<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1997
REGISTRATION NO. 333-21995
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN FINANCIAL GROUP, INC.
(formerly American Financial Group Holdings, Inc.)
(exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
OHIO 31-1544320
(State or other
jurisdiction of (I.R.S. Employer
incorporation or Identification
organization) Number)
</TABLE>
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
(513) 579-2121
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
AMERICAN FINANCIAL CAPITAL TRUST II
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 31-6549738
(State or other
jurisdiction of (I.R.S. Employer
incorporation or Identification
organization) Number)
</TABLE>
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
(513) 579-2121
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------
JAMES C. KENNEDY, ESQ.
DEPUTY GENERAL COUNSEL AND SECRETARY
AMERICAN FINANCIAL GROUP, INC.
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
(513) 579-2538
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
WITH COPIES TO:
EDWARD E. STEINER, ESQ.
KEATING, MUETHING & KLEKAMP
1800 PROVIDENT TOWER
CINCINNATI, OHIO 45202
(513) 579-6467
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______
If this Form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to Registration Statement on Form S-3,
Registration No. 333-21995, is being filed pursuant to Rule 414 under the
Securities Act of 1933 by American Financial Group, Inc., an Ohio corporation
(formerly known as American Financial Group Holdings, Inc.) (this successor
corporation is referred to in this Explanatory Note as "New AFG").
On December 2, 1997, the shareholders of AFC Holdings Company (formerly
known as American Financial Group, Inc.) (this predecessor corporation is
referred to in this Explanatory Note as "Old AFG") voted to approve a
reorganization pursuant to which Old AFG became a wholly-owned subsidiary of New
AFG.
Pursuant to Rule 414(d) under the Securities Act of 1933, New AFG, as
successor to Old AFG, hereby adopts this Registration Statement as its own
registration statement for all purposes of the Securities Act of 1933 and the
Securities Exchange Act of 1934.
<PAGE> 3
SUBJECT TO COMPLETION, DATED DECEMBER 5, 1997
PROSPECTUS
$500,000,000
AMERICAN FINANCIAL GROUP, INC.
DEBT SECURITIES AND COMMON STOCK
AND
AMERICAN FINANCIAL CAPITAL TRUST II
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY AMERICAN
FINANCIAL GROUP, INC.
American Financial Group, Inc. ("AFG" or the "Company") may from time to
time offer, together or separately, (i) in one or more series, unsecured debt
securities which may be either senior or subordinated debt securities (together,
the "Debt Securities"), consisting of debentures, notes and/or other evidences
of indebtedness and (ii) shares of its Common Stock, without par value ("Common
Stock"), in amounts, at prices and on terms to be determined at the time of the
offering.
American Financial Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), may from time to time
offer preferred securities, representing undivided beneficial interests in the
assets of the Trust ("Preferred Securities"). The payment of periodic cash
distributions ("Distributions") with respect to Preferred Securities will be
made from moneys held by the Trust, and payments on liquidation, redemption or
otherwise with respect to such Preferred Securities, will be guaranteed (a
"Trust Guarantee") by the Company to the extent described herein. See
"Description of Trust Guarantee." The Company's obligations under the Trust
Guarantee will rank junior and subordinate in right of payment to all other
liabilities of the Company and pari passu with its obligations under the senior-
most preferred or preference stock of the Company. See "Description of Trust
Guarantee -- Status of Trust Guarantees." The proceeds from the offering of
Preferred Securities and Common Securities (as defined herein) by the Trust will
be invested in subordinated debt securities of the Company. The subordinated
debt securities purchased by the Trust may be subsequently distributed pro rata
to holders of Preferred Securities and Common Securities in connection with the
dissolution of the Trust, upon the occurrence of certain events as may be
described in an accompanying supplement to the prospectus ("Prospectus
Supplement").
The Debt Securities, Common Stock and Preferred Securities (collectively
the "Securities") may be offered as separate series or issuances at an aggregate
initial public offering price not to exceed $500,000,000 or, if applicable, the
equivalent thereof in one or more foreign currencies or in amounts determined by
reference to an index as shall be designated by the Company or the Trust. While
the amount of the various Securities to be offered, as well as the prices and
terms of issuance, will be determined in light of market conditions at the time
of sale, none of the Debt Securities, Common Stock nor Preferred Securities will
individually exceed an initial public offering price of $300,000,000.
Specific terms of the particular Securities covered by this Prospectus will
be set forth in a Prospectus Supplement which will describe, where applicable,
(i) in the case of Debt Securities, the specific designation, aggregate
principal amount, ranking as senior or subordinated debt securities,
denominations, maturity, any interest rate and method of calculating payment of
any interest, dates on which any premium or any interest is payable, any terms
for redemption, any terms for sinking fund payments, any terms for conversion or
exchange into other securities, any right of the Company to defer payment of
interest on the Debt Securities, and the maximum length of such deferral period,
subordination terms, currency or currencies of denomination and payment, if
other than U.S. dollars, the purchase price, any listing on a securities
exchange and any other terms in connection with the offering and sale of the
Debt Securities in respect of which this Prospectus is delivered; (ii) in the
case of Common Stock, the number of shares offered and the terms of the offering
and sale thereof, (iii) in the case of Preferred Securities, the specific
designation, number of securities, liquidation preference per security, the
purchase price, any listing on a securities exchange, distribution rate (or
method of calculation thereof), dates on which distributions shall be payable
and dates from which distributions shall accrue, any voting rights, terms for
any conversion or exchange into other securities, any redemption, exchange or
sinking fund provisions, any other rights, preferences, privileges, limitations
or restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Debt Securities of the Company. The Debt Securities may be
issued in registered or bearer form, or both. If so specified in the applicable
Prospectus Supplement, Securities may be issued in whole or in part in the form
of one or more temporary or permanent global securities.
The Securities may be sold by the Company or the Trust directly, or to or
through underwriters or through dealers or agents. See "Plan of Distribution."
The names of any underwriters, dealers or agents involved in the sale of the
Securities in respect of which this Prospectus is being delivered and any
applicable fee, commission or discount arrangements with them will be set forth
in the applicable Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
This Prospectus may not be used to consummate sales of 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 , 1997.
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, ANY ACCOMPANYING
PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED OR DEEMED INCORPORATED BY
REFERENCE HEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR
THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
TRUST OR BY ANY AGENT, DEALER OR UNDERWRITER. THIS PROSPECTUS AND ANY
ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
periodic reports, proxy and information statements and other information with
the Securities and Exchange Commission (the "Commission"). The Company has filed
a Registration Statement on Form S-3 (the "Registration Statement") with the
Commission under the Securities Act of 1933 (the "Securities Act") with respect
to the Securities. This Prospectus does not contain all the information,
exhibits and undertakings contained in the Registration Statement, to which
reference is hereby made. Statements contained in this Prospectus as to the
terms of any contract or other document are not necessarily complete with
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement. Reference is made to the exhibits for a more
complete description of the matter involved. Such reports, proxy and information
statements, the Registration Statement and other information filed with the
Commission by AFG may be inspected at and obtained from the Commission at its
public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices located at Suite 1400, 500 West Madison
Avenue, Chicago, Illinois, and at 7 World Trade Center, 13th Floor, New York,
New York. Copies of such material can also be obtained, at prescribed rates, by
mail from the Public Reference Section of the Commission at its Washington, D.C.
address set forth above. Such material may also be accessed electronically by
means of the Commission's home page on the World Wide Web located at
http://www.sec.gov. In addition, material filed by the Company can be obtained
and inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005 (the "NYSE"), on which AFG's Common Stock is
listed.
No separate financial statements of the Trust have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the voting securities of the Trust will be owned, directly or
indirectly, by the Company, a reporting company under the Exchange Act, (ii) the
Trust has no independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in its assets and
investing the proceeds thereof in Debt Securities issued by the Company, and
(iii) the obligations of the Trust under the Preferred Securities are fully and
unconditionally guaranteed by the Company to the extent that the Trust shall
have funds available to meet such obligations. See "Description of Preferred
Securities" and "Description of Trust Guarantees."
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<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference certain documents relating to the
Company which are not delivered herewith. These documents (other than the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents) are available, without charge, on oral or
written request by any person to whom this Prospectus is delivered. Written or
telephone requests should be directed to Fred J. Runk, Senior Vice President and
Treasurer, One East Fourth Street, Cincinnati, Ohio 45202, telephone (513)
579-2488. The following documents, which have been filed by the Company's
predecessor (File No. 1-11453) with the Commission, are hereby incorporated by
reference in this Prospectus:
(i) Annual Report on Form 10-K for the year ended December 31, 1996,
as amended on April 30, 1997 and October 29, 1997;
(ii) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997; and
(iii) Current Report on Form 8-K dated July 14, 1997.
The Company's Current Report on Form 8-K dated December 3, 1997 (File No.
1-13653) is hereby incorporated by reference in this Prospectus.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of this Offering
shall be deemed to be incorporated by reference in this Prospectus and to be a
part of this Prospectus from the date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other 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 this Prospectus.
3
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THE COMPANY
American Financial Group, Inc. ("AFG" or the "Company") is a holding
company which, through its subsidiaries, is engaged primarily in specialty and
multi-line property and casualty insurance businesses and in the sale of
tax-deferred annuities and certain life and health insurance. AFG's property and
casualty operations originated in 1872 and are the twentieth largest property
and casualty group in the United States based on 1996 statutory net premiums
written of $2.8 billion. At September 30, 1997, the Company had total assets of
$15.7 billion and shareholders' equity of $1.7 billion.
THE TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust (the "Declaration") executed by the Company as
sponsor for such trust (the "Sponsor"), and the Trustees (as defined herein) of
such trust and (ii) the filing of a certificate of trust with the Secretary of
State of the State of Delaware on February 4, 1997. The Trust will engage solely
in the following activities: (i) issuing and selling the Preferred Securities
and common securities representing undivided beneficial interests in the assets
of the Trust (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities"), (ii) using the gross proceeds from the sale
of the Trust Securities to acquire the Debt Securities and (iii) engaging in
only those other activities necessary or incidental thereto. All of the Common
Securities will be directly or indirectly owned by the Company. The Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Preferred Securities, except that, if an event of default under the
Declaration has occurred and is continuing, the rights of the holders of the
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Company will directly or indirectly
acquire Common Securities, in an aggregate liquidation amount equal to at least
3% of the total capital of the Trust.
The Trust's business and affairs will be conducted by the trustees (the
"Trustees") appointed by the Company as the direct or indirect holder of all of
the Common Securities. The holder of the Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the
Trustees of the Trust. The duties and obligations of the Trustees shall be
governed by the Declaration. The Trust will have three Trustees (the "Regular
Trustees") who are employees or officers of or who are affiliated with the
Company. One Trustee of the Trust will be a financial institution that is not
affiliated with the Company and has a minimum amount of combined capital and
surplus of not less than $50,000,000, which shall act as property trustee and as
indenture trustee for the purposes of compliance with the provisions of Trust
Indenture Act of 1939 (the "Trust Indenture Act"), pursuant to the terms set
forth in the applicable Prospectus Supplement (the "Property Trustee"). In
addition, unless the Property Trustee maintains a principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
one Trustee of the Trust will be an entity having a principal place of business
in, or a natural person resident of, the State of Delaware (the "Delaware
Trustee"). The Company will pay all fees and expenses related to the Trust and
the offering of the Trust Securities.
The Property Trustee for the Trust is The Bank of New York and its
principal corporate trust office is at 101 Barclay Street, 21st Floor, New York,
New York 10286, Attention: Corporate Trust Trustee Administration. The Delaware
Trustee for the Trust is The Bank of New York (Delaware) and its address in the
State of Delaware is White Clay Center, Route 273, Newark, Delaware 19711. The
Delaware Trustee is an affiliate of the Property Trustee. The address for the
Trust is c/o American Financial Group, Inc., the Sponsor of the Trust, at the
Company's corporate headquarters located at One East Fourth Street, Cincinnati,
Ohio 45202, telephone (513) 579-2121.
4
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USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds received by the Company from the sale of any Debt Securities
(including Debt Securities sold to the Trust) or Common Stock offered hereby are
expected to be used for general corporate purposes, which may include investment
in insurance businesses and the repayment of outstanding debt of the Company and
its subsidiaries. Until the net proceeds are used for these purposes, the
Company may deposit them in interest-bearing accounts or invest them in
short-term marketable securities. The specific allocations, if any, of the
proceeds of any of the Securities will be described in the Prospectus Supplement
relating thereto.
The proceeds from any sale of Preferred Securities by the Trust will be
invested in Debt Securities of the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical and pro forma ratios of
earnings to fixed charges for the Company and its subsidiaries. Fixed charges
are computed on a "total enterprise" basis. For purposes of calculating the
ratios, "earnings" have been computed by adding to pretax earnings (excluding
discontinued operations) the fixed charges and minority interest in earnings of
subsidiaries having fixed charges and deducting (adding) the undistributed
equity in earnings (losses) of investees. Fixed charges include interest
(excluding annuity benefits), amortization of debt discount and expense,
preferred dividend requirements of subsidiaries and a portion of rental expense
deemed to represent the interest factor.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER
30, YEAR ENDED DECEMBER 31,
------------ ------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Historical ratio of earnings to fixed
charges...................................... 3.45 4.78 4.22 2.60 1.69 2.62 2.15
</TABLE>
5
<PAGE> 8
DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
do not apply to those Debt Securities will be described in the Prospectus
Supplement relating to such Debt Securities.
The Debt Securities will be general unsecured obligations of the Company
and will constitute either senior debt securities or subordinated debt
securities. In the case of Debt Securities that will be senior debt securities
("Senior Debt Securities"), the Senior Debt Securities will be issued under an
Indenture (the "Senior Indenture") to be executed by the Company and Star Bank,
N.A., Cincinnati, Ohio, as trustee (the "Senior Debt Trustee"). In the case of
Debt Securities that will be subordinated debt securities ("Subordinated Debt
Securities"), the Debt Securities will be issued under an Indenture (the
"Subordinated Indenture") to be executed by the Company and The Bank of New
York, as trustee (the "Subordinated Debt Trustee") under the Subordinated
Indenture. Subordinated Debt Securities, if issued, will be initially issued to
the Trust in connection with an offering of Preferred Securities. The Senior
Debt Trustee and the Subordinated Debt Trustee are sometimes referred to herein
individually as the "Trustee" or collectively as the "Trustees." The Senior
Indenture and the Subordinated Indenture are sometimes referred to herein
individually as the "Indenture" or collectively as the "Indentures". The
statements made under this caption relating to the Debt Securities and the
Indentures are summaries only, do not purport to be complete, and are qualified
in their entirety by reference to the form of Indenture filed with the
Commission in connection with the issuance of any series of Debt Securities.
Such summaries make use of terms defined in the Indentures. Wherever such terms
are used herein, such terms are incorporated by reference from the Indentures as
part of the statements made herein. Summaries of certain terms used herein will
be included in the Prospectus Supplement relating to the issuance of any
particular series of Debt Securities. The statements made under this caption
relating to the Debt Securities and the Indenture are summaries only, do not
purport to be complete, and are qualified in their entirety by reference to the
Indenture or form of Indenture filed with the Commission in connection with the
issuance of any series of Debt Securities. Such summaries make use of terms
defined in the Indenture. Wherever such terms are used herein, such terms are
incorporated by reference from the Indenture as part of the statements made
herein. Summaries of certain terms used herein will be included in the
Prospectus Supplement relating to the issuance of any particular series of Debt
Securities.
Except as may be set forth in the terms of the Debt Securities and
described in the Prospectus Supplement relating to such Debt Securities, the
Indentures do not limit the amount of Debt Securities which can be issued
thereunder and provide that additional Debt Securities may be issued thereunder
up to the aggregate principal amount which may be authorized from time to time
by the Company's Board of Directors. Reference is made to the Prospectus
Supplement for the following terms of the particular series of Debt Securities
being offered thereby: (i) the title of the Debt Securities; (ii) the aggregate
principal amount and authorized denominations of the offering; (iii) the price
at which the Debt Securities will be issued; (iv) the date or dates on which the
Debt Securities will mature (or manner of determining the same); (v) the rate or
rates per annum, if any, at which the Debt Securities will bear interest (or the
manner of calculation thereof) and the date or dates from which such interest
will accrue; (vi) certain covenants which will be applicable to the offered Debt
Securities; (vii) the times at which any interest will be payable (or manner of
determining the same) and the Regular Record Dates for Interest Payment Dates;
(viii) the place or places where the principal of (and premium, if any) and
interest, if any, on the Debt Securities will be payable and each office or
agency, as described below under "Denominations, Registration and Transfer,"
where the Debt Securities may be presented for transfer or exchange; (ix) any
mandatory or optional sinking fund or analogous provisions; (x) the date, if
any, after which, and the price at which, such Debt Securities are payable
pursuant to any optional or mandatory redemption provisions; (xi) the terms and
conditions upon which the Debt Securities may be repayable prior to maturity at
the option of the holder thereof and the price at which such Debt Securities are
so repayable; (xii) any provisions regarding exchangeability or conversion of
the Debt
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Securities; (xiii) information with respect to book-entry procedures, if any;
(xiv) any provisions of the Indenture which will not be applicable to such
offering of Debt Securities; (xv) whether the Debt Securities are Senior Debt
Securities or Subordinated Debt Securities; and (xvi) any other additional
provisions or specific terms which may be applicable to such Debt Securities.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or interest at a rate which at the time of issuance is
below market rates) to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any Discounted Debt Securities will be described in
the Prospectus Supplement relating thereto.
Neither the Senior Indenture nor the Subordinated Indenture contain
provisions that afford the holders of the Senior Debt Securities or Subordinated
Debt Securities protection in the event of a highly leveraged transaction
involving the Company or other similar transaction that may adversely affect
such holders.
PROVISIONS APPLICABLE TO THE SENIOR DEBT SECURITIES
DENOMINATIONS, REGISTRATION AND TRANSFER. Unless otherwise indicated in the
applicable Prospectus Supplement, the Senior Debt Securities of a series will be
issuable only in fully registered form. Unless otherwise provided in an
applicable Prospectus Supplement with respect to a series of Senior Debt
Securities, Senior Debt Securities will be issued only in denominations of
$1,000 or any integral multiple thereof.
Senior Debt Securities may be presented for exchange or for registration of
transfer (with the form of transfer duly executed) at the office of a transfer
agent designated by the Company for such purpose with respect to any series of
Senior Debt Securities. If a Prospectus Supplement refers to any transfer agent
initially designated by the Company with respect to any series of Senior Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts.
The Company is not required to issue, register the transfer of, or exchange
Senior Debt Securities of any series for the 15-day period prior to the mailing
of a notice of redemption and, with respect to any Senior Debt Securities called
for redemption in whole or in part (except for the unredeemed portion of any
Senior Debt Securities being redeemed in part), following such mailing.
PAYMENT AND PAYING AGENTS. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of (and premium, if any) and
interest, if any, on Senior Debt Securities will be made (i) by check mailed or
delivered to the address of the Person entitled thereto as such address shall
appear in the Debt Security Register or (ii) by wire transfer to an account
(with a bank located inside the United States) designated by the Person entitled
thereto. Unless otherwise indicated in an applicable Prospectus Supplement,
payment of any installment of interest on any Debt Security will be made to the
Person in whose name such Debt Security is registered at the close of business
on the Regular Record Date for such interest payment.
All moneys paid by the Company to the Senior Debt Trustee or a Paying Agent
for the payment of principal of (and premium, if any) and interest, if any, on
any Debt Security which remains unclaimed at the end of two years after such
principal, premium or interest shall have become due and payable may be repaid
to the Company and the holder of such Debt Security will thereafter look only to
the Company for payment thereof.
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS. Under the Senior Indenture,
the Company may not consolidate with or merge into any other entity or sell,
convey, assign, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any entity, unless: (1) either (a) the Company
shall be the continuing corporation or (b) the entity (if other than the
Company) formed by such consolidation or into which the Company is merged or the
entity that acquires, by sale, assignment, conveyance, transfer, lease or
disposition, all or substantially all of the properties and assets of the
Company as an entirety shall be a corporation, partnership or trust organized
and validly existing under the laws of the United States or any State thereof or
the District of Columbia, and shall expressly assume by a supplemental
indenture, the due
7
<PAGE> 10
and punctual payment of the principal of and premium, if any, and interest on
all the Senior Debt Securities and the performance and observance of every
covenant of the Senior Indenture on the part of the Company to be performed or
observed; (2) immediately thereafter, no Event of Default (and no event that,
after notice or lapse of time, or both, would become an Event of Default) shall
have occurred and be continuing; and (3) certain other conditions, if any, are
met, as are described in the Prospectus Supplement relating to the Senior Debt
Securities being offered thereby.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraphs in
which the Company is not the continuing corporation, the successor entity formed
or remaining would be substituted for the Company and the Company would be
discharged from all obligations and covenants under the Senior Indenture and the
Senior Debt Securities.
EVENTS OF DEFAULT. Unless otherwise set forth in the applicable Prospectus
Supplement and Supplemental Indenture, the following events will constitute
"Events of Default" with respect to a series of Senior Debt Securities: (i)
default in the payment of any installment of interest on any Senior Debt
Securities in such series for 30 consecutive days after becoming due; (ii)
default in the payment of the principal of (or premium, if any, on) any Senior
Debt Securities in such series when due; (iii) default in the performance of any
other covenant or warranty applicable to such series contained in the Senior
Debt Securities or the Senior Indenture for a period of 60 days after written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Senior Debt Trustee or to the Company and the
Senior Debt Trustee by the holders of 25% in aggregate principal amount of such
series of Senior Debt Securities then Outstanding; (iv) default shall have
occurred under any other series of Senior Debt Securities or any agreements,
indentures or instruments under which the Company then has outstanding
Indebtedness in excess of $15 million in the aggregate and, if not already
matured in accordance with its terms, such Indebtedness shall have been
accelerated and such acceleration shall not have been rescinded or annulled
within ten days after notice thereof shall have been given to the Company by the
Senior Debt Trustee or to the Company and the Senior Debt Trustee by the holders
of at least 25% in aggregate principal amount of such series of Senior Debt
Securities then Outstanding, provided, that if, prior to the entry of judgment
in favor of the Senior Debt Trustee, such default under such Senior Indenture or
instrument shall be remedied or cured by the Company, or waived by the holders
of such Indebtedness, then the Event of Default under such Senior Indenture
shall be deemed likewise to have been remedied, cured or waived and provided,
further, that if such default results from an action of the United States
government or a foreign government which prevents the Company from performing
its obligations under such agreement, indenture or instrument, the occurrence of
such default will not be an Event of Default under such Senior Indenture; (v)
one or more judgments, orders or decrees for the payment of money in excess of
$15 million, either individually or in the aggregate, shall be entered against
the Company and shall not be discharged, there shall have been a period of 60
days during which a stay of enforcement of such judgment or order, by reason of
an appeal or otherwise, shall not be in effect and there shall have been given
written notice of the default to the Company by the Senior Debt Trustee or to
the Company and the Senior Debt Trustee by the holders of 25% in aggregate
principal amount of such series of Senior Debt Securities then Outstanding; or
(vi) certain events of bankruptcy, insolvency or reorganization with respect to
the Company shall have occurred. If an Event of Default shall occur and be
continuing with respect to a series of Senior Debt Securities, either the Senior
Debt Trustee or the holders of at least 25% in principal amount of the
Outstanding Senior Debt Securities of such series may declare the entire
principal amount, or, in the case of Discounted Securities, such lesser amount
as may be provided for in such Discounted Securities, of all the Senior Debt
Securities of such series to be immediately due and payable.
Under the Senior Indenture, the Company is required to furnish the Senior
Debt Trustee annually a statement by certain officers of the Company to the
effect that to the best of their knowledge the Company is not in default in the
fulfillment of any of its obligations under the Senior Indenture or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default.
The Senior Indenture provides that the Senior Debt Trustee shall, within 90
days after the occurrence of a default with respect to a particular series of
Senior Debt Securities (unless such default has been cured or waived), give the
holders of the Senior Debt Securities of such series notice of such default
known to it (the
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term default to mean the events specified above without grace periods); provided
that, except in the case of a default in the payment of principal of (or
premium, if any) or interest, if any, on any of the Senior Debt Securities of
such series, the Senior Debt Trustee shall be protected in withholding such
notice if it in good faith determines the withholding of such notice is in the
interest of the holders of the Senior Debt Securities of such series.
The holders of a majority in principal amount of a particular series of
Senior Debt Securities Outstanding have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the Senior Debt Trustee with respect to such series
or exercising any trust or power conferred on the Senior Debt Trustee, and to
waive certain defaults. The Senior Indenture provides that in case an Event of
Default shall occur and be continuing, the Senior Debt Trustee shall exercise
such of its rights and powers under the Senior Indenture, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs. Subject to
such provisions, the Senior Debt Trustee will be under no obligation to exercise
any of its rights or powers under the Senior Indenture at the request of any of
the holders of the Senior Debt Securities unless they shall have offered to the
Senior Debt Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such request.
SATISFACTION AND DISCHARGE. Except as may otherwise be set forth in the
Prospectus Supplement relating to a series of Senior Debt Securities, the Senior
Indenture provides that the Company shall be deemed to have satisfied and
discharged its obligations under the Senior Debt Securities of such series (with
certain exceptions) at any time prior to the Stated Maturity or redemption
thereof when (a) the Company has deposited with the Senior Debt Trustee, in
trust, sufficient funds to pay the principal of (and premium, if any) and
interest, if any, to Stated Maturity (or to Redemption Date) on, the Senior Debt
Securities of such series, (b) the Company has paid all other sums payable with
respect to the Senior Debt Securities of such series and (c) certain other
conditions are met. Upon such discharge, the holders of the Senior Debt
Securities of such series shall no longer be entitled to the benefits of the
Senior Indenture, except for certain rights, including registration of transfer
and exchange of the Senior Debt Securities of such series and replacement of
mutilated, destroyed, lost or stolen Senior Debt Securities, and shall look only
to such deposited funds.
Such discharge may be treated as a taxable exchange of the related Senior
Debt Securities for an issue of obligations of the trust or a direct interest in
the cash and securities held in the trust. In that case, holders of such Senior
Debt Securities would recognize gain or loss as if the trust obligations or the
cash or securities deposited, as the case may be, had actually been received by
them in exchange for their Senior Debt Securities. Such holders thereafter might
be required to include in income a different amount than would be includable in
the absence of discharge. Prospective investors are urged to consult their own
tax advisors as to the specific consequences of discharge.
MODIFICATION AND WAIVER. Certain modifications and amendments (which,
generally, either benefit or do not affect the holders of Outstanding Senior
Debt Securities) of the Senior Indenture may be made by the Company and the
Senior Debt Trustee without the consent of holders of the Senior Debt
Securities. Other modifications and amendments of each Senior Indenture require
the consent of the holders of more than 50% in principal amount of the
Outstanding Senior Debt Securities of each series issued under the Senior
Indenture affected by the modification or amendment; provided, however, that no
such modification or amendment may, without the consent of the holder of each
Outstanding Senior Debt Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest, if
any, on any Senior Debt Security, (b) reduce the principal amount of (or
premium, if any) or interest, if any, on any Senior Debt Security, (c) reduce
the amount of principal of a Discounted Senior Debt Security payable upon
acceleration of the Maturity thereof, (d) impair the right to institute suit for
the enforcement of any payment on or with respect to any Senior Debt Security on
or after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date) or (e) reduce the percentage in principal amount of
Outstanding Senior Debt Securities of any series, the consent of the holders of
which is required for modification or amendment of such Senior Indenture or for
waiver of compliance with certain provisions of such Senior Indenture or for
waiver of certain defaults.
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The holders of a majority in principal amount of the Outstanding Senior
Debt Securities of any series may on behalf of the holders of all Senior Debt
Securities of that series waive, insofar as that series is concerned, compliance
by the Company with certain restrictive provisions of the Senior Indenture. The
holders of a majority in principal amount of the Outstanding Senior Debt
Securities of any series may on behalf of the holders of all Senior Debt
Securities of that series waive any past default under the Senior Indenture with
respect to that series, except a default in the payment of the principal of (or
premium, if any) and interest, if any, on any Debt Security of that series or in
respect of a provision which under the Senior Indenture cannot be modified or
amended without the consent of the holder of each Outstanding Debt Security of
that series affected.
PROVISIONS APPLICABLE TO THE SUBORDINATED DEBT SECURITIES
DENOMINATIONS, REGISTRATION AND TRANSFER. If Subordinated Debt Securities
are distributed to holders of Preferred Securities in liquidation of such
holders' interests in the Trust, it is presently anticipated that such
Subordinated Debt Securities will initially be issued in the form of one or more
Global Securities (as defined below). As described herein, under certain limited
circumstances, Subordinated Debt Securities may be issued in definitive
certificated form in exchange for a Global Security. See "-- Book-Entry and
Settlement" below. Payments on Subordinated Debt Securities issued as a Global
Security will be made to DTC or its nominee, a successor depository or its
nominee. In the event Subordinated Debt Securities are issued in definitive
certificated form, principal and interest will be payable, the transfer of the
Subordinated Debt Securities will be registrable and Subordinated Debt
Securities will be exchangeable for Subordinated Debt Securities of other
denominations of a like aggregate principal amount at the principal corporate
trust office of the Subordinated Debt Trustee in New York, New York; provided
that payment of interest may be made at the option of the Company by check
mailed to the address of the persons entitled thereto.
SUBORDINATION. The Subordinated Indenture will provide that the
Subordinated Debt Securities are subordinated and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company whether now
existing or hereafter incurred. In the event and during the continuation of any
default by the Company in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness of the Company, or in the event
that the maturity of any Senior Indebtedness of the Company has been accelerated
because of a default, then in either case, no payment will be made by the
Company with respect to the principal (including redemption payments) of or
interest on the Subordinated Debt Securities. Upon any distribution of assets of
the Company to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal, premium, if any, and interest
due or to become due on all Senior Indebtedness of the Company (including
interest after the commencement of any bankruptcy, insolvency, receivership or
other proceedings at the rate specified in the applicable Senior Indebtedness,
whether or not such interest is an allowable claim in any such proceeding) must
be paid in full before the holders of Subordinated Debt Securities are entitled
to receive or retain any payment. In the event that the Subordinated Debt
Securities are declared due and payable before the Maturity Date, then all
amounts due or to become due on all Senior Indebtedness shall have been paid in
full (including interest after the commencement of any bankruptcy, insolvency,
receivership or other proceedings at the rate specified in the applicable Senior
Indebtedness, whether or not such interest is an allowable claim in any such
proceeding) before holders of the Subordinated Debt Securities are entitled to
receive or retain any payment. Upon satisfaction of all claims of all Senior
Indebtedness then outstanding, the rights of the holders of the Subordinated
Debt Securities will be subrogated to the rights of the holders of Senior
Indebtedness of the Company to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Subordinated Debt Securities
are paid in full.
The term "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by the Company; (ii) all
capital lease obligations of the Company; (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of the Company and all obligations of the Company
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under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of the Company
for the reimbursement on any letter of credit, banker's acceptance, security
purchase facility or similar credit transaction; (v) all obligations of the type
referred to in clauses (i) through (iv) above of other persons for the payment
of which the Company is responsible or liable as obligor, guarantor or
otherwise, including under all support agreements or guarantees by the Company
of debentures, notes and other securities issued by its subsidiaries; and (vi)
all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company); except in each case
for (1) any such indebtedness that is by its terms subordinated to or pari passu
with the Subordinated Debt Securities, and (2) any indebtedness in respect of
debt securities issued to any trust, or a trustee of such trust, partnership or
other entity affiliated with the Company that is a financing entity of the
Company (a "financing entity") in connection with the issuance by such financing
entity of securities that are similar to the Preferred Securities. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
The Subordinated Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued by the Company.
OPTION TO CHANGE SCHEDULED MATURITY DATE. The Company may extend the
scheduled maturity date for one or more periods. The Company must satisfy the
following conditions on the date the Company exercises such right and on the
Maturity Date then in effect prior to such proposed extension: (a) the Company
is not in bankruptcy or otherwise insolvent, (b) the Company is not in default
on any Subordinated Debt Securities issued to the Trust or to any trustee of the
Trust in connection with an issuance of Trust Securities by the Trust, (c) the
Company has made timely payments on the Subordinated Debt Securities for the
immediately preceding six quarters without deferrals, (d) the Trust is not in
arrears on payments of distributions on the Trust Securities, (e) the
Subordinated Debt Securities or Preferred Securities are rated investment grade
by any one of Standard & Poor's Corporation, Moody's Investors Service, Inc.,
Fitch Investor Services, Duff & Phelps Credit Rating Company or any other
nationally recognized statistical rating organization, and (f) the final
maturity of such Subordinated Debt Securities is not later than the 49th
anniversary of the issuance of the Preferred Securities. Pursuant to the
Declaration, the Regular Trustees are required to give notice of the Company's
election to change the Maturity Date to the holders of the Preferred Securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD. The Company has the right, from
time to time, to defer payment of interest on the Subordinated Debt Securities
for up to 20 consecutive quarters, provided that no Extension Period may extend
beyond the Maturity Date of the Subordinated Debt Securities. There could be
multiple Extension Periods of varying lengths during the term of the
Subordinated Debt Securities. At the end of each Extension Period, if any, the
Company shall pay all interest then accrued and unpaid, together with interest
thereon, compounded quarterly at the rate specified for the Subordinated Debt
Securities to the extent permitted by applicable law ("Compound Interest"). In
the event the Company exercises this right, then during any Extension Period,
(a) the Company shall not declare or pay any dividends on, make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to any of its capital stock and (b) the Company shall not, directly or
indirectly, and will not allow any of its subsidiaries to, make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Subordinated Debt Securities; provided, however, that, the restriction in clause
(a) above does not apply (i) to repurchases or acquisitions of shares of common
stock of the Company as contemplated by any employment arrangement, benefit plan
or other similar contract with or for the benefit of employees, officers or
directors entered into in the ordinary course of business, (ii) as a result of
an exchange or conversion of any class or series of the Company's capital stock
for common stock, (iii) to the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged or (iv) to the
payment of any stock dividend by the Company payable in common stock. Prior to
the termination of any such Extension Period, the Company may further defer
payments of interest by
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extending the interest payment period; provided, however, that each Extension
Period, including all such previous and further extensions if any, may not
exceed 20 consecutive quarters or extend beyond the Maturity Date. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the terms set forth in
this section. No interest during an Extension Period, except at the end thereof,
shall be due and payable.
COVENANTS RELATING TO THE TRUST. The Subordinated Indenture requires that
for so long as the Preferred Securities and the Common Securities remain
outstanding, the Company will be required to (i) maintain 100% of direct or
indirect ownership of the Common Securities, provided, however, that any
permitted successor of the Company under the Subordinated Indenture may succeed
to the Company's ownership of the Common Securities, (ii) not voluntarily
dissolve, wind-up or terminate the Trust, except in connection with the
distribution of Subordinated Debt Securities or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration, (iii) timely perform its
duties as sponsor of the Trust, (iv) use its reasonable efforts to cause the
Trust (a) to remain a business trust classified as a grantor trust, except in
connection with a distribution of the Subordinated Debt Securities to the
holders of Preferred Securities in liquidation of the Trust, the redemption of
all of the Preferred Securities and Common Securities of the Trust or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration,
and (b) continue not to be treated as an association taxable as a corporation
for United States federal income tax purposes other than in connection with a
distribution of the Subordinated Debt Securities to the holders of Preferred
Securities in liquidation of the Trust, and (v) use its reasonable efforts to
cause each holder of Preferred Securities and Common Securities to be treated as
owning an undivided beneficial interest in the Subordinated Debt Securities.
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS. Upon any consolidation of the
Company with, or merger of the Company into, any other person or any conveyance,
transfer or lease of the properties and assets of the Company substantially as
an entirety, the successor person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under the Subordinated Indenture with the same effect as the Company
prior to such transaction, and thereafter, except in the case of a lease, the
Company shall be relieved of all obligations and covenants under the
Subordinated Indenture and the Subordinated Debt Securities.
EVENTS OF DEFAULT. The occurrence of any of the following events with
respect to the Subordinated Debt Securities will, unless otherwise specified,
constitute an "Event of Default" with respect to the Subordinated Debt
Securities: (i) default for thirty (30) days in the payment of any installment
of interest on the Subordinated Debt Securities; (ii) default in the payment of
any of the principal of the Subordinated Debt Securities when due, whether at
maturity, upon redemption, by declaration of acceleration or otherwise; (iii)
default for sixty (60) days by the Company in the observance or performance of
any other covenant or agreement contained in the Subordinated Debt Securities or
the Subordinated Indenture (other than a covenant or agreement default which is
specifically designated as having a different time period) for the benefit of
the Subordinated Debt Securities after written notice thereof as provided in the
Subordinated Indenture; (iv) (a) an event of default occurs under any instrument
(including the Subordinated Indenture) under which there is at the time
outstanding, or by which there may be secured or evidenced, any indebtedness of
the Company for money borrowed by the Company (other than non-recourse
indebtedness) which results in acceleration or nonpayment at maturity (after
giving effect to any applicable grace period) of such indebtedness in an
aggregate amount exceeding $15 million, or any such indebtedness exceeding $15
million shall otherwise be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled prepayment or exercise of an
optional prepayment right), prior to the stated maturity thereof, or any failure
by the Company to make any payment under a guarantee in respect of any
indebtedness, in each case in an amount of at least $15 million, on the date
such payment is due (or within any grace period specified in the agreement or
other instrument governing such indebtedness); in which case the Company shall
immediately give notice to the Trustee of such acceleration or non-payment, and
(b) there shall have been a failure to cure such default or to pay or discharge
such defaulted indebtedness within ten (10) days after
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written notice thereof as provided in the Subordinated Indenture; (v) any final
non-appealable judgment or order for the payment of money in excess of $15
million is rendered against the Company, such judgment or order is not satisfied
by payment or bonded and either enforcement proceedings have been commenced by
the judgment creditor or there has been a period of 60 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not have been in effect; provided, however, that a
judgment or order fully covered by insurance (or a judgment or order for the
payment of money covered by insurance to the extent of all payments in excess of
$15 million), which coverage has not been disputed by the insurer, shall not be
considered a default or an Event of Default; or (vi) certain events of
bankruptcy, insolvency or reorganization relating to the Company.
In addition, an Event of Default shall include the voluntary or involuntary
dissolution or winding up of the business of the Trust or other termination of
the existence of the Trust, other than in connection with (i) the distribution
of the Subordinated Debt Securities to holders of the Trust Securities in
liquidation of their interests in the Trust, (ii) the redemption of all of the
outstanding Trust Securities, or (iii) certain mergers, consolidations or
amalgamations of the Trust, each as permitted by the Declaration.
If any Event of Default shall occur and be continuing, the Property
Trustee, as the holder of the Subordinated Debt Securities, will have the right
to declare the principal of and the interest on the Subordinated Debt Securities
(including any Compound Interest and any other amounts payable under the
Subordinated Indenture) to be forthwith due and payable and to enforce its other
rights as a creditor with respect to the Subordinated Debt Securities subject to
the subordination provisions in the Subordinated Indenture. An Event of Default
also constitutes a Declaration Event of Default. If the Property Trustee fails
to enforce its rights with respect to the Subordinated Debt Securities held by
the Trust, any record holder of Preferred Securities may institute legal
proceedings directly against the Company to enforce the Property Trustee's
rights under such Subordinated Debt Securities without first instituting any
legal proceedings against such Property Trustee or any other person or entity.
In addition, if a Declaration Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest or
principal on the Subordinated Debt Securities issued to the Trust on the date
such interest or principal is otherwise payable, then a record holder of
Preferred Securities may institute a proceeding directly against the Company for
enforcement of payment to the record holder of the Preferred Securities of the
principal of or interest on the Subordinated Debt Securities on or after the
respective due dates specified in the Subordinated Debt Securities, and the
amount of the payment will be based on the holder's pro rata share of the amount
due and owing on all of the Preferred Securities. The record holder in the case
of the issuance of one or more global Preferred Securities certificates will be
DTC acting at the direction of its Direct Participants, who in turn will be
acting at the direction of the Beneficial Owners. The holders of Preferred
Securities in certain circumstances have the right to direct the Property
Trustee to exercise its rights, with respect to other than principal and
interest payments on the Subordinated Debt Securities, as the holder of the
Subordinated Debt Securities. See "Description of the Preferred
Securities -- Declaration Events of Default" and "Description of the Preferred
Securities -- Voting Rights."
SATISFACTION AND DISCHARGE. Except as may otherwise be set forth in the
Prospectus Supplement relating to Subordinated Debt Securities, the Subordinated
Indenture provides that the Company shall be deemed to have satisfied and
discharged its obligations under the Subordinated Debt Securities (with certain
exceptions) at any time prior to the final maturity or redemption thereof when
(a) the Company has deposited with the Subordinated Debt Trustee, in trust,
sufficient funds to pay the principal of (and premium, if any) and interest, if
any, to maturity (or to Redemption Date) on, the Subordinated Debt Securities,
(b) the Company has paid all other sums payable with respect to the Subordinated
Debt Securities and (c) certain other conditions are met. Upon such discharge,
the holders of the Subordinated Debt Securities of such series shall no longer
be entitled to the benefits of the Subordinated Indenture, except for certain
rights, including registration of transfer and exchange of the Subordinated Debt
Securities of such series and replacement of mutilated, destroyed, lost or
stolen Subordinated Debt Securities, and shall look only to such deposited
funds.
Such discharge may be treated as a taxable exchange of the related
Subordinated Debt Securities for an issue of obligations of the trust or a
direct interest in the cash and securities held in the trust referred to in the
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prior paragraph. In that case, holders of such Subordinated Debt Securities
would recognize gain or loss as if the trust obligations or the cash or
securities deposited, as the case may be, had actually been received by them in
exchange for their Subordinated Debt Securities. Such holders thereafter might
be required to include in income a different amount than would be includable in
the absence of discharge. Prospective investors are urged to consult their own
tax advisors as to the specific consequences of discharge.
MODIFICATION AND WAIVER. Certain modifications and amendments (which,
generally, either benefit or do not affect the holders of Subordinated Debt
Securities) of the Subordinated Indenture may be made by the Company and the
Subordinated Debt Trustee without the consent of holders of the Subordinated
Debt Securities. Other modifications and amendments of each Subordinated
Debenture require the consent of the holders of more than 50% in principal
amount of the Subordinated Debt Securities issued under the Subordinated
Indenture affected by the modification or amendment; provided, however, that no
such modification or amendment may, without the consent of the holder of each
Subordinated Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest, if any, on any
Subordinated Debt Security, (b) reduce the principal amount of (or premium, if
any) or interest, if any, on any Subordinated Debt Security, (c) reduce the
amount of principal of a Subordinated Debt Security payable upon acceleration of
the Maturity thereof, (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any Subordinated Debt Security on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date) or (e) reduce the percentage in principal amount of Outstanding
Senior Debt Securities of any series, the consent of the holders of which is
required for modification or amendment of such Senior Indenture or for waiver of
compliance with certain provisions of such Senior Indenture or for waiver of
certain defaults.
The holders of a majority in principal amount of the Subordinated Debt
Securities may on behalf of the holders of all Subordinated Debt Securities
waive compliance by the Company with certain restrictive provisions of the
Subordinated Indenture. The holders of a majority in principal amount of the
Subordinated Debt Securities may on behalf of the holders of all Subordinated
Debt Securities waive any past default under the Subordinated Indenture, except
a default in the payment of the principal of (or premium, if any) and interest,
if any, on any Subordinated Debt Security or in respect of a provision which
under the Subordinated Indenture cannot be modified or amended without the
consent of the holder of each Subordinated Debt Security affected; provided,
however, that no waiver of any past default or compliance with any covenant
shall be effective without the prior consent of the holders of at least a
majority of the aggregate liquidation preference of the outstanding Preferred
Securities unless the principal of and any premium on the Subordinated Debt
Securities and all accrued and unpaid interest thereon has been paid in full.
DESCRIPTION OF COMMON STOCK
AFG is incorporated under the laws of the State of Ohio. The following
description is a summary and is qualified in its entirety by the provisions of
AFG's Articles of Incorporation, Code of Regulations and the Ohio General
Corporation Law.
The total number of authorized shares of Common Stock is 200,000,000.
Holders of Common Stock are entitled to one vote for each share held of record
on all matters submitted to a vote of shareholders. Holders of Common Stock have
the right to cumulate their votes in the election of directors but are not
entitled to any preemptive rights.
Subject to preferences which may be granted to holders of preferred stock,
holders of Common Stock are entitled to such dividends as the Board of
Directors, in its discretion, may validly declare from funds legally available.
In the event of liquidation, each outstanding share of Common Stock entitles its
holder to participate ratably in the assets remaining after the payment of
liabilities and any preferred stock liquidation preferences.
AFG is authorized to issue 12,500,000 shares of voting preferred stock and
12,500,000 shares of nonvoting preferred stock, each without par value, none of
which is outstanding. AFG's Articles of Incorporation authorize the Board of
Directors, without further shareholder approval, to designate for any series of
preferred stock not fixed in AFG's Articles of Incorporation the designations,
preferences, conversion
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rights, and relative, participating, optional and other special rights, and such
qualifications, limitations or restrictions, as they determine and as are
permitted by the Ohio General Corporation Law.
AFG's stock option plan allows for the grant of options for shares of
Common Stock at a price not less than the fair market value of the underlying
Common Stock at the date of grant. Options granted to officers and key employees
become exercisable at the rate of 20% per year commencing one year after grant;
those granted to non-employee directors of AFG are fully exercisable upon grant.
All options expire ten years after the date of grant. At December 31, 1996,
there were 5.4 million shares of Common Stock reserved for issuance upon
exercise of the options and 3.3 million options outstanding.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is required to amend the Articles of Incorporation and to
approve mergers, reorganizations, share exchanges and similar transactions.
The Company acts as its own transfer agent and registrar.
DESCRIPTION OF PREFERRED SECURITIES OF THE TRUST
The following summary of certain provisions of the Declaration of Trust of
the Trust (the "Declaration") does not purport to be complete and is subject to
and qualified in its entirety by reference to the Declaration, a copy of which
has been filed with the Commission.
The Trust may issue a series of Preferred Securities having terms described
in the Prospectus Supplement relating thereto. The Declaration authorizes the
Regular Trustees of the Trust to issue on behalf of the Trust one series of
Preferred Securities. The Declaration will be qualified as an indenture under
the Trust Indenture Act. The Preferred Securities will have such terms,
including distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be
established by the Regular Trustees in accordance with the Declaration or as
shall be set forth in the Declaration or made part of the Declaration by the
Trust Indenture Act. Reference is made to any Prospectus Supplement relating to
the Preferred Securities of the Trust for specific terms of the Preferred
Securities, including, to the extent applicable, (i) the distinctive designation
of such Preferred Securities, (ii) the number of Preferred Securities issued by
the Trust, (iii) the annual distribution rate (or method of determining such
rate) for Preferred Securities issued by the Trust and the date or dates upon
which such distributions shall be payable (provided, however, that distributions
on such Preferred Securities shall, subject to any deferral provisions, and any
provisions for payment of defaulted distributions, be payable on a quarterly
basis to Holders of such Preferred Securities as of a record date in each
quarter during which such Preferred Securities are outstanding), (iv) any right
of the Trust to defer quarterly distributions on the Preferred Securities as a
result of an interest deferral right exercised by the Company on the Debt
Securities held by the Trust; (v) whether distributions on Preferred Securities
shall be cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Preferred Securities shall be
cumulative, (vi) the amount or amounts which shall be paid out of the assets of
the Trust to the Holders of Preferred Securities upon voluntary or involuntary
dissolution, winding-up or termination of the Trust, (vii) the obligation or
option, if any, of the Trust to purchase or redeem Preferred Securities and the
price or prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities shall be purchased or redeemed, in
whole or in part, pursuant to such obligation or option, (viii) the voting
rights, if any, of Preferred Securities in addition to those required by law,
including the number of votes per Preferred Security and any requirement for the
approval by the Holders of Preferred Securities as a condition to specified
action or amendments to the Declaration, (ix) the terms and conditions, if any,
upon which Debt Securities held by the Trust may be distributed to holders of
Preferred Securities, and (x) any other relevant rights, preferences,
privileges, limitations or restrictions of Preferred Securities consistent with
the Declaration or with applicable law. All Preferred Securities offered hereby
will be guaranteed by the Company to the extent set forth below under
"Description of Trust Guarantee." Certain United States federal income tax
considerations applicable to any offering of Preferred Securities will be
described in the Prospectus Supplement relating thereto.
15
<PAGE> 18
The Declaration authorizes the Regular Trustees to issue on behalf of the
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be
established by the Regular Trustees in accordance with the Declaration or as
shall otherwise be set forth therein. The terms of the Common Securities issued
by the Trust will be substantially identical to the terms of the Preferred
Securities issued by the Trust, and the Common Securities will rank pari passu,
and payments will be made thereon pro rata, with the Preferred Securities except
that, if an event of default under the Declaration has occurred and is
continuing, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Preferred Securities.
An event of default under the Declaration will be deemed to have occurred
whenever an event of default (as defined in the Indenture) shall have occurred
with respect to the Debt Securities held by the Trust. Except in certain limited
circumstances, the Common Securities will also carry the right to vote and to
appoint, remove or replace any of the Trustees of the Trust. All of the Common
Securities of the Trust will be directly or indirectly owned by the Company.
DESCRIPTION OF TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust Guarantee
that will be executed and delivered by the Company for the benefit of the
holders, from time to time, of Preferred Securities. The Trust Guarantee will be
qualified as an indenture under the Trust Indenture Act. The Bank of New York
will act as indenture trustee under the Trust Guarantee (the "Preferred
Securities Guarantee Trustee"). The terms of the Trust Guarantee will be those
set forth in such Trust Guarantee and those made part of such Trust Guarantee by
the Trust Indenture Act. The summary of certain provisions of the Trust
Guarantee does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the form of Trust Guarantee, a copy
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part, and the Trust Indenture Act. The Trust Guarantee will
be held by the Preferred Securities Guarantee Trustee for the benefit of the
holders of the Preferred Securities of the Trust.
GENERAL
Pursuant to the Trust Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to the
holders of the Preferred Securities, the Trust Guarantee Payments (as defined
below) (except to the extent paid by the Trust), as and when due, regardless of
any defense, right of set-off or counterclaim which the Trust may have or
assert. The following payments or distributions with respect to the Preferred
Securities (the "Trust Guarantee Payments"), to the extent not paid by the
Trust, will be subject to the Trust Guarantee (without duplication): (i) any
accrued and unpaid distributions that are required to be paid on such Preferred
Securities, to the extent the Trust shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid distributions to the date
of redemption (the "Redemption Price"), to the extent the Trust has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Trust and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Trust (other than in connection with the
distribution of Debt Securities to the holders of Preferred Securities or the
redemption of all of the Preferred Securities upon maturity or redemption of the
Debt Securities) the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid distributions on such Preferred Securities to the date of
payment, to the extent the Trust has funds available therefor or (b) the amount
of assets of the Trust remaining for distribution to holders of such Preferred
Securities in liquidation of the Trust. The Company's obligation to make a Trust
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of Preferred Securities or by causing the Trust to
pay such amounts to such holders.
The Trust Guarantee will be a full and unconditional guarantee with respect
to the Preferred Securities from the time of issuance of such Preferred
Securities but will not apply to any payment of distributions except to the
extent the Trust shall have funds available therefor. If the Company does not
make interest or principal payments on the Debt Securities purchased by the
Trust, the Trust will not pay distributions on the Preferred Securities issued
by the Trust and will not have funds available therefor.
16
<PAGE> 19
The Company has also agreed to irrevocably and unconditionally guarantee
the obligations of the Trust with respect to the Common Securities (the "Trust
Common Guarantee") to the same extent as the Trust Guarantee, except that, if an
Event of Default under the Indenture has occurred and is continuing, holders of
Preferred Securities under the Trust Guarantee shall have priority over holders
of the Common Securities under the Trust Common Guarantee with respect to
distributions and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Trust Guarantee, the Company will covenant that, so long as any
Preferred Securities remain outstanding, if there shall have occurred any event
of default under the Trust Guarantee or under the Declaration, then (a) the
Company will not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock; (b) the Company shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank pari
passu with or junior to the Debt Securities issued to the Trust and (c) the
Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Trust Guarantee)provided, however, that the Company
may declare and pay a stock dividend where the dividend stock is the same stock
as that on which the dividend is being paid.
MODIFICATION OF THE TRUST GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent of such holders
will be required), the Trust Guarantee may be amended only with the prior
approval of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of such Preferred Securities will be set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in the Trust
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Trust Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Preferred Securities Guarantee Trustee in respect of
the Trust Guarantee or to direct the exercise of any trust or power conferred
upon the Preferred Securities Guarantee Trustee under the Trust Guarantee.
If the Preferred Securities Guarantee Trustee fails to enforce the Trust
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Guarantee
without first instituting a legal proceeding against the Trust, the Preferred
Securities Guarantee Trustee or any other person or entity. The Company has
waived any right or remedy to require that any action be brought first against
the Trust or any other person or entity before proceeding directly against the
Company.
The Company will be required to provide annually to the Preferred
Securities Guarantee Trustee a statement as to the performance by the Company of
certain of its obligations under the Trust Guarantee and as to any default in
such performance.
INFORMATION CONCERNING THE PREFERRED SECURITIES GUARANTEE TRUSTEE
The Preferred Securities Guarantee Trustee, prior to the occurrence of a
default, undertakes to perform only such duties as are specifically set forth in
the Trust Guarantee and, after default with respect to the Trust Guarantee,
shall 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 Preferred
Securities Guarantee Trustee is under no obligation
17
<PAGE> 20
to exercise any of the powers vested in it by the Trust Guarantee at the request
of any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE TRUST GUARANTEE
The Trust Guarantee will terminate as to the Preferred Securities upon full
payment of the Redemption Price of all Preferred Securities, upon distribution
of the Debt Securities held by the Trust to the holders of all of the Preferred
Securities or upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Trust. The Trust Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of Preferred Securities must restore payment of any sums paid under such
Preferred Securities or the Trust Guarantee.
STATUS OF THE TRUST GUARANTEE
The Trust Guarantee will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, including the Debt Securities, except those
liabilities of the Company made pari passu or subordinate by their terms, (ii)
pari passu with the most senior preferred or preference stock now or hereafter
issued by the Company and with any guarantee now or hereafter entered into by
the Company in respect of any preferred or preference stock of any affiliate of
the Company and (iii) senior to the Company's Common Stock. The terms of the
Preferred Securities provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Trust Guarantee.
The Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Guarantee
without instituting a legal proceeding against any other person or entity).
PLAN OF DISTRIBUTION
The Company and the Trust may offer and sell Securities in any of the
following ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters, (iv) through dealers or (v) through a combination of any such
methods. The Prospectus Supplement with respect to an offering of Securities
will set forth the terms of such offering, including, to the extent applicable,
the name or names of any underwriters (and any managing underwriters), the names
of any dealers or agents, the purchase price of the Securities and the proceeds
to the Company or the Trust from such sale, any underwriting discounts and
commissions or agency fees and other items constituting underwriters' or agents'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges or
interdealer quotation system on which such Securities are expected to be listed.
Any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Securities may be offered and sold, and offers to purchase such securities
may be solicited, by agents designated by the Company or the Trust from time to
time. Any such agent involved in the offer or sale of the Securities in respect
of which this Prospectus is delivered will be named, and the terms of such
agency (including any commissions payable by the Company or the Trust to such
agent) will be set forth, in the applicable Prospectus Supplement. Unless
otherwise indicated in such Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale of Securities,
the Company or the Trust will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the managing underwriter or managing underwriters, as well as
any other underwriters, and the terms of the transaction, including commissions,
discounts and other compensation of the underwriters and dealers, if any, will
be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Securities in respect of which such
Prospectus Supplement is delivered to the public. If underwriters are used in
the sale, such underwriters will acquire Securities for their own account
18
<PAGE> 21
and may resell such Securities from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at varying
prices determined by the underwriter at the time of sale. Securities may be
offered to the public either through underwriting syndicates represented by
managing underwriters, or directly by underwriters without a syndicate. Only
underwriters named in the Prospectus Supplement are deemed to be underwriters in
connection with the Securities offered thereby. If any underwriters are utilized
in the sale of the Securities, unless otherwise set forth in the Prospectus
Supplement relating thereto the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters with respect to a sale of Securities will be obligated to
purchase all such Securities, if any are purchased.
If a dealer is utilized in the sale of the Securities, the Company or the
Trust will sell such Securities to the dealer, as principal. The dealer may then
resell such Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
Agents, underwriters and dealers may be entitled under agreements that may
be entered into with the Company or the Trust to indemnification by the Company
or the Trust against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribution with respect to payments
which the agents, underwriters or dealers may be required to make in respect
thereof. Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for the Company and affiliates of the
Company. Any agents, dealers or underwriters participating in the offering of
Securities may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended, of the Securities so offered.
Offers to purchase Securities may be solicited directly by the Company or
the Trust and sales thereof may be made by the Company or the Trust directly to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales, including the terms of any bidding or auction process, if
utilized, will be described in the Prospectus Supplement relating thereto.
Each series of Securities will be a new issue of securities and may have no
established trading market. Agents and underwriters may from time to time
purchase and sell Securities in the secondary market or may make a market in the
Securities, but are not obligated to do so, and there can be no assurance that
there will be a secondary market for the Securities or liquidity in the
secondary market if one develops.
If so indicated in the applicable Prospectus Supplement, the Company or the
Trust will authorize agents, underwriters or dealers to solicit offers by
certain institutions to purchase Securities from the Company or the Trust at the
public offering price set forth in the applicable Prospectus Supplement pursuant
to Delayed Delivery Contracts ("Contracts") providing for payment and delivery
on a specified date in the future. A commission indicated in the applicable
Prospectus Supplement will be paid to underwriters, dealers or agents soliciting
purchases of Securities pursuant to Contracts accepted by the Company or the
Trust. The Contracts will be subject to the conditions set forth in the
applicable Prospectus Supplement.
As one of the means of direct issuances of Securities, the Company or the
Trust may utilize the services of an entity through which it may conduct an
electronic "dutch auction" or similar offering of the Securities among potential
purchasers who are eligible to participate in the auction or offering of such
Securities, if so described in the applicable Prospectus Supplement.
The anticipated place and time of delivery for the Securities in respect of
which this Prospectus is delivered will be set forth in the applicable
Prospectus Supplement.
LEGAL MATTERS
The validity of the Securities offered hereby other than the Preferred
Securities will be passed upon for the Company and the Trust by Keating,
Muething & Klekamp, P.L.L., Cincinnati, Ohio. Certain United States federal
income taxation matters also will be passed upon for the Company and the Trust
by Akin, Gump, Strauss, Hauer & Feld, L.L.P., Washington, D.C. Attorneys in the
Keating, Muething & Klekamp law firm hold certain Securities of the Company and
the Trust. Certain matters of Delaware law relating to the
19
<PAGE> 22
validity of the Preferred Securities will be passed upon for the Trust by
Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware.
EXPERTS
The consolidated financial statements of the Company's predecessor
appearing in its Annual Report (Form 10-K) for the year ended December 31, 1996,
as amended, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
20
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Previously filed.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Previously filed.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -------------------------------------------------------------------------------
<S> <C>
1.1* Underwriting Agreement for Debt Securities
1.2* Underwriting Agreement for Common Stock
1.3* Underwriting Agreement for Preferred Securities
4.1 Articles of Incorporation of American Financial Group, Inc.
4.2 Code of Regulations of American Financial Group, Inc.
4.3** Form of Senior Indenture
4.3.1 Form of Supplemental Indenture to Senior Indenture
4.4** Form of Subordinated Indenture
4.4.1 Form of Supplemental Indenture to Subordinated Indenture
4.5* Preferred Securities Guarantee Agreement by American Financial Group, Inc.
4.6* Form of Debt Security
4.7* Form of Preferred Security
4.8* Certificate of Trust of American Financial Capital Trust II
4.9* Declaration of Trust of American Financial Capital Trust II
5.1* Opinion of Keating, Muething & Klekamp, P.L.L.
8.1* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1 Consent of Independent Auditors
23.2** Consent of Keating, Muething & Klekamp, P.L.L.
23.3** Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.4** Consent of Morris, Nichols, Arsht & Tunnell
24** Powers of Attorney
25.1** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Star Bank, N.A., as Trustee under the Senior Indenture
25.2** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Bank of New York, as Trustee under the Subordinated Indenture
25.3** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Bank of New York, as Trustee under the Declaration of American
Financial Capital Trust II
25.4** Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Bank of New York, as Trustee of the Trust Preferred Securities
Guarantee for the benefit of the holders of Preferred Securities of American
Financial Capital Trust II
</TABLE>
- ---------------
* To be filed as an exhibit to a Current Report on Form 8-K.
** Previously filed.
ITEM 17. UNDERTAKINGS.
Previously filed.
II-1
<PAGE> 24
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS POST-EFFECTIVE
AMENDMENT TO THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF CINCINNATI, STATE OF OHIO,
AS OF THE 5TH DAY OF DECEMBER, 1997.
AMERICAN FINANCIAL GROUP, INC.
BY: CARL H. LINDNER
------------------------------------
CARL H. LINDNER
Chairman of the Board
(Principal Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
POST-EFFECTIVE AMENDMENT TO THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ----------------------------------- ------------------------------------- ------------------
<C> <S> <C>
* CARL H. LINDNER Chairman of the Board and Chief December 5, 1997
- ----------------------------------- Executive Officer and a Director
Carl H. Lindner
* CARL H. LINDNER III Director December 5, 1997
- -----------------------------------
Carl H. Lindner III
* S. CRAIG LINDNER Director December 5, 1997
- -----------------------------------
S. Craig Lindner
* KEITH E. LINDNER Director December 5, 1997
- -----------------------------------
Keith E. Lindner
* JAMES E. EVANS Director December 5, 1997
- -----------------------------------
James E. Evans
* THEODORE H. EMMERICH Director December 5, 1997
- -----------------------------------
Theodore H. Emmerich
* WILLIAM R. MARTIN Director December 5, 1997
- -----------------------------------
William R. Martin
FRED J. RUNK Senior Vice President and Treasurer December 5, 1997
- ----------------------------------- (Principal Financial and Accounting
Fred J. Runk Officer)
* By: JAMES C. KENNEDY
- -----------------------------------
James C. Kennedy, as Attorney-
in-Fact
</TABLE>
II-2
<PAGE> 1
Exhibit 4.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
AMERICAN FINANCIAL GROUP HOLDINGS, INC.
---------------------------------------
FIRST. The name of the corporation is AMERICAN FINANCIAL GROUP
HOLDINGS, INC. (the "Corporation").
SECOND. The place in the State of Ohio where the Corporation's
principal office is to be located is the City of Cincinnati in Hamilton County,
Ohio.
THIRD. The purpose for which the Corporation is organized shall be to
engage in any lawful act or activity for which corporations may be formed under
the Ohio General Corporation Law, Ohio Revised Code Sections 1701.01 ET SEQ..
FOURTH. The aggregate number of shares of stock which the Corporation
shall have authority to issue is Two Hundred Twenty Five Million (225,000,000)
shares, which shall be divided into two classes, consisting of:
(a) Twenty Five Million (25,000,000) shares of preferred stock
("Preferred Stock") without par value; and,
(b) Two Hundred Million (200,000,000) shares of common stock ("Common
Stock") without par value.
PART ONE: PREFERRED STOCK
(a) Except as otherwise provided by this Article FOURTH or by the
amendment or amendments adopted by the Board of Directors providing for the
issue of any series of Preferred Stock, the Preferred Stock may be issued at any
time or from time to time in any amount, not exceeding in the aggregate,
including all shares of any and all series thereof theretofore issued, the
Twenty Five Million (25,000,000) shares of Preferred Stock hereinabove
authorized, as Preferred Stock of one or more series, as hereinafter provided,
and for such lawful consideration as shall be fixed from time to time by the
Board of Directors.
Twelve Million Five Hundred Thousand (12,500,000) shares of
Preferred Stock shall have voting rights as provided in clause (b) of this Part
One of Article FOURTH (collectively, "Voting Preferred Stock").
Twelve Million Five Hundred Thousand (12,500,000) shares of
Preferred Stock shall have no voting power whatsoever, except as may be
otherwise provided by law or except as may arise upon a default, failure or
other contingency (collectively, "Non-Voting Preferred Stock").
All shares of any one series of Preferred Stock shall be alike
in every particular, each series thereof shall be distinctively designated by
letter or descriptive words, and all series of
<PAGE> 2
-2-
Preferred Stock shall rank equally and be identical in all respects except as
provided above with respect to Voting Preferred Stock and Non-Voting Preferred
Stock or as permitted by the provisions of Clause (b) of this Part One of
Article FOURTH.
(b) Authority is hereby expressly granted to the Board of Directors
from time to time to adopt amendments to these Articles of Incorporation
providing for the issue in one or more series of any unissued or treasury shares
of Preferred Stock, and providing, to the fullest extent now or hereafter
permitted by the laws of the State of Ohio and notwithstanding the provisions of
any other Article of these Articles of Incorporation of the Corporation, in
respect of the matters set forth in the following subdivisions (i) to (x),
inclusive, as well as any other rights or matters pertaining to such series:
(i) The designation and number of shares of such series;
(ii) With respect to the Voting Preferred Stock only, voting
rights (to the fullest extent now or hereafter permitted by the laws of the
State of Ohio);
(iii) With respect to the Non-Voting Preferred Stock only,
voting rights upon a default, failure or other contingency;
(iv) The dividend rate or rates of such series (which may be a
variable rate or adjustable rate and which may be cumulative);
(v) The dividend payment date or dates of such series;
(vi) The price or prices at which shares of such series may be
redeemed;
(vii) The amount of the sinking fund, if any, to be applied to
the purchase or redemption of shares of such series and the manner of its
application;
(viii) The liquidation price or prices of such series;
(ix) Whether or not the shares of such series shall be made
convertible into, or exchangeable for, shares of any other class or classes or
of any other series of the same class of stock of the Corporation or any other
property, and if made so convertible or exchangeable, the conversion price or
prices, or the rates of exchange at which such conversion or exchange may be
made and the adjustments thereto, if any; and,
(x) Whether or not the issue of any additional shares of such
series or any future series in addition to such series shall be subject to any
restrictions and, if so, the nature of such restrictions.
Any of the voting rights (with respect to the Voting Preferred Stock only),
voting rights upon a default, failure or other contingency (with respect to the
Non-Voting Preferred Stock only), dividend
<PAGE> 3
-3-
rate or rates, dividend payment date or dates, redemption rights and price or
prices, sinking fund requirements, liquidation price or prices, conversion or
exchange rights and restrictions on issuance of shares of any such series of
Preferred Stock may, to the fullest extent now or hereafter permitted by the
laws of the State of Ohio, be made dependent upon facts ascertainable outside
these Articles of Incorporation or outside the amendment or amendments providing
for the issue of such Preferred Stock adopted by the Board of Directors pursuant
to authority expressly vested in it by this Article FOURTH. Any of the terms of
any series may be established as senior to or having preference over the terms
of any other series, whether or not outstanding at the time of adoption of the
amendment creating such series of Preferred Stock by the Board of Directors. If
the then-applicable laws of the State of Ohio do not permit the Board of
Directors to fix, by the amendment creating a series of Voting Preferred Stock,
the voting rights of shares of such series, each holder of a share of such
series of Voting Preferred Stock shall, except as may be otherwise provided by
law, be entitled to one (1) vote for each share of Voting Preferred Stock of
such series held by such holder.
FIFTH. AMENDMENT TO ARTICLES OF INCORPORATION. The Corporation shall
have the right to amend, alter, change or repeal any provision contained in
these Articles of Incorporation or any provision that may be added or inserted
in these Articles of Incorporation, provided that:
(a) Such amendment, alteration, change, repeal, addition or insertion
is consistent with law and is accomplished in the manner now or hereafter
prescribed by statute or these Articles of Incorporation;
(b) Any provision of these Articles of Incorporation which requires, or
the change of which requires, the vote or consent of all or a specific number or
percentage of the holders of shares of any class or series shall not be amended,
altered, changed or repealed by any lesser amount, number or percentage of votes
or consents of such class or series; and,
(c) No amendment to these Articles of Incorporation pursuant to Ohio
Revised Code Section 1701.69(B)(10) or any successor provision may be adopted
without the affirmative vote or consent of the holders of an aggregate of
two-thirds of the total voting power of the Corporation.
Any rights at any time conferred upon the shareholders of the Corporation are
granted subject to the provisions of this Article.
SIXTH. No holder of any shares of this Corporation shall have any
preemptive rights to subscribe for or to purchase any shares of this Corporation
of any class, whether such shares or such class be now or hereafter authorized,
or to purchase or subscribe for any security convertible into, or exchangeable
for, shares of any class or to which shall be attached or appertained any
warrants or rights entitling the holder thereof to purchase or subscribe for
shares of any class.
SEVENTH. This Corporation, through its Board of Directors, shall have
the right and power to purchase any of its outstanding shares at such price and
upon such terms as may be agreed upon between the Corporation and any selling
shareholder.
<PAGE> 4
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EIGHTH. Subject to the provisions of Article FIFTH hereof, the
affirmative vote of shareholders entitled to exercise a majority of the voting
power of this Corporation shall be required to amend these Articles of
Incorporation, approve mergers and to take any other action which by law must be
approved by a specified percentage of the voting power of the Corporation or of
all outstanding shares entitled to vote.
NINTH. The provisions of Ohio Revised Code Chapter 1704 or any
successor provisions relating to transactions involving interested shareholders
shall not be applicable to the Corporation.
TENTH. The provisions of Ohio Revised Code Section 1701.831 or any
successor provisions relating to control share acquisitions shall not be
applicable to the Corporation.
ELEVENTH. These Amended and Restated Articles of Incorporation take the
place of and supersede the existing Articles of Incorporation of the Corporation
as heretofore amended and/or restated.
<PAGE> 5
CERTIFICATE OF AMENDMENT
BY SHAREHOLDERS OF ARTICLES OF INCORPORATION OF
AMERICAN FINANCIAL GROUP HOLDINGS, INC.
James E. Evans, who is Senior Vice President, and James C. Kennedy, who is
Secretary, of the above named Ohio corporation for profit do hereby certify
that in a writing signed by all of the shareholders entitled to notice of a
meeting held for that purpose, the following resolution to amend the articles
was adopted:
"RESOLVED, that Article FIRST of the Corporation's Articles of
Incorporation be, and it hereby is, amended in its entirety to read as
follows:
"FIRST. The name of the corporation is AMERICAN FINANCIAL GROUP,
INC. (the "Corporation")"
IN WITNESS WHEREOF, the above named officers, acting for and on behalf of
the corporation, have hereunto subscribed their names this 2nd day of December,
1997.
AMERICAN FINANCIAL GROUP
HOLDINGS, INC.
BY: /s/ JAMES E. EVANS
-------------------------------------
James E. Evans, Senior Vice President
By: /s/ James C. Kennedy
-------------------------------------
James C. Kennedy, Secretary
<PAGE> 1
Exhibit 4.2
CODE OF REGULATIONS
-------------------
OF
--
AMERICAN FINANCIAL GROUP, INC. (THE "CORPORATION")
--------------------------------------------------
ARTICLE I
---------
SHAREHOLDERS
------------
Section 1. ANNUAL MEETINGS. The Annual Meeting of the Shareholders of this
Corporation, for the election of the Board of Directors and the transaction of
such other business as may properly be brought before such meeting, shall be
held at the time, date and place designated by the Board of Directors or, if it
shall so determine, by the Chairman of the Board or the President. If the Annual
Meeting is not held or if Directors are not elected thereat, a Special Meeting
may be called and held for that purpose.
Section 2. SPECIAL MEETINGS. Special meetings of the Shareholders may be held on
any business day when called by the Chairman of the Board, the President, a
majority of Directors, or persons holding twenty percent of all voting power of
the Corporation and entitled to vote at such meeting.
Section 3. PLACE OF MEETINGS. Any meeting of Shareholders may be held at such
place within or without the State of Ohio as may be designated in the Notice of
said meeting.
Section 4. NOTICE OF MEETING AND WAIVER OF NOTICE
4.1 NOTICE. Written notice of the time, place and purposes of
any meeting of Shareholders shall be given to each Shareholder entitled
thereto not less than seven (7)days nor more than sixty (60) days
before the date fixed for the meeting and as prescribed by law. Such
notice shall be given by personal delivery, mail or facsimile
transmission to the Share holders at their respective addresses as they
appear on the records of the Corporation. Notice shall be deemed to
have been given on the day mailed. If any meeting is adjourned to
another time or place, no notice as to such adjourned meeting need be
given other than by announcement at the meeting at which such an
adjournment is taken. No business shall be transacted at any such
adjourned meeting except as might have been lawfully transacted at the
meeting at which such adjournment was taken.
4.2 NOTICE TO JOINT OWNERS. All notices with respect to any
shares to which persons are entitled by joint or common ownership may
be given to that one of such persons who is named first upon the books
of this Corporation, and notice so given shall be sufficient notice to
all the holders of such shares.
<PAGE> 2
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4.3 WAIVER. Notice of any meeting may be waived in writing by
any Shareholder either before or after any meeting, or by attendance at
such meeting without protest to its commencement.
Section 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. If a record date shall
not be fixed, the record date for the determination of Shareholders entitled to
notice of or to vote at any meeting of Shareholders shall be the close of
business on the twentieth day prior to the date of the meeting and only
Shareholders of record at such record date shall be entitled to notice of and to
vote at such meeting.
Section 6. QUORUM. The holders of shares entitling them to exercise a majority
of the voting power of the Corporation, present in person or by proxy, shall
constitute a quorum for any meeting. The Shareholders present in person or by
proxy, whether or not a quorum be present, may adjourn the meeting from time to
time without notice other than by announcement at the meeting.
Section 7. VOTING. Except as provided by statute or in the Articles of
Incorporation (the "Articles"), every Shareholder entitled to vote shall be
entitled to cast one vote on each proposal submitted to the meeting for each
share held of record on the record date for the determination of the
Shareholders entitled to vote at the meeting. At any meeting at which a quorum
is present, all questions and business which may come before the meeting shall
be determined by a majority of votes cast, except when a greater proportion is
required by law, the Articles or these Regulations; provided, however, that no
action required by law, the Articles, or these Regulations to be authorized or
taken by the holders of a designated proportion of the shares of the Corporation
may be authorized or taken by a lesser proportion.
Section 8. ORGANIZATION OF MEETINGS.
8.1 PRESIDING OFFICER. The Chairman of the Board, or in his
absence, the President, or the person designated by the Board of
Directors, shall call all meetings of the Shareholders to order and
shall act as Chairman thereof; if all are absent, the Shareholders
shall elect a Chairman.
8.2 MINUTES. The Secretary of the Corporation, or in his
absence, an Assistant Secretary, or, in the absence of both, a person
appointed by the Chairman of the meeting, shall act as Secretary of the
meeting and shall keep and make a record of the proceedings thereat.
Section 9. PROXIES. A person who is entitled to attend a Shareholders' meeting,
to vote thereat, or to execute consents, waivers and releases, may be
represented at such meeting or vote thereat, and execute consents, waivers and
releases and exercise any of his rights, by proxy or proxies appointed by a
writing signed by such person, or by his duly authorized attorney which may be
transmitted physically, by facsimile or by other electronic medium.
<PAGE> 3
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Section 10. LIST OF SHAREHOLDERS. At any meeting of Shareholders a list of
Shareholders, alphabetically arranged, showing the number and classes of shares
held by each on the record date applicable to such meeting, shall be produced on
the request of any Shareholder.
ARTICLE II
DIRECTORS
---------
Section 1. GENERAL POWERS.
The authority of this Corporation shall be exercised by or under the
direction of the Board of Directors, except where the law, the Articles or these
Regulations require action to be authorized or taken by the Shareholders.
Section 2. ELECTION, NUMBER AND QUALIFICATION OF DIRECTORS.
2.1 ELECTION. The Directors shall be elected at the annual meeting of
the Shareholders, or if not so elected, at a special meeting of Shareholders
called for that purpose. The only candidates who shall be eligible for election
at such meeting shall be those who have been nominated by or at the direction of
the Board of Directors (which nominations shall be either made at such meeting
or disclosed in a proxy statement, or supplement thereto, distributed to
Shareholders for such meeting at the direction of the Board of Directors) and
those who have been nominated at such meeting by a Shareholder who has complied
with the procedures set forth in this Section 2. A Shareholder may make a
nomination for the office of Director only if such Shareholder has first
delivered or sent by certified mail, return receipt requested, to the Secretary
of the Corporation notice in writing at least fifteen and no more than thirty
days prior to such meeting of Shareholders, which notice shall set forth or be
accompanied by (a) the name and residence of such Shareholder; (b) a
representation that such Shareholder is a holder of record of voting stock of
the Corporation and intends to appear in person or by proxy at such meeting to
nominate the person or persons specified in the notice; (c) the name and
residence of each such nominee; and (d) the consent of such nominee to serve as
director if so elected.
2.2 NUMBER. The number of Directors, which shall not be less than the
lesser of three or the number of Shareholders of record, may be fixed or changed
at a meeting of the Shareholders called for the purpose of electing Directors at
which a quorum is present, by a majority of the votes cast at the meeting. In
addition, the number of Directors may be fixed or changed by action of the
Directors at any meeting at which a quorum is present by a majority vote of the
Directors present at the meeting. The Directors then in office may fill any
Director's office that is created by an increase in the number of Directors. The
number of Directors elected shall be deemed to be the number of Directors fixed
unless otherwise fixed by resolution adopted at the meeting at which such
Directors are elected.
<PAGE> 4
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2.3 QUALIFICATIONS. Directors need not be Shareholders of the
Corporation.
Section 3. TERM OF OFFICE OF DIRECTORS.
3.1 TERM. Each Director shall hold office until the next annual meeting
of the Shareholders and until his successor has been elected or until his
earlier resignation, removal from office or death. Directors shall be subject to
removal as provided by statute or by other lawful procedures and nothing herein
shall be construed to prevent the removal of any or all Directors in accordance
therewith.
3.2 RESIGNATION. A resignation from the Board of Directors shall be
deemed to take effect immediately upon its being received by any incumbent
corporate officer other than an officer who is also the resigning Director,
unless some other time is specified therein.
3.3 VACANCY. In the event of any vacancy in the Board of Directors for
any reason, the remaining Directors, though less than a majority of the whole
Board, may fill any such vacancy for the unexpired term.
Section 4. MEETINGS OF DIRECTORS.
4.1 REGULAR MEETINGS. Regular meetings of the Board of Directors shall
be held at such times and places as may be fixed by the Directors.
4.2 SPECIAL MEETINGS. Special Meetings of the Board of Directors may be
held at any time upon call of the Chairman of the Board, the President, any Vice
President, or any two Directors.
4.3 PLACE OF MEETING. Any meeting of Directors may be held at such
place within or without the State of Ohio as may be designated in the notice of
said meeting.
4.4 NOTICE OF MEETING AND WAIVER OF NOTICE. Notice of the time and
place of any regular or special meeting of the Board of Directors shall be given
to each Director by personal delivery, telephone, facsimile transmission or mail
at least forty-eight hours before the meeting, which notice need not specify the
purpose of the meeting.
Section 5. QUORUM AND VOTING.
At any meeting of Directors, not less than one-half of the whole
authorized number of Directors is necessary to constitute a quorum for such
meeting, except that a majority of the remaining Directors in office shall
constitute a quorum for filling a vacancy in the Board. At any meeting at which
a quorum is present, all acts, questions, and business which may come before the
meeting shall be determined by a majority of votes cast by the Directors present
at such meeting, unless the vote of a greater number is required by the Articles
or these Regulations.
<PAGE> 5
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Section 6. COMMITTEES.
6.1 APPOINTMENT. The Board of Directors may from time to time appoint
certain of its members to act as a committee or committees in the intervals
between meetings of the Board and may delegate to such committee or committees
power to be exercised under the control and direction of the Board. Each
committee shall be composed of at least three directors unless a lesser number
is allowed by law. Each such committee and each member thereof shall serve at
the pleasure of the Board.
6.2 EXECUTIVE COMMITTEE. In particular, the Board of Directors may
create from its membership and define the powers and duties of an Executive
Committee. During the intervals between meetings of the Board of Directors, the
Executive Committee shall possess and may exercise all of the powers of the
Board of Directors in the management and control and the business of the
Corporation to the extent permitted by law.
6.3 COMMITTEE ACTION. Unless otherwise provided by the Board of
Directors, a majority of the members of any committee appointed by the Board of
Directors pursuant to this Section shall constitute a quorum at any meeting
thereof and the act of a majority of the members present at a meeting at which a
quorum is present shall be the act of such committee. Any such committee shall
prescribe its own rules for calling and holding meetings and its method of
procedure, subject to any rules prescribed by the Board of Directors, and shall
keep a written record of all action taken by it.
Section 7. ACTION OF DIRECTORS WITHOUT A MEETING.
Any action which may be taken at a meeting of Directors or any
committee thereof may be taken without a meeting if authorized by a writing or
writings signed by all the Directors or all of the members of the particular
committee, which writing or writings shall be filed or entered upon the records
of the Corporation.
Section 8. COMPENSATION OF DIRECTORS.
The Board of Directors may allow compensation to Directors for
performance of their duties and for attendance at meetings or for any special
services, may allow compensation to members of any committee, and may reimburse
any Director for his expenses in connection with attending any Board or
committee meeting.
Section 9. RELATIONSHIP WITH CORPORATION.
Directors shall not be barred from providing professional or other
services to the Corporation. No contract, action or transaction shall be void or
voidable with respect to the Corporation for the reason that it is between or
affects the Corporation and one or more of its Directors, or between or affects
the Corporation and any other person in which one or more of its Directors are
<PAGE> 6
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directors, trustees or officers or have a financial or personal interest, or for
the reason that one or more interested Directors participate in or vote at the
meeting of the Directors or committee thereof that authorizes such contract,
action or transaction, if, in any such case, any of the following apply:
9.1 the material facts as to the Director's relationship or interest
and as to the contract, action or transaction are disclosed or are known to the
Directors or the committee and the Directors or committee, in good faith,
reasonably justified by such facts, authorize the contract, action or
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors constitute less than a
quorum;
9.2 the material facts as to the Director's relationship or interest
and as to the contract, action or transaction are disclosed or are known to the
shareholders entitled to vote thereon and the contract, action or transaction is
specifically approved at a meeting of the Shareholders held for such purpose by
the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the Corporation held by persons not interested
in the contract, action or transaction; or
9.3 the contract, action or transaction is fair as to the Corporation
as of the time it is authorized or approved by the Directors, a committee
thereof or the Shareholders.
Section 10. ATTENDANCE AT MEETINGS OF PERSONS
WHO ARE NOT DIRECTORS
Unless waived by the Chairman, any Director who desires the presence at
any regular or special meeting of the Board of Directors of a person who is not
a Director, shall so notify all other Directors, not less than 24 hours before
such meeting, request the presence of such person and state the reason in
writing. Such person will not be permitted to attend the Directors' meeting
unless a majority of the Directors in attendance vote to admit such person to
the meeting. Such vote shall constitute the first order of business for any such
meeting of the Board of Directors. Such right to attend, whether granted by
waiver or vote, may be revoked at any time during any such meeting by the vote
of a majority of the Directors in attendance.
ARTICLE III
OFFICERS
--------
Section 1. GENERAL PROVISIONS.
The Board of Directors shall elect a President, a Secretary and a
Treasurer, and may elect a Chairman of the Board, a Chief Executive Officer, one
or more Vice Presidents, and such other officers and assistant officers as the
Board may from time to time deem necessary. The Chairman
<PAGE> 7
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of the Board, if any, shall be a Director, but none of the other officers need
be a Director. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge or verify any instrument in more than one
capacity if such instrument is required to be executed, acknowledged or verified
by two or more officers.
Section 2. POWERS AND DUTIES.
All officers, as between themselves and the Corporation, shall
respectively have such authority and perform such duties as are customarily
incident to their respective offices, and as may be specified from time to time
by the Board of Directors, regardless of whether such authority and duties are
customarily incident to such office. The Chief Executive Officer shall also
serve either as Chairman of the Board or President and shall have plenary power
over the business and activities of the Corporation and over its officers and
employees, subject, however, to the control of the Board of Directors and any
limitations thereon contained in these Regulations. In the absence of any
officer of the Corporation, or for any other reason the Board of Directors may
deem sufficient, the powers or duties of such officer, or any of them may be
delegated to any other officer or to any Director. The Board of Directors may
from time to time delegate to any officer authority to appoint and remove
subordinate officers and to prescribe their authority and duties.
Section 3. TERM OF OFFICE AND REMOVAL.
3.1 TERM. Each officer of the Corporation shall hold office at the
pleasure of the Board of Directors.
3.2 REMOVAL. The Board of Directors may remove any officer at any time
with or without cause by the affirmative vote of a majority of Directors in
office.
Section 4. COMPENSATION OF OFFICERS.
The Directors shall establish the compensation of officers and
employees or may, to the extent not prohibited by law, delegate such authority
to a committee of Directors, the President or a Chief Executive Officer, as they
determine.
<PAGE> 8
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ARTICLE IV
INDEMNIFICATION
---------------
Section 1. RIGHT TO INDEMNIFICATION.
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved (including, without limitation, as a witness)
in any actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she is or was a director or officer of the Corporation or that,
being or having been such a director or officer of the Corporation, he or she is
or was serving at the request of an executive officer of the Corporation as a
director, officer, partner, employee or agent of another corporation or of a
partnership, joint venture, trust, limited liability company or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whenever the basis of such proceeding is alleged
action in an official capacity as such a director, officer, partner, employee,
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent permitted by the General Corporation Law of Ohio, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than permitted prior thereto), or by other applicable law
as then in effect, against all expense, liability and loss (including, without
limitation, attorneys' fees, costs of investigation, judgments, fines, excise
taxes or penalties arising under the Employee Retirement Income Security Act of
1974 ("ERISA") or other federal or state acts) actually incurred or suffered by
such indemnitee in connection therewith and such indemnification shall continue
as to an indemnitee who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors, and
administrators. Except as provided in Section 2 with respect to proceedings
seeking to enforce rights to indemnification, the Corporation shall indemnify
any such indemnitee in connection with a proceeding (or part thereof) initiated
by such indemnitee only if such proceeding (or part thereof) was authorized or
ratified by the Board of Directors of the Corporation.
The right to indemnification conferred in this Section 1 shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"). An advancement of
expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such indemnitee including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking, by
or on behalf of such indemnitee, to repay all amounts so advanced if it is
proved by clear and convincing evidence in a court of competent jurisdiction
that his omission or failure to act involved an act or omission undertaken with
deliberate intent to cause injury to the Corporation or undertaken with reckless
disregard for the best interests of the Corporation. An advancement of expenses
shall not be made if the Corporation's Board of Directors makes a good faith
determination that such payment would violate applicable law.
<PAGE> 9
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Section 2. RIGHT OF INDEMNITEE TO BRING SUIT.
If a claim under Section 1 is not paid in full by the Corporation
within thirty days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty days, the indemnitee may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the indemnitee shall also be entitled to be paid the
expense of prosecuting or defending such suit. The indemnitee shall be presumed
to be entitled to indemnification under this Article IV upon submission of a
written claim (and, in an action brought to enforce a claim for an advancement
of expenses, where the required undertaking has been tendered to the
Corporation), and thereafter the Corporation shall have the burden of proof to
overcome the presumption that the indemnitee is so entitled. Neither the failure
of the Corporation (including its Board of Directors, independent legal counsel
or its Shareholders) to have made a determination prior to the commencement of
such suit that indemnification of the indemnitee is proper in the circumstances,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or its Shareholders) that the indemnitee is
not entitled to indemnification shall be a defense to the suit or create a
presumption that the indemnitee is not so entitled.
Section 3. NONEXCLUSIVITY AND SURVIVAL OF RIGHTS.
The rights to indemnification and to the advancement of expenses
conferred in this Article IV shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provisions of the
Articles of Incorporation, Code of Regulations, agreement, vote of Shareholders
or disinterested Directors, or otherwise.
Notwithstanding any amendment to or repeal of this Article IV, or of
any of the procedures established by the Board of Directors pursuant to Section
6, any indemnitee shall be entitled to indemnification in accordance with the
provisions hereof and thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
Without limiting the generality of the foregoing paragraph, the rights
to indemnification and to the advancement of expenses conferred in this Article
IV shall, notwithstanding any amendment to or repeal of this Article IV, inure
to the benefit of any person who otherwise may be entitled to be indemnified
pursuant to this Article IV (or the estate or personal representative of such
person) for a period of six years after the date such person's service to or in
behalf of the Corporation shall have terminated or for such longer period as may
be required in the event of a lengthening in the applicable statute of
limitations.
<PAGE> 10
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Section 4. INSURANCE, CONTRACTS, AND FUNDING.
The Corporation may maintain insurance, at its expense, to protect
itself and any Director, officer, employee, or agent of the Corporation or
another corporation, partnership, joint venture, trust, or other enterprise
against any expense, liability, or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of Ohio. The Corporation may enter into
contracts with any indemnitee in furtherance of the provisions of this Article
IV and may create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the payment of
such amounts as may be necessary to effect indemnification as provided in this
Article IV.
Section 5. INDEMNIFICATION OF EMPLOYEES AND AGENTS
OF THE CORPORATION.
The Corporation may, by action of its Board of Directors, authorize one
or more executive officers to grant rights to advancement of expenses to
employees or agents of the Corporation on such terms and conditions no less
stringent than provided in Section 1 hereof as such officer or officers deem
appropriate under the circumstances. The Corporation may, by action of its Board
of Directors, grant rights to indemnification and advancement of expenses to
employees or agents or groups of employees or agents of the Corporation with the
same scope and effect as the provisions of this Article IV with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation; provided, however, that an undertaking shall be made by an employee
or agent only if required by the Board of Directors.
Section 6. PROCEDURES FOR THE SUBMISSION OF CLAIMS.
The Board of Directors may establish reasonable procedures for the
submission of claims for indemnification pursuant to this Article IV,
determination of the entitlement of any person thereto, and review of any such
determination. Such procedures shall be set forth in an appendix to these Code
of Regulations and shall be deemed for all purposes to be a part hereof.
ARTICLE V
AMENDMENTS
----------
This Code of Regulations may be amended by the affirmative vote or the
written consent of the Shareholders entitled to exercise a majority of the
voting power on such proposal. If an amendment is adopted by written consent the
Secretary shall mail a copy of such amendment to each Shareholder who would be
entitled to vote thereon and did not participate in the adoption thereof. This
Code of Regulations may also be amended by the affirmative vote of a majority of
the directors to the extent permitted by Ohio law at the time of such amendment.
<PAGE> 1
Exhibit 4.3.1
AMERICAN FINANCIAL GROUP, INC.,
AFC HOLDING COMPANY
AND
STAR BANK, N.A., as Trustee
----------
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER __, 1997
SENIOR DEBT SECURITIES
Amending the Indenture, dated as of November 12, 1997, by and between
AFC Holding Company (formerly known as American Financial Group, Inc.)
and Star Bank, N.A., as Trustee, with respect to the Senior Debt
Securities in order to substitute American Financial Group, Inc.
(formerly known as American Financial Group Holdings, Inc.) as obligor
for all purposes under the Senior Debt Securities and the Indenture
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of December __, 1997, among American Financial Group, Inc., an Ohio corporation
(formerly known as American Financial Group Holdings, Inc.)(the "Company"), AFC
Holding Company, an Ohio corporation and wholly-owned subsidiary of AFG
(formerly known as American Financial Group, Inc.)("AFC Holding"), and Star
Bank, N.A., as trustee, (the "Trustee"), with respect to the Senior Debt
Securities.
RECITALS
A. AFC Holding and the Trustee are parties to an Indenture dated as of
November 12, 1997 (the "Indenture") pursuant to which AFC Holding may issue,
from time to time, Debt Securities.
B. On December 2, 1997, the shareholders of AFC Holding voted to
approve a reorganization pursuant to which AFC Holding became a wholly-owned
subsidiary of the Company, and such reorganization became effective
December 2, 1997.
C. Section 9.2 of the Indenture sets forth the procedure under which,
among other things, AFC Holding may enter into supplemental indentures with the
consent of Holders to, among other things, add any provisions or change in any
manner or eliminate any provisions of the Indenture.
D. No Debt Securities have been issued under the Indenture.
E. AFC Holding desires to be discharged from any and all obligations
under the Indenture, and the Company desires to assume all obligations of AFC
Holding under the Debt Securities and the Indenture and be substituted for AFC
Holding under the Debt Securities and the Indenture for all purposes.
F. The Board of Directors of the Company and AFC Holding have duly
adopted resolutions authorizing the execution and delivery of this Supplemental
Indenture.
G. The Trustee has authorized the execution and delivery of this
Supplemental Indenture.
ARTICLE ONE
ASSUMPTION BY THE COMPANY; DISCHARGE OF AFC HOLDING
From and after the date hereof, the Company expressly covenants to
assume all the obligations of AFC Holding under the Debt Securities and the
Indenture and agrees to, for all purposes, be substituted for AFC Holding under
the Debt Securities and the Indenture. From
<PAGE> 3
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and after the date hereof, AFC Holding is released and discharged from any and
all obligations under the Debt Securities and the Indenture.
ARTICLE TWO
MISCELLANEOUS
Section 2.1 GOVERNING LAW. The internal laws of the State of Ohio shall
govern and be used to construe this Supplemental Indenture, without regard to
the conflicts of law rules thereof.
Section 2.2 DEFINED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Indenture.
Section 2.3 REPRESENTATION OF AFC HOLDING. This Supplemental Indenture
is a legal, valid and binding obligation of AFC Holding in accordance with its
terms. All conditions and requirements on the part of AFC Holding necessary to
make this Supplemental Indenture binding upon AFC Holding have been performed
and fulfilled. No Debt Securities have been issued under the Indenture, and AFC
Holding has no obligation to the Trustee or otherwise under any Debt Securities
or the Indenture.
Section 2.4 REPRESENTATION OF THE COMPANY. The Company is a successor
issuer to AFC Holding for all purposes under Rule 12g-3 promulgated under the
Securities Exchange Act of 1934. This Supplemental Indenture is a legal, valid
and binding obligation of the Company in accordance with its terms. All
conditions and requirements on the part of the Company necessary to make this
Supplemental Indenture binding upon the Company have been performed and
fulfilled.
Section 2.5 REPRESENTATION OF THE TRUSTEE. This Supplemental Indenture
is a legal, valid and binding obligation of the Trustee in accordance with its
terms. All conditions and requirements on the part of the Trustee necessary to
make this Supplemental Indenture binding upon the Trustee have been performed
and fulfilled.
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be signed and acknowledged by their respective officers thereunto
duly authorized as of the day and year first above written.
<PAGE> 4
-3-
SIGNATURES
Dated as of December __, 1997
AMERICAN FINANCIAL GROUP, INC.
By:
-------------------------------------
Attest:
- -----------------------------------
AFC HOLDING COMPANY
By:
-------------------------------------
Attest:
- -----------------------------------
STAR BANK, N.A.
By:
-------------------------------------
Attest:
- -----------------------------------
<PAGE> 1
Exhibit 4.4.1
AMERICAN FINANCIAL GROUP, INC.,
AFC HOLDING COMPANY
AND
THE BANK OF NEW YORK,
a New York banking corporation, as TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER __, 1997
___% Subordinated Debentures
Amending the Indenture, dated as of _________, 1997, by and between AFC
Holding Company (formerly known as American Financial Group, Inc.) and The Bank
of New York, as Trustee, with respect to the ___% Subordinated Debentures in
order to substitute American Financial Group, Inc. (formerly known as American
Financial Group Holdings, Inc.) as obligor for all purposes under the ___%
Subordinated Debentures and the Indenture
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as
of December __, 1997, among American Financial Group, Inc., an Ohio corporation
(formerly known as American Financial Group Holdings, Inc.)(the "Company"), AFC
Holding Company, an Ohio corporation and wholly-owned subsidiary of AFG
(formerly known as American Financial Group, Inc.)("AFC Holding"), and The Bank
of New York, as trustee, (the "Trustee"), with respect to the ___% Subordinated
Debentures (the "Securities").
RECITALS
A. AFC Holding and the Trustee are parties to an Indenture dated as of
_________, 1997 (the "Indenture") pursuant to which AFC Holding may issue, from
time to time, Securities.
B. On December 2, 1997, the shareholders of AFC Holding voted to
approve a reorganization pursuant to which AFC Holding became a wholly-owned
subsidiary of the Company, and such reorganization became effective
December 2, 1997.
C. Section 902 of the Indenture sets forth the procedure under which,
among other things, AFC Holding may enter into supplemental indentures with the
consent of Holders to, among other things, add any provisions or change in any
manner or eliminate any provisions of the Indenture.
D. No Securities have been issued under the Indenture.
E. AFC Holding desires to be discharged from any and all obligations
under the Indenture, and the Company desires to assume all obligations of AFC
Holding under the Securities and the Indenture and be substituted for AFC
Holding under the Securities and the Indenture for all purposes.
F. The Board of Directors of the Company and AFC Holding have duly
adopted resolutions authorizing the execution and delivery of this Supplemental
Indenture.
G. The Trustee has authorized the execution and delivery of this
Supplemental Indenture.
ARTICLE ONE
ASSUMPTION BY THE COMPANY; DISCHARGE OF AFC HOLDING
From and after the date hereof, the Company expressly covenants to
assume all the obligations of AFC Holding under the Securities and the Indenture
and agrees to, for all purposes, be substituted for AFC Holding under the
Securities and the Indenture. From and
<PAGE> 3
-2-
after the date hereof, AFC Holding is released and discharged from any and all
obligations under the Securities and the Indenture.
ARTICLE TWO
MISCELLANEOUS
Section 2.1 GOVERNING LAW. The internal laws of the State of ______
shall govern and be used to construe this Supplemental Indenture, without regard
to the conflicts of law rules thereof.
Section 2.2 DEFINED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Indenture.
Section 2.3 REPRESENTATION OF AFC HOLDING. This Supplemental Indenture
is a legal, valid and binding obligation of AFC Holding in accordance with its
terms. All conditions and requirements on the part of AFC Holding necessary to
make this Supplemental Indenture binding upon AFC Holding have been performed
and fulfilled. No Securities have been issued under the Indenture, and AFC
Holding has no obligation to the Trustee or otherwise under any Securities or
the Indenture.
Section 2.4 REPRESENTATION OF THE COMPANY. The Company is a successor
issuer to AFC Holding for all purposes under Rule 12g-3 promulgated under the
Securities Exchange Act of 1934. This Supplemental Indenture is a legal, valid
and binding obligation of the Company in accordance with its terms. All
conditions and requirements on the part of the Company necessary to make this
Supplemental Indenture binding upon the Company have been performed and
fulfilled.
Section 2.5 REPRESENTATION OF THE TRUSTEE. This Supplemental Indenture
is a legal, valid and binding obligation of the Trustee in accordance with its
terms. All conditions and requirements on the part of the Trustee necessary to
make this Supplemental Indenture binding upon the Trustee have been performed
and fulfilled.
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be signed and acknowledged by their respective officers thereunto
duly authorized as of the day and year first above written.
<PAGE> 4
-3-
SIGNATURES
Dated as of December __, 1997
AMERICAN FINANCIAL GROUP, INC.
By:
---------------------------------
Attest:
- -------------------------------
AFC HOLDING COMPANY
By:
---------------------------------
Attest:
- -------------------------------
THE BANK OF NEW YORK
By:
---------------------------------
Attest:
- -------------------------------
<PAGE> 1
Exhibit 23.1
We consent to the reference to our firm under the caption "Experts" in Post-
Effective Amendment No. 1 to the Registration Statement (Form S-3 No.
333-21995) and Prospectus relating to the registration of up to $500,000,000
of American Financial Group, Inc. debt securities and common stock and
American Financial Capital Trust II preferred securities and to the
incorporation by reference therein of our report dated March 25, 1997, with
respect to the consolidated financial statements and schedules of American
Financial Group, Inc. included in its Annual Report (Forms 10-K, as amended)
for the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
Cincinnati, Ohio
December 5, 1997
ERNST & YOUNG LLP
