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EXHIBIT 1.2
PRICING AGREEMENT
SALOMON SMITH BARNEY INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MORGAN STANLEY & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
FIRST UNION SECURITIES, INC.,
as Representatives of the several Underwriters
named in Schedule I hereto
c/o SALOMON SMITH BARNEY INC.
390 Greenwich Street
New York, New York 10013
November 30, 2000
Ladies and Gentlemen:
American General Capital III, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), and American General
Corporation, a Texas corporation, as sponsor of the Trust and as guarantor (the
"Company"), propose, subject to the terms and conditions stated herein and in
the Underwriting Agreement (a form of which was filed as an exhibit to the
registration statement filed by the Trust, certain other trusts and the Company
on Form S-3 (Nos. 333-40583, 333-40583-01, 333-40583-02, 333-40583-03 and
333-40583-04)) attached hereto (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
number of Preferred Securities specified in Schedule I hereto.
If so specified in Schedule II hereto, the Preferred Securities are
exchangeable into Junior Subordinated Debentures of the Company or other
property or securities specified in Schedule II hereto. The Preferred
Securities will be guaranteed by the Company on a limited basis as to the
payment of Distributions and as to payments on liquidation or redemption (the
"Guarantee").
Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Pricing Agreement to the same extent as if such provisions had been set forth
in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 1 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined),
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and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Prospectus as amended or supplemented with respect to the
offering of the Preferred Securities. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representative designated to act on behalf of the Representatives and on
behalf of each of the Underwriters pursuant to Section 9 of the Underwriting
Agreement and the address of the Representative referred to in such Section 9
are set forth in Section II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the offering of the Preferred
Securities, in the form heretofore delivered to you, is now proposed to be
filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Trust, at the time and
place and at the purchase price set forth in Schedule II hereto, the amount of
Preferred Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us one counterpart hereof for the Trust and one for the
Company, one for each of the Representatives and one for each counsel, and upon
acceptance hereof by you on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters and the Trust and the Company. It is understood that
your acceptance of this letter on behalf of each of the Underwriters is or will
be pursuant to the authority set forth in a form of Agreement Among
Underwriters, the form of which shall be submitted to the Trust and the Company
for examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
2
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Very truly yours,
AMERICAN GENERAL CAPITAL III
By: AMERICAN GENERAL CORPORATION,
as sponsor
By: /s/ C. JEFFREY GAY
-----------------------------------------------
Name: C. Jeffrey Gay
Title: Vice President and Assistant Treasurer
AMERICAN GENERAL CORPORATION
By: /s/ C. JEFFREY GAY
-----------------------------------------------
Name: C. Jeffrey Gay
Title: Vice President and Assistant Treasurer
3
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Accepted as of the date hereof:
SALOMON SMITH BARNEY INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MORGAN STANLEY & CO. INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
FIRST UNION CAPITAL MARKETS CORP.,
as Representatives of the several Underwriters
By: SALOMON SMITH BARNEY INC.
By: /s/ ANNE KRONENBERG
----------------------------------------------------------
Authorized Signatory
On behalf of themselves and the other several Underwriters
4
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SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED SECURITIES TO
UNDERWRITER BE PURCHASED
------------------------------------------------------------------------------------------- -----------------------
<S> <C>
Salomon Smith Barney Inc................................................................... 605,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................................. 600,000
Morgan Stanley & Co. Incorporated.......................................................... 600,000
Prudential Securities Incorporated......................................................... 600,000
UBS Warburg LLC............................................................................ 600,000
Banc of America Securities LLC............................................................. 75,000
Banc One Capital Markets, Inc. ............................................................ 75,000
First Union Securities, Inc................................................................ 75,000
ABN AMRO Incorporated...................................................................... 30,000
Bear Stearns & Co. Inc..................................................................... 30,000
Charles Schwab & Co. Inc................................................................... 30,000
Chase Securities Inc....................................................................... 30,000
CIBC World Markets Corp.................................................................... 30,000
Credit Suisse First Boston Corporation..................................................... 30,000
Dain Rauscher Wessels, a division of Dain Rauscher Incorporated............................ 30,000
Fifth Third Securities..................................................................... 30,000
Fleet Securities Inc....................................................................... 30,000
H&R Block, Inc............................................................................. 30,000
J.P. Morgan Securities Inc................................................................. 30,000
McDonald Investments Inc................................................................... 30,000
NatCity Investments, Inc................................................................... 30,000
Raymond James & Associates, Inc............................................................ 30,000
Robert W. Baird & Co. Incorporated......................................................... 30,000
The Robinson-Humphrey Company, LLC......................................................... 30,000
Suntrust Equitable Securities Corp......................................................... 30,000
U.S. Bancorp Piper Jaffray Inc............................................................. 30,000
Wachovia Securities, Inc................................................................... 30,000
Advest, Inc................................................................................ 10,000
BB&T Capital Markets, a Division of Scott & Stringfellow................................... 10,000
C.L. King & Associates, Inc................................................................ 10,000
D.A. Davidson & Co. Incorporated........................................................... 10,000
Davenport & Company LLC.................................................................... 10,000
Fahnestock & Co. Inc....................................................................... 10,000
Gibraltar Securities Co.................................................................... 10,000
Gruntal & Co., L.L.C....................................................................... 10,000
J.J.B. Hilliard, W.L. Lyons, Inc........................................................... 10,000
Janney Montgomery Scott Inc................................................................ 10,000
Legg Mason Wood Walker, Incorporated....................................................... 10,000
Mesirow Financial, Inc..................................................................... 10,000
Morgan Keegan & Company, Inc............................................................... 10,000
Stephens Inc............................................................................... 10,000
Stifel, Nicolaus & Co., Inc. .............................................................. 10,000
TD Securities (USA) Inc.................................................................... 10,000
Tucker Anthony Inc......................................................................... 10,000
Utendahl Capital Partners, L.P............................................................. 10,000
Wedbush Morgan Securities, Inc............................................................. 10,000
William Blair & Company, L.L.C............................................................. 10,000
-------------------------
Total......................................................... 4,000,000
=========================
</TABLE>
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SCHEDULE II
PREFERRED SECURITIES
Title of Preferred Securities: 8.05% Trust Preferred Securities ("TruPS")
Number of Preferred Securities: 4,000,000
Distribution Payments: Quarterly, on March 31, June 30, September
30 and December 31 of each year, commencing
December 31, 2000, at an annual rate of
8.05% of the liquidation amount of $25.00
per Preferred Security.
Record Dates: As long as the Preferred Securities are
represented by a global security, the
record date for the payment of
distributions will be one business day
before the relevant payment date. If the
Preferred Securities are ever issued in
certificated form, the record date for the
payment of distributions will be the 15th
day of the last month of each quarterly
distribution period, even if that day is
not a business day.
Liquidation Amount: $25.00 per Preferred Security, plus
accumulated and unpaid distributions to the
date of payment.
Exchange Provisions: If the Company, as the sponsor of the
Trust, exercises its right to dissolve the
Trust at any time, the Trust will be
liquidated by distribution of the Junior
Subordinated Debentures to holders of the
Preferred Securities and the Common
Securities.
Redemption Provisions: Redeemable when the Junior Subordinated
Debentures are paid, either at maturity on
December 31, 2049, or upon early redemption
as described in the Prospectus Supplement.
Initial Offering Price to Public: $25.00 per Preferred Security, plus
accumulated distributions from December 7,
2000, if settlement occurs after that date.
Purchase Price by Underwriters: $25.00 per Preferred Security, plus
accumulated distributions from December 7,
2000, if settlement occurs after that date.
Underwriters' Compensation: $0.7875 per Preferred Security.
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Method of and Specified Funds for
Payment of Purchase Price and
Underwriters' Compensation: By wire transfer to bank accounts specified
by the Trust and the Representatives in
same day funds.
Form of Preferred Securities: Book-entry-only form represented by one or
more global securities deposited with The
Depository Trust Company ("DTC") or its
designated custodian, to be made available
for checking by the Representatives at
least 24 hours prior to the Time of
Delivery at the office of DTC.
Securities Exchange: New York Stock Exchange.
Time of Delivery: 10:00 a.m. (New York City time), December
7, 2000.
Closing Location: Brown & Wood LLP
One World Trade Center
New York, New York 10048
Representatives: Salomon Smith Barney Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
Prudential Securities Incorporated
UBS Warburg LLC
Banc of America Securities LLC
Banc One Capital Markets, Inc.
First Union Securities, Inc.
Designated Representative: Salomon Smith Barney Inc.
Address for Notices, etc.: Salomon Smith Barney Inc.
390 Greenwich Street
New York, New York 10013
Attention: Peter Jurdjevic
JUNIOR SUBORDINATED DEBENTURES
Title of Junior Subordinated
Debentures: 8.05% Junior Subordinated Debentures due
2049
Aggregate Principal Amount: $103,092,800
Interest Payments: Quarterly, on March 31, June 30, September
30 and December 31 of each year, commencing
December 31, 2000, at an annual rate of
8.05% of the principal amount of $25 per
Junior Subordinated Debenture.
II-2
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Record Dates: As long as the Preferred Securities
(or, if the Junior Subordinated Debentures
are distributed to the holders of the
Preferred Securities, then the Junior
Subordinated Debentures) are represented by
a global security, the record date for the
payment of interest on the Junior
Subordinated Debentures will be one
business day before the relevant payment
date. If the Preferred Securities (or, if
the Junior Subordinated Debentures are
distributed to the holders of the Preferred
Securities, then the Junior Subordinated
Debentures) are ever issued in certificated
form, the record date for the payment of
interest will be the 15th day of the last
month of each quarterly interest period,
even if that day is not a business day.
Maturity Date: December 31, 2049
Redemption Provisions: Redeemable at 100% of principal amount plus
accrued and unpaid interest to the date of
redemption (i) in whole or in part on one
or more occasions any time on or after
December 7, 2005; and (ii) in whole but not
in part before December 7, 2005, if certain
changes in tax or investment company law
occur or will occur within 90 days.
Sinking Fund Provisions: None.
Extension Provisions: The Company may, on one or more occasions,
defer interest payments on the Junior
Subordinated Debentures for up to 20
consecutive quarterly periods (but not
beyond December 31, 2049) unless an event
of default under the Junior Subordinated
Debentures has occurred and is continuing.
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