-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oltEKhluVrO9J0qQKEp+Zd6zgiT24BsWKZk4JwiCOdrlN+UQinqKxI2TGh9XsFB8 0pfS/Ed7BAIOPmzLt/5NCQ== 0000950129-94-000730.txt : 19941017 0000950129-94-000730.hdr.sgml : 19941017 ACCESSION NUMBER: 0000950129-94-000730 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19941014 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL CORP /TX/ CENTRAL INDEX KEY: 0000005103 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 740483432 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-30693 FILM NUMBER: 94552661 BUSINESS ADDRESS: STREET 1: 2929 ALLEN PKWY CITY: HOUSTON STATE: TX ZIP: 77019 BUSINESS PHONE: 7135221111 424B2 1 AMERICAN GENERAL CORP FORM 424B2 1 Filed Pursuant to Rule 424B2 Registration No. 033-30693 PROSPECTUS SUPPLEMENT (To Prospectus Dated August 30, 1989) {AMERICAN GENERAL LOGO} $100,000,000 AMERICAN GENERAL CORPORATION 7.70% NOTES DUE 1999 The Notes will mature on October 15, 1999. Interest on the Notes is payable semi-annually on April 15 and October 15, commencing April 15, 1995. The Notes may not be redeemed prior to maturity and will not be subject to any sinking fund. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - --------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO PUBLIC(1) DISCOUNT COMPANY(1)(2) Per Note............................... 100.000% .287% 99.713% Total.................................. $100,000,000 $287,000 $99,713,000
- -------------------------------------------------------------------------------- (1) Plus accrued interest, if any, from October 20, 1994 to the date of delivery. (2) Before deducting expenses payable by the Company estimated to be $130,000. The Notes are offered subject to receipt and acceptance by the Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the Notes will be made at the office of Salomon Brothers Inc, Seven World Trade Center, New York, New York on or about October 20, 1994. SALOMON BROTHERS INC PRUDENTIAL SECURITIES INCORPORATED SMITH BARNEY INC. The date of this Prospectus Supplement is October 13, 1994. 2 THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION The regional offices of the Securities and Exchange Commission referred to under "Available Information" in the accompanying Prospectus have moved and are now located at 219 Dearborn Street, Chicago, Illinois 60604 and Seven World Trade Center, New York, New York 10048. AMERICAN GENERAL American General Corporation (the "Company") is the parent company of one of the nation's largest consumer financial services organizations. The Company's operating subsidiaries are leading providers of retirement annuities, consumer loans, and life insurance. The Company's operations are classified into the following three business segments: Retirement Annuities, Consumer Finance, and Life Insurance. These segments provide insurance and other financial services in all 50 states, the District of Columbia, Canada, Puerto Rico, and the Virgin Islands. RECENT DEVELOPMENTS On July 12, 1994, the Company proposed to Unitrin, Inc. a merger offer to acquire each of Unitrin's 51.8 million outstanding shares at a price of $50 3/8 per share in cash. Unitrin, a Chicago-based holding company with assets of $4.8 billion and shareholders' equity of $2.0 billion (based on Unitrin's public filings), provides basic financial services including insurance and consumer loans to individuals and small businesses throughout the United States. Since the offer was based on publicly available information, the Company indicated it would be willing to consider a higher price if Unitrin were to demonstrate additional value in the course of due diligence and negotiation. The Company also said it would be willing to consider alternative transaction structures, including the opportunity for Unitrin shareholders to receive American General Corporation equity securities in a tax-free exchange. Unitrin's board of directors rejected the Company's offer in a letter dated July 26, 1994, and continues to decline to hold merger discussions with the Company. On August 2, 1994, the Company publicly announced the merger offer. The Company initially announced that the offer would be open through September 16, 1994, and has announced subsequently that the offer has been extended to October 28, 1994. On August 15, 1994, the Company filed a pre-merger notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 to acquire in excess of 50% of the outstanding shares of Unitrin. The Company subsequently has provided additional information to the Federal Trade Commission with respect to this filing. In a related action, on August 19, 1994, the Company filed suit in Delaware's Court of Chancery to enjoin Unitrin and its board of directors from proceeding with an announced share repurchase program. On October 13, 1994, the Delaware court preliminarily enjoined Unitrin's share repurchase program. As a result of this series of events, the Company's debt ratings are under review by rating agencies. Until such time as the Company may enter into a definitive arrangement for such a merger transaction, the Company cannot determine what impact, if any, such transaction might have upon the ultimate capital structure of the Company. S-2 3 SUMMARY FINANCIAL INFORMATION The following table sets forth summary financial information, on a consolidated basis, of American General Corporation for the periods indicated.
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31, --------------------- ------------------------------------ (IN MILLIONS OF DOLLARS) 1994 1993 1993 1992 1991 -------- -------- -------- -------- -------- Operating Results Revenues........................... $ 2,446 $ 2,392 $ 4,829 $ 4,602 $ 4,395 ======== ======== ======== ======== ======== Business Segment Earnings: Retirement Annuities............. $ 103 $ 87 $ 162 $ 130 $ 110 Consumer Finance................. 114 103 206 161 136 Life Insurance................... 127 142 (9)(1) 323 326 -------- -------- -------- -------- -------- Total Business Segments............... 344 332 359 614 572 Corporate Operations: Interest on Corporate Debt....... (37) (43) (81) (85) (87) Unallocated Expenses............. (15) (11) (25) (28) (37) Earnings on Corporate Assets..... 25 13 21 23 31 Realized Investment Gains........ 2 4 6 9 1 -------- -------- -------- -------- -------- Total Corporate Operations............. (25) (37) (79) (81) (92) -------- -------- -------- -------- -------- Income before Cumulative Effect and Tax Rate Related Adjustment...... 319 295 280 533 480 Cumulative Effect of Accounting Changes.......................... -- (46) (46) -- -- Tax Rate Related Adjustment........ -- -- (30) -- -- -------- -------- -------- -------- -------- Net Income......................... $ 319 $ 249 $ 204 $ 533 $ 480 ======== ======== ======== ======== ======== Operating Earnings(2).............. $ 317 $ 291 $ 574 $ 524 $ 479 ======== ======== ======== ======== ======== Financial Position Assets............................. $ 44,824 $ 42,059 $ 43,982 $ 39,742 $ 36,105 Debt: Corporate........................ 1,345 1,439 1,257 1,371 1,391 Real Estate...................... 424 560 429 616 590 Consumer Finance................. 6,309 5,655 5,843 5,484 5,243 Redeemable Equity.................. 22 -- -- -- -- Shareholders' Equity............... 4,266 4,746 5,137 4,616 4,329
- ------------ (1) Includes a $300 million write-down of goodwill. (2) Unaudited. Under generally accepted accounting principles, operating earnings, which exclude after-tax realized investment gains, non-recurring items, and the effect of accounting changes, are not separately presented. They are presented here as supplemental information. S-3 4 RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges has been calculated by dividing fixed charges into earnings available for fixed charges. Earnings available for fixed charges is the sum of net income before income tax expense, cumulative effect of accounting changes, and fixed charges. Fixed charges consist of interest expense, capitalized interest and a portion of rental expense.
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31, ----------- ----------------------------------- 1994 1993 1993 1992 1991 1990 1989 --- --- --- --- --- --- --- Ratio of earnings to fixed charges for consolidated continuing operations: Consolidated operations..................... 2.9 2.7 2.1 2.4 2.1 2.2 1.8 Consolidated operations, Corporate fixed charges only(1).......................... 9.4 8.4 6.0 7.2 5.8 5.3 3.3
- ------------ (1) Calculated by dividing Corporate fixed charges (parent only) into the sum of consolidated net income before income tax expense, cumulative effect of accounting changes, and Corporate fixed charges. DESCRIPTION OF NOTES The following description of the particular terms of the 7.70% Notes Due 1999 offered hereby (referred to in the accompanying Prospectus as the "Offered Debt Securities" and herein as the "Notes") supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of Debt Securities set forth in the Prospectus, to which description reference is hereby made. The Notes are to be issued as a series of Debt Securities under the Indenture, which is more fully described in the Prospectus. The Notes will be limited to $100,000,000 aggregate principal amount. Certain terms used herein are defined in the Prospectus. The Notes are to mature on October 15, 1999 and bear interest at the rate set forth on the cover page of this Prospectus Supplement, payable semi-annually on April 15 and October 15, commencing April 15, 1995, to the registered holders thereof on the preceding April 1 or October 1 as the case may be. The Notes are not redeemable at the option of the Company or repayable at the option of any holder prior to maturity. The Indenture does not contain any provisions that limit the ability of the Company to incur indebtedness or that would afford Holders of Debt Securities protection in the event of a highly leveraged or similar transaction involving the Company, except as described in the Prospectus under "Description of Debt Securities -- Limitation on Liens" and "-- Consolidation, Merger and Sale of Assets." With reference to "Description of Debt Securities -- Limitation on Liens" contained in the Prospectus, the Designated Subsidiaries of the Company as of June 30, 1994 were American General Finance, Inc., American General Finance Corporation, American General Life Insurance Company, AGC Life Insurance Company, American General Life and Accident Insurance Company, and The Variable Annuity Life Insurance Company. S-4 5 UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, the Company has agreed to sell to each of the Underwriters named below, and each of the Underwriters has severally agreed to purchase, the principal amount of the Notes set forth opposite its name below:
PRINCIPAL AMOUNT OF UNDERWRITER NOTES - ----------------------------------------------------------------------------- ------------- Salomon Brothers Inc ........................................................ $ 50,000,000 Prudential Securities Incorporated........................................... 25,000,000 Smith Barney Inc. ........................................................... 25,000,000 ------------- Total.............................................................. $ 100,000,000 =============
The Underwriters propose initially to offer the Notes to the public at the public offering price set forth on the cover page of this Prospectus Supplement and to certain dealers at such price less a concession of .250% of the principal amount of the Notes. The Underwriters may allow and such dealers may reallow concessions not in excess of .125% of such principal amount of Notes. After the initial public offering, the public offering price and such concessions may be changed. The Company does not intend to apply for listing of the Notes on a national securities exchange, but has been advised by the Underwriters that they presently intend to make a market in the Notes, as permitted by applicable laws and regulations. The Underwriters are not obligated, however, to make a market in the Notes and any such market making may be discontinued at any time at the sole discretion of the Underwriters. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Notes. The Company has agreed to indemnify the Underwriters against certain liabilities, including civil liabilities under the Securities Act of 1933, or contribute to payments the Underwriters may be required to make in respect thereof. LEGAL OPINIONS The validity of the Notes offered hereby will be passed upon for the Company by Vinson & Elkins L.L.P., 3300 First City Tower, Houston, Texas 77002. Certain legal matters in connection with the Notes will be passed upon for the Underwriters by Baker & Botts, L.L.P., 3000 One Shell Plaza, Houston, Texas 77002. J. Evans Attwell, a partner in the firm of Vinson & Elkins L.L.P., is a director of the Company. EXPERTS The consolidated financial statements and schedules of American General Corporation appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1993, have been audited by Ernst & Young LLP, as set forth in their reports included therein and incorporated by reference in the Prospectus. The financial statements and schedules referred to above are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing. S-5 6 {AMERICAN GENERAL LOGO} AMERICAN GENERAL CORPORATION DEBT SECURITIES ------------------------ American General Corporation ("American General" or the "Company") may from time to time offer Debt Securities consisting of debentures, notes and/or other unsecured evidences of indebtedness in one or more series in an aggregate principal amount of up to $350,000,000. The Debt Securities may be offered as separate series in amounts, at prices and on terms to be determined at the time of sale. The title, aggregate principal amount, denominations (which may be in United States dollars or in any other currency, in composite currencies or in amounts determined by reference to an index), maturity, rate (which may be fixed or variable) and time of payment of any interest, any terms for redemption at the option of the Company or the holder, any terms for sinking fund payments, any listing on a securities exchange and the initial public offering price and any other terms in connection with the offering and sale of Debt Securities in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement or Prospectus Supplements. The Company may sell Debt Securities directly, through agents designated from time to time or through underwriters or dealers. If any agents of the Company or any dealers or underwriters are involved in the sale of the Debt Securities in respect of which this Prospectus is being delivered, the names of such agents, dealers or underwriters and any applicable agent's commission, dealer's purchase price, or underwriter's discount will be set forth in, or may be calculated on the basis set forth in, the Prospectus Supplement. The net proceeds to the Company from such sale will be the purchase price of such Debt Securities less such commission in the case of an agent, the purchase price of such Debt Securities in the case of a dealer or the public offering price less such discount in the case of an underwriter, and less, in each case, other issuance expenses. See "Plan of Distribution" for possible indemnification arrangements for any such agents, dealers and underwriters. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is August 30, 1989. 7 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at Room 3190, Kluczynski Building, 230 South Dearborn Street, Chicago, Illinois 60604 and 75 Park Place, New York, New York 10007. Copies of such materials may be obtained by mail from the Public Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, such material may also be inspected and copied at the offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and The Pacific Stock Exchange, Incorporated, 301 Pine Street, San Francisco, California 94104. The Company has filed with the Commission a registration statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by the Company with the Commission pursuant to the Exchange Act (File No. 1-7981), are incorporated herein by reference: (a) the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988; (b) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1989 and June 30, 1989; and (c) The Company's Current Reports on Form 8-K dated January 30, 1989, February 16, 1989, May 25, 1989 and June 11, 1989. Each document filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Debt Securities offered hereby shall be deemed to be incorporated by reference into this Prospectus from the date of filing of such document. Any statement contained herein, in a Prospectus Supplement or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of the Registration Statement and this Prospectus to the extent that a statement contained herein, in a Prospectus Supplement or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS WHICH ARE INCORPORATED HEREIN BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO THE COMPANY, 2929 ALLEN PARKWAY, HOUSTON, TEXAS 77019, ATTENTION: SHAREHOLDER SERVICES, TELEPHONE (713) 831-1004. 2 8 AMERICAN GENERAL American General is an insurance and financial services organization, headquartered in Houston, and through its subsidiaries operates in all 50 states and Canada. The Company was incorporated as a general business corporation in Texas in 1980 and is the successor to American General Insurance Company, incorporated in 1926. As part of its strategic program to focus on individual life insurance, retirement annuities and consumer loans, the Company acquired in May 1988 the consumer finance subsidiary of Manufacturers Hanover Trust Company, and in August 1988 announced plans to sell its property-liability insurance and group life and health insurance operations. In May 1989, the Company sold its property-liability insurance segment to Zurich Insurance Company. American General's continuing operations are grouped into three business segments: Insurance-Home Service, which emphasizes the sale and service of traditional insurance policies by employee agents to low-and middle-income households; Insurance-Special Markets, which provides insurance products to specific geographic areas, needs, or targeted customer groups; and Finance/Real Estate, which focuses on consumer finance through American General Finance, Inc. ("AGF") and on real estate investment and development. Since American General is a holding company, rights to participate in any distribution of assets of any subsidiary upon its liquidation or reorganization or otherwise (and thus the ability of holders of the Debt Securities to benefit indirectly from such distribution) are subject to the prior claims of creditors of that subsidiary, except to the extent that American General may itself be a creditor of that subsidiary. Claims on American General's subsidiaries by other creditors include substantial claims for policy benefits and debt obligations, as well as other liabilities incurred in the ordinary course of business. In addition, since many of American General's subsidiaries are insurance companies subject to regulatory control by various state insurance departments, the ability of such subsidiaries to pay dividends to American General without prior regulatory approval is limited by applicable laws and regulations. At December 31, 1988, the amount available from subsidiaries included in continuing operations during 1989 for dividends to the Company not limited by such restrictions is $539 million. The principal executive offices of American General are located at 2929 Allen Parkway, Houston, Texas 77019, and its telephone number is (713) 522-1111. USE OF PROCEEDS Except as may otherwise be set forth in a Prospectus Supplement, the net proceeds from the sale of the Debt Securities offered hereby will be added to American General's general corporate funds and may be used for repayment of long-or short-term indebtedness, for the repurchase of shares of its Common Stock, and for general corporate purposes. 3 9 RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges, including and excluding AGF, has been calculated by dividing fixed charges into earnings available for fixed charges. Earnings available for fixed charges is the sum of net income before income tax expense (benefit) and fixed charges. Fixed charges consist of interest expense, capitalized interest and a portion of rental expense.
SIX MONTHS ENDED JUNE 30, YEARS ENDED DECEMBER 31, ----------- ----------------------------------- 1989 1988 1988 1987 1986 1985 1984 --- --- --- --- --- --- --- (UNAUDITED) Ratio of earnings to fixed charges for consolidated continuing operations Including AGF................................. 1.8 2.1 1.9 2.4 2.9 2.2 2.3 Excluding AGF................................. 2.7 2.9 2.7 3.8 5.1 3.2 3.8
DESCRIPTION OF DEBT SECURITIES The following description of the terms of the Debt Securities sets forth certain general terms and provisions of the Debt Securities to which any Prospectus Supplement may relate. The particular terms of the Debt Securities offered by any Prospectus Supplement (the "Offered Debt Securities"), including the nature of any variations from the following general provisions applicable to such Offered Debt Securities, will be described in the Prospectus Supplement relating to such Offered Debt Securities. The Offered Debt Securities are to be issued under an Indenture dated as of April 15, 1986 as supplemented by a First Supplemental Indenture dated as of August 31, 1987 (the "Indenture"), between the Company and The Bank of New York, as Trustee (the "Trustee"), a copy of which is filed as an exhibit to the Registration Statement. The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the Indenture, including the definitions therein of certain terms. Wherever particular provisions or defined terms of the Indenture are referred to, such provisions or defined terms are incorporated herein by reference. Certain defined terms in the Indenture are capitalized herein. The section references below refer to the Indenture. GENERAL The Indenture does not limit the amount of debentures, notes or other evidences of indebtedness which may be issued thereunder (such securities issued under the Indenture being herein referred to as the "Debt Securities"). The Indenture provides that Debt Securities may be issued from time to time in one or more series. The Debt Securities are unsecured obligations of the Company. The Prospectus Supplement relating to the Offered Debt Securities will describe the following terms, where applicable, of the Offered Debt Securities: (1) the title of the Offered Debt Securities; (2) any limit on the aggregate principal amount of the Offered Debt Securities; (3) the date or dates on which the Offered Debt Securities will mature; (4) the rate or rates at which the Offered Debt Securities will bear interest, if any, and the date or dates from which such interest will accrue; (5) the dates on which such interest, if any, will be payable and the Regular Record Dates for such Interest Payment Dates; (6) any mandatory or optional sinking fund or analogous provisions; (7) the date, if any, after which, and the price or prices at which, the Offered Debt Securities may, pursuant to any optional or mandatory redemption provisions, be redeemed at the option of the Company; (8) the terms and conditions, if any, upon which the Offered Debt Securities may be repayable prior to maturity at the option of the holder thereof (which option may be conditional); (9) if other than in United States dollars, the currency of payment of principal and premium, if any, and interest on the Offered Debt Securities; (10) any index used to determine the amount of payments of principal of and 4 10 premium, if any, and interest on the Offered Debt Securities; and (11) any other terms of the Offered Debt Securities. (Section 301). Unless otherwise indicated in the Prospectus Supplement, principal of and premium, if any, and interest, if any, on the Offered Debt Securities will be payable, and transfers of the Offered Debt Securities will be registrable, at the Corporate Trust Office of the Trustee, provided that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as it appears in the Security Register. (Sections 301, 305, 307 and 1002). Unless otherwise indicated in the Prospectus Supplement, the Offered Debt Securities will be issued only in fully registered form without coupons in denominations of $1,000 or any integral multiple thereof. (Section 302). No service charge will be made for any registration of transfer or exchange of Offered Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. (Section 305). Debt Securities may be issued under the Indenture as Original Issue Discount Securities to be sold at a substantial discount below their principal amount. Certain federal income tax and other considerations applicable thereto will be described in the Prospectus Supplement relating to any Original Issue Discount Securities. LIMITATION ON LIENS The Company will not, and will not permit any Designated Subsidiary (as defined below), directly or indirectly, to create, issue, assume incur or guarantee any indebtedness for money borrowed which is secured by a mortgage, pledge, lien or other encumbrance of any nature on (i) any of the present or future common stock of a Designated Subsidiary or (ii) any property or assets (other than cash) representing, directly or indirectly, the consideration for the sale, assignment, transfer or disposal of such common stock unless the Debt Securities and, if the Company so elects, any other indebtedness of the Company ranking pari passu with the Debt Securities, shall be equally and ratably secured with, or prior to, such other secured indebtedness for money borrowed so long as it is outstanding. (Section 1006). The term "Designated Subsidiary" means any present or future consolidated subsidiary of the Company the consolidated assets of which constitute 15 percent or more of the consolidated assets of the Company. As of June 30, 1989, the Company's Designated Subsidiaries were AGC Life Insurance Company, American General Finance, Inc., American General Finance Corporation, American General Life and Accident Insurance Company, American General Life Insurance Company and The Variable Annuity Life Insurance Company. EVENTS OF DEFAULT The following are Events of Default under the Indenture with respect to Debt Securities of any series: (a) failure to pay principal of or premium, if any, on any Debt Security of that series when due; (b) failure to pay any interest on any Debt Security of that series when due, continued for 30 days; (c) failure to deposit any sinking fund payment, when due, in respect of any Debt Security of that series; (d) failure to perform any other covenant of the Company in the Indenture (other than a covenant included in the Indenture solely for the benefit of series of Debt Securities other than that series), continued for 90 days after written notice as provided in the Indenture; (e) the acceleration, or failure to pay at maturity, of any indebtedness for money borrowed of the Company exceeding $20,000,000 in principal amount, which acceleration is not rescinded or annulled or indebtedness paid within 15 days after the date on which written notice thereof shall have first been given to the Company as provided in the Indenture; (f) certain events in bankruptcy, insolvency or reorganization in respect of the Company; and (g) any other Event of Default provided with respect to Debt Securities of that series. (Section 501). 5 11 If an Event of Default with respect to Debt Securities of any series at the time Outstanding occurs and is continuing, either the Trustee or the Holders of at least 25 percent in principal amount of the Outstanding Debt Securities of that series may declare the principal amount (or, if the Debt Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of the series) of all the Debt Securities of that series to be due and payable immediately. At any time after a declaration of acceleration with respect to Debt Securities of any series has been made, but before a judgment or decree based on acceleration has been obtained, the Holders of a majority in principal amount of the Outstanding Debt Securities of that series may, under certain circumstances, rescind and annul such acceleration. (Section 502). For information as to waiver of defaults, see "Modification and Waiver". The Indenture provides that the Trustee will be under no obligation, subject to the duty of the Trustee during default to act with the required standard of care, to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable indemnity. (Section 603). Subject to such provisions for indemnification of the Trustee, the Holders of a majority in principal amount of the Outstanding Debt Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debt Securities of that series. (Section 512). The Company will be required to furnish to the Trustee annually a statement as to the performance by the Company of certain of its obligations under the Indenture and as to any default in such performance. (Section 1008). DEFEASANCE Defeasance and Discharge. The Indenture provides that the Company will be discharged from any and all obligations in respect of the Debt Securities of any series (except for certain obligations to register the transfer or exchange of Debt Securities of such series, to replace stolen, lost or mutilated Debt Securities of such series, to maintain paying agencies and to hold monies for payment in trust) upon the deposit with the Trustee, in trust, of money and/or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide money in an amount sufficient to pay the principal of and premium, if any, and each installment of interest on the Debt Securities of such series on the stated maturity of such payments in accordance with the terms of the Indenture and the Debt Securities of such series. Such a trust may only be established if, among other things, (i) either (x) the Company has delivered to the Trustee an Opinion of Counsel (who may be counsel for the Company) to the effect that since the date of the Indenture there has been a change in the applicable federal income tax law, including a change in the official interpretation thereof, or (y) the Company has received from, or there has been published by, the Internal Revenue Service, a ruling, in either case to the effect that Holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amounts and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred, and (ii) the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Debt Securities of such series, if then listed on The New York Stock Exchange, Inc., will not be delisted as a result of such deposit, defeasance and discharge. (Section 403). Defeasance of Certain Covenants and Certain Events of Default. The Indenture provides that, if applicable, the Company may omit to comply with the restrictive covenants in Section 1005 ("Maintenance of Properties") and Section 1006 ("Limitation on Liens on Common Stock of Designated Subsidiaries"), and Section 501(4) (described in clause (d) under "Events of Default") with respect to Sections 1005 and 1006 and Section 501(5) (described in clause (e) under "Events of Default") shall not be deemed to be an Event of Default under the Indenture and the Debt Securities of any series, upon the deposit with the Trustee, in trust, of money and/or U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with 6 12 their terms will provide money in an amount sufficient to pay the principal of and premium, if any, and each installment of interest on the Debt Securities of such series on the stated maturity of such payments in accordance with the terms of the Indenture and the Debt Securities of such series. The obligations of the Company under the Indenture and the Debt Securities of such series other than with respect to the covenants referred to above and the Events of Default other than the Events of Default referred to above shall remain in full force and effect. Such a trust may only be established if, among other things, the Company has delivered to the Trustee an Opinion of Counsel to the effect that (i) the Holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain covenants and Events of Default and will be subject to federal income tax on the same amounts and in the same manner and at the same times, as would have been the case if such deposit and defeasance had not occurred, and (ii) the Debt Securities of such series, if then listed on The New York Stock Exchange, Inc., will not be delisted as a result of such deposit and defeasance. (Section 1007). In the event the Company exercises its option to omit compliance with certain covenants of the Indenture with respect to the Debt Securities of any series as described above and the Debt Securities of such series are declared due and payable because of the occurrence of any Event of Default other than an Event of Default described in clauses (d) or (e) under "Events of Default", the amount of money and U.S. Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on the Debt Securities of such series at the time of their stated maturity but may not be sufficient to pay amounts due on the Debt Securities of such series at the time of the acceleration resulting from such Event of Default. However, the Company will remain liable for such payments. MODIFICATION AND WAIVER Modifications and amendments of the Indenture may be made by the Company and the Trustee with the consent of the Holders of not less than 66 2/3 percent in principal amount of the Outstanding Debt Securities of each series affected by such modification or amendment; provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Debt Security affected thereby, (a) change the stated maturity date of the principal of, or any installment of principal of or interest on, any Debt Security, (b) reduce the principal amount of, or the premium, if any, or interest on, any Debt Security, (c) reduce the amount of principal of an Original Issue Discount Security payable upon acceleration of the Maturity thereof, (d) change the place or currency of payment of principal of, or premium, if any, or interest on, any Debt Security, (e) impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security, or (f) reduce the percentage in principal amount of Outstanding Debt Securities of any series, the consent of the Holders of which is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults. (Section 902). The Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all Debt Securities of that series waive, insofar as that series is concerned, compliance by the Company with certain restrictive provisions of the Indenture. (Section 1009). The Holders of a majority in principal amount of the Outstanding Debt Securities of any series may on behalf of the Holders of all Debt Securities of that series waive any past default under the Indenture with respect to that series, except a default in the payment of the principal of or premium, if any, or interest on any Debt Security of that series or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the Holder of each Outstanding Debt Security of that series affected. (Section 513). CONSOLIDATION, MERGER AND SALE OF ASSETS The Company may, without the consent of any Holders of Outstanding Debt Securities, consolidate or merge with or into, or transfer or lease its assets substantially as an entirety to, any Person, and any other Person may consolidate or merge with or into, or transfer or lease its assets substantially as 7 13 an entirety to, the Company, provided that (i) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or which acquires or leases the assets of the Company substantially as an entirety is organized under the laws of any United States jurisdiction and assumes the Company's obligations on the Debt Securities and under the Indenture, (ii) after giving effect to the transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing, and (iii) certain other conditions are met. (Sections 801 and 802). CONCERNING THE TRUSTEE The Company maintains general banking and credit relations with the Trustee in the ordinary course of business. PLAN OF DISTRIBUTION General. The Company may sell Debt Securities to or through underwriters or dealers; directly to other purchasers; or through agents. The distribution of the Debt Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. In connection with the sale of Debt Securities, underwriters may receive compensation from the Company or from purchasers of Debt Securities for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell Debt Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agent. Underwriters, dealers and agents that participate in the distribution of Debt Securities may be deemed to be underwriters, and any discounts or commissions received by them from the Company and any profit on the resale of Debt Securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act. Any such underwriter, dealer or agent will be identified, and any such compensation received from the Company will be described, in the Prospectus Supplement. Under agreements which may be entered into by the Company, underwriters, dealers and agents who participate in the distribution of Debt Securities may be entitled to indemnification by the Company against certain liabilities, including liabilities under the Securities Act. Delayed Delivery Arrangements. If so indicated in the Prospectus Supplement, the Company will authorize underwriters, dealers or other persons acting as the Company's agents to solicit offers by certain institutions to purchase Offered Debt Securities from the Company pursuant to contracts providing for payment and delivery on a future date. Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by the Company. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the Offered Debt Securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts. LEGAL OPINIONS Unless otherwise indicated in a Prospectus Supplement relating to Offered Debt Securities, the validity of the Debt Securities offered hereby will be passed upon for the Company by Vinson & Elkins, 3300 First City Tower, Houston, Texas 77002 and for any underwriters, dealers or agents of a 8 14 particular issue of Offered Debt Securities, by Baker & Botts, 3000 One Shell Plaza, Houston, Texas 77002. J. Evans Attwell, a partner in the firm of Vinson & Elkins, is a director of the Company. EXPERTS The consolidated financial statements and schedules of American General Corporation incorporated by reference in this Prospectus have been audited by Ernst & Whinney, independent auditors, to the extent and for the periods indicated in their report thereon which is included in the Company's Annual Report on Form 10-K for the year ended December 31, 1988. The financial statements and schedules audited by Ernst & Whinney have been incorporated herein by reference in reliance on their report given on their authority as experts in accounting and auditing. The report of Peat Marwick Main & Co., independent auditors, on the consolidated financial statements of American General Finance, Inc. and its subsidiaries which is filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1988 has been incorporated herein by reference in reliance on their report given on their authority as experts in accounting and auditing. 9 15 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE. ------------------ TABLE OF CONTENTS
PAGE --- PROSPECTUS SUPPLEMENT Available Information................ S-2 American General..................... S-2 Recent Developments.................. S-2 Summary Financial Information........ S-3 Ratio of Earnings to Fixed Changes... S-4 Description of Notes................. S-4 Underwriting......................... S-5 Legal Opinions....................... S-5 Experts.............................. S-5 PROSPECTUS Available Information................ 2 Incorporation of Certain Documents by Reference....................... 2 American General..................... 3 Use of Proceeds...................... 3 Ratio of Earnings to Fixed Charges... 4 Description of Debt Securities....... 4 Plan of Distribution................. 8 Legal Opinions....................... 8 Experts.............................. 9
$100,000,000 AMERICAN GENERAL CORPORATION 7.70% NOTES DUE 1999 {AMERICAN GENERAL LOGO} SALOMON BROTHERS INC PRUDENTIAL SECURITIES INCORPORATED SMITH BARNEY INC. PROSPECTUS SUPPLEMENT DATED OCTOBER 13, 1994 -----END PRIVACY-ENHANCED MESSAGE-----