
American General Preferred Stock shall be entitled to one vote, the voting power
of such series, on matters on which holders of such series and holders of other
series of American General Preferred Stock are entitled to vote as a single
class, shall depend on the number of shares in such series, not the aggregate
stated value, liquidation preference or initial offering price of the shares of
such series of American General Preferred Stock.
CONVERSION AND EXCHANGE
The applicable Prospectus Supplement will set forth the conditions or
terms, if any, upon which the series of American General Preferred Stock
described in such Prospectus Supplement will be convertible or exchangeable, and
the terms of the securities into which such series will be convertible or
exchangeable.
REDEMPTION RIGHTS
A series of American General Preferred Stock may be redeemable, in whole or
in part, at the option of American General or any holder thereof, and may be
subject to mandatory redemption pursuant to a sinking fund or otherwise, in each
case upon terms, at the times and at the redemption prices specified in the
applicable Prospectus Supplement and subject to the rights of holders of other
securities of American General. American General Preferred Stock redeemed by
American General will be restored to the status of authorized but unissued
preferred shares.
If less than all outstanding shares of a series are to be redeemed, the
shares to be redeemed will be selected ratably or by lot in such manner as may
be prescribed by resolution of the Board of Directors of American General. The
notice of redemption will set forth the designation of the series or part of the
series of shares to be redeemed, the date fixed for redemption, the redemption
price, the place at which the shareholders may obtain payment of the redemption
price upon surrender of their respective share certificates and a statement with
respect to the existence of any right of conversion with respect to the shares
to be redeemed and the period within which such right may be exercised. Such
notice will be given to each holder of shares being called, either personally or
by mail, not less than 20 nor more than 60 days before the date fixed for
redemption. If mailed, such notice will be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at such shareholder's
address as it appears on the stock transfer book of American General, with
postage thereon prepaid.
American General may, on or prior to the date fixed for redemption of a
series of American General Preferred Stock, deposit with any bank or trust
company in Texas, or any bank or trust company in the United
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States duly appointed and acting as transfer agent for American General, as a
trust fund, a sum sufficient to redeem shares called for redemption, with
irrevocable instructions and authority to such bank or trust company to give or
complete the notice of redemption thereof and to pay, on or after the date fixed
for such redemption, to the respective holders of shares, as evidenced by a list
of holders of such shares certified by an officer of American General, the
redemption price upon surrender of their respective share certificates. From and
after the date fixed for redemption, such shares shall be deemed to be redeemed
and dividends thereon shall cease to accrue. Such deposit will be deemed to
constitute full payment of such shares to their holders. From and after the date
such deposit is made and such instructions are given, such shares shall no
longer be deemed to be outstanding, and the holders thereof shall cease to be
shareholders with respect to such shares, and shall have no rights with respect
thereto except the right to receive from the bank or trust company payment of
the redemption price of such shares, without interest (and, in the case of
holders of certificated shares, upon the surrender of their respective
certificates therefor), and any right to convert such shares which may exist. In
case the holders of such shares shall not, within six years after such deposit,
claim the amount deposited for redemption thereof, such bank or trust company
shall upon demand pay over to American General the balance of such amount so
deposited to be held in trust and such bank or trust company shall thereupon be
relieved of all responsibility to the holders thereof.
REPURCHASE OBLIGATION
The applicable Prospectus Supplement will state the conditions and terms,
if any, upon which the series of American General Preferred Stock described in
the Prospectus Supplement shall be subject to repurchase by American General.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of American General, the holders of each series of American General
Preferred Stock shall be entitled to receive out of the assets of American
General available for distribution to shareholders, before any distribution of
assets is made to holders of American General Common Stock or any other class or
series of shares ranking junior to such American General Preferred Stock upon
liquidation, dissolution or winding-up a liquidating distribution in the amount
per share as set forth in the applicable Prospectus Supplement plus accrued and
unpaid dividends. If, upon any voluntary or involuntary liquidation, dissolution
or winding-up of American General, the amounts payable with respect to American
General Preferred Stock of any series and any other shares of American General
ranking as to any such distribution on a parity with such American General
Preferred Stock of such series are not paid in full, the holders of such
American General Preferred Stock of such series and of such other shares will
share ratably in any such distribution of assets of American General in
proportion to the full respective preferential amounts to which they are
entitled. Neither the sale of all or substantially all of the property or
business of American General nor the merger or consolidation of American General
into or with any other corporation shall be deemed to be a liquidation,
dissolution or winding-up, voluntary or involuntary, of American General. After
payment of the full amount of the liquidating distribution to which they are
entitled, the holders of American General Preferred Stock of any series will not
be entitled to any further participation in any distribution of assets by
American General.
CONDITIONS AND RESTRICTIONS UPON AMERICAN GENERAL
The applicable Prospectus Supplement will describe any conditions or
restrictions upon American General which are for the benefit of the series of
American General Preferred Stock described in the Prospectus Supplement,
including restrictions upon the creation of debt or other series of American
General Preferred Stock; payment of dividends; or distributions, acquisitions or
redemptions of shares ranking junior to such series.
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DESCRIPTION OF AMERICAN GENERAL COMMON STOCK
GENERAL
American General is authorized to issue 300,000,000 shares of American
General Common Stock, par value $.50 per share. As of March 1, 1995, there were
outstanding 204,766,121 shares of American General Common Stock.
Holders of American General Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors of American General out of
any funds legally available therefor, and are entitled upon liquidation, after
claims of creditors and preferences of any series of American General Preferred
Stock, to receive pro rata the net assets of American General.
The holders of American General Common Stock are entitled to one vote for
each share held and are vested with all of the voting power, except as the Board
of Directors of American General or an authorized committee thereof may provide
in the future with respect to any series of American General Preferred Stock.
Directors of American General are elected for a one-year term expiring upon the
annual meeting of stockholders of American General. The holders of American
General Common Stock do not have cumulative voting rights.
The holders of American General Common Stock do not have any preemptive
rights to acquire any shares or other securities of any class which may at any
time be issued, sold or offered for sale by American General. The holders of
Common Stock have no conversion rights and the Common Stock is not subject to
redemption by either American General or a stockholder.
The American General Common Stock is listed on the New York, Pacific,
London and Swiss Stock Exchanges. First Chicago Trust Company of New York is the
transfer agent, registrar and dividend disbursing agent for the American General
Common Stock.
PREFERRED SHARE PURCHASE RIGHTS
On July 27, 1989, the Board of Directors of American General authorized the
issuance of one preferred share purchase right (a "Right") for each share of
American General Common Stock outstanding on August 7, 1989 and for each share
of American General Common Stock issued thereafter but prior to the earlier of
the Distribution Date and the Termination Date (as each such term is defined
below). A Right is attached to each share of American General Common Stock and
entitles the registered holder to purchase from American General one
one-hundredth of a share of Series A Junior Participating Preferred Stock, par
value $1.50 per share, of American General (the "American General Junior
Preferred Shares"), at a price of $120 per one one-hundredth of a American
General Junior Preferred Share, subject to certain adjustments.
The Rights will expire on August 7, 1999, unless the expiration date is
extended or the Rights are redeemed earlier (any such date being the
"Termination Date"). The Rights are not exercisable or transferable separately
from the shares of Common Stock until the "Distribution Date" which will occur
on the earlier of (i) 10 business days following the first public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
American General Common Stock and any other shares of capital stock of American
General entitled to vote generally in the election of directors or entitled to
vote in respect of any merger, consolidation, sale of all or substantially all
of American General's assets, liquidation, dissolution or winding up of American
General (the "Voting Stock") or (ii) 10 business days following the commencement
of, or the first public announcement of an intention to commence, a tender or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of affiliated or associated persons of 25% or
more of the then outstanding Voting Stock.
In the event American General is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earnings
power should be sold or otherwise transferred, each holder of a Right will have
the right to receive, upon payment of the Right's then current exercise price,
common stock of the acquiring company which has a market value of two times the
exercise price of the Right. In the event that any person becomes an Acquiring
Person, each holder of a Right will thereafter have the right to receive upon
exercise thereof that number of shares of American General Common Stock (or
under certain circumstances,
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Common Stock-equivalent American General Junior Preferred Shares) having a
market value of two times the exercise price of the Rights.
At any time 10 business days after a person or group of affiliated or
associated persons has become an Acquiring Person and prior to the acquisition
by any person or group of 50% or more of the outstanding Voting Stock, the Board
of Directors of American General may exchange the Rights (other than Rights
acquired or beneficially owned by such Acquiring Person, which Rights held by
such Acquiring Person shall then be null and void), in whole or in part, at an
exchange ratio of one share of Common Stock (or one one-hundredth of a share of
American General Junior Preferred Stock), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction, for each two shares of
Common Stock for which the Right is then exercisable.
At any time prior to the close of business on the tenth day following the
first public announcement that a person or group of affiliated or associated
persons has become an Acquiring Person, the Board of Directors of American
General may redeem the then outstanding Rights in whole, but not in part, at a
price of $.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction (the "Rights Redemption Price"). Any such
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors of American General in its sole
discretion may establish.
The purchase price payable, and the number of American General Junior
Preferred Shares or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution in the
event of a stock dividend on, or a subdivision, combination or reclassification
of, the Junior Preferred Shares.
The number of outstanding Rights and the number of one one-hundredths of an
American General Junior Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of reclassification of securities, or
recapitalization or reorganization of American General or other transaction
involving American General which has the effect, directly or indirectly, of
increasing by more than one percent the proportionate share of the outstanding
shares of any class of equity securities of American General or any of its
subsidiaries beneficially owned by any Acquiring Person, in any such case, prior
to an exchange by American General as described above.
The terms of the Rights may be amended, including extending the expiration
date, by the Board of Directors of American General without the consent of the
holders of the Rights, except in certain circumstances.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire American
General on terms not approved by the Board of Directors of American General. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors of American General since the Rights may be
redeemed by American General at the Rights Redemption Price prior to the time
that a person or group has acquired beneficial ownership of 50% or more of the
Voting Stock.
The American General Junior Preferred Shares will be non-redeemable and
rank junior to all other series of American General Preferred Stock. Each whole
Junior Preferred Share will be entitled to receive a quarterly preferential
dividend in an amount equal to the greater of (i) $0.25 or (ii) subject to
certain adjustments, 100 times the dividend declared on each share of American
General Common Stock. In the event of the liquidation, dissolution or winding up
of American General, each whole American General Junior Preferred Share will be
entitled to receive a preferential liquidation payment in an amount equal to the
greater of (i) $1.50, or (ii) 100 times the aggregate amount to be distributed
per share to holders of American General Common Stock, plus, in either case, an
amount equal to all accrued and unpaid dividends thereon. In the event of any
merger, consolidation or other transaction in which American General Common
Stock is exchanged for or changed into other stock or securities, cash or other
property, each whole American General Junior Preferred Share will be entitled to
receive 100 times the amount received per each share of American General Common
Stock. Each whole American General Junior Preferred Share will be entitled to
100 votes on all matters submitted to a vote of the shareholders of American
General, and American General Junior Preferred Shares will generally vote
together as one class with the American General Common Stock and any
21
<PAGE> 83
other voting capital stock of American General on all matters submitted to a
vote of shareholders of American General.
If such registration is then required by applicable law, American General
will use its best efforts to cause the offer and sale of American General Junior
Preferred Shares issuable upon exercise of the Rights to be registered pursuant
to the Securities Act at any such time as the Rights become exercisable.
The foregoing description of the Rights and the American General Junior
Preferred Shares does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, as amended, which is an exhibit
to the Registration Statement of which this Prospectus forms a part, and the
Certificate of Designation, Preferences and Rights for the American General
Junior Preferred Shares.
PLAN OF DISTRIBUTION
The American General LLCs may sell Preferred Securities to or through
underwriters or dealers; directly to other purchasers; through agents; or
through a combination of any such methods of sale. Any such underwriter, dealer
or agent involved in the offer and sale of the offered Preferred Securities will
be named in an applicable Prospectus Supplement or Prospectus Supplements.
The distribution of the Preferred 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 Preferred Securities, underwriters may
receive compensation from American General or the American General LLC issuing
the Preferred Securities or from purchasers of Preferred Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Preferred 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 Preferred Securities may be deemed to be underwriters, and
any discounts or commissions received by them from American General or an
American General LLC, and any profit on the resale of Preferred Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any compensation paid by American General or an American General
LLC to underwriters, dealers or agents in connection with the offering of the
Preferred Securities, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be described in an applicable
Prospectus Supplement.
Under agreements which may be entered into by American General and an
American General LLC, underwriters, dealers and agents who participate in the
distribution of Preferred Securities may be entitled to indemnification by
American General or such American General LLC against, and/or contribution by
American General or such American General LLC toward, certain liabilities,
including liabilities under the Securities Act, and to reimbursement for certain
expenses.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with and perform services for American
General or one or more of its affiliates in the ordinary course of business.
The specific terms and manner of sale, including the place and time of
delivery, of the Preferred Securities in respect of which this Prospectus is
being delivered will be set forth or summarized in the applicable Prospectus
Supplement.
22
<PAGE> 84
LEGAL OPINIONS
Unless otherwise indicated in a Prospectus Supplement, the validity of each
series of Preferred Securities, the related Guarantee and the related series of
Junior Subordinated Debentures, as well as the validity of any American General
Common Stock and American General Preferred Stock issuable upon conversion or
exchange of such Junior Subordinated Debentures, will be passed upon for
American General by Vinson & Elkins L.L.P., Houston, Texas. Unless otherwise
indicated in a Prospectus Supplement, certain legal matters relating to such
securities will be passed upon for any underwriters, dealers or agents by Brown
& Wood, New York, New York. Brown & Wood may rely as to matters of Texas law on
the opinion of Vinson & Elkins L.L.P. J. Evans Attwell, a partner in the firm of
Vinson & Elkins L.L.P., is a director of American General.
EXPERTS
The consolidated financial statements and schedules of American General and
its subsidiaries appearing in American General's Annual Report on Form 10-K for
the year ended December 31, 1994 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included therein and
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference." Such financial statements and schedules are, and audited financial
statements and schedules 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.
The consolidated financial statements of American Franklin Company and
subsidiaries as of December 31, 1993, and for the year then ended, appearing in
American General's Current Report on Form 8-K, dated February 14, 1995, have
been audited by Coopers & Lybrand L.L.P., independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. See
"Incorporation of Certain Documents by Reference." Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
23
<PAGE> 85
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses to be incurred by the registrants
in connection with the offering described in this Registration Statement (other
than underwriting discount and commissions).
<TABLE>
<S> <C>
SEC registration fee...................................................... $431,038
Printing and engraving.................................................... *
Legal fees and expenses................................................... *
Blue Sky qualification fees and expenses.................................. *
Accounting fees and expenses.............................................. *
Fees and expenses of Trustee.............................................. *
Rating agency fees........................................................ *
Miscellaneous............................................................. *
--------
Total.............................................................. $ *
========
</TABLE>
---------------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02-1 of the Texas Business Corporation Act contains detailed
provisions with respect to indemnification of directors and officers of a Texas
corporation against reasonable expenses actually incurred in connection with
certain legal proceedings.
In addition, Article VI of American General's Bylaws sets forth certain
rights of American General's officers and directors to indemnification. American
General's Bylaws, as in effect on the date hereof, are incorporated by reference
herein as Exhibit 4(f).
The agreements which may be entered into by American General, the American
General LLCs, underwriters, dealers and agents who participate in the
distribution of securities registered hereunder may provide for the
indemnification of American General, the American General LLCs, their respective
controlling persons and directors and certain of their respective officers by
any agents, dealers or underwriters, as the case may be, against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
American General has placed in effect insurance coverage which purports (a)
to insure it against certain costs of indemnification which may be incurred by
it pursuant to the aforementioned Bylaw provisions or otherwise, and (b) to
insure the officers and directors of American General and of its specified
subsidiaries against certain liabilities incurred by them in the discharge of
their functions as officers and directors except for liabilities arising from
their own malfeasance. See "Item 17. Undertakings" below for a description of
the position of the Securities and Exchange Commission with respect to such
indemnification provisions.
ITEM 16. EXHIBITS
The following exhibits are filed as a part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
*1(a) -- Form of Underwriting Agreement (Debt Securities and Warrants to
purchase Debt Securities), including forms of Pricing Agreement and
Delayed Delivery Contract.
*1(b) -- Form of Underwriting Agreement (Common Stock and Warrants to Purchase
Common Stock), including forms of Pricing Agreement and Delayed
Delivery Contract.
</TABLE>
II-1
<PAGE> 86
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
*1(c) -- Form of Underwriting Agreement (Preferred Stock and Warrants to
Purchase Preferred Stock), including forms of Pricing Agreement and
Delayed Delivery Contract.
*1(d) -- Form of Underwriting Agreement (Preferred Securities).
*4(a) -- Form of Senior Indenture, dated as of March , 1995, between the
Company and Chemical Bank, as Trustee. The form or forms of Senior
Securities with respect to each particular offering will be filed as
an exhibit to a Current Report on Form 8-K and incorporated herein by
reference.
*4(b) -- Form of Senior Subordinated Indenture, dated as of March , 1995,
between the Company and Chemical Bank, as Trustee. The form or forms
of Senior Subordinated Securities with respect to each particular
offering will be filed as an exhibit to a Current Report on Form 8-K
and incorporated herein by reference.
*4(c) -- Form of Junior Subordinated Indenture, dated as of March , 1995,
between the Company and Chemical Bank, as Trustee. The form or forms
of Junior Subordinated Debentures with respect to each particular
offering will be filed as an exhibit to a Current Report on Form 8-K
and incorporated herein by reference.
4(d) -- Restated Articles of Incorporation of the Company (including
Statement of Resolution Establishing Series of Shares of Series A
Junior Participating Preferred Stock) (incorporated by reference to
Exhibit 4.1 to Registration Statement No. 33-33115 of the Company).
4(e) -- Rights Agreement dated as of July 27, 1989 between the Company and
Texas Commerce Bank National Association, as Rights Agent, and First
Amendment, dated as of October 26, 1992 (incorporated by reference to
Exhibit 4 to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1989, and to Exhibit 19 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1992, respectively).
4(f) -- Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993).
*4(g) -- Form of Debt Warrant Agreement, including form of Debt Warrant
Certificates.
**4(h) -- Form of Preferred Stock Warrant Agreement, including form of
Preferred Stock Warrant Certificates.
**4(i) -- Form of Common Stock Warrant Agreement, including form of Common
Stock Warrant Certificates.
4(j) -- Certificate of Formation of American General Delaware, L.L.C.
4(k) -- Limited Liability Company Agreement of American General Delaware,
L.L.C.
*4(l) -- Form and terms of American General Delaware, L.L.C. Preferred
Securities.
4(m) -- Certificate of Formation of American General Capital, L.L.C.
4(n) -- Limited Liability Company Agreement of American General Capital,
L.L.C.
**4(o) -- Form of Statement of Resolution Establishing Series of Preferred
Stock of the Company.
*4(p) -- Form of Guarantees with respect to Preferred Securities.
*5 -- Opinion and Consent of Vinson & Elkins L.L.P.
*8 -- Opinion and Consent of Vinson & Elkins L.L.P. with respect to certain
tax matters.
12 -- Computation of Ratio of Earnings to Fixed Charges.
*23(a) -- Consent of Vinson & Elkins L.L.P. (contained in their opinions in
Exhibits 5 and 8).
23(b) -- Consent of Ernst & Young LLP, Independent Auditor.
23(c) -- Consent of Coopers & Lybrand L.L.P., Independent Accountants.
24 -- Powers of Attorney.
*25 -- Form T-1 Statement of Eligibility of Chemical Bank, as Trustee under
the Senior Indenture, Senior Subordinated Indenture and Junior
Subordinated Indenture.
</TABLE>
---------------
* To be filed by Amendment.
** To be filed as an exhibit to a Current Report on Form 8-K and incorporated
herein by reference.
II-2
<PAGE> 87
ITEM 17. UNDERTAKINGS
The registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
Company pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of a registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(6) That, for purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions set forth in Item 15, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with
II-3
<PAGE> 88
the securities being registered, the registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE> 89
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMERICAN
GENERAL CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON MARCH 29, 1995.
AMERICAN GENERAL CORPORATION
(Registrant)
By: AUSTIN P. YOUNG
-------------------------------
Austin P. Young
Senior Vice President and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMERICAN
GENERAL DELAWARE, L.L.C. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE
THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED
THIS REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON MARCH 29, 1995.
AMERICAN GENERAL DELAWARE, L.L.C.
(Registrant)
By: American General Corporation,
as Manager
By: AUSTIN P. YOUNG
-------------------------------
Austin P. Young
Senior Vice President and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMERICAN
GENERAL CAPITAL, L.L.C. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT
IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF HOUSTON, STATE OF TEXAS,
ON MARCH 29, 1995.
AMERICAN GENERAL CAPITAL, L.L.C.
(Registrant)
By: American General Corporation,
as Manager
By: AUSTIN P. YOUNG
-------------------------------
Austin P. Young
Senior Vice President and
Chief Financial Officer
II-5
<PAGE> 90
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES WITH AMERICAN GENERAL CORPORATION (AS A REGISTRANT AND THE
MANAGER OF EACH OF AMERICAN GENERAL DELAWARE, L.L.C. AND AMERICAN GENERAL
CAPITAL, L.L.C.) INDICATED ON MARCH 29, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
HAROLD S. HOOK* Chairman of the Board, Chief Executive
------------------------------------------ Officer and Director (principal executive
Harold S. Hook officer)
AUSTIN P. YOUNG Senior Vice President and Chief Financial
------------------------------------------ Officer (principal financial officer)
Austin P. Young
PAMELA J. PENNY Vice President and Controller (principal
------------------------------------------ accounting officer)
Pamela J. Penny
J. EVANS ATTWELL*
------------------------------------------
(J. Evans Attwell) Director
BRADY F. CARRUTH*
------------------------------------------
(Brady F. Carruth) Director
W. LIPSCOMB DAVIS, JR.*
------------------------------------------
(W. Lipscomb Davis, Jr.) Director
ROBERT M. DEVLIN*
------------------------------------------
(Robert M. Devlin) Director
LARRY D. HORNER*
------------------------------------------
(Larry D. Horner) Director
RICHARD J.V. JOHNSON*
------------------------------------------
(Richard J.V. Johnson) Director
ROBERT E. SMITTCAMP*
------------------------------------------
(Robert E. Smittcamp) Director
</TABLE>
II-6
<PAGE> 91
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
JAMES R. TUERFF*
------------------------------------------
(James R. Tuerff) Director
*By: JON P. NEWTON
------------------------------------------
(Jon P. Newton, Attorney-in-fact)
</TABLE>
II-7
<PAGE> 92
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
---------- ----------- -----------
<C> <S> <C>
*1(a) -- Form of Underwriting Agreement (Debt Securities and Warrants to
purchase Debt Securities), including forms of Pricing Agreement
and Delayed Delivery Contract.
*1(b) -- Form of Underwriting Agreement (Common Stock and Warrants to
Purchase Common Stock), including forms of Pricing Agreement and
Delayed Delivery Contract.
*1(c) -- Form of Underwriting Agreement (Preferred Stock and Warrants to
Purchase Preferred Stock), including forms of Pricing Agreement
and Delayed Delivery Contract.
*1(d) -- Form of Underwriting Agreement (Preferred Securities).
*4(a) -- Form of Senior Indenture, dated as of March , 1995, between the
Company and Chemical Bank, as Trustee. The form or forms of
Senior Securities with respect to each particular offering will
be filed as an exhibit to a Current Report on Form 8-K and
incorporated herein by reference.
*4(b) -- Form of Senior Subordinated Indenture, dated as of March ,
1995, between the Company and Chemical Bank, as Trustee. The form
or forms of Senior Subordinated Securities with respect to each
particular offering will be filed as an exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
*4(c) -- Form of Junior Subordinated Indenture, dated as of March ,
1995, between the Company and Chemical Bank, as Trustee. The form
or forms of Junior Subordinated Debentures with respect to each
particular offering will be filed as an exhibit to a Current
Report on Form 8-K and incorporated herein by reference.
4(d) -- Restated Articles of Incorporation of the Company (including
Statement of Resolution Establishing Series of Shares of Series A
Junior Participating Preferred Stock) (incorporated by reference
to Exhibit 4.1 to Registration Statement No. 33-33115 of the
Company).
4(e) -- Rights Agreement dated as of July 27, 1989 between the Company
and Texas Commerce Bank National Association, as Rights Agent,
and First Amendment, dated as of October 26, 1992 (incorporated
by reference to Exhibit 4 to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1989, and to Exhibit 19
to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992, respectively).
4(f) -- Bylaws of the Company (incorporated by reference to Exhibit 3.2
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993).
*4(g) -- Form of Debt Warrant Agreement, including form of Debt Warrant
Certificates.
**4(h) -- Form of Preferred Stock Warrant Agreement, including form of
Preferred Stock Warrant Certificates.
**4(i) -- Form of Common Stock Warrant Agreement, including form of Common
Stock Warrant Certificates.
4(j) -- Certificate of Formation of American General Delaware, L.L.C.
</TABLE>
<PAGE> 93
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
---------- ----------- -----------
<C> <S> <C>
4(k) -- Limited Liability Company Agreement of American General Delaware,
L.L.C.
*4(l) -- Form and terms of American General Delaware, L.L.C. Preferred
Securities.
4(m) -- Certificate of Formation of American General Capital, L.L.C.
4(n) -- Limited Liability Company Agreement of American General Capital,
L.L.C.
**4(o) -- Form of Statement of Resolution Establishing Series of Preferred
Stock of the Company.
*4(p) -- Form of Guarantees with respect to Preferred Securities.
*5 -- Opinion and Consent of Vinson & Elkins L.L.P.
*8 -- Opinion and Consent of Vinson & Elkins L.L.P. with respect to
certain tax matters.
12 -- Computation of Ratio of Earnings to Fixed Charges.
*23(a) -- Consent of Vinson & Elkins L.L.P. (contained in their opinions in
Exhibits 5 and 8).
23(b) -- Consent of Ernst & Young LLP, Independent Auditor.
23(c) -- Consent of Coopers & Lybrand L.L.P., Independent Accountants.
24 -- Powers of Attorney.
*25 -- Form T-1 Statement of Eligibility of Chemical Bank, as Trustee
under the Senior Indenture, Senior Subordinated Indenture and
Junior Subordinated Indenture.
</TABLE>
---------------
* To be filed by Amendment.
** To be filed as an exhibit to a Current Report on Form 8-K and incorporated
herein by reference.
<PAGE> 1
Exhibit 4(j)
CERTIFICATE OF FORMATION
OF
AMERICAN GENERAL DELAWARE, L.L.C.
This Certificate of Formation, dated effective March 28, 1995, is
being duly executed and filed by American General Corporation, as an authorized
person, to form a limited liability company (the "Company") pursuant to Section
18-201 of the Delaware Limited Liability Company Act (the "Act").
1. Name. The name of the Company is "American General Delaware,
L.L.C."
2. Registered Office; Registered Agent. The address of the
registered office required to be maintained by Section 18-104 of the Act is:
1209 Orange Street
Wilmington, Delaware 19801
The name and the address of the registered agent for service of process
required to be maintained by Section 18-104 of the Act are:
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
EXECUTED as of the date written first above.
AMERICAN GENERAL CORPORATION
By: /s/ AUSTIN P. YOUNG
________________________________
Name: Austin P. Young
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 4(k)
LIMITED LIABILITY COMPANY AGREEMENT
OF
AMERICAN GENERAL DELAWARE, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is entered
into effective as of March 28, 1995, by and between American General
Corporation, a Texas corporation ("American General"), and American General
Capital Services, Inc., a Delaware corporation ("AGCSI"). American General and
AGCSI are individually referred to herein as a "Member" and collectively as the
"Members".
1. The Members hereby agree to form a limited liability company
(the "Company") pursuant to the provisions of the Delaware Limited Liability
Company Act, 6 Del. C Section 18-101, et seq., as it may be amended from time
to time, and any successor to such Act (the "Delaware Act"). The rights and
obligations of the Members and the administration and termination of the
Company shall be governed by this Agreement and the Delaware Act.
2. The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, to issue
limited liability common and preferred securities, to loan all or substantially
all of the proceeds thereof to American General or any direct or indirect
subsidiary thereof and, at the discretion of the Manager (as defined in
Paragraph 6), to invest a portion of the proceeds thereof in such investments
as are approved by the Manager and to engage in any and all activities
necessary or incidental to the foregoing.
3. The name of the Company shall be "American General Delaware,
L.L.C.".
4. The registered office and the principal office of the Company
shall be as the Manager may designate from time to time. The Company may
maintain offices at such other place or places as the Manager deems necessary
or appropriate.
5. The Company shall commence upon the filing of a Certificate of
Formation (the "Certificate") in accordance with the Delaware Act and shall
continue in existence until the close of the Company's business on December 31,
2050, or until the earlier termination of the Company in accordance with the
provisions of Paragraph 8. The form of the Certificate shall be as determined
by the Manager.
6. The powers of the Company shall be exercised by or under
authority of, and the business and affairs of the Company shall be managed by
or under the direction of, a manager (the "Manager"). The initial Manager of
the Company is American General, which shall serve in such capacity until its
successor or replacement shall have been appointed by the unanimous decision of
the Members. In connection with the management of the
<PAGE> 2
business and affairs of the Company, the Manager shall have full power and
authority to do all things and on such terms as it, in its sole discretion, may
deem necessary or appropriate to conduct the business of the Company. American
General is hereby designated as an authorized person, within the meaning of the
Delaware Act, to execute, deliver and file the Certificate of Formation of the
Company (and any amendments and/or restatements thereof) necessary for the
Company to qualify to do business in any jurisdiction in which the Company may
wish to conduct business. The Manager is hereby authorized to execute any and
all registration statements, amendments and other documents related to the
issuance and sale of any limited liability common or preferred securities of
the Company, the loan of the proceeds thereof to American General or any direct
or indirect subsidiary thereof, and the investment of the proceeds thereof in
such investments as are approved by the Manager, and to engage in any and all
activities necessary or incidental to the foregoing.
7. The Members have contributed the following amounts in cash to
the Company:
American General Corporation $10.00
American General Capital Services, Inc. $10.00
American General shall be required, and hereby undertakes, to maintain
at least a 21% membership interest in the Company at all times. The membership
interest of American General in the Company shall not be transferable.
8. The Company shall dissolve and its affairs shall be wound up
on the first to occur of the following events (each a "Dissolution Event"):
(a) The expiration of the fixed period for the duration
of the Company set forth in Paragraph 5;
(b) The unanimous written consent of the Members;
(c) Except as provided in paragraph 10, the resignation,
expulsion, dissolution or Bankruptcy (as defined below) of any Member,
or the occurrence of any other event that terminates the continued
membership of any Member; or
(d) Entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Delaware Act.
As referenced herein, "Bankruptcy" means the occurrence of any of the events
described in Section 18-304 of the Delaware Act.
-2-
<PAGE> 3
9. This Agreement may be amended or restated from time to time,
but only by a written instrument executed by all of the Members. The
Certificate may be amended or restated from time to time, but only with the
approval of all Members.
10. One or more additional members of the Company may be admitted
to the Company with the consent of the Members. Immediately following the
admission of an additional member of the Company, AGCSI shall resign from the
Company as a member of the Company. Upon such resignation, the remaining
members of the Company are authorized to, and shall continue, the business of
the Company without dissolution.
11. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law.
12. This Agreement may be executed in one or more counterparts
each of which shall constitute an original, but all of which together shall
constitute only one agreement.
AMERICAN GENERAL CORPORATION
By: /s/ AUSTIN P. YOUNG
_______________________________
Name: Austin P. Young
Title: Senior Vice President and
Chief Financial Officer
AMERICAN GENERAL CAPITAL
SERVICES, INC.
By: /s/ JAMES L. GLEAVES
_______________________________
Name: James L. Gleaves
Title: Treasurer
-3-
<PAGE> 1
Exhibit 4(m)
CERTIFICATE OF FORMATION
OF
AMERICAN GENERAL CAPITAL, L.L.C.
This Certificate of Formation, dated effective March 28, 1995, is
being duly executed and filed by American General Corporation, as an authorized
person, to form a limited liability company (the "Company") pursuant to Section
18-201 of the Delaware Limited Liability Company Act (the "Act").
1. Name. The name of the Company is "American General Capital,
L.L.C."
2. Registered Office; Registered Agent. The address of the
registered office required to be maintained by Section 18-104 of the Act is:
1209 Orange Street
Wilmington, Delaware 19801
The name and the address of the registered agent for service of process
required to be maintained by Section 18-104 of the Act are:
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
EXECUTED as of the date written first above.
AMERICAN GENERAL CORPORATION
By: /s/ AUSTIN P. YOUNG
____________________________
Name: Austin P. Young
Title: Senior Vice President and
Chief Financial Officer
<PAGE> 1
Exhibit 4(n)
LIMITED LIABILITY COMPANY AGREEMENT
OF
AMERICAN GENERAL CAPITAL, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is entered
into effective as of March 28, 1995, by and between American General
Corporation, a Texas corporation ("American General"), and American General
Capital Services, Inc., a Delaware corporation ("AGCSI"). American General and
AGCSI are individually referred to herein as a "Member" and collectively as the
"Members".
1. The Members hereby agree to form a limited liability company
(the "Company") pursuant to the provisions of the Delaware Limited Liability
Company Act, 6 Del. C Section 18-101, et seq., as it may be amended from time
to time, and any successor to such Act (the "Delaware Act"). The rights and
obligations of the Members and the administration and termination of the
Company shall be governed by this Agreement and the Delaware Act.
2. The Company is formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, to issue
limited liability common and preferred securities, to loan all or substantially
all of the proceeds thereof to American General or any direct or indirect
subsidiary thereof and, at the discretion of the Manager (as defined in
Paragraph 6), to invest a portion of the proceeds thereof in such investments
as are approved by the Manager and to engage in any and all activities
necessary or incidental to the foregoing.
3. The name of the Company shall be "American General Capital,
L.L.C.".
4. The registered office and the principal office of the Company
shall be as the Manager may designate from time to time. The Company may
maintain offices at such other place or places as the Manager deems necessary
or appropriate.
5. The Company shall commence upon the filing of a Certificate of
Formation (the "Certificate") in accordance with the Delaware Act and shall
continue in existence until the close of the Company's business on December 31,
2050, or until the earlier termination of the Company in accordance with the
provisions of Paragraph 8. The form of the Certificate shall be as determined
by the Manager.
6. The powers of the Company shall be exercised by or under
authority of, and the business and affairs of the Company shall be managed by
or under the direction of, a manager (the "Manager"). The initial Manager of
the Company is American General, which shall serve in such capacity until its
successor or replacement shall have been appointed by the unanimous decision of
the Members. In connection with the management of the
<PAGE> 2
business and affairs of the Company, the Manager shall have full power and
authority to do all things and on such terms as it, in its sole discretion, may
deem necessary or appropriate to conduct the business of the Company. American
General is hereby designated as an authorized person, within the meaning of the
Delaware Act, to execute, deliver and file the Certificate of Formation of the
Company (and any amendments and/or restatements thereof) necessary for the
Company to qualify to do business in any jurisdiction in which the Company may
wish to conduct business. The Manager is hereby authorized to execute any and
all registration statements, amendments and other documents related to the
issuance and sale of any limited liability common or preferred securities of
the Company, the loan of the proceeds thereof to American General or any direct
or indirect subsidiary thereof, and the investment of the proceeds thereof in
such investments as are approved by the Manager, and to engage in any and all
activities necessary or incidental to the foregoing.
7. The Members have contributed the following amounts in cash to
the Company:
American General Corporation $10.00
American General Capital Services, Inc. $10.00
American General shall be required, and hereby undertakes, to maintain
at least a 21% membership interest in the Company at all times. The membership
interest of American General in the Company shall not be transferable.
8. The Company shall dissolve and its affairs shall be wound up
on the first to occur of the following events (each a "Dissolution Event"):
(a) The expiration of the fixed period for the duration
of the Company set forth in Paragraph 5;
(b) The unanimous written consent of the Members;
(c) Except as provided in paragraph 10, the resignation,
expulsion, dissolution or Bankruptcy (as defined below) of any Member,
or the occurrence of any other event that terminates the continued
membership of any Member; or
(d) Entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Delaware Act.
As referenced herein, "Bankruptcy" means the occurrence of any of the events
described in Section 18-304 of the Delaware Act.
-2-
<PAGE> 3
9. This Agreement may be amended or restated from time to time,
but only by a written instrument executed by all of the Members. The
Certificate may be amended or restated from time to time, but only with the
approval of all Members.
10. One or more additional members of the Company may be admitted
to the Company with the consent of the Members. Immediately following the
admission of an additional member of the Company, AGCSI shall resign from the
Company as a member of the Company. Upon such resignation, the remaining
members of the Company are authorized to, and shall continue, the business of
the Company without dissolution.
11. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of law.
12. This Agreement may be executed in one or more counterparts
each of which shall constitute an original, but all of which together shall
constitute only one agreement.
AMERICAN GENERAL CORPORATION
By: /s/ AUSTIN P. YOUNG
____________________________
Name: Austin P. Young
Title: Senior Vice President and
Chief Financial Officer
AMERICAN GENERAL CAPITAL
SERVICES, INC.
By: /s/ JAMES L. GLEAVES
____________________________
Name: James L. Gleaves
Title: Treasurer
-3-
<PAGE> 1
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------
(IN MILLIONS, EXCEPT RATIOS) 1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Consolidated operations:
Income before income tax expense and cumulative
effect of accounting changes................... $ 802 $ 602* $ 775 $ 678 $ 836
Fixed charges deducted from income
Interest expense
Consolidated................................. 526 483 508 565 607
Relating to real estate operations........... - 5 8 3 1
Implicit interest in rents..................... 16 15 13 13 12
Preferred dividend of a consumer finance
subsidiary................................... - - - - 6
------ ------ ------ ------ ------
Total fixed charges deducted from
income.................................. 542 503 529 581 626
------ ------ ------ ------ ------
Earnings available for fixed charges.... $1,344 $1,105* $1,304 $1,259 $1,462
====== ====== ====== ====== ======
Fixed charges per above........................... $ 542 $ 503 $ 529 $ 581 $ 626
Capitalized interest relating to real estate
operations..................................... 18 15 21 31 39
------ ------ ------ ------ ------
Total fixed charges..................... $ 560 $ 518 $ 550 $ 612 $ 665
====== ====== ====== ====== ======
Ratio of earnings to fixed charges...... 2.4 2.1 2.4 2.1 2.2
====== ====== ====== ====== ======
Consolidated operations, corporate fixed charges
only:
Income before income tax expense and cumulative
effect of accounting changes................... $ 802 $ 602* $ 775 $ 678 $ 836
Corporate fixed charges deducted from income --
corporate interest expense..................... 121 121 126 140 191
------ ------ ------ ------ ------
Earnings available for fixed charges.... $ 923 $ 723* $ 901 $ 818 $1,027
====== ====== ====== ====== ======
Corporate fixed charges per above................. $ 121 $ 121 $ 126 $ 140 $ 191
Corporate capitalized interest.................... - - - - 1
------ ------ ------ ------ ------
Total corporate fixed charges........... $ 121 $ 121 $ 126 $ 140 $ 192
====== ====== ====== ====== ======
Ratio of earnings to corporate fixed
charges.............................. 7.6 6.0 7.2 5.8 5.3
====== ====== ====== ====== ======
American General Finance, Inc.:
Income before income tax expense and cumulative
effect of accounting changes................... $ 392 $ 337 $ 250 $ 208 $ 191
Fixed charges deducted from income
Interest expense............................... 416 380 398 440 452
Implicit interest in rents..................... 11 10 9 9 9
Preferred dividend of a consumer finance
subsidiary................................... - - - - 6
------ ------ ------ ------ ------
Total fixed charges deducted from
income.................................. 427 390 407 449 467
------ ------ ------ ------ ------
Earnings available for fixed charges.... $ 819 $ 727 $ 657 $ 657 $ 658
====== ====== ====== ====== ======
Ratio of earnings to fixed charges...... 1.9 1.9 1.6 1.5 1.4
====== ====== ====== ====== ======
</TABLE>
---------------
* Includes $300 million write-down of goodwill. Additional information is
incorporated herein by reference from the section "1993 Significant Events"
within Item 7 of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
<PAGE> 1
EXHIBIT 23(B)
CONSENT OF INDEPENDENT AUDITOR
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 to be filed on or about March 29, 1995, for
the registration of $1,250,000,000 of securities and to the incorporation by
reference therein of our report dated February 15, 1995, with respect to the
consolidated financial statements and schedules of American General Corporation
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1994, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
March 27, 1995
<PAGE> 1
EXHIBIT 23(C)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of American General Corporation, American General Delaware, LLC and American
General Capital, LLC on Form S-3 of our report, which includes an explanatory
paragraph for certain changes in accounting principles, dated February 1, 1994,
except for Note 13 as to which the date is January 30, 1995, on our audit of the
consolidated financial statements of American Franklin Company and Subsidiaries
as of December 31, 1993, and for the year then ended, which report is included
in the Form 8-K of American General Corporation dated February 14, 1995. We also
consent to the references to our Firm under the caption "Experts" in this
registration statement.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 29, 1995
<PAGE> 1
EXHIBIT 24
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf
Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ J. EVANS ATTWELL
-------------------------
J. Evans Attwell
<PAGE> 2
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ BRADY F. CARRUTH
------------------------------
Brady F. Carruth
<PAGE> 3
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ W. LIPSCOMB DAVIS JR.
------------------------------
W. Lipscomb Davis Jr.
<PAGE> 4
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ ROBERT M. DEVLIN
------------------------------
Robert M. Devlin
<PAGE> 5
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint James
R. Tuerff and Jon P. Newton, and each of them, severally, his true and lawful
attorney-in-fact or attorneys-in-fact, with or without the others and with full
power of substitution and resubstitution, to execute in his name, place, and
stead, in his capacity as a director or officer or both, as the case may be, of
the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ HAROLD S. HOOK
------------------------------
Harold S. Hook
<PAGE> 6
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ LARRY D. HORNER
------------------------------
Larry D. Horner
<PAGE> 7
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ RICHARD J. V. JOHNSON
------------------------------
Richard J. V. Johnson
<PAGE> 8
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook, James R. Tuerff, and Jon P. Newton, and each of them, severally, his
true and lawful attorney-in-fact or attorneys-in-fact, with or without the
others and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director or officer or both,
as the case may be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ ROBERT E. SMITTCAMP
------------------------------
Robert E. Smittcamp
<PAGE> 9
American General Corporation: Board of Directors
<TABLE>
<S> <C>
Date: March 16, 1995
Subject: Limited Power of Attorney for Shelf Registration Statement on Form S-3
Purpose. The purpose of this limited power of attorney is to authorize certain officers of the Company to
------- execute, on behalf of the undersigned person, the Company's Shelf Registration Statement on Form S-3,
together with any required further amendments, exhibits or other related documents and to file the same
with the Securities and Exchange Commission.
</TABLE>
WHEREAS, AMERICAN GENERAL CORPORATION, a Texas corporation (the
"Company"), will file with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, a Registration
Statement on Form S-3 ("Registration Statement") including one or more
prospectuses included therein ("Prospectuses"), with such amendments (including
pre-effective and post-effective amendments) to such Registration Statement and
any supplement or supplements to the Prospectuses as may be necessary or
appropriate, in connection with registration by the Company of the following
securities: (i) debt securities, including but not limited to senior or
subordinated debt securities, medium-term notes, debt securities convertible
into common stock or convertible into, or exchangeable for, other equity
securities, or debt securities secured by assets of the Company, or of any
direct or indirect subsidiaries of the Company or of any special purpose entity
(a "SPE"), including but not limited to corporations, limited liability
companies, limited partnerships or trusts; (ii) common stock of the Company;
(iii) preferred stock of the Company (which may be represented in whole or in
part by depositary shares) issuable with such designations, powers, preferences
and rights as permitted by the Company's Restated Articles of Incorporation, as
amended, and applicable law; (iv) warrants to purchase common stock, preferred
stock or debt securities; (v) any other equity securities; and/or (vi) the
guaranty of any contract, securities (including any preferred shares or other
equity or debt securities) or other obligations of any SPE or of one or more
other entities, which securities may be issued from time to time at the
discretion of the Terms Committee of the Board of Directors (as established by
the Board of Directors);
NOW, THEREFORE, the undersigned in his capacity as a director or
officer or both, as the case may be, of the Company does hereby appoint Harold
S. Hook and Jon P. Newton, and each of them, severally, his true and lawful
attorney- in-fact or attorneys-in-fact, with or without the others and with
full power of substitution and resubstitution, to execute in his name, place,
and stead, in his capacity as a director or officer or both, as the case may
be, of the Company:
(1) the Registration Statement, including the Prospectuses and
exhibits thereto, and any and all amendments (including
pre-effective and post-effective amendments) to such
Registration Statement and any supplement or supplements to
the Prospectuses as said attorneys-in-fact or any of them
shall deem necessary or appropriate, together with all
instruments necessary or incidental in connection therewith,
to file the same or cause the same to be filed with the
Commission and to appear before the Commission in connection
with any matter relating thereto; and
(2) any application, statement, petition, notice, or other
document, or any amendment thereto, or any exhibit filed in
connection therewith, which is required to register or qualify
(or exempt from registration or qualification) the securities
of the Company being offered, and to register or license the
Company as a broker or dealer in securities, under the
securities or blue-sky or insurance laws of all states as may
be necessary or appropriate to permit the offering and sale as
contemplated by said Registration Statement.
Each of said attorneys-in-fact shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable in connection with such
Registration Statement or related securities or blue-sky or insurance filings,
as fully and for all intents and purposes as the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys-in-fact and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
16th day of March, 1995.
/S/ JAMES R. TUERFF
------------------------------
James R. Tuerff
