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AMERICAN GENERAL CORPORATION
RESOLUTIONS RELATING TO ____% SERIES A CONVERTIBLE
JUNIOR SUBORDINATED DEBENTURES DUE _________________, 2025
ADOPTED BY THE TERMS COMMITTEE
WHEREAS, American General Delaware, L.L.C., a Delaware limited
liability company ("American General Delaware"), proposes to issue its
___________ Preferred Securities, Series A (collectively, the "Series A
Preferred Securities") and use the proceeds from the sale of such Preferred
Securities to purchase junior subordinated debentures of the Company; and
WHEREAS, this Committee desires to establish the terms of such junior
subordinated debentures pursuant to Section 301 of the Indenture, [dated] [to
be dated] as of ____________, 1995 (the "Indenture"), between the Company and
Chemical Bank, as Trustee;
Now, therefore, be it:
RESOLVED, that, upon receipt of the purchase price therefor, the
Company shall issue, sell and deliver a series of its junior subordinated
debentures pursuant to the Indenture.
RESOLVED, that the title, principal amount, interest rate, redemption
provisions, conversion and exchange features, and other terms of such
debentures to be fixed pursuant to Section 301 of the Indenture shall be as
follows (capitalized terms appearing below that are defined in the Indenture,
but not defined herein, having the meanings ascribed to them in the Indenture):
1. TITLE. Each of such debentures shall be designated as
"______% Series A Convertible Junior Subordinated Debenture due
_______________, 2025" (collectively, the "Series A Junior Subordinated
Debentures") and each such Series A Junior Subordinated Debenture shall be
included in the series of Securities so designated.
2. PRINCIPAL AMOUNT. The aggregate principal amount of the
Series A Junior Subordinated Debentures which may be authenticated and
delivered pursuant to these resolutions shall be limited to
$______________________ or, if and to the extent that the underwriters
underwriting the sale of the Series A Preferred Securities exercise their
overallotment option with respect thereto, then such aggregate principal amount
of Series A Junior Subordinated Debentures shall be up to $___________ (except,
in each case, for Series A Junior Subordinated Debentures authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Series A Junior Subordinated Debentures pursuant to Section 304, 305,
306, 907 or 1107 of the Indenture).
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3. MATURITY DATE. The principal of the Series A Junior
Subordinated Debentures shall be payable (together with any accrued and unpaid
interest thereon, including Additional Interest, as defined in Section 6, if
any) on the earlier of (a) _________, 2025, or (b) the date upon which American
General Delaware is liquidated, dissolved or wound-up; provided, however,
that, if all the Series A Preferred Securities are exchanged for Series A
Junior Subordinated Debentures (a "Series A Special Event Exchange") in the
manner set forth in Section 5(d) of the Written Action, dated ______________,
1995 (the "Written Action"), of the Managing Member of American General
Delaware establishing the Series A Preferred Securities, the Series A Junior
Subordinated Debentures will mature on the date set forth in clause (a),
notwithstanding that American General Delaware may have liquidated, dissolved
or wound-up in connection with or after such Series A Special Event Exchange.
4. INTEREST RATE; INTEREST PAYMENT DATES. The Series A Junior
Subordinated Debentures shall bear interest at the rate of _______ % per annum;
interest shall accrue from ______________, 1995 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for; the
Interest Payment Dates on which such interest shall be payable shall be the
last day of each calendar month of each year, commencing ________________,
1995, until the principal is paid in full or such payment is duly provided for;
and the Regular Record Date for the interest payable upon any such Interest
Payment Date shall be the Business Day next preceding such Interest Payment
Date, provided, however, that if the Series A Junior Subordinated Debentures
are not in book-entry-only form during any period following a Series A Special
Event Exchange, the Regular Record Date for any Interest Payment Date within
such period shall be the fifteenth day of the month in which such Interest
Payment Date occurs.
5. EXTENSION OF AN INTEREST PAYMENT PERIOD. The Company shall
have the right, at any time and from time to time during the term of the Series
A Junior Subordinated Debentures, to extend an interest payment period to a
period ending on the last day of a calendar month (an "Extension Period") not
exceeding 60 consecutive months, but in no event beyond the date of Stated
Maturity or the Redemption Date of the Series A Junior Subordinated Debentures.
During an Extension Period, interest will continue to accrue and compound
monthly in the manner set forth in Section 6 below. Prior to the termination
of any Extension Period of less than 60 consecutive months, the Company may
further extend the interest payment period, provided that such Extension Period
may not exceed 60 consecutive months and may not extend beyond the date of
Stated Maturity or the Redemption Date of the Series A Junior Subordinated
Debentures. Upon the termination of any Extension Period and the payment of
all accrued and unpaid interest (including Additional Interest) then due, the
Company may select a new Extension Period, subject to the above requirements.
No interest shall be due during an Extension Period until the end of such
period. Such interest shall be due and payable on the Interest Payment Date
which is the last day of the Extension Period. The Regular Record Date for the
interest payable on such Interest Payment Date shall be the Business Day next
preceding such Interest Payment Date, provided that if the Series A Junior
Subordinated Debentures are not in book-entry-only form during any period
following a Series A Special Event Exchange, the Regular Record Date for such
payment shall be the 15th day of the month in which such Interest Payment
Date occurs.
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At any time prior to a Series A Special Event Exchange and if any
Series A Preferred Securities are then outstanding, the Company shall give
American General Delaware notice of its selection of an Extension Period at
least one Business Day prior to the earlier of (i) the date that dividends on
the Series A Preferred Securities are payable or (ii) the date on which
American General Delaware is required to give notice of the record or payment
date of any dividend payable on the Series A Preferred Securities to the New
York Stock Exchange ("NYSE") or other applicable self-regulatory organization
or to holders of the Series A Preferred Securities, but in any event not less
than one Business Day prior to such record date. After any Series A Special
Event Exchange, the Company shall give the holders of the Series A Junior
Subordinated Debentures notice of its selection of an Extension Period not less
than two Business Days prior to the Regular Record Date for the first Interest
Payment Date for which such Extension Period will be effective. In each case,
the Company shall give the Trustee notice of its selection of an Extension
Period not later than the Business Day such notice is required to be given to
American General Delaware or the Holders of the Series A Junior Subordinated
Debentures, as the case may be, pursuant to the preceding provisions of this
paragraph.
Notice of the Company's extension of an Extension Period shall be
given prior to the then scheduled end of the Extension Period in a manner
similar to the notice given in connection with the selection of an Extension
Period.
6. ADDITIONAL INTEREST. Interest shall accrue at the rate of
____% per annum on any interest on the Series A Junior Subordinated Debentures
that is not paid during an Extension Period. Such interest shall compound
monthly. The Company shall pay such interest, to the fullest extent permitted
by applicable law, on the Interest Payment Date, which is the last day of
such Extension Period. Additionally, if at any time prior to a Series A
Special Event Exchange, American General Delaware shall be required to pay,
with respect to the income it derives from the interest payments on the Series
A Junior Subordinated Debentures, any amounts for or on account of any taxes,
duties, assessments or governmental charges of whatever nature imposed by the
United States (other than withholding taxes), or any other taxing authority,
then, in any such case, the Company shall pay, to the fullest extent permitted
by applicable law, as additional interest such additional amounts (the
"Additional Amounts") as may be necessary in order that the net amounts
received and retained by American General Delaware with respect to interest
payments on the Series A Junior Subordinated Debentures, after the payment of
such taxes, duties, assessments or governmental charges (including such taxes,
duties, assessments or governmental charges payable with respect to additional
sums payable pursuant to this sentence), shall result in American General
Delaware's having such funds as it would have had in the absence of the payment
of such taxes, duties, assessments or governmental charges. Such Additional
Amounts shall be payable when the related interest payment on the Series A
Junior Subordinated Debentures is due, except that, if the existence or
applicability of such taxes, duties, assessments or governmental charges is not
known by the Company at the time of such interest payment, then on the Interest
Payment Date immediately preceding the date on which American General Delaware
proposes to pay such taxes, duties, assessments or charges. The amounts of
interest payable to effect monthly compounding on the Series A
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Junior Subordinated Debentures pursuant to the first three sentences of this
Section 6, together with any such Additional Amounts, are referred to herein as
"Additional Interest."
In addition to the Additional Interest, the Company shall be required
to pay interest, at the rate borne by the Series A Junior Subordinated
Debentures, on any principal or premium that is not paid when due and, to the
extent that payment of such interest is lawful, interest on overdue
installments of interest (which shall not include interest not paid because of
an extension of an interest payment period).
7. PLACE OF PAYMENT. The Trustee is hereby appointed as the
initial sole Paying Agent for the Series A Junior Subordinated Debentures. The
principal of and interest (including any Additional Interest) on the Series A
Junior Subordinated Debentures shall be payable at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York, provided,
however, that, at the option of the Company, payment of interest may be made
(a) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (b) subject to the procedures
of the Paying Agent, by wire transfer in immediately available funds at such
place and to such account as may be designated by the Person entitled thereto
as specified in the Security Register.
8. CONDITIONAL RIGHT OF REDEMPTION. If at any time following the
Conversion Expiration Date or the Conversion Expiration Date of the Series A
Junior Subordinated Debentures (as such terms are defined in Section 12(d)),
less than 10% of the aggregate principal amount of the Series A Junior
Subordinated Debentures originally purchased by American General Delaware with
the proceeds from the sale of the Series A Preferred Securities remains
Outstanding, then the Series A Junior Subordinated Debentures shall be subject
to redemption, in whole but not in part, at the option of the Company, at a
Redemption Price equal to the unpaid principal amount thereof, without premium
or penalty, plus any accrued and unpaid interest (including any Additional
Interest) thereon to the Redemption Date.
9. MANDATORY REDEMPTION.
(a) If, prior to a Series A Special Event Exchange, American
General Delaware redeems any Series A Preferred Securities in accordance with
the terms thereof, then the Series A Junior Subordinated Debentures shall be
due and payable and shall be redeemed by the Company in an aggregate principal
amount equal to the aggregate stated liquidation preference of the Series A
Preferred Securities so redeemed at a Redemption Price equal to the unpaid
principal amount of the Series A Junior Subordinated Debentures so redeemed,
without premium or penalty, plus any accrued and unpaid interest (including any
Additional Interest) thereon to the Redemption Date. Any redemption pursuant
to this Section shall be made prior to 12:00 noon, New York time, on the date
of such redemption of the Series A Preferred Securities (or at such other time
on such earlier date as the Company and American General Delaware shall agree).
(b) In the case of a redemption pursuant to this Section 9, the
Company shall, at least one Business Day prior to the Redemption Date, notify
the Trustee of such
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Redemption Date and of the principal amount of the Series A Junior Subordinated
Debentures to be redeemed. If the related redemption of Series A Preferred
Securities does not occur, then such redemption of the Series A Junior
Subordinated Debentures shall be of no force and effect, notwithstanding the
giving of such notice of redemption.
10. OPTIONAL REDEMPTION. The Series A Junior Subordinated
Debentures shall be subject to redemption, at the option of the Company, in
whole or in part, at any time or from time to time on or after _______________,
2003 at a Redemption Price equal to the unpaid principal amount thereof,
without premium or penalty, plus any accrued and unpaid interest (including any
Additional Interest) thereon to the Redemption Date.
Additionally, if, prior to a Series A Special Event Exchange, the
Company or any of its Subsidiaries purchases any Series A Preferred Securities
by tender, in the open market, or otherwise, the Company shall have the right
to redeem the Series A Junior Subordinated Debentures in a principal amount not
to exceed the aggregate stated liquidation preference of the Series A Preferred
Securities so purchased, at a Redemption Price equal to the unpaid principal
amount thereof, without premium or penalty, plus any accrued and unpaid
interest (including any Additional Interest) thereon to the Redemption Date.
11. CONVERSION INTO AMERICAN GENERAL COMMON STOCK.
(a) Conversion Price. The Series A Junior Subordinated Debentures
shall be convertible, at the option of the Holders, at any time on or before
the earlier of the Conversion Expiration Date or the Conversion Expiration Date
of the Series A Junior Subordinated Debentures, into fully paid and
nonassessable shares of American General Common Stock at an initial conversion
price of $________________ principal amount of Series A Junior Subordinated
Debentures per share of American General Common Stock, subject to adjustment as
described in Section 13 (such conversion price, as so adjusted, being herein
called the "Conversion Price"). Subject to the provisions of this Section 11
and Section 12, a Holder of Series A Junior Subordinated Debentures may convert
any portion of the principal amount of the Series A Junior Subordinated
Debentures into that number of fully paid and nonassessable full shares of
American General Common Stock obtained by dividing the aggregate principal
amount of the Series A Junior Subordinated Debentures to be converted by such
Holder by such Conversion Price.
(b) Conversion Procedure Prior to Series A Special Event Exchange.
The Written Action provides that a holder of Series A Preferred Securities
wishing to exercise its right under such Written Action to convert Series A
Preferred Securities into American General Common Stock shall surrender to the
Conversion Agent, as defined in Section 16, such Series A Preferred Securities
(or, if such Series A Preferred Securities are in book-entry form, cause such
Series A Preferred Securities to be transferred to the account of the
Conversion Agent on the records of the Depository), together with an irrevocable
notice of conversion setting forth the number of Series A Preferred Securities
to be converted, together with the name or names, if other than the holder, in
which the shares of American General Common Stock to be issued upon conversion
are to be registered and directing it (i) to exchange such Series A Preferred
Securities for the appropriate portion of the Series A Junior Subordinated
Debentures held by American General Delaware at the
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exchange rate specified in the Written Action and (ii) to immediately convert
such Series A Junior Subordinated Debentures, on behalf of such holder, into
shares of American General Common Stock. The Written Action also provides
that, if such Series A Preferred Securities and notice of conversion are so
delivered (or transferred, in the case of book-entry Series A Preferred
Securities) to the Conversion Agent before the close of business on the
Conversion Expiration Date, American General Delaware shall deliver the
appropriate portion of the Series A Junior Subordinated Debentures held by it
to the Conversion Agent for conversion in accordance with this Section. As
promptly as practicable after its receipt of a copy of such notice of
conversion and the certificates representing the Series A Junior Subordinated
Debentures surrendered for conversion (or, in the case of book-entry Series A
Junior Subordinated Debentures, the transfer of such Series A Junior
Subordinated Debentures to its account at the Depository), the Company shall
issue and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of American General Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of a share to the Person or Persons entitled to receive the
same and, if required pursuant to Section 11(e) below, the Series A Junior
Subordinated Debentures referenced in such section.
(c) Conversion Procedure After Series A Special Event Exchange.
In order to convert Series A Junior Subordinated Debentures into shares of
American General Common Stock after a Series A Special Event Exchange and prior
to the Conversion Expiration Date of the Series A Junior Subordinated
Debentures, the Holder of any Series A Junior Subordinated Debentures to be
converted shall surrender to the Conversion Agent such Series A Junior
Subordinated Debentures, duly endorsed or assigned to the Company or in blank
(or, if such Series A Junior Subordinated Debentures are in book-entry form,
cause such Series A Junior Subordinated Debentures to be transferred to the
account of the Conversion Agent on the records of the Depository), together
with an irrevocable notice of conversion (copies of which shall be available at
the office of the Conversion Agent) stating that the Holder elects to convert
such Series A Junior Subordinated Debentures or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be
converted. Such notice of conversion shall list the name or names, if other
than the Holder, in which the shares of American General Common Stock to be
issued upon conversion are to be registered upon conversion (and in which the
unconverted portion, if any, of the Series A Junior Subordinated Debentures
surrendered are to be registered). As promptly as practicable after its
receipt of a copy of such notice of conversion and the certificates
representing the Series A Junior Subordinated Debentures surrendered for
conversion (or, in the case of book-entry Series A Junior Subordinated
Debentures, the transfer of such Series A Junior Subordinated Debentures to its
account at the Depository), the Company shall issue and shall deliver at the
office of the Conversion Agent a certificate or certificates for the number of
full shares of American General Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of a share,
and, if applicable, a new Series A Junior Subordinated Debenture representing
the unconverted portion of the Series A Junior Subordinated Debentures
surrendered for conversion.
(d) Fractional Shares. No fractional shares of American General
Common Stock will be issued as a result of conversion, but in lieu thereof,
such fractional interest will be
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paid in cash (computed to the nearest cent, with one-half cent being rounded
upward) by the Company based on the Current Market Price (as defined in Section
12(d)) of American General Common Stock on the date the notice of conversion
was received by the Conversion Agent.
(e) Partial Conversions. If the conversion of any Series A Junior
Subordinated Debenture is in part only, then a new Series A Junior Subordinated
Debenture for the unconverted portion thereof will be issued in the name of the
Holder thereof (or, subject to compliance with applicable legal requirements,
the name specified by the Holder) upon the cancellation thereof in accordance
with Section 305 of the Indenture.
(f) No Payments. Subject to the next succeeding sentence, upon
the conversion of any Series A Junior Subordinated Debentures into American
General Common Stock, the Company will not make, or be required to make, any
payment, allowance or adjustment for accrued interest (including any Additional
Interest) thereon, whether or not in arrears. If, however, a notice of
conversion is received by the Conversion Agent with respect to Series A Junior
Subordinated Debentures on or after a Regular Record Date and prior to the next
succeeding Interest Payment Date, the Holder thereof will be entitled to
receive the interest payable on such Interest Payment Date on the portion of
such Series A Junior Subordinated Debentures to be converted, notwithstanding
the conversion thereof prior to such Interest Payment Date. No payment or
adjustment shall be made upon conversion of any Series A Junior Subordinated
Debentures into American General Common Stock with respect to dividends or
other distributions on such American General Common Stock having record dates
prior to the date of conversion.
(g) Effective Time of Conversion. Each conversion shall be deemed
to have been effected immediately prior to the close of business on the day on
which the related notice of conversion was received by the Conversion Agent and
the Conversion Price of Series A Subordinated Debentures surrendered for
conversion shall be the Conversion Price in effect at that time. The Person or
Persons entitled to receive the American General Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of the American General Common Stock issued upon such conversion as of
such effective time and, at such time, the rights of the Holders of the
converted Series A Junior Subordinated Debentures, as such Holders, but subject
to the second sentence of Section 11(f) and the last sentence of Section 11(h),
shall cease.
(h) Effect of Conversion. Subject to the second sentence of
Section 11(f), the Company's delivery (through the Conversion Agent or
otherwise) of the number of full shares of American General Common Stock into
which the Series A Junior Subordinated Debentures surrendered for conversion
are convertible (together with the cash payment, if any, in lieu of fractional
shares) to the Person or Persons entitled to receive such shares shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Series A Junior Subordinated Debentures so converted
and any unpaid interest, including Additional Interest (but excluding
Additional Amounts), accrued on, or payable with respect to, such Series A
Junior Subordinated Debentures at the time of such conversion. A Holder's
right to receive Additional Amounts accrued as of the effective time of
conversion shall continue until such Additional Amounts are paid.
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(i) Issuance of Rights. Whenever the Company shall issue shares
of American General Common Stock upon conversion of Series A Junior
Subordinated Debentures as contemplated by this Section 11, the Company shall
issue, together with each such share of American General Common Stock, one
right to purchase Series A Junior Participating Preferred Stock of the Company
(or other securities in lieu thereof) pursuant to the Rights Agreement, dated as
of July 27, 1989, between the Company and First Chicago Trust Company of New
York, as amended, or any similar rights issued to holders of American General
Common Stock in addition thereto or in replacement therefor (such rights,
together with any additional or replacement rights, being collectively referred
to as the "Rights"), whether or not such Rights shall be exercisable at such
time, but only if such Rights are issued and outstanding and held by other
holders of American General Common Stock (or are evidenced by outstanding share
certificates representing American General Common Stock) at such time and have
not expired or been redeemed.
12. EXPIRATION OF CONVERSION RIGHTS.
(a) Right of Company to Terminate Conversion Privilege. On or
after __________, ____, the Company may, at its option, cause the conversion
rights of Holders of Series A Junior Subordinated Debentures to expire if (i)
the Company is then current in the payment of interest (without regard to any
Extension Period) on the Series A Junior Subordinated Debentures and (ii) for
20 Trading Days (as defined in Section 13(e)) within any period of 30
consecutive Trading Days, including the last Trading Day of such period, the
Current Market Price of American General Common Stock shall have exceeded 120%
of the Conversion Price then in effect.
(b) Exercise of Option Prior to a Series A Special Event Exchange.
In order to exercise its conversion expiration option prior to a Series A
Special Event Exchange, the Company shall give a written notice to American
General Delaware directing American General Delaware to exercise its right,
pursuant to Section 8(d) of the Written Action, to cause the conversion rights
of the holders of Series A Preferred Securities to expire and to issue the
press release referred to in Section 8(d)(ii) of the Written Action. The
Company shall also furnish a copy of such notice to the Trustee (and the
Conversion Agent if the Trustee is not then serving as the Conversion Agent).
If American General Delaware fails to issue such press release within two
Business Days after its receipt of such notice, the Company may, on behalf of
American General Delaware, issue such press release in accordance with the
provisions of Section 8(d)(ii) of the Written Action.
(c) Exercise of Option After a Series A Special Event Exchange.
In order to exercise its conversion expiration option after a Series A Special
Event Exchange, the Company shall issue a press release for publication on the
Dow Jones News Service or on a comparable news service announcing the
Conversion Expiration Date of the Series A Junior Subordinated Debentures.
Such press release must be issued prior to the opening of business on the
second Trading Day after a period in which the conditions in Section 12(a) have
been met, but in no event prior to _________, ____. Such press release shall
state that the Company has elected to exercise its right to terminate the
conversion privilege, specify the Conversion Expiration Date of the Series A
Junior Subordinated Debentures (as determined in the manner set forth below)
and provide the Conversion
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Price and the Current Market Price of American General Common Stock, in each
case as of the close of business on the Trading Day next preceding the date of
the press release. Additionally, the Company shall cause a notice of the
expiration of conversion rights (a "Notice of Conversion Expiration") to be
given by first-class mail to the Holders of Series A Junior Subordinated
Debentures, the Trustee (and the Conversion Agent if the Trustee is not then
serving as the Conversion Agent) not more than four Business Days after the
Company issues the press release. The Notice of Conversion Expiration shall
state, as appropriate: (i) the Conversion Expiration Date of the Series A
Junior Subordinated Debentures; (ii) the Conversion Price of the Series A
Junior Subordinated Debentures and the Current Market Price of the American
General Common Stock, in each case as of the close of business on the Trading
Day next preceding the date of the Notice of Conversion Expiration; (iii) the
place or places at which a conversion notice with respect to Series A Junior
Subordinated Debentures may be given to the Conversion Agent in accordance with
Section 11(c) prior to the Conversion Expiration Date of the Series A Junior
Subordinated Debentures; and (iv) such other information or instructions as the
Company deems necessary or advisable to enable a Holder to exercise its
conversion right hereunder. Notice of Conversion Expiration shall be deemed to
have been given on the day such notice is first mailed by first-class mail,
postage prepaid, to each Holder of Series A Junior Subordinated Debentures at
the address of the Holder appearing in the Security Register (whether or not
the Holder receives the Notice of Conversion Expiration). No defect in the
Notice of Conversion Expiration or in the mailing thereof with respect to any
Series A Junior Subordinated Debenture shall affect the validity of the
Company's exercise of its conversion expiration option if the press release
referred to above shall have been issued.
(d) Certain Definitions. The term "Conversion Expiration Date"
has the meaning assigned to such term in Section 8(d)(ii) of the Written
Action. The "Conversion Expiration Date of the Series A Junior Subordinated
Debentures" shall be the close of business on the Business Day selected by the
Company which is not less than 30 nor more than 60 calendar days after the
date on which the Company issues the press release required by Section 12(c)
announcing its intention to terminate the conversion rights of the holders of
the Series A Junior Subordinated Debentures. If the Company does not exercise
its conversion expiration option, the Conversion Expiration Date of the Series A
Junior Subordinated Debentures (i) with respect to any principal amount of
Series A Junior Subordinated Debentures which is called for redemption shall be
the close of business on the third Business Day prior to the scheduled
Redemption Date for such Series A Junior Subordinated Debentures and (ii) in
any other case shall be the close of business on the third Business Day prior
to the Stated Maturity of the principal of the Series A Junior Subordinated
Debentures. As of the close of business on the earlier of the Conversion
Expiration Date or the Conversion Expiration Date of the Series A Junior
Subordinated Debentures, the Series A Junior Subordinated Debentures shall be
deemed to be non-convertible securities.
The term "Current Market Price" of American General Common Stock for
any day means the reported last sale price, regular way, on such day, or, if no
sale takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Composite Tape, or, if the American General Common Stock is not listed or
admitted to trading on the NYSE, on the principal national
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securities exchange on which the American General Common Stock is listed or
admitted to trading, or if the American General Common Stock is not listed or
admitted to trading on a national securities exchange, on the National Market
System of the National Association of Securities Dealers, Inc., or, if the
American General Common Stock is not quoted or admitted to trading on such
quotation system, on the principal quotation system on which the American
General Common Stock is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of the
American General Common Stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or, if not so available in such
manner, as furnished by any NYSE member firm selected from time to time by the
Board of Directors of the Company for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Company's Board of
Directors.
13. CONVERSION PRICE ADJUSTMENTS.
(a) Stock Dividends, Subdivisions, Etc. The Conversion Price
shall be subject to adjustment from time to time as follows:
(i) If the Company shall pay or make a dividend or other
distribution exclusively in American General Common Stock on any class
or series of capital stock of the Company, then the Conversion Price
in effect at the opening of business on the day following the date
fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction, of which the numerator shall be the
number of shares of American General Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For the purposes of this subparagraph (i), the number of shares of
American General Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall
not pay any dividend or make any distribution exclusively in American
General Common Stock on shares of any class or series of capital stock
of the Company held in the treasury of the Company.
(ii) Subject to Section 13(g), if the Company shall pay or
make a dividend or other distribution on the outstanding shares of
American General Common Stock consisting exclusively of, or shall
otherwise issue to all holders of the outstanding shares of American
General Common Stock, rights (other than Rights) or warrants entitling
the holders thereof to subscribe for or purchase shares of American
General Common Stock at a price per share (taking into account the
consideration received for the issuance of such right or warrant plus
any consideration to be received upon the exercise thereof) less than
the Current Price per share (determined as provided in subparagraph
(vi) of this Section 13(a)) of the American General Common Stock on
the date fixed for the determination of shareholders entitled to
receive such rights
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or warrants, then the Conversion Price in effect at the opening of
business on the day following the date fixed for such determination
shall be reduced by multiplying such Conversion Price by a fraction,
of which the numerator shall be the number of shares of American
General Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of American
General Common Stock which the aggregate of the offering price of the
total number of shares of American General Common Stock so offered for
subscription or purchase would purchase at such Current Price per
share and the denominator shall be the number of shares of American
General Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of American
General Common Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination.
For the purposes of this subparagraph (ii), the number of shares of
American General Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. The Company shall
not issue any rights or warrants in respect of shares of American
General Common Stock held in the treasury of the Company. In case any
rights or warrants referred to in this subparagraph (ii) in respect of
which an adjustment shall have been made shall expire or terminate
unexercised, the Conversion Price shall be readjusted at the time of
such expiration to the Conversion Price that would have been in effect
if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.
(iii) If outstanding shares of American General Common
Stock shall be subdivided into a greater number of shares of American
General Common Stock, then the Conversion Price in effect at the
opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced and,
conversely, if outstanding shares of American General Common Stock
shall be combined into a smaller number of shares of American General
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph
(iv), if the Company shall, by dividend or otherwise, pay or otherwise
distribute to all holders of American General Common Stock evidences
of its indebtedness, shares of any class or series of American General
Capital Stock, cash, securities or other assets other than Excluded
Dividends (as defined below), then the Conversion Price shall be
reduced so that the same shall equal the price determined by
multiplying (A) the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by
this subparagraph (iv) by (B) a fraction of which the numerator shall
be the Current Price per share (determined as provided in subparagraph
(vi) of this Section 13(a)) of the American General Common Stock on
the date fixed for the payment of such distribution (the "Reference
Date") less the fair market value, on the Reference Date, of the
portion of the evidences of
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indebtedness, shares of American General Capital Stock, cash,
securities or other assets so distributed (other than Excluded
Dividends) applicable to one share of American General Common Stock
and the denominator shall be such Current Price per share of the
American General Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
Reference Date. "Excluded Dividends" shall mean (1) any dividend or
distribution referred to in subparagraph (i) of this Section 13(a),
(2) any dividend, distribution or issuance of rights or warrants
referred to in subparagraph (ii) of this Section 13(a) or of Rights,
(3) any regular cash dividend on the American General Common Stock
that does not exceed the per share amount of the immediately preceding
regular cash dividend on the American General Common Stock (as
adjusted to appropriately reflect any of the events referred to in
subparagraphs (i) and (iii) of this Section 13(a)), and (4) in the
case of any other dividend or distribution (cash or otherwise), that
portion thereof which, when combined with the per share fair market
value of all other dividends and distributions paid by the Company on
American General Common Stock during the 365-day period ending on the
date of declaration of such dividend or distribution (as adjusted to
appropriately reflect any of the events referred to in subparagraphs
(i) and (iii) of this Section 13(a) and excluding dividends and
distributions referred to in clauses (1) and (2) and dividends and
distributions, or portions thereof, that resulted in an adjustment to
the Conversion Price (or would have but for the application of Section
13(a)(viii), 13(f) or 13(g)), does not exceed 15% of the Current Price
per share of the American General Common Stock on the Trading Day
immediately preceding the date of declaration of such dividend or
distribution. The fair market value of any dividend or distribution
not paid in cash shall be determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors. For purposes of this
subparagraph (iv), any dividend or distribution that includes shares
of American General Common Stock or rights or warrants to subscribe
for or purchase shares of American General Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences
of indebtedness, shares of American General Capital Stock, cash or
assets other than such shares of American General Common Stock or such
rights or warrants (making any Conversion Price reduction required by
this subparagraph (iv)) immediately followed by (2) a dividend or
distribution of such shares of American General Common Stock or such
rights or warrants (making any further Conversion Price reduction
required by subparagraphs (i) or (ii) of this Section 13(a) and, in
the case of rights or warrants, subject to the last sentence of such
subparagraph (ii)), except (A) the Reference Date of such dividend or
distribution as defined in this subparagraph (iv) shall be substituted
as "the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution," "the date fixed for the
determination of shareholders entitled to receive such rights or
warrants" and "the date fixed for such determination" within the
meaning of subparagraphs (i) and (ii) of this Section 13(a) and (B)
any shares of American General Common Stock included in such dividend
or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning
of subparagraph (i) of this Section 13(a).
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(v) If a tender or exchange offer made by the Company or
any Subsidiary of the Company for all or any portion of American
General Common Stock shall expire and such tender or exchange offer
shall involve the payment by the Company or such Subsidiary of
consideration per share of American General Common Stock having a fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) at the last time (the "Tender Expiration Time") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it
may have been amended) that exceeds 110% of the Current Price per
share (determined as provided in subparagraph (vi) of this Section
13(a)) of the American General Common Stock on the Trading Day (as
defined in Section 13(e)) next succeeding the Tender Expiration Time,
then the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subparagraph (v) by a fraction, of
which the numerator shall be the number of shares of American General
Common Stock outstanding (including any tendered or exchanged shares)
at the Tender Expiration Time multiplied by the Current Price per
share (determined as provided in subparagraph (vi) of this Section
13(a)) of the American General Common Stock on the Trading Day next
succeeding the Tender Expiration Time and the denominator shall be the
sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Tender Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of American
General Common Stock outstanding (less any Purchased Shares) at the
Tender Expiration Time and the Current Price per share (determined as
provided in subparagraph (vi) of this Section 13(a)) of the American
General Common Stock on the Trading Day next succeeding the Tender
Expiration Time, such reduction to become effective immediately prior
to the opening of business on the day following the Tender Expiration
Time. Notwithstanding anything contained in this Section 13(a)(v) to
the contrary, no adjustment shall be made to the Conversion Price in
the case of a tender or exchange offer of the character described in
Rule 13e-4(h)(5) under the Securities Exchange Act of 1934, as
amended, or any successor rule thereto.
(vi) For the purpose of any computation under
subparagraphs (ii), (iv) and (v) of this Section 13(a), the "Current
Price" per share of American General Common Stock on any date in
question shall be deemed to be the average of the daily Closing Prices
(as defined in Section 13(e)) for the five consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the day in question
and, if applicable, the day before the "ex" date with respect to the
issuance or distribution requiring such computation; provided,
however, that if another event occurs that would require an adjustment
pursuant to subparagraph (i) through (v), inclusive, the Board of
Directors may make such adjustments to the Closing Prices during such
five Trading Day period as it deems appropriate to effectuate the
intent of the adjustments in this Section 13(a),
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in which case any such determination by the Board of Directors shall
be set forth in a Board Resolution and shall be conclusive. For
purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which
the American General Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Prices were
obtained without the right to receive such issuance or distribution,
and (2) when used with respect to any tender or exchange offer means
the first date on which the American General Common Stock trades
regular way on such exchange or in such market after the Tender
Expiration Time of such offer.
(vii) The Company may make such reductions in the
Conversion Price of the Series A Junior Subordinated Debentures, in
addition to those required by subparagraphs (i), (ii), (iii), (iv) and
(v) of this Section 13(a), as it considers to be advisable to avoid or
diminish any income tax to holders of American General Common Stock or
holders of rights to purchase American General Common Stock or
securities convertible into American General Common Stock, resulting
from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. The
Company from time to time may reduce the Conversion Price by any
amount selected by the Company for any period of time if the period is
at least twenty days, and the Board of Directors of the Company shall
have made a determination that such reduction would be in the best
interest of the Company, which determination shall be conclusive.
Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to holders of record of the Series A
Junior Subordinated Debentures a notice of the reduction at least
fifteen days prior to the date the reduced Conversion Price takes
effect, and such notice shall state the reduced Conversion Price and
the period it will be in effect.
(viii) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in the Conversion Price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not
required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 13
shall be made to the nearest cent or to the nearest 1/100th of a
share, as the case may be, with one-half cent and 5/1000th of a share,
respectively, being rounded upward.
(ix) Whenever the Conversion Price is adjusted as herein
provided:
(1) the Company shall compute the adjusted
Conversion Price and shall prepare a certificate signed by the
Chief Financial Officer, the Treasurer or a Vice President of
the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be
filed with the Conversion Agent and, if such adjustment is
made prior to a Series A Special Event Exchange, to American
General Delaware; and
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(2) if such adjustment is made after a Series A
Special Event Exchange, the Company shall cause a notice
stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price to be mailed to
all record holders of Series A Junior Subordinated Debentures
at their last addresses as they appear upon the Security
Register.
(b) Reclassification, Consolidation, Merger Or Sale of Assets. In
the event that the Company shall be a party to any transaction, including
without limitation any recapitalization or reclassification of the American
General Common Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a subdivision
or combination of the American General Common Stock), any consolidation of the
Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
American General Common Stock), any sale or transfer of all or substantially
all of the assets of the Company or any compulsory share exchange, in each case
pursuant to which the American General Common Stock is converted into the right
to receive other securities, cash or other property, then lawful provision
shall be made as part of the terms of such transaction whereby each holder of
Series A Junior Subordinated Debentures then outstanding shall have the right
thereafter to convert such Series A Junior Subordinated Debentures only into
(i) in the case of any such transaction other than a Common Stock Fundamental
Change (as defined in Section 13(e)), the kind and amount of securities, cash
and other property receivable upon the consummation of such transaction by a
holder of that number of shares of American General Common Stock into which
such Series A Junior Subordinated Debentures could have been converted
immediately prior to such transaction, after giving effect, in the case of any
Non-Stock Fundamental Change (as defined in Section 13(e)), to any adjustment
in the Conversion Price required by the provisions of Section 13(d), and (ii)
in the case of a Common Stock Fundamental Change, common stock of the kind
received by holders of American General Common Stock as a result of such Common
Stock Fundamental Change in an amount determined pursuant to the provisions of
Section 13(d). The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquired the
Company's shares, as the case may be, shall make provision in its certificate
or articles of incorporation or other constituent document to establish such
right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments which, for events subsequent to the
effective date of such provisions in such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 13. The
above provisions shall similarly apply to successive transactions of the
foregoing type.
(c) Prior Notice Of Certain Events. In case:
(i) the Company shall (1) declare any dividend (or any
other distribution) on the American General Common Stock, other than
(A) a dividend payable in shares of American General Common Stock or
(B) a dividend payable in cash that would not require an adjustment
pursuant to 13(a)(iv) or (2) authorize a tender or exchange offer that
would require an adjustment pursuant to Section 13(a)(v);
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(ii) the Company shall authorize the granting to all
holders of American General Common Stock of rights or warrants to
subscribe for or purchase any shares of stock of any class or series
or of any other rights or warrants (other than Rights);
(iii) of any reclassification of American General Common
Stock (other than a subdivision or combination of the outstanding
American General Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company shall be required, or of
the sale or transfer of all or substantially all of the assets of the
Company or of any compulsory share exchange whereby the American
General Common Stock is converted into other securities, cash or other
property; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall (1) if such event occurs prior to a Series A Special
Event Exchange, cause to be filed with American General Delaware or (2) if such
event occurs after a Series A Special Event Exchange, cause to be mailed to the
Holders at their last addresses as they appear in the Security Register, in
each case, at least fifteen calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record (if any) is to be taken for the purpose of such dividend, distribution,
rights or warrants or, if a record is not to be taken, the date as of which the
holders of American General Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of American
General Common Stock of record shall be entitled to exchange their shares of
American General Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up (but no failure to mail
such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
(d) Adjustments In Case of Fundamental Changes. Notwithstanding
any other provision in this Section 13 to the contrary, if any Fundamental
Change (as defined in Section 13(e)) occurs, then the Conversion Price in
effect will be adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental Change, the
Series A Junior Subordinated Debentures shall be convertible solely into common
stock of the kind received by holders of American General Common Stock as the
result of such Common Stock Fundamental Change as more specifically provided in
the following clauses (d)(i) and (d)(ii).
For purposes of calculating any adjustment to be made pursuant to this Section
13(d) in the event of a Fundamental Change, immediately after such Fundamental
Change:
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(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price shall thereupon become the lower of (A) the
Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 13, and (B) the result
obtained by multiplying the greater of the Applicable Price (as
defined in Section 13(e)) or the then applicable Reference Market
Price (as defined in Section 13(e)) by a fraction, of which the
numerator shall be $50 and the denominator shall be the amount set
forth below (based on the date such Non-Stock Fundamental Change
occurs):
Twelve Months
Ending _______________, Denominator
1996 . . . . . . . . . . . . . . . . . . . . . . . $
1997 . . . . . . . . . . . . . . . . . . . . . . . $
1998 . . . . . . . . . . . . . . . . . . . . . . . $
1999 . . . . . . . . . . . . . . . . . . . . . . . $
2000 . . . . . . . . . . . . . . . . . . . . . . . $
2001 . . . . . . . . . . . . . . . . . . . . . . . $
2002 . . . . . . . . . . . . . . . . . . . . . . . $
2003 and thereafter . . . . . . . . . . . . . . . $
; and
(ii) in the case of a Common Stock Fundamental Change, the
Conversion Price in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Section 13, shall thereupon be
adjusted by multiplying such Conversion Price by a fraction of which
the numerator shall be the Purchaser Stock Price (as defined in
Section 13(e)) and the denominator shall be the Applicable Price;
provided, however, that in the event of a Common Stock Fundamental
Change in which (A) 100% of the value of the consideration received by
a holder of American General Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, is paid
only with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of
the American General Common Stock shall have been exchanged for,
converted into or acquired for common stock (and cash with respect to
fractional interests) of the successor, acquiror or other third party,
the Conversion Price of the Series A Junior Subordinated Debentures in
effect immediately prior to such Common Stock Fundamental Change shall
thereupon be adjusted by multiplying such Conversion Price by a
fraction of which the numerator shall be one (1) and the denominator
shall be the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one share of
American General Common Stock as a result of such Common Stock
Fundamental Change.
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(e) Definitions. The following definitions shall apply to terms
used in this Section 13:
(i) "Applicable Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the American
General Common Stock receive only cash, the amount of cash received by
a holder of one share of American General Common Stock and (ii) in the
event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the daily Closing Prices of the
American General Common Stock for the ten consecutive Trading Days
prior to and including the record date for the determination of the
holders of American General Common Stock entitled to receive
securities, cash or other property in connection with such Non-Stock
Fundamental Change or Common Stock Fundamental Change, or, if there is
no such record date, the date upon which the holders of the American
General Common Stock shall have the right to receive such securities,
cash or other property (such record date or distribution date being
hereinafter referred to as the "Entitlement Date"), in each case, as
adjusted in good faith by the Board of Directors to appropriately
reflect any of the events referred to in subparagraphs (i), (ii),
(iii), (iv) and (v) of Section 13(a).
(ii) "Closing Price" of any common stock on any day shall
mean the reported last sale price, regular way, on such day, or, if no
sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported
on the principal national securities exchange on which such common
stock is listed or admitted to trading, or, if such common stock is
not listed or admitted to trading on a national securities exchange,
on the National Market System of the National Association of
Securities Dealers, Inc., or, if such common stock is not quoted or
admitted to trading on such quotation system, on the principal
quotation system on which such common stock is listed or admitted to
trading or quoted, or, if not listed or admitted to trading or quoted
on any national securities exchange or quotation system, the average
of the closing bid and asked prices of such common stock in the
over-the-counter market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or, if not so available in such manner, as
furnished by any NYSE member firm selected from time to time by the
Board of Directors for that purpose or, if not so available in such
manner, as otherwise determined in good faith by the Board of
Directors.
(iii) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined
in good faith by the Board of Directors) of the consideration received
by holders of American General Common Stock consists of common stock
that for each of the ten consecutive Trading Days prior to the
Entitlement Date has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or
quoted on the National Market System of the National Association of
Securities Dealers, Inc.; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental
Change and the outstanding Series A Junior
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Subordinated Debentures continue to exist as outstanding Series A
Junior Subordinated Debentures, or (ii) not later than the occurrence
of such Fundamental Change, the outstanding Series A Junior
Subordinated Debentures are converted into or exchanged for
convertible subordinated debentures of the entity succeeding to the
business of the Company, which convertible subordinated debentures
have terms substantially similar to those of the Series A Junior
Subordinated Debentures.
(iv) "Conversion Price" shall have the meaning given that
term in Section 11(a).
(v) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all
or substantially all of the American General Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the
right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or otherwise);
provided, however, that, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the
Conversion Price, such Fundamental Change shall be deemed to have
occurred when substantially all of the American General Common Stock
shall be exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash or other property, but
the adjustment shall be based upon the highest weighted average per
share consideration that a holder of American General Common Stock
could have received in such transactions or events as a result of
which more than 50% of the American General Common Stock shall have
been exchanged for, converted into, or acquired for or constitute
solely the right to receive securities, cash or other property.
(vi) "Non-Stock Fundamental Change" shall mean any
Fundamental Change other than a Common Stock Fundamental Change.
(vii) "Purchased Shares" shall have the meaning given that
term in Section 13(a)(v).
(viii) "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the average of the daily Closing
Prices of the common stock received in such Common Stock Fundamental
Change for the ten consecutive Trading Days prior to and including the
Entitlement Date, as adjusted in good faith by the Board of Directors
to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv) and (v) of Section 13(a).
(ix) "Reference Date" shall have the meaning given that
term in Section 13(a)(iv).
(x) "Reference Market Price" shall initially mean $_____
and in the event of any adjustment to the Conversion Price other than
as a result of a Non-Stock Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any
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such adjustment shall always be the same as the ratio of $_____ to the
initial Conversion Price.
(xi) "Tender Expiration Time" shall have the meaning given
that term in Section 13(a)(v).
(xii) "Trading Day" shall mean, with respect to any
security listed or admitted to trading on the NYSE, any day on which
such security is traded on the NYSE, or, if such security is not
listed or admitted to trading on the NYSE, on the principal national
securities exchange on which such security is listed or admitted to
trading, or, if such security is not listed or admitted to trading on
a national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc., or, if such security
is not quoted or admitted to trading on such quotation system, on the
principal quotation system on which such security is listed or
admitted to trading or quoted, of, if not listed or admitted to
trading or quoted on any national securities exchange or quotation
system, in the over-the-counter market.
(f) Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions of this Section 13, no adjustment of the Conversion Price
shall be required to be made upon the issuance of any shares of American
General Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of American General
Common Stock under any such plan, or the issuance of any shares of American
General Common Stock or options or rights to purchase such shares pursuant to
any present or future employee, officer, director, or consultant benefit plan
or program or agreement of the Company or a Subsidiary or pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Series A Junior Subordinated Debentures were
first established pursuant to this instrument.
(g) Certain Rights. Notwithstanding any other provision of this
Section 13, the issuance or distribution of Rights shall not be deemed to
constitute an issuance or a distribution or dividend of rights, warrants, or
other securities to which any of the adjustment provisions described above
applies.
(h) Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on American General
Common Stock referred to in Section 13(a)(iv) (including, without limitation,
dividends or distributions referred to in the last sentence of Section
13(a)(iv) but excluding the Excluded Dividends), the Holders of the Series A
Junior Subordinated Debentures, upon the conversion thereof subsequent to the
close of business on the date fixed for the determination of shareholders
entitled to receive such distribution and prior to the effectiveness of the
Conversion Price adjustment in respect of such distribution, shall also be
entitled to receive for each share of American General Common Stock into which
the Series A Junior Subordinated Debentures are converted, the portion of the
shares of American General Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed
applicable to one share of American General Common Stock; provided, however,
that, at the election
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of the Company (whose election shall be evidenced by a Board Resolution) with
respect to all Holders so converting, the Company may, in lieu of distributing
to such Holders any portion of such distribution not consisting of cash or
securities of the Company, pay such Holders an amount in cash equal to the fair
market value thereof (as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution).
If any conversion of Series A Junior Subordinated Debentures described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of American General Common Stock which the Holder of
the Series A Junior Subordinated Debentures so converted is entitled to receive
in accordance with the immediately preceding sentence, the Company may elect
(such election to be evidenced by a Board Resolution) to distribute to such
Holder a due bill for the shares of American General Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such Holder is so entitled, provided that such due bill (i) meets any
applicable requirements of the principal national securities exchange or other
market on which the American General Common Stock is then traded, and (ii)
requires payment or delivery of such shares of American General Common Stock,
rights, warrants, evidences of indebtedness, shares of capital stock, cash or
assets no later than the date of payment or delivery thereof to holders of
shares of American General Common Stock receiving such distribution.
(i) One Adjustment. There shall be no adjustment of the
Conversion Price in case of the issuance of any American General Capital Stock
(or securities convertible into or exchangeable for American General Capital
Stock) or any other distribution or event except as specifically described in
this Section 13. If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions of this Section 13, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the Holders of the Series A Junior
Subordinated Debentures.
14. CONVERSION FOR AMERICAN GENERAL SERIES A PREFERRED STOCK PRIOR
TO A SERIES A SPECIAL EVENT EXCHANGE.
(a) Convertibility. Section 9 of the Written Action provides
that, upon the occurrence of an Exchange Event (as defined in Section 14(d))
prior to a Series A Special Event Exchange, the holders of a majority of the
aggregate liquidation preference of the Series A Preferred Securities then
outstanding, voting at a meeting of the holders of the Series A Preferred
Securities called for such purpose or by written consent, may, at their option,
direct the Conversion Agent to exchange all (but not less than all) of the
Series A Preferred Securities for Series A Junior Subordinated Debentures and
to immediately convert such Series A Junior Subordinated Debentures, on behalf
of such holders, for shares of Series A Cumulative Convertible Preferred Stock,
par value $1.50 per share, of the Company ("American General Series A Preferred
Stock"), at the rate of one share of American General Series A Preferred Stock
for each $50 principal amount of Series A Junior Subordinated Debentures.
Accordingly, prior to a Series A Special Event Exchange and if any Series A
Preferred Securities are then outstanding, the Series A Junior Subordinated
Debentures shall be convertible at the request of Holders thereof, following an
Exchange Election (as defined in Section 9(c) of the Written Action) by a
majority in
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aggregate liquidation preference of the Series A Preferred Securities, into
fully paid and non-assessable shares of American General Series A Preferred
Stock in accordance with the terms and conditions of this Section 14.
(b) Conversion Procedure. The procedure for the conversion of all
the Series A Junior Subordinated Debentures into shares of American General
Series A Preferred Stock pursuant to this Section 14 shall be as follows:
(i) The Conversion Agent, upon receiving irrevocable
notice from American General Delaware (or such other Person as is
entitled to give such notice under the Written Action) of an Exchange
Election by the holders of a majority in aggregate liquidation
preference of the Series A Preferred Securities (a "Notice of
Exchange"), shall (A) exchange all (but not less than all) outstanding
Series A Preferred Securities for Series A Junior Subordinated
Debentures held by American General Delaware in the manner prescribed
in Section 9(a) of the Written Action at the rate of $50 principal
amount of Series A Junior Subordinated Debentures for each share of
Series A Preferred Securities and (B) deliver a copy of the Notice of
Exchange to the Company and, if the Trustee is not then serving as the
Conversion Agent, the Trustee. Upon receipt by it of the Notice of
Exchange, American General Delaware shall deliver the appropriate
principal amount of Series A Junior Subordinated Debentures held by it
to the Conversion Agent (or, if such Series A Junior Subordinated
Debentures are in book-entry form, cause such principal amount of
Series A Junior Subordinated Debentures to be transferred to the
account of the Conversion Agent on the records of the Depository)
for conversion in accordance with this Section 14.
(ii) Upon receipt of a copy of the Notice of Election from
the Conversion Agent and the certificates, if any, representing the
appropriate principal amount of Series A Junior Subordinated
Debentures held by American General Delaware (or the transfer thereof
to its account at the Depository, as the case may be), the Company
shall issue, and deliver to the Conversion Agent, shares of American
General Series A Preferred Stock for the principal amount of Series A
Junior Subordinated Debentures so to be converted, at the rate of one
share of American General Series A Preferred Stock for each $50
principal amount of Series A Junior Subordinated Debentures.
(iii) The Company shall cause the shares of American
General Series A Preferred Stock issuable upon conversion of the
Series A Junior Subordinated Debentures to be registered in the names
of the holders of Series A Preferred Securities designated in the
Notice of Exchange and, as promptly as practicable after receipt of
certificates representing the shares of American General Series A
Preferred Stock so registered, the Conversion Agent shall deliver such
certificates, if any, representing the American General Series A
Preferred Stock issuable upon such conversion to the Person or Persons
entitled to receive the same.
(c) Accrued Interest; Effective Date of Exchange. Any accrued but
unpaid interest (including any Additional Interest) on the Series A Junior
Subordinated Debentures
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surrendered for conversion shall, from and after the time of such conversion,
be treated as accumulated and unpaid dividends on the American General Series A
Preferred Stock issued upon conversion of the Series A Junior Subordinated
Debentures. Series A Junior Subordinated Debentures shall be deemed to have
been converted immediately prior to the close of business on the Exchange
Election Date (as defined below). The Person or Persons entitled to receive
the American General Series A Preferred Stock issuable upon an exchange of the
Series A Preferred Securities shall be treated for all purposes as the record
holder or holders of such shares at such time and, at such time, all interest
on the Series A Junior Subordinated Debentures shall cease to accrue and the
rights of such Person or Persons as a Holder or Holders of Series A Junior
Subordinated Debentures shall cease. Any Series A Junior Subordinated
Debentures surrendered for conversion shall be cancelled by the Trustee.
(d) Definitions. For the purpose of this Section 14, the failure
of holders of Series A Preferred Securities to receive, for 15 consecutive
months, the full amount of dividend payments (including arrearages and any
Additional Dividends (as defined in Section 1 of the Written Action)) on the
Series A Preferred Securities will constitute an "Exchange Event." The term
"Exchange Election Date" shall mean the date of an Exchange Election Meeting
(as defined in Section 9(c) of the Written Action) at which the holders of a
majority of the aggregate liquidation preference of the Series A Preferred
Securities authorize the exchange of all the Series A Preferred Securities or,
in the absence of such meeting, the date of receipt by American General
Delaware of a written consent or consents signed by the holder or holders of a
majority in aggregate liquidation preference of the Series A Preferred
Securities authorizing such exchange.
15. CERTAIN PROVISIONS APPLICABLE TO CONVERSION INTO AMERICAN
GENERAL SERIES A PREFERRED STOCK.
(a) Redemptions and Conversion. Notwithstanding the provisions of
Section 14, a Series A Junior Subordinated Debenture (or portion thereof called
for redemption) may not be converted into American General Series A Preferred
Stock if such Series A Junior Subordinated Debenture (or applicable portion
thereof) has been previously surrendered for conversion into American General
Common Stock or called for redemption unless the applicable Redemption Price
is not paid on the applicable Redemption Date.
(b) Consolidation, Mergers and Sale of Assets. If the Company
shall consolidate with, or merge into, another Person or sell or transfer all
or substantially all of the property of the Company to another Person, in each
case prior to a conversion pursuant to Section 14, then, subject to the
penultimate sentence of this Section 15(b), lawful provision shall be made as
part of the terms of such transaction whereby each Holder of Series A Junior
Subordinated Debentures then Outstanding shall have the right thereafter to
convert, at a conversion rate as nearly equivalent as may be practicable to the
rate specified in Section 14, each such Series A Junior Subordinated Debenture
upon the occurrence of an Exchange Election only into shares of preferred stock
of the Person resulting from such consolidation, surviving such merger or to
which such property was transferred having substantially the same dividend and
voting rights, liquidation preference, and (subject to the provisions of
Section 13) other designations, preferences, limitations and relative rights as
the American
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General Series A Preferred Stock. The Person resulting from such consolidation
or surviving such merger or which acquired such property, as the case may be,
shall make provision in its certificate or articles of incorporation or other
constituent document to establish such right. The above provisions shall
similarly apply to successive transactions of the foregoing type.
16. CONVERSION AGENT. Chemical Mellon Shareholder Services, LLC
shall be the initial Conversion Agent for the Series A Junior Subordinated
Debentures. Without in any way limiting any authority granted to the
Conversion Agent under the Written Action, in effecting the conversion and
exchange transactions described in Sections 11 and 14, the Conversion Agent is
acting (i) in the case of Sections 11(b) and 14, as agent of the holders of
Series A Preferred Securities, and (ii) in the case of Section 11(c), as agent
for the Holders of the Series A Junior Subordinated Debentures, directing it to
effect such conversion or exchange transactions. Without in any way limiting
any authority granted to the Conversion Agent under the Written Action, the
Conversion Agent is authorized (i) to convert Series A Junior Subordinated
Debentures into American General Common Stock and thereupon to deliver such
shares of American General Common Stock, all in accordance with the provisions
of Section 11, (ii) to convert Series A Junior Subordinated Debentures
following the occurrence of an Exchange Event into American General Series A
Preferred Stock and thereupon to deliver such shares of American General Series
A Preferred Stock, all in accordance with the provisions of Section 14, and
(iii) to conduct the other activities specified herein to be performed by such
Conversion Agent. Subject to the provisions of 601 of the Indenture, neither
the Trustee nor the Conversion Agent shall at any time be under any duty or
responsibility to any Holder of a Series A Junior Subordinated Debenture or any
holder of a Series A Preferred Security to determine whether any facts exist
which may require any adjustment of the Conversion Price or any exchange
contemplated hereby, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making the
same. Neither the Trustee nor the Conversion Agent shall be accountable with
respect to the validity or value (or the kind or amount) of any shares of
American General Common Stock, or of any securities or property or cash, which
may at any time be issued or delivered upon the conversion of any Series A
Junior Subordinated Debenture or upon any exchange contemplated hereby; and
neither the Trustee nor the Conversion Agent shall be deemed to make any
representation with respect thereto. Subject to the provisions of 601 of the
Indenture, neither the Trustee nor the Conversion Agent shall be responsible
for any failure of the Company to issue, transfer or deliver any shares of
American General Common Stock or American General Series A Preferred Stock or
stock certificates or other securities or property or cash upon the surrender
of any Series A Junior Subordinated Debenture or Series A Preferred Security
for the purpose of conversion or exchange or to comply with any of the
covenants of the Company in this resolution, provided that the foregoing shall
not relieve the
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Conversion Agent of any responsibility it may have under this resolution to
deliver to the Person entitled to receive the same the shares of American
General Common Stock or American General Series A Preferred Stock or other
securities or property or cash which has been made available to the Conversion
Agent by the Company for such purpose.
17. RESERVATION OF SHARES; REGULATORY REQUIREMENTS; TAXES; LISTING.
(a) Reservation of Shares. The Company shall at all times reserve
and keep available out of its authorized and unissued American General Common
Stock and American General Series A Preferred Stock, solely for issuance upon
the conversion of the Series A Junior Subordinated Debentures, free from any
preemptive or other similar rights, such number of shares of American General
Common Stock and American General Series A Preferred Stock as shall from time
to time be issuable upon the conversion of all the Series A Junior Subordinated
Debentures then Outstanding. Notwithstanding the foregoing, the Company shall
be entitled to deliver upon conversion of Series A Junior Subordinated
Debentures, shares of American General Common Stock or American General Series
A Preferred Stock, as appropriate, reacquired and held in the treasury of
American General (in lieu of the issuance of authorized and unissued shares),
so long as any such treasury shares are free and clear of all liens, charges,
claims, equities, security interests or encumbrances. Any shares of American
General Common Stock or American General Series A Preferred Stock, as
appropriate, issued upon conversion of the Series A Junior Subordinated
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable.
(b) Governmental Requirements. The Company shall use its best
efforts to obtain and keep in force such governmental or regulatory permits or
other authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of the American
General Common Stock and American General Series A Preferred Stock (and all
requirements to list on the applicable stock exchange, the American General
Common Stock and American General Series A Preferred Stock issuable upon
conversion of Series A Junior Subordinated Debentures that are at the time
applicable), that are necessary to enable the Company to lawfully issue
American General Common Stock and American General Series A Preferred Stock
upon the conversion of the Series A Junior Subordinated Debentures.
(c) Taxes. The Company shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of the issuance or
delivery of shares of American General Common Stock or American General Series
A Preferred Stock, as the case may be, by the Company upon conversion of the
Series A Junior Subordinated Debentures. The Company shall not, however, be
required to pay any tax, fee or governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of shares of
American General Common Stock or American General Series A Preferred Stock in a
name other than that in which the security so converted was registered and no
such issuance or delivery shall be made unless and until the Person requesting
such issuance or delivery has paid to the Conversion Agent the amount of any
such tax, fee or governmental charge or has established to the satisfaction of
the Conversion Agent that such tax, fee or governmental charge has been paid.
The Company and the Conversion Agent may require
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that such Person furnish a suitable indemnity with respect to any tax, fee or
other governmental charge required to be paid with respect to such a transfer.
Nothing in this paragraph (c) shall limit the requirement of the Company to
withhold taxes pursuant to applicable law or otherwise require the Company to
pay any amounts on account of such withholding.
(d) Listing. If the Series A Preferred Securities are listed on
the NYSE or another national securities exchange at the time of the
distribution of the Series A Junior Subordinated Debentures pursuant to a
Series A Special Event Exchange, then, prior to such distribution, the Company
shall use its best efforts to cause the Series A Junior Subordinated Debentures
to be listed on the NYSE or such other exchange on which the Series A
Preferred Securities are then listed.
18. CERTAIN PROVISIONS APPLICABLE AFTER A SERIES A SPECIAL EVENT
EXCHANGE. If, immediately prior to any Series A Special Event Exchange, the
Series A Preferred Securities are represented by one or more global securities
held by The Depository Trust Company ("DTC") or any successor securities
depositary or their respective nominees, then (a) DTC or such successor shall
act as (and is hereby appointed) the Depository for the Series A Junior
Subordinated Debentures, and (b) the Series A Junior Subordinated Debentures
exchanged for the Series A Preferred Securities upon such Series A Special
Event Exchange shall be represented by one or more global Series A Junior
Subordinated Debentures registered in the name of DTC or such successor
securities depositary or their respective nominees.
After the date fixed for a Series A Special Event Exchange, any
certificates representing Series A Preferred Securities not held by DTC or any
successor securities depositary or their respective nominees and not
surrendered for exchange shall be deemed to represent Series A Junior
Subordinated Debentures having a principal amount and accrued and unpaid
interest equal to the liquidation preference plus accrued and unpaid dividends
of such Series A Preferred Securities until such certificates are surrendered
to the Conversion Agent for exchange in accordance with the terms of the Series
A Special Event Exchange. Notwithstanding the foregoing, until such
certificates are so surrendered, no payments of interest or principal will be
made with respect to such Series A Junior Subordinated Debentures.
19. REGISTRAR. The Series A Junior Subordinated Debentures may be
surrendered for registration of transfer or exchange and for conversion or
exchange at the Corporate Trust Office of the Trustee and any notices or
demands to or upon the Company in respect of the Series A Junior Subordinated
Debentures and the Indenture may be presented at that office.
20. FORM. The certificates evidencing the Series A Junior
Subordinated Debentures shall be substantially in the form attached hereto as
Annex A, with such changes as the officer executing the same shall approve,
such approval to be evidenced by such officer's manual or facsimile signature.
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21. TRANSFERABILITY. Prior to a Series A Special Event Exchange,
the Series A Junior Subordinated Debentures may not be transferred by American
General Delaware without the Company's prior consent. The Series A Junior
Subordinated Debentures may be distributed to the holders of the Series A
Preferred Securities upon the occurrence of a Tax Event or an Investment Event
(as such terms are defined in the Written Action) only upon the written consent
of the Company.
22. DENOMINATION. The Series A Junior Subordinated Debentures
shall be issuable in denominations of $50 and any integral multiple thereof.
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ANNEX A
FORM OF FACE OF SERIES A JUNIOR SUBORDINATED DEBENTURE
AMERICAN GENERAL CORPORATION
___% Series A Convertible Junior Subordinated Debenture
Due ___________, 2025
No._________ $___________
American General Corporation, a corporation duly organized and
existing under the laws of the State of Texas (herein called the "Company",
which term includes any successor under the Indenture referred to on the
reverse side), for value received, hereby promises to pay to
_____________________________, or registered assigns, the principal sum of
_________ Dollars on the earlier of (i) ____________, 2025 or (ii) the date
upon which American General Delaware, L.L.C., a Delaware limited liability
company (herein called "American General Delaware"), is liquidated, dissolved
or wound-up; provided, however, that, if all the _______________ Preferred
Securities, Series A, of American General Delaware (herein called the "Series A
Preferred Securities") are exchanged (herein called a "Series A Special Event
Exchange") for the Series A Junior Subordinated Debentures (as defined on the
reverse side) in accordance with terms of the Series A Preferred Securities,
this Series A Junior Subordinated Debenture will mature on _________________,
2025, notwithstanding that American General Delaware may have liquidated,
dissolved or wound-up in connection with or after such Series A Special Event
Exchange. The Company also agrees to pay interest on the principal hereof at
the rate of ____% per annum from ______________, 1995 (or from the most recent
Interest Payment Date, as hereinafter defined, to which interest has been paid
or duly provided for), payable monthly in arrears on the last day of each
calendar month of each year (each an "Interest Payment Date"), commencing
___________, 1995, until the principal hereof is paid or made available for
payment. To the fullest extent permitted by applicable law, interest will
accrue at the rate of ____% per annum on any interest installment that is not
paid at the end of any monthly interest period compounded monthly (herein,
together with the Additional Amounts referred to in the Indenture, called
"Additional Interest"). The amount of interest payable for any period will be
computed on the basis of a 360 day year consisting of twelve 30-day months and,
for any period shorter than a full monthly interest payment period, will be
computed on the basis of the actual number of days elapsed in such period. If
any date on which interest is payable on this Series A Junior Subordinated
Debenture is not a Business Day, then the payment of the interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. A "Business Day" shall
mean any day other than a Saturday, Sunday
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or other day on which banking institutions in New York City are authorized or
obligated by law or executive order to close. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Series A
Junior Subordinated Debenture (or one or more Predecessor Securities, as
defined in the Indenture) is registered at the close of business on the Regular
Record Date for such Interest Payment Date. The Regular Record Date shall be
the Business Day next preceding such Interest Payment Date, provided that if
the Series A Junior Subordinated Debentures are not in book-entry-only form
during any period following a Series A Special Event Exchange, the Regular
Record Date for any Interest Payment Date within such period shall be the 15th
day of the month in which such Interest Payment Date occurs. Any such interest
not so punctually paid or duly provided for (other than by reason of the
following paragraph) will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Series A Junior Subordinated Debenture (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest to be fixed by the Trustee, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in such
Indenture.
The Company shall have the right, at any time and from time to time,
to extend an interest payment period to a period (herein called an "Extension
Period") not exceeding 60 consecutive months, but in no event beyond the date
of Stated Maturity or the Redemption Date of the Series A Junior Subordinated
Debentures. During an Extension Period, interest will continue to accrue and
compound monthly. Prior to the termination of any such Extension Period of
less than 60 consecutive months, the Company may further extend the interest
payment period, provided that such Extension Period may not exceed 60
consecutive months and may not extend beyond the date of Stated Maturity or the
Redemption Date of the Series A Junior Subordinated Debentures. Upon the
termination of any Extension Period and the payment of all accrued and unpaid
interest (including any Additional Interest) then due, the Company may select a
new Extension Period, subject to the above requirements. No interest will be
due during an Extension Period until the end of such period. Such interest
shall be due and payable on the Business Day next succeeding the last day of
the Extension Period, unless such last day is an Interest Payment Date and, in
that event, on such Interest Payment Date to the Person in whose name this
Series A Junior Subordinated Debenture is registered on the Regular Record Date
for such Business Day or Interest Payment Date.
Payment of the principal of and interest on this Series A Junior
Subordinated Debenture will be made at the office or agency of the Company
maintained for that purpose in New York, New York, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made (i) by check mailed to the address
of the Person entitled thereto as such address shall appear in the Security
Register or (ii) subject to the procedures of the Paying Agent, by wire
transfer in immediately available funds at such place and to such account as
may be designated by the Person entitled thereto as specified in the Security
Register.
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Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Series
A Junior Subordinated Debenture shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: ___________ __, ______
AMERICAN GENERAL CORPORATION
By:___________________________
Name:
Title:
[SEAL]
Attest:_______________________
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
CHEMICAL BANK
As Trustee
By __________________________
Authorized Officer
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FORM OF REVERSE OF SERIES A JUNIOR SUBORDINATED DEBENTURE
This Debenture is one of a duly authorized issue of Securities of the
Company, designated as its ___% Series A Convertible Junior Subordinated
Debentures due ___________ __, 2025 (herein called the "Series A Junior
Subordinated Debentures"), limited in aggregate principal amount to
$____________ (or up to __________ aggregate principal amount if and to the
extent the over-allotment option granted to the underwriters for the sale of
the Series A Preferred Securities is exercised), issued and to be issued under
an Indenture, dated as of _____________ (herein called the "Indenture"),
between the Company and Chemical Bank, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture). Reference is
made to the Indenture and all indentures supplemental thereto for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, the holders of Senior Indebtedness and
the Holders of the Series A Junior Subordinated Debentures and other series of
Securities which may be issued pursuant to the Indenture and of the terms upon
which the Securities are, and are to be, authenticated and delivered. All
terms used in this Series A Junior Subordinated Debenture which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
The indebtedness evidenced by this Series A Junior Subordinated
Debenture, including all principal and interest (including Additional
Interest), is, to the extent provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness,
and this Security is issued subject to the provisions of the Indenture with
respect thereto. The Holder of this Series A Junior Subordinated Debenture, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default with respect to the Series A Junior
Subordinated Debentures shall occur and be continuing, the principal of the
Series A Junior Subordinated Debentures may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series A Junior Subordinated
Debentures under the Indenture at any time by the Company and the Trustee with,
in some cases, the consent of the Holders of a majority in aggregate principal
amount of the Series A Junior Subordinated Debentures at the time Outstanding
and, in other cases, without the consent of any Holders. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Series A Junior Subordinated Debentures, on behalf of
the Holders of all Series A Junior Subordinated Debentures, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver shall be conclusive and binding upon such Holder and upon all future
Holders of this Series A Junior Subordinated Debenture and of any Series A
Junior Subordinated Debenture issued upon the registration of transfer
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hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent is made upon this Series A Junior Subordinated Debenture or
thereon.
Subject to and in compliance with the provisions of the Indenture, the
Series A Junior Subordinated Debentures are convertible at any time before the
close of business on the Conversion Expiration Date or Conversion Expiration
Date of the Series A Junior Subordinated Debentures at the option of the Holder
into fully paid and nonassessable shares of American General Common Stock at an
initial conversion price of $______ aggregate principal amount of Series A
Junior Subordinated Debentures per share of American General Common Stock,
subject to adjustment as provided for in the Indenture. Notwithstanding the
conversion hereof after a Regular Record Date, the Holder will be entitled to
receive the interest payable on this Series A Junior Subordinated Debenture
with respect to the then current interest payment period on the next succeeding
Interest Payment Date. No other adjustment, however, shall be made for accrued
interest, including Additional Interest, whether or not in arrears. No
fractional shares of American General Common Stock will be issued as a result
of conversion, but in lieu thereof such fractional interest will be paid in
cash by the Company.
If following the Conversion Expiration Date or Conversion Expiration
Date of the Series A Junior Subordinated Debentures, less than 10% of the
original aggregate principal amount of the Series A Junior Subordinated
Debentures remains Outstanding, then such Series A Junior Subordinated
Debentures shall be subject to redemption at the option of the Company upon not
less than 30 days' nor more than 60 days' notice, at a Redemption Price equal
to the unpaid principal amount thereof, plus accrued and unpaid interest
(including any Additional Interest) thereon to the Redemption Date.
The Series A Junior Subordinated Debentures are also subject to
redemption, at the option of the Company, in whole or in part, at any time or
from time to time on or after ________________, 2003, at a redemption price
equal to the unpaid principal amount thereof, plus accrued but unpaid interest
(including any Additional Interest) to the Redemption Date.
In addition, if the Company or any of its Subsidiaries purchases
Series A Preferred Securities by tender, in the open market or otherwise, the
Company shall have the right to redeem the Series A Junior Subordinated
Debentures, in an amount not to exceed the aggregate stated liquidation
preference of the Series A Preferred Securities so purchased, together with any
accrued and unpaid interest thereon (including any Additional Interest) to the
Redemption Date. The Series A Junior Subordinated Debentures are also subject
to redemption in certain other circumstances described in the Indenture.
Upon the occurrence of an Exchange Event, the Series A Junior
Subordinated Debentures are exchangeable for Series A Cumulative Convertible
Preferred Stock of the Company as provided under the terms of the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Series A Junior Subordinated Debenture is
registrable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency
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of the Trustee in New York City, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Series A Junior Subordinated
Debentures, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees provided,
however, that, prior to a Series A Special Event Exchange, the Series A Junior
Subordinated Debentures may not be transferred without the written consent of
the Company.
The Series A Junior Subordinated Debentures are issuable only in
registered form without coupons in denominations of $50 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations set forth therein, Series A Junior Subordinated Debentures are
exchangeable for a like aggregate principal amount of Series A Junior
Subordinated Debentures of a different authorized denomination, as requested by
the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Series A Junior Subordinated
Debenture be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or
interest (including Additional Interest, if any) on this Series A Junior
Subordinated Debenture, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, all such liability being, by the acceptance hereof and as part of
the consideration for the issue hereof, expressly waived and released.
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