<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
PROSPECTUS SUPPLEMENT Registration No. 33-58317
- ----------------------------------
(TO PROSPECTUS DATED MAY 23, 1995) [AMERICAN GENERAL
LOGO]
$150,000,000
AMERICAN GENERAL CORPORATION
6 3/4% NOTES DUE 2005
---------------------
Interest on the Notes is payable on June 15 and December 15 of each year,
commencing December 15, 1995. The Notes are not redeemable at the option of the
Company or repayable at the option of any holder prior to maturity, and do not
have the benefit of a sinking fund.
The Notes will be registered in the name of Cede & Co., as registered owner
and as nominee for The Depository Trust Company ("DTC"), New York, New York.
Beneficial interests in the Notes will be shown on, and transfers will be
effected only through, records maintained by DTC (with respect to its
participants' interests) and its participants. Except as described in the
Prospectus, the Notes will not be issued in certificated form. See "Description
of Debt Securities -- Global Debt Securities" in the Prospectus. Settlement for
the Notes will be made in immediately available funds. The Notes will trade in
DTC's Same-Day Funds Settlement System until maturity, and secondary market
trading activity for the Notes will therefore settle in immediately available
funds. All payments of principal and interest will be made by the Company in
immediately available funds. See "Description of Notes -- Same-Day Settlement
and Payment".
---------------------
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 UNDER THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.......................... 100% .447% 99.553%
- ------------------------------------------------------------------------------------------------
Total............................. $150,000,000 $670,500 $149,329,500
================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from June 26, 1995.
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $150,000.
---------------------
The Notes are offered by the Underwriter, subject to prior sale, when, as
and if issued to and accepted by the Underwriter, subject to approval of certain
legal matters by counsel for the Underwriter and certain other conditions. The
Underwriter reserves the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that the Notes will be ready
for delivery in book-entry form only through the facilities of The Depository
Trust Company on or about June 26, 1995, against payment therefor in immediately
available funds.
---------------------
MERRILL LYNCH & CO.
---------------------
The date of this Prospectus Supplement is June 21, 1995.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
AMERICAN GENERAL
American General Corporation (the "Company" or "American General"), with
assets of $56 billion and shareholders' equity of $4.4 billion as of March 31,
1995, is the parent company of one of the nation's largest consumer financial
services organizations. American General provides financial services directly to
consumers, emphasizing personal service and frequent customer contact. American
General's operating subsidiaries are leading providers of retirement annuities,
consumer loans and life insurance. American General, headquartered in Houston,
was incorporated as a general business corporation in Texas in 1980 and is the
successor to American General Insurance Company, an insurance company
incorporated in Texas in 1926.
RECENT DEVELOPMENTS
As of November 29, 1994, the Company signed a definitive agreement to
acquire American Franklin Company ("AFC"), the holding company of The Franklin
Life Insurance Company ("Franklin Life"), for $1.17 billion. The transaction
closed on January 31, 1995. The purchase price consisted of $920 million in cash
paid at closing and a $250 million dividend paid by AFC to its former parent
prior to closing. This acquisition was accounted for using the purchase method.
Beginning with the first quarter of 1995, Franklin Life was reported as part of
the Life Insurance segment, increasing that segment's assets and life insurance
in force by approximately 45% and 35%, respectively. Franklin Life was acquired
to complement American General's existing life insurance distribution systems
and further strengthen the Company's position in middle-income households,
particularly in the Midwest.
S-2
<PAGE> 3
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical and pro forma ratios of
earnings to fixed charges for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED MARCH 31, DECEMBER 31,
----------------- ----------------
PRO PRO
FORMA FORMA
1995(a) 1995 1994(a) 1994
------- ---- ------- ----
<S> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Consolidated operations............................... 2.6 2.5 2.5 2.4
Consolidated operations, corporate (parent company)
fixed charges only................................. 7.3 7.6 6.3 7.6
</TABLE>
- ---------------
(a) Assuming the AFC acquisition and the proposed permanent long-term debt
financing of the acquisition had been effective as of January 1, 1994. The
proposed permanent financing is expected to include the issuance of $450
million of long-term fixed-rate corporate debt, including the offering made
hereby, and $287.5 million of 8.45% non-convertible preferred securities
issued on June 5, 1995. Dividends on preferred securities are excluded from
the calculation of the ratio of earnings to fixed charges.
USE OF PROCEEDS
American General will use the net proceeds from the offering made hereby to
repay short-term notes issued in connection with the acquisition of AFC. See
"Recent Developments". At June 21, 1995, the blended interest rate on such
short-term notes was 6.03% per annum.
S-3
<PAGE> 4
SUMMARY FINANCIAL INFORMATION
The following table presents summary consolidated financial information
derived from American General's audited financial statements as of and for the
five years ended December 31, 1994. The financial data as of and for the three
months ended March 31, 1995 and 1994 has been derived from American General's
unaudited quarterly financial statements, which, in the opinion of management,
include all adjustments (consisting of normal recurring accruals) necessary for
a fair presentation of the Company's results of operations and financial
position. The results of operations for the three months ended March 31, 1995
are not necessarily indicative of results to be anticipated for the entire year.
The table should be read in conjunction with "Management's Discussion and
Analysis of American General" and the consolidated financial statements and the
related notes within Items 7 and 8 of American General's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and within American General's
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1995
incorporated herein by reference.
(IN MILLIONS)
Operating Results
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
------------------ ---------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues..................................... $ 1,518 $ 1,214 $ 4,841 $ 4,829 $ 4,602 $ 4,395 $ 4,434
======= ======= ======= ======= ======= ======= =======
Business segment earnings
Retirement Annuities....................... $ 54 $ 53 $ 187 $ 162 $ 130 $ 110 $ 99
Consumer Finance........................... 60 53 245 206 161 136 125
Life Insurance............................. 84(a) 64 257 (9)(b) 323 326 303
------- ------- ------- ------- ------- ------- -------
Total business segments.............. 198 170 689 359 614 572 527
------- ------- ------- ------- ------- ------- -------
Corporate operations
Net interest on corporate debt............. (27) (19) (76) (81) (85) (87) (119)
Expenses not allocated to segments......... (9) (6) (29) (25) (28) (37) (52)
Earnings on corporate assets............... 6 15 43 21 23 31 69
Net equity in WNC.......................... 6 - - - - - -
Net realized investment gains (losses)..... 1 1 (114)(c) 6 9 1 137(d)
------- ------- ------- ------- ------- ------- -------
Total corporate operations........... (23) (9) (176) (79) (81) (92) 35
------- ------- ------- ------- ------- ------- -------
Income before cumulative effect and tax rate
related adjustment......................... 175 161 513 280 533 480 562
Tax rate related adjustment.................. - - - (30) - - -
Cumulative effect of accounting changes...... - - - (46) - - -
------- ------- ------- ------- ------- ------- -------
Net income........................... $ 175 $ 161 $ 513 $ 204 $ 533 $ 480 $ 562
======= ======= ======= ======= ======= ======= =======
</TABLE>
Financial Position
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
------------------ ---------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets....................................... $55,667(e) $44,281(e) $46,295(f) $43,982(f) $39,742 $36,105 $33,808
Debt (including short-term)
Corporate.................................. 2,359 1,354 1,475 1,257 1,371 1,391 1,555
Real Estate................................ 349 412 361 429 616 590 498
Consumer Finance........................... 7,261 5,947 7,090 5,843 5,484 5,243 5,096
Redeemable equity............................ 47 - 47 - - - 296
Shareholders' equity......................... 4,422(e) 4,593(e) 3,457(f) 5,137(f) 4,616 4,329 4,138
</TABLE>
- ------------
(a) Includes two months of operations for AFC, which was acquired January 31,
1995.
(b) Includes $300 million write-down of goodwill. See "Significant
Events -- 1993 Significant Events" within Item 7 and Note 1.7 within Item 8
of American General's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 incorporated herein by reference.
(c) Results primarily from the capital gains offset program. See "Significant
Events -- Capital Gains Offset Program" within Item 7 of American General's
Annual Report on Form 10-K for the fiscal year ended December 31, 1994
incorporated herein by reference.
(d) Results primarily from the sale of substantially all of the common stock
portfolio.
(e) Includes $172 million and $106 million decrease in assets and shareholders'
equity, respectively, at March 31, 1995, and $195 million and $126 million
increase in assets and shareholders' equity, respectively, at March 31,
1994, due to the effect of SFAS 115. See "Management's Discussion and
Analysis" within American General's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1995 incorporated herein by reference.
(f) 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. See "Significant
Events -- 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 incorporated herein by reference.
S-4
<PAGE> 5
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of Debt
Securities set forth in the Prospectus under the caption "Description of Debt
Securities".
GENERAL
The Notes are to be issued as a series of Debt Securities under the Senior
Indenture, which is more fully described in the Prospectus. Certain terms used
herein are defined in the Prospectus.
The Notes are to mature on June 15, 2005 and bear interest at the rate set
forth on the cover page of this Prospectus Supplement, payable semi-annually on
June 15 and December 15, commencing December 15, 1995, to the registered holders
thereof on the preceding June 1 or December 1, as the case may be.
The Notes are not redeemable at the option of the Company or repayable at
the option of any holder prior to maturity.
The Notes will be issued as a global Debt Security. See "Description of
Debt Securities -- Global Debt Securities" in the Prospectus. The Depository
Trust Company, New York, New York will be the Depository with respect to the
Notes. The Notes will be issued as fully-registered securities in the name of
Cede & Co., the Depository's partnership nominee, and will be deposited with the
Depository.
BOOK-ENTRY NOTES
The Depository has advised the Company and the Underwriter that it is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearinghouse corporation" within the meaning
of the New York Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depository was created to hold securities for persons that
have accounts with the Depository ("Participants") and facilitate the clearance
and settlement of securities transactions among its Participants in such
securities through electronic book-entry changes in accounts of the
Participants, thereby eliminating the need for physical movement of
certificates. The Depository's Participants include securities brokers and
dealers (including the Underwriter), banks, trust companies, clearing
corporations and certain other organizations, some of which (and/or their
representatives) own the Depository. Access to the Depository's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly. Persons who are not Participants may
beneficially own interests in securities held by the Depository only through
Participants.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriter in immediately
available funds. All payments of principal and interest on the Notes will be
made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Notes
will trade in the Depository's Same-Day Funds Settlement System until maturity,
and secondary market trading activity in the Notes will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
S-5
<PAGE> 6
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") and in the Pricing Agreement between the Company
and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), the
Company has agreed to sell to the Underwriter, and the Underwriter has agreed to
purchase, the entire principal amount of the Notes.
In the Underwriting Agreement, the Underwriter has agreed, subject to the
terms and conditions set forth therein, to purchase all the Notes offered hereby
if any Notes are purchased. The Company has been advised by the Underwriter that
the Underwriter proposes initially to offer the Notes to the public at the
public offering price set forth on the cover page of this Prospectus Supplement,
and to certain dealers at such price less a concession not in excess of .4% of
the principal amount. The Underwriter may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
The Notes are a new issue of securities with no established trading market.
The Company has not applied for listing of the Notes on a national securities
exchange. The Company has been advised by the Underwriter that it intends to
make a market in the Notes but is not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
S-6
<PAGE> 7
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 May 23, 1995.
<PAGE> 8
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER
OF INSURANCE OF THE STATE OF NORTH CAROLINA NOR HAS THE COMMISSIONER OF
INSURANCE 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:
o the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
o the Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1995; and
o the Company's Current Reports on Form 8-K dated February 14, 1995,
March 22, 1995, April 14, 1995 and May 9, 1995.
2
<PAGE> 9
Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities made hereby shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such document.
Any statement contained herein, in a Prospectus Supplement or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of the Registration Statement and this
Prospectus to the extent that a statement contained herein, in a Prospectus
Supplement or in any subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
The Company 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.
3
<PAGE> 10
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.
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges is calculated by dividing total
fixed charges into earnings available for the payment of fixed charges. Earnings
available for the payment of fixed charges is the sum of fixed charges deducted
from income and income before tax expense, accounting changes, and preferred
stock dividends. Total fixed charges consist of interest expense, capitalized
interest, a portion of rental expense, and preferred stock dividends of
majority-owned subsidiaries.
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
------------ ------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges:
Consolidated operations..................... 2.5 3.0 2.4 2.1 2.4 2.1 2.2
Consolidated operations, corporate (parent
company) fixed charges only.............. 7.6 9.3 7.6 6.0 7.2 5.8 5.3
</TABLE>
Because no preferred stock dividends were paid in the periods reported
above (other than preferred stock dividends paid by a subsidiary in 1990), the
ratio of earnings to combined fixed charges and preferred stock dividends for
such periods is the same as the ratio of earnings to fixed charges.
DESCRIPTION OF DEBT SECURITIES
The Senior Securities are to be issued under a Senior Indenture dated as of
May 15, 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 May 15, 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.
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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 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 and the terms, if any, upon which the Company may reborrow the
proceeds from such payment or exchange other securities for such Debt Securities
when a principal payment is due; (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 right, if any, of the Company to extend an interest payment period;
(8) the place of payment (if other than New York City) and the place where such
Debt Securities may be surrendered for registration of transfer or exchange or
for conversion; (9) 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); (10) 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; (11) 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; (12) any
deletions from, modification of or additions to the Events of Default or
covenants of the Company with respect to such Debt Securities and any change in
the rights of the Trustee or the Holders to accelerate the maturity of such Debt
Securities; and (13) 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 the Debt 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.
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<PAGE> 12
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
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, unless otherwise specified in a
Prospectus Supplement relating to a particular Series of Debt Securities, 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 any of the present or
future common stock of a Designated Subsidiary, 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 and is so secured. (Section 1007 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,
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<PAGE> 13
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,
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
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<PAGE> 14
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 Security or for
the conversion or exchange of such Debt Security in accordance with its terms)
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 1005 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 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 and is so secured. (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
aggregate 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 amount 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
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<PAGE> 15
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) adversely affect any right to convert or exchange any
Debt Security or, in the case of the Subordinated Indenture, modify the
subordination provisions in a manner adverse to the Holders of the Subordinated
Securities; (h) reduce the above-stated percentage in aggregate 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 in
aggregate principal amount of such series, or reduce certain requirements of the
Indentures for quorum or voting; or (i) 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 aggregate 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 1008 of the Senior Indenture and Sections 902 and 1007 of the
Subordinated 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, to modify the provisions relating to global 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 add to, change or
eliminate any provision of the Indentures, provided that such amendment shall
become effective only if there is no Outstanding Debt Security of any series
then entitled to the benefit of such provision or such amendment does not apply
to any then Outstanding Debt Security; (f) to secure the Debt Securities
pursuant to the requirements of certain sections 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 provide for
the discharge of the Indenture with respect to the Debt Securities of any series
by the deposit of monies or Government Obligations in trust, (j) 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; (k) to provide for conversion or exchange rights of any series
of Debt Securities pursuant to the requirements of the instrument authorizing
such series, (l) in the case of the Subordinated Indenture, to limit or
terminate the benefits to the holders of Superior Indebtedness of the
subordination provisions contained in the Subordinated Indenture, or (m) to cure
any ambiguity, defect or inconsistency in the Indentures or to make any other
provisions with respect to matters or questions arising under 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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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 convert
convertible 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 with respect to a series of Debt
Securities, upon the request of the Company, such Indenture will cease to be of
further effect with respect to such series (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 of such series
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 of such series 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 maturity 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 maturity 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
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<PAGE> 17
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 1009 of the
Senior Indenture and Section 1008 of the Subordinated Indenture) The Prospectus
Supplement relating to a particular issuance of Debt Securities may describe
further provisions, if any, permitting such an omission to comply.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global Debt Securities that will be deposited with, or on
behalf of, a depositary (the "Depository") identified in the Prospectus
Supplement relating to such series. Unless and until it is exchanged in whole or
in part for the individual Debt Securities represented thereby, a global Debt
Security may not be transferred except as a whole among the Depository, any
successor Depository and their respective nominees.
The specific terms of the depository arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Unless otherwise indicated in the applicable Prospectus Supplement,
the following provisions will apply to all depository arrangements.
Upon the issuance of a global Debt Security, the Depository for such global
Debt Security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such global Debt Security to the accounts of persons
that have accounts with such Depository ("Participants"). Such accounts will be
designated by the underwriters or agents with respect to such Debt Securities or
by the Company if such Debt Securities are offered and sold directly by the
Company. Ownership of beneficial interests in a global Debt Security will be
limited to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such global Debt Security will be shown on,
and the transfer of that ownership will be effected only through, records
maintained by the applicable Depository or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons other than Participants). The laws of some states may
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limitation and such laws may impair the
ability to transfer beneficial interests in a global Debt Security.
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
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payments in amounts proportionate to their respective beneficial interests in
the principal amount of such global Debt Security for such Debt Securities as
shown on the records of such Depository or its nominee. The Company also expects
that payments by Participants to owners of beneficial interests in such global
Debt Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities
registered in "street name." Such payments will be the responsibility of such
Participants.
If the Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days or if the Company executes and delivers
to the Trustee a Company Order to the effect that a global Debt Security shall
be exchangeable for certificated Debt Securities or if an Event of Default has
occurred and is continuing with respect to a series of Debt Securities, the
Company will issue individual certificated Debt Securities of such series in
definitive form in exchange for the global Debt Security or Debt Securities
representing such series of Debt Securities. Accordingly, the Company may at any
time and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities, determine not to have
any Debt Securities of a series represented by one or more global Debt
Securities and, in such event, will issue individual certificated Debt
Securities of such series in definitive form in exchange for the global Debt
Security or Debt Securities representing such series of Debt Securities. In any
such instance, the individual certificated Debt Securities of such series issued
by the Company will be issued to Participants, as directed by the Depository or
its nominee, or to the beneficial owners holding Debt Securities of such series
through such Participants, as directed by such Participants, all in accordance
with standing instructions and customary practices, as is now the case with
securities registered in "street name." Certificated Debt Securities of such
series so issued in definitive form will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
SUBORDINATION OF SUBORDINATED SECURITIES
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 1501 and 1502 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). (Sections
1502 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
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Subordinated Securities. (Section 1503 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, created or
assumed 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;
(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 any interest rate,
currency or commodity swap agreement, option agreement, hedge agreement,
forward contract, or similar agreement designed to protect the Company or
another person against fluctuations in interest rates, exchange rates or
commodity prices;
(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 indebtedness, renewal, extension, refinancing, replacement,
refunding, assumption, guarantee or other obligation that expressly provides, or
in the instrument creating or evidencing the same or the assumption or guarantee
of the same it is expressly provided, that such indebtedness, renewal,
extension, refinancing, replacement, refunding, assumption, guarantee or other
refinancing 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 Indenture dated as of May 15, 1995 between the
Company and Chemical Bank, as trustee, and (iv) the 13 1/2% Restricted
Subordinated Notes Due 2002 of the Company, which shall rank pari passu to the
Subordinated Securities. (Section 101 of the Subordinated Indenture)
As of March 31, 1995, an aggregate of $2.8 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 subordination provisions of the Subordinated Indenture may be modified
or amended as provided under "-- Modification and Waiver," provided that no such
modification or amendment may adversely affect the rights of any holder of
Superior Indebtedness without the consent of such holder. (Section 907 of the
Subordinated Indenture)
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CONVERSION
Certain Debt Securities may be convertible into other securities (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, Common Stock Warrants or other securities, as the case
may be, at the conversion price set forth in the applicable Prospectus
Supplement, subject to adjustment as described in such Prospectus Supplement.
The relevant provisions for each series of Convertible Debt Securities will be
set forth in the applicable Prospectus Supplement. (Sections 301 and 1502)
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.
The Trustee, prior to default, undertakes to perform only such duties as
are specifically set forth in the Indentures 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 Trustee is
under no obligation to exercise any of the powers vested in it by an Indenture
at the request of any Holder of Debt Securities, unless offered reasonable
indemnity by such Holder against the costs, expenses and liabilities which might
be incurred thereby. The 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 Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it. Each Indenture contains other provisions limiting the
responsibilities and liabilities of the Trustee.
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
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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.
As of the date of this Prospectus, 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
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Company. Preferred Stock redeemed by the Company will be restored to the status
of authorized but unissued preferred shares.
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. Except as indicated in the applicable Prospectus Supplement, 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.
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 31, 1995, there were outstanding 204,820,775
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.
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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 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.
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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 Statement of Resolution
Establishing Series of Shares of the Junior Preferred Shares.
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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
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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 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.
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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 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 or incorporated by reference 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
American General's Current Report on Form 8-K dated February 14, 1995, and the
consolidated financial statements of American Franklin Company and Subsidiaries
as of December 31, 1994 and 1993, and for the years ended December 31, 1994 and
1993, appearing in American General's Current Report on Form 8-K dated April 14,
1995, have been audited by Coopers & Lybrand L.L.P., independent accountants, as
set forth in their reports 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 reports given upon the authority of such firm as experts in
accounting and auditing.
21
<PAGE> 28
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
American General..................... S-2
Recent Developments.................. S-2
Ratio of Earnings to Fixed Charges... S-3
Use of Proceeds...................... S-3
Summary Financial Information........ S-4
Description of Notes................. S-5
Underwriting......................... S-6
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents
by Reference....................... 2
The Company.......................... 3
Use of Proceeds...................... 4
Ratio of Earnings to Fixed Charges
and Ratio of Earnings to Combined
Fixed Charges and Preferred Stock
Dividends.......................... 4
Description of Debt Securities....... 4
Description of the Preferred Stock... 14
Description of Common Stock.......... 16
Description of Warrants.............. 19
Plan of Distribution................. 20
Legal Opinions....................... 21
Experts.............................. 21
</TABLE>
================================================================================
================================================================================
$150,000,000
AMERICAN GENERAL
CORPORATION
6 3/4% NOTES DUE 2005
[AMERICAN GENERAL LOGO]
------------------------------
PROSPECTUS SUPPLEMENT
------------------------------
MERRILL LYNCH & CO.
JUNE 21, 1995
================================================================================
