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EXHIBIT 4(t)
AMERICAN GENERAL CORPORATION
RESOLUTIONS RELATING TO ____% SERIES A JUNIOR SUBORDINATED DEBENTURES
ADOPTED BY THE TERMS COMMITTEE
WHEREAS, American General Capital, L.L.C., a Delaware limited
liability company ("American General Capital"), proposes to issue its
_____________________ Preferred Securities, Series A (collectively, the
"Capital Series A Preferred Securities") and use the proceeds from the sale of
the Capital Series A 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, 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 Junior Subordinated Debenture" (collectively, the
"Subordinated Debentures") and each such Subordinated Debenture shall be
included in the series of Securities so designated.
2. PRINCIPAL AMOUNT. The aggregate principal amount of the
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 Capital Series A
Preferred Securities exercise their overallotment option with respect thereto,
then such aggregate principal amount of Subordinated Debentures shall be up to
$___________ (except, in each case, for Subordinated Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Subordinated Debentures pursuant to Section 304, 305, 306, 907 or
1107 of the Indenture).
3. MATURITY DATE. The principal of the 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 (subject to the Company's right to exchange the
Subordinated Debentures for new Securities or to redeem or repay the
Subordinated Debentures and reborrow the proceeds from such redemption or
repayment upon the terms and subject to the conditions set forth in Section
11), or (b) the date upon which American General
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Capital is liquidated, dissolved or wound-up; provided, however, that, if all
the Capital Series A Preferred Securities are exchanged for Subordinated
Debentures (a "Capital Special Event Exchange") in the manner set forth in
Section 5(c)(ii) of the Written Action, dated ______________, 1995 (the
"Capital Written Action"), of the Managing Member of American General Capital
establishing the Capital Series A Preferred Securities, then (i) the
Subordinated Debentures will mature on the date set forth in clause (a),
notwithstanding that American General Capital may have liquidated, dissolved or
wound-up in connection with or after such Capital Special Event Exchange and
(ii) the Subordinated Debentures will not thereafter be subject to an election
by the Company pursuant to Section 11 hereof to exchange the Subordinated
Debentures for new Securities or to redeem or repay the Subordinated Debentures
and reborrow the proceeds from such redemption or repayment.
4. INTEREST RATE; INTEREST PAYMENT DATES. The 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 Subordinated Debentures are not in book-entry-only form
during any period following a Capital 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
Subordinated Debentures, to extend the 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 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 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 Subordinated Debentures are not in book-entry-only
form during any period following a Capital 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 Capital Special Event Exchange and if any
Capital Series A Preferred Securities are then outstanding, the Company shall
give American General Capital 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 Capital Series A Preferred Securities are payable or (ii) the date on which
American General Capital is required to give notice of the record or payment
date of any dividend payable on the Capital Series A Preferred Securities to
the New York Stock Exchange ("NYSE") or other applicable self-regulatory
organization or to holders of the Capital Series A Preferred Securities, but in
any event not less than one Business Day prior to such record date. After any
Capital Special Event Exchange, the Company shall give the holders of the
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 Capital or the Holders of the 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 such 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 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 the Extension Period.
Additionally, if at any time prior to a Capital Special Event Exchange,
American General Capital shall be required to pay, with respect to the income
it derives from the interest payments on the 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 Capital
with respect to interest payments on the 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 Capital'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
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 Capital proposes to
pay such taxes, duties, assessments or charges. The amounts of interest
payable to effect monthly compounding on the 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."
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In addition to the Additional Interest, the Company shall be required
to pay interest, at a rate borne by the 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 Subordinated Debentures. The principal of
and interest (including any Additional Interest) on the 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. SPECIAL EVENT REDEMPTION. At any time after the occurrence of
a Tax Event or an Investment Company Event (each as hereafter defined and each
constituting a "Capital Special Event") and prior to a Capital Special Event
Exchange, the Subordinated Debentures shall be subject to redemption, at the
option of the Company, in whole but not in part, at a Redemption Price equal to
the unpaid principal amount thereof, without premium or penalty, plus accrued
and unpaid interest (including any Additional Interest) thereon to the
Redemption Date.
"Tax Event" means that a change in any applicable United States law or
regulation or in the interpretation thereof (including but not limited to the
enactment or imminent enactment of any legislation, the publication of any
judicial decisions, regulatory rulings, regulatory procedures, or notices or
announcements (including notices or announcements of intent to adopt such
procedures or regulations), or a change in the official position or the
interpretation of any law or regulation by any legislative body, court
governmental authority or regulatory body, irrespective of the manner in which
such change is made known) shall have occurred after ______________, 1995, and
that American General Capital or the Company shall have received an opinion of
nationally recognized independent legal counsel experienced in such matters
that, as a result of such change, there exists more than an insubstantial risk
that (i) American General Capital will be subject to federal income tax with
respect to the interest received on the Subordinated Debentures, (ii) the
Company will be precluded from deducting the interest paid on the Subordinated
Debentures for federal income tax purposes or (iii) American General Capital
will be subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Investment Company Event" means that a change in any applicable
United States law or regulation or in the interpretation thereof (including but
not limited to the enactment or imminent enactment of any legislation, the
publication of any judicial decisions, regulatory rulings, regulatory
procedures, or notices or announcements (including notices or announcements of
intent to adopt such procedures or regulations), or a change in the official
position or the
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interpretation of any law or regulation by any legislative body, court,
governmental authority or regulatory body, irrespective of the manner in which
such change is made known) shall have occurred after _________________, 1995,
and that American General Capital or the Company shall have received an opinion
of nationally recognized independent legal counsel experienced in practice
under the Investment Company Act of 1940, as amended (the "1940 Act"), that, as
a result of such change, there exists more than an insubstantial risk that
American General Capital is or will be considered an "investment company" which
is required to be registered under the 1940 Act.
9. MANDATORY REDEMPTION.
(a) If, prior to a Capital Special Event Exchange, American
General Capital redeems any Capital Series A Preferred Securities in accordance
with the terms thereof, then the 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 Capital Series A
Preferred Securities so redeemed at a Redemption Price equal to the unpaid
principal amount of the 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 Capital Series A Preferred Securities (or at such other time
on such earlier date as the Company and American General Capital 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 Redemption Date and of the principal amount of the
Subordinated Debentures to be redeemed. If the related redemption of Capital
Series A Preferred Securities does not occur, then such redemption of the
Subordinated Debentures shall be of no force and effect, notwithstanding the
giving of such notice of redemption.
10. OPTIONAL REDEMPTION.
(a) The 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 _______________, 200___ 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.
(b) If, prior to a Capital Special Event Exchange, the Company or
any of its Subsidiaries purchases any Capital Series A Preferred Securities by
tender, in the open market or otherwise, then the Subordinated Debentures shall
be subject to redemption, at the option of the Company, in an aggregate
principal amount not to exceed the aggregate stated liquidation preference of
the Capital 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.
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(c) At any time after the occurrence of a Capital Special Event
and prior to a Capital Special Event Exchange, the Subordinated Debentures
shall be subject to redemption, at the option of the Company, in whole but not
in part, at a Redemption Price equal to the unpaid principal amount thereof,
without premium or penalty, plus accrued and unpaid interest (including any
Additional Interest) thereon to the Redemption Date.
(d) If at any time prior to a Capital Special Event Exchange the
Company is, or in the opinion of nationally recognized independent legal
counsel would be, required to pay Additional Interest with respect to the
Subordinated Debentures (other than Additional Interest required in order to
provide for monthly compounding on the Subordinated Debentures), then the
Company shall have the right to redeem the Subordinated Debentures, in whole
but not in part (except to the extent provided in the next sentence), 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. REBORROWING OR EXCHANGE.
(a) Notwithstanding the provisions of Sections 3, 8, 9 and 10,
prior to a Capital Special Event Exchange, the Company may, with American
General Capital's consent, (i) in lieu of repaying the Subordinated Debentures
when due (either at Stated Maturity, earlier redemption or otherwise, but
excluding any payment due resulting from the acceleration of the maturity of
the Subordinated Debentures upon the occurrence of an Event of Default under
the Indenture with respect to the Subordinated Debentures), or optionally
redeeming the Subordinated Debentures, exchange such Subordinated Debentures
for new Securities with an equal aggregate principal amount or (ii) if the
Company repays such Subordinated Debentures when due or optionally redeems such
Subordinated Debentures, reborrow from American General Capital the proceeds
from such repayment or redemption, which reborrowing shall be evidenced by new
Securities; provided, however, that the Company may not so exchange the
Subordinated Debentures for new Securities or reborrow the proceeds from the
repayment or redemption thereof unless American General Capital owns all of
such Subordinated Debentures and the following conditions are satisfied (which
satisfaction, in the case of clauses (6) through (10), shall be determined in
the judgment of the Managing Member of American General Capital and American
General Capital's financial advisor selected by such Managing Member and who
shall be unaffiliated with the Company and shall be among the 30 largest
investment banking firms, measured by total capital, in the United States at
the time of the issuance of the new Securities that will evidence the new loan
to be made in connection with such exchange or reborrowing):
(1) the Company is not bankrupt, insolvent or in
liquidation,
(2) the Company is not in default in the payment of any
interest (including Additional Interest) or principal in respect of
any Securities under the Indenture,
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(3) the Company has made timely payments on the
Subordinated Debentures for the immediately preceding 24 months (and
has not elected to extend any interest payment period of the
Subordinated Debentures during such 24-month period),
(4) such new Securities will mature no later than the
earlier of (A) the 49th anniversary of the date of the initial
issuance of the Subordinated Debentures and (B) the 30th anniversary
of the date such new Securities are issued,
(5) American General Capital is not in arrears in the
payment of any dividends (including Additional Dividends) on the
Capital Series A Preferred Securities,
(6) the Company is expected to be able to make timely
payment of the principal of and the interest on such new Securities,
(7) the issuance of such new Securities is being made on
terms, and under circumstances, that are consistent with those which a
lender would then require for a loan to an unrelated party,
(8) the interest rate on such new Securities is
sufficient to provide payments equal to or greater than the amount of
dividend payments required under the Capital Series A Preferred
Securities,
(9) the terms of such new Securities are consistent with
market circumstances and the Company's financial condition, and
(10) immediately prior to the issuance of such new
Securities, the senior unsecured long-term debt of the Company is (or,
if no such debt is outstanding, would be) rated not less than BBB (or
the equivalent) by Standard & Poor's Corporation and Baa2 (or the
equivalent) by Moody's Investors Service, inc. and the subordinated
unsecured long-term debt of the Company (or, if more than one issue of
such subordinated debt is outstanding, the most junior of such issues)
is (or, if no such debt is outstanding, would be) rated not less than
BBB- (or the equivalent) by Standard & Poor's Corporation and Baa3 by
Moody's Investors Service, Inc. (or, if either of such rating
organizations is not then rating the Company's senior or subordinated
unsecured long- term debt, as the case may be, the equivalent of such
ratings by any other "nationally recognized statistical rating
organization," as that term is defined by the Securities and Exchange
Commission for purposes of Rule 436(g)(2) under the Securities Act of
1933, as amended).
(b) If the Company elects to exercise its option to exchange new
Securities for Subordinated Debentures pursuant to clause (i) of Section 11(a),
then, no later than ____ Business Days prior to the Stated Maturity or
Redemption Date of the Subordinated Debentures to be exchanged (or, if such
exchange is to be made in lieu of an optional redemption, then no later than
____Business Days before the proposed date of exchange), the Company shall
deliver
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a notice stating that it elects to exercise such option to the Trustee and to
American General Capital. If the Company desires to reborrow the proceeds of
the repayment or redemption of the Subordinated Debentures pursuant to clause
(ii) of Section 11(a), then the Company will deliver a notice stating that
desire to the Trustee and American General Capital at any time before or after
such repayment or redemption. The Company shall specify in each such notice
the date (the "Refunding Date") on which an exchange or reborrowing is to occur
and each such notice shall be accompanied by an Officer's Certificate stating
that the conditions to such exchange or reborrowing contained in this Section
11 have been satisfied. If American General Capital consents to such exchange
or reborrowing (as evidenced by a notice to the Company and the Trustee to that
effect), then the Company shall, on or prior to the Refunding Date, furnish to
the Trustee a Company Order for the authentication and delivery of the
Securities which are to be issued in exchange for the Subordinated Debentures
or which are to evidence the reborrowing, together with (i) the Securities
which are to be authenticated, (ii) the Board Resolutions and Officers'
Certificate or supplemental indenture or other instrument with respect to such
Securities referred to in Sections 201 and 301 of the Indenture, and (iii) if
required by the Trustee, the Opinion of Counsel and other documents referred to
in clauses (1), (2) and (3) of Section 303 of the Indenture.
(c) In the case of an exchange of new Securities for the
Subordinated Debentures pursuant to clause (i) of Section 11(a), on the
Refunding Date, the Company shall deliver the new Securities, authenticated by
the Trustee or an authenticating Agent, to American General Capital in exchange
for the Subordinated Debentures held by American General Capital. Such
Subordinated Debentures shall be cancelled by the Trustee and, on the Refunding
Date, all rights of American General Capital, as Holder of the Subordinated
Debentures, shall cease.
12. CERTAIN PROVISION APPLICABLE AFTER A CAPITAL SPECIAL EVENT
EXCHANGE.
(a) If, immediately prior to any Capital Special Event Exchange,
the Capital Series A Preferred Securities are represented by one or more global
securities held by The Depository Trust Company ("DTC") or any successor
securities depository or their respective nominees, then (a) DTC or such
successor shall act as (and is hereby appointed) the Depository for the
Subordinated Debentures, and (b) the Subordinated Debentures exchanged for the
Capital Series A Preferred Securities upon such Capital Special Event Exchange
shall be represented by one or more global Subordinated Debentures registered
in the name of DTC or such successor securities depository or their respective
nominees.
(b) After the date fixed for a Capital Special Event Exchange, any
certificates representing Capital Series A Preferred Securities not held by DTC
or any successor securities depository or their respective nominees and not
surrendered for exchange shall be deemed to represent Subordinated Debentures
having a principal amount and accrued and unpaid interest equal to the
liquidation preference plus accrued and unpaid dividends of such Capital Series
A Preferred Securities until such certificates are surrendered to the agent
named in the Capital Written Action for exchange in accordance with the terms
of the Capital Special Event
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Exchange. Notwithstanding the foregoing, until such certificates are so
surrendered, no payments of interest or principal will be made with respect to
such Subordinated Debentures.
13. LISTING. If the Capital Series A Preferred Securities are
listed on the NYSE or another national securities exchange at the time of the
distribution of the Subordinated Debentures pursuant to a Capital Special Event
Exchange, then, prior to such distribution, the Company shall use its best
efforts to cause the Subordinated Debentures to be listed on the NYSE or such
other exchange on which the Capital Series A Preferred Securities are then
listed.
14. REGISTRAR. The Subordinated Debentures may be surrendered for
registration of transfer or exchange at the Corporate Trust Office of the
Trustee and any notices or demands at or upon the Company in respect of the
Subordinated Debentures and the Indenture may be presented at that office.
15. FORM. The certificates evidencing the 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.
16. TRANSFERABILITY. Prior to a Capital Special Event Exchange,
the Subordinated Debentures may not be transferred by American General Capital
without the Company's prior consent. The Subordinated Debentures may be
distributed to the holders of the Capital Series A Preferred Securities upon
the occurrence of a Tax Event or an Investment Company Event only upon the
written consent of, the Company.
17. DENOMINATION. The Subordinated Debentures shall be issuable
in denominations of $25 and any integral multiple thereof.
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ANNEX A
FORM OF FACE OF SUBORDINATED DEBENTURE
AMERICAN GENERAL CORPORATION
___% Series A Junior Subordinated Debenture
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 (subject to the
Company's right to exchange this Subordinated Debenture for a new Security or
reborrow the proceeds from the repayment of this Subordinated Debenture upon
the terms and subject to the conditions set forth in the Indenture) or (ii) the
date upon which American General Capital, L.L.C., a Delaware limited liability
company (herein called "American General Capital"), is liquidated, dissolved or
wound-up; provided, however, that (i) if all the _______________ Preferred
Securities, Series A, of American General Capital (herein called the "Capital
Series A Preferred Securities") are exchanged (herein called a "Capital Special
Event Exchange") for the Subordinated Debentures (as defined on the reverse
side) in accordance with terms of the Capital Series A Preferred Securities,
this Subordinated Debenture will mature on _________________, 2025,
notwithstanding that American General Capital may have liquidated, dissolved or
wound-up in connection with or after such Capital Special Event Exchange, and
(ii) the Subordinated Debentures will not thereafter be subject to an election
by the Company to exchange the Subordinated Debentures for new Securities or to
redeem or repay the Subordinated Debentures and reborrow the proceeds from such
redemption or repayment. 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 Subordinated
Debenture is not a
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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 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 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 Subordinated Debentures are not in
book-entry-only form during any period following a Capital 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 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 ending on the last day of a
calendar month (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 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 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 Interest Payment
Date which is the last day of the Extension Period, to the Person in whose name
this Subordinated Debenture is registered on the Regular Record Date for such
Interest Payment Date.
Payment of the principal of and interest on this Subordinated
Debenture will be made at the office or agency of the Company maintained for
that purpose in _________________, 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
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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.
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.
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Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
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:_______________________
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 SUBORDINATED DEBENTURE
This Subordinated Debenture is one of a duly authorized issue of
Securities of the Company, designated as its ___% Series A Junior Subordinated
Debentures (herein called the "Subordinated Debentures"), limited in aggregate
principal amount to $____________ (or up to _________ aggregate principal
amount if and to the extent that the over- allotment option granted to the
underwriters for the sale of the Capital 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 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 Subordinated Debenture
which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
The indebtedness evidenced by this 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 Subordinated
Debenture is issued subject to the provisions of the Indenture with respect
thereto. The Holder of this 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 Subordinated Debentures
shall occur and be continuing, the principal of the 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 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
Subordinated Debentures at the time Outstanding and, in other cases, without
the consent of any Holders. This Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Subordinated
Debentures, on behalf of the Holders of all 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 the Holder of this Subordinated
Debenture and upon all future Holders of this Subordinated Debenture and of any
Subordinated Debenture issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent is
made upon this Subordinated Debenture or thereon.
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The Subordinated Debentures are 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 and unpaid interest (including any
Additional Interest) thereon to the Redemption Date. If American General
Capital redeems the Capital Series A Preferred Securities in accordance with
the terms thereof, the Subordinated Debentures shall be subject to redemption
in a principal amount equal to the aggregate stated liquidation preference of
the Capital Series A Preferred Securities so redeemed, plus accrued and unpaid
interest (including any Additional Interest) thereon to the Redemption Date.
The Company also has the right to redeem the Subordinated Debentures,
in whole, at a Redemption Price equal to the principal amount thereof, plus any
accrued and unpaid interest (including any Additional Interest) if a Tax Event
or Investment Company Event, as defined in the Indenture, shall have occurred.
If at any time prior to a Capital Special Event Exchange the Company is, or in
the opinion of nationally recognized independent legal counsel would be,
required to pay Additional Interest with respect to the Subordinated Debentures
(other than Additional Interest required in order to provide for monthly
compounding on the Subordinated Debentures), the Company shall have the right
to redeem the Subordinated Debentures, in whole but not in part (except to the
extent provided in the next sentence), 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. Notwithstanding the
preceding sentence, if the Company is, or would be, required to pay Additional
Interest as a consequence of American General Capital's being required to pay
Additional Amounts, then the Company may only redeem Subordinated Debentures in
an aggregate principal amount not to exceed the aggregate liquidation
preference of the Capital Series A Preferred Securities with respect to which
such Additional Amounts are required to be paid.
In addition, if the Company or any of its Subsidiaries purchases
Capital Series A Preferred Securities by tender, in the open market or
otherwise, the Company shall have the right to redeem the Subordinated
Debentures, in an amount not to exceed the aggregate stated liquidation
preference of the Capital Series A Preferred Securities so purchased, at a
Redemption Price equal to the principal amount thereof, plus any accrued and
unpaid interest (including any Additional Interest) thereon. This Subordinated
Debenture is also subject to redemption in certain other circumstances
described in the Indenture.
Notwithstanding any other provision of this Subordinated Debenture,
prior to a Capital Special Event resulting in an exchange of Capital Series A
Preferred Securities for Subordinated Debentures, the Company may, with
American General Capital's consent and if the conditions stated in the
Indenture have been satisfied, (i) in lieu of repaying the Subordinated
Debentures when due (either at Stated Maturity, earlier redemption or
otherwise, but excluding any payment due as a result of the acceleration of the
Subordinated Debentures upon the occurrence of an Event of Default under the
Indenture with respect to the Subordinated Debentures), or optionally redeeming
the Subordinated Debentures, exchange such Subordinated Debentures for new
Securities issued under the Indenture with an equal aggregate principal amount
or (ii) if the Company repays such Subordinated Debentures when due or
optionally redeems such
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Subordinated Debentures, reborrow the proceeds from such repayment or
redemption, which reborrowing shall be evidenced by new Securities.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Subordinated Debenture is registrable in
the Security Register, upon surrender of this Subordinated Debenture for
registration of transfer at the office or agency 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 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 Capital Special Event Exchange,
the Subordinated Debentures may not be transferred without the written consent
of the Company.
The Subordinated Debentures are issuable only in registered form
without coupons in denominations of $_______ and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations set forth
therein, Subordinated Debentures are exchangeable for a like aggregate
principal amount of 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 Subordinated Debenture is registered as
the owner hereof for all purposes, whether or not this 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 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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