1
EXHIBIT 4(s)
TERMS OF THE ___% CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES, SERIES A
DATED AS OF MAY ___, 1995
WRITTEN ACTION OF THE MANAGING MEMBER
PURSUANT TO SECTION 7.1(b) OF THE AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF AMERICAN GENERAL CAPITAL, L.L.C.
The undersigned Managing Member of American General Capital, L.L.C., a
Delaware limited liability company (the "Company"), pursuant to Section 7.1(b)
of the Amended and Restated Limited Liability Company Agreement of the Company
(the "Agreement") dated as of May 24, 1995 by and among American General
Corporation ("American General"), the Managing Member and the Persons who become
Members of the Company in accordance with the provisions thereof, does hereby
authorize the issue of, and establish the relative rights, powers, preferences,
limitations and restrictions of, a series of Preferred Securities as follows:
1. Definitions. All terms defined in the Agreement and not
otherwise defined herein shall have for purposes hereof the meanings provided
for therein. The following additional terms have the respective meanings
specified below:
"Additional Dividends" means the amount of dividends that is
payable by the Company on any dividend arrearages in respect of the Series A
Preferred Securities at the rate of ___% per annum compounded monthly.
"Book-Entry Interest" means a beneficial interest in the global
certificates representing Series A Preferred Securities, ownership and transfers
of which shall be made through the book-entry system of a Clearing Agency as
described in Section 12.
"Business Day" means any day other than a Saturday, Sunday or
other day on which banking institutions in The City of New York are authorized
or obligated by law or executive order to close.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, that is acting as depositary for the Series A Preferred
Securities and in whose name (or nominee's name) shall be registered one or more
global certificates representing Series A Preferred Securities and which shall
undertake to effect book-entry transfers and pledges of interests in the Series
A Preferred Securities.
2
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of interests in
securities deposited with the Clearing Agency.
"Dividend Payment Date" has the meaning set forth in Section
4(b) hereof.
"Guarantee" means the Guarantee Agreement dated as of May 24,
1995, executed and delivered by American General for the benefit of the holders
from time to time of the Series A Preferred Securities and other Preferred
Securities of the Company, as amended from time to time.
"Holders" means the registered holders of the Series A
Preferred Securities as they appear on the books and records of the Company.
"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 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 May
___, 1995, and that the Company or American General 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 the Company is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Liquidation Distribution" has the meaning set forth in Section
7 hereof.
"Notice of Exchange" has the meaning set forth in Section 6(a)
hereof.
"Notice of Redemption" has the meaning set forth in Section
6(a) hereof.
"NYSE" means the New York Stock Exchange, Inc.
"Redemption Price" has the meaning set forth in Section 5(a)
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
-2-
3
"Series A Debentures" means the $__________ aggregate principal
amount (or up to $____________ aggregate principal amount if and to the extent
the over-allotment option granted by the Company to the underwriters of the
Series A Preferred Securities is exercised) of American General's ___% Series A
Junior Subordinated Debentures due 2025 issued pursuant to the Indenture and
sold by American General to the Company in connection with the issuance and sale
by the Company of the Series A Preferred Securities.
"Series A Preferred Securities" has the meaning set forth in
Section 2 hereof.
"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 May ___, 1995, and that the
Company or American General 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) the
Company will be subject to federal income tax with respect to the interest
received on the Series A Debentures, (ii) American General will be precluded
from deducting the interest paid on the Series A Debentures for federal income
tax purposes or (iii) the Company will be subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
2. Designation. A total of 10,000,000 ___% Cumulative Monthly
Income Preferred Securities, Series A (or up to 11,500,000 ___% Cumulative
Monthly Income Preferred Securities, Series A if and to the extent the over-
allotment option granted by the Company to the related underwriters is
exercised) with a liquidation preference of $25.00 per Preferred Security are
hereby authorized and designated as "___% Cumulative Monthly Income Preferred
Securities, Series A" (collectively, the "Series A Preferred Securities").
3. Voting. Except as otherwise provided in the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq., as amended, the
Agreement (including, without limitation, Section 8.1 thereof) or this Written
Action, Preferred Members holding the Series A Preferred Securities shall have,
with respect to such Series A Preferred Securities, no right or power to vote on
any question or matter or in any proceeding or to be represented at, or to
receive notice of, any meeting of Members.
4. Dividends. (a) The Holders shall be entitled to receive, when,
as and if declared by the Company out of funds legally available therefor,
cumulative cash dividends at a rate per annum of ____% of the liquidation
preference of $25.00 per Series A Preferred Security. The amount of dividends
payable for a full monthly dividend period shall be computed on the basis of a
360-day year consisting of 12 months of 30 days each, and for any period shorter
than a full monthly dividend period, shall be computed on the basis of the
actual number of days elapsed in such period. Dividends shall accrue from
-3-
4
______________, 1995, and shall be payable in United States dollars monthly in
arrears on the last day of each calendar month of each year, commencing June 30,
1995. Dividends shall accrue and be cumulative whether or not they have been
earned or declared and whether or not there are funds of the Company legally
available for the payment of dividends. Upon any dividend arrearages in respect
of the Series A Preferred Securities, the Company shall declare and pay
Additional Dividends in order to provide, in effect, monthly compounding on such
dividend arrearages at a rate of ____% per annum compounded monthly and such
Additional Dividends shall accumulate. In the event that any date on which
dividends are payable on the Series A Preferred Securities is not a Business
Day, then payment of the dividend 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.
(b) Dividends on the Series A Preferred Securities must be
declared monthly and be paid on the last day of each calendar month (each a
"Dividend Payment Date") to the extent that the Company has, on such date, (x)
funds legally available for the payment of such dividends and (y) cash on hand
sufficient to make such payments, it being understood that to the extent that
funds are not available to pay in full all accumulated and unpaid dividends, the
Company may pay partial dividends to the extent of funds legally available
therefor. For purposes of this Section 4(b), net interest and investment income
from Eligible Investments shall be considered funds available for the payment of
dividends; provided, however, that the principal amount of Eligible Investments
shall not be available as distributions, dividends or otherwise except in
connection with a Liquidation Distribution pursuant to Section 15.4 of the
Agreement. Dividends will be payable to the Holders as of the relevant record
dates, which, if and so long as the Series A Preferred Securities are
represented by one or more global certificates through the book-entry system of
a Clearing Agency, will be one Business Day prior to the related Dividend
Payment Dates. In the event that the Series A Preferred Securities shall not
continue to be so represented, the Managing Member shall have the right to
select relevant record dates that are more than one Business Day prior to the
related Dividend Payment Dates. In addition, if American General has extended an
interest payment period with respect to the Series A Debentures pursuant to the
Indenture, thereby resulting in the deferral of the payment of dividends on the
Series A Preferred Securities, the Managing Member shall notify the Holders in
writing as to such extended interest payment period no later than the last date
on which notice would be required to be given to the NYSE of the related record
date or Dividend Payment Date.
5. Redemption and Exchange. (a) Upon repayment by American
General of the principal of the Series A Debentures at stated maturity, earlier
redemption or otherwise, including as a result of the acceleration of the
Series A Debentures upon the occurrence of an Event of Default under the
Indenture with respect to the Series A Debentures, the Series A Preferred
Securities shall be subject to mandatory redemption, in whole but not in part,
by the Company, and the proceeds from such repayment shall be applied to
redeem the Series A Preferred Securities at a cash redemption price equal to
the liquidation
-4-
5
preference for such Series A Preferred Securities plus accumulated and unpaid
dividends (whether or not earned or declared), including any Additional
Dividends, to the date fixed for redemption thereof (the "Redemption Price")
(unless such proceeds are used to fund the aggregate Liquidation Distributions
on the Series A Preferred Securities in connection with the liquidation,
dissolution or winding-up of the Company). In case of such repayment, the Series
A Preferred Securities will be redeemed only when repayment of the Series A
Debentures has actually been received by the Company. Notwithstanding the
foregoing, the Series A Preferred Securities will not be so redeemed if (i) in
lieu of repaying the Series A Debentures at stated maturity or date of earlier
redemption, American General is permitted by the Company to exchange the Series
A Debentures for new Debentures or (ii) American General repays the Series A
Debentures at stated maturity or date of earlier redemption but is permitted by
the Company to reborrow the proceeds from such repayment which reborrowing will
be evidenced by new Debentures; provided, however, that the Company may only
permit American General to so exchange the Series A Debentures for new
Debentures or reborrow the proceeds from the repayment thereof if the Company
owns all of the Series A Debentures and the following conditions are satisfied
(which satisfaction, in the case of clauses (f) through (j), shall be determined
in the judgment of the Managing Member and the Company's financial advisor
(which will be selected by the Managing Member, and must be unaffiliated with
American General and be among the 30 largest investment banking firms, measured
by total capital, in the United States at the time of the proposed issuance of
the new Debentures that would evidence the new loan to be made in connection
with such exchange or reborrowing)): (a) American General is not bankrupt,
insolvent or in liquidation, (b) American General is not in default in the
payment of any interest (including Additional Interest, as defined in the
Indenture) or principal in respect of any Debentures, (c) American General has
made timely payments on the Series A Debentures for the immediately preceding 24
months (and has not elected to extend any interest payment period of the Series
A Debentures during such 24-month period), (d) such new Debentures will mature
no later than the earlier (1) the 49th anniversary of the date of the initial
issuance of the Series A Debentures and (2) the 30th anniversary of the date
such new Debentures are issued, (e) the Company is not in arrears in the payment
of any dividends (including Additional Dividends) on the Series A Preferred
Securities, (f) American General is expected to be able to make timely payment
of principal of and interest on such new Debentures, (g) the issuance of such
new Debentures 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, (h) the interest rate on such new Debentures is sufficient to
provide payments equal to or greater than the amount of dividend payments
required under the Series A Preferred Securities, (i) the terms of such new
Debentures are consistent with market circumstances and American General's
financial condition and (j) immediately prior to the issuance of such new
Debentures, the senior unsecured long-term debt of American General is (or, if
no such debt is outstanding, would be) rated not less than BBB (or the
equivalent) by S&P and Baa2 (or the equivalent) by Moody's and the subordinated
unsecured long-term debt of American General (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 S&P and Baa3 by Moody's (or, if either of such rating organizations is not
then rating American General's senior or subordinated unsecured long-term debt,
as the case may be, then, in lieu
-5-
6
of the rating organization no longer rating American General's senior or
subordinated unsecured long-term debt, 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).
(b) The Series A Preferred Securities shall be redeemable at
the option of the Company (subject to the prior consent of American General), in
whole or in part from time to time, on or after _____________, 2000 at the
Redemption Price. The Company may not redeem the Series A Preferred Securities
in part unless all accumulated and unpaid dividends (whether or not earned or
declared), including any Additional Dividends, have been paid in full on all
Series A Preferred Securities for all monthly dividend periods terminating on or
prior to the date of redemption. American General shall have the right to cause
the Company to exercise such redemption option.
(c) At any time after the occurrence of a Tax Event or an
Investment Company Event, the Company (subject to the prior consent of American
General) may, either (i) redeem, in whole but not in part, the Series A
Preferred Securities at the Redemption Price or (ii) exchange, in whole but not
in part, the Series A Preferred Securities for Series A Debentures having an
aggregate principal amount and accrued and unpaid interest equal to the
Redemption Price. Upon any such exchange, American General will use its best
efforts to have the Series A Debentures listed on the NYSE or, if the Series A
Preferred Securities are not then listed on the NYSE, such other exchange on
which the Series A Preferred Securities may then be listed. American General
shall have the right to cause the Company to exercise its right to effect any
such exchange for Series A Debentures.
(d) Subject to applicable law, American General or its
subsidiaries may at any time and from time to time purchase outstanding Series A
Preferred Securities by tender, in the open market or otherwise.
6. Redemption and Exchange Procedures. (a) Notice of any
redemption (optional or mandatory) of the Series A Preferred Securities (a
"Notice of Redemption") and notice of any exchange of the Series A Preferred
Securities for Series A Debentures (a "Notice of Exchange") shall be
irrevocable and shall be given by the Company by mail not fewer than 30 nor
more than 60 calendar days prior to the date fixed for redemption or exchange
thereof to American General and (i) with respect to a Notice of Redemption, to
each Holder of Series A Preferred Securities that are being redeemed and
(ii) with respect to a Notice of Exchange, to each Holder of Series A Preferred
Securities. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
6(a), a Notice of Redemption or Notice of Exchange shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage prepaid, to
each appropriate Holder of Series A Preferred Securities. A Notice of
Redemption or Notice of Exchange shall be addressed to each appropriate Holder
of Series A Preferred Securities at the address of such Holder appearing in the
books and records of the Company. If all of the Series A Preferred Securities
are represented by Book-Entry Interests, Notices of Redemption or Notices of
Exchange shall be sent to the
-6-
7
Clearing Agency. No defect in the Notice of Redemption or Notice of Exchange or
in the mailing thereof with respect to any Series A Preferred Security shall
affect the validity of the redemption or exchange proceedings with respect to
any other Series A Preferred Security.
(b) If the Company issues a Notice of Redemption, then, by
12:00 noon, New York time, on the date fixed for redemption, American General
will repay to the Company an aggregate principal amount of the Series A
Debentures, which, together with accrued and unpaid interest thereon, will be an
amount sufficient to pay the Redemption Price for the Series A Preferred
Securities to be redeemed. If the Series A Preferred Securities are represented
by Book-Entry Interests, the Company shall irrevocably deposit such funds on the
date fixed for redemption with the Clearing Agency and give the Clearing Agency
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Series A Preferred Securities to be redeemed, and if the Series A
Preferred Securities are not represented by Book-Entry Interests, the Company
shall irrevocably deposit such funds with the paying agent for the Series A
Preferred Securities and give such paying agent such irrevocable instructions
and authority to pay the Redemption Price to the Holders of the Series A
Preferred Securities to be redeemed. If a Notice of Redemption shall have been
given and funds irrevocably deposited as required, then immediately prior to the
close of business on the date of such deposit, all rights of the Holders of such
Series A Preferred Securities so called for redemption will cease, except the
right of such Holders to receive the Redemption Price, but without additional
interest from and after such redemption date. In the event that any date fixed
for redemption of Series A Preferred Securities is not a Business Day, then
payment of the Redemption Price 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 falls in
the next calendar year, such payment will be made on the immediately preceding
Business Day. In the event that payment of the Redemption Price is improperly
withheld or refused and not paid either by the Company or by American General
(pursuant to the Guarantee), dividends on the Series A Preferred Securities
called for redemption (including any Additional Dividends) will continue to
accumulate at the then applicable rate, from the original redemption date to the
date that the Redemption Price is actually paid and the Holders of such Series A
Preferred Securities may exercise all of their rights as Holders thereof.
(c) If the Company issues a Notice of Exchange, then following
the date fixed for the exchange of Series A Preferred Securities for Series A
Debentures (as set forth in the Notice of Exchange), (i) the Series A Preferred
Securities will no longer be deemed to be outstanding, (ii) certificates
representing Series A Debentures will be issued to holders of certificates
representing Series A Preferred Securities, upon surrender of such certificates
to the Company or its agent for exchange, (iii) any certificates representing
Series A Preferred Securities not so surrendered for exchange will be deemed to
represent Series A Debentures having a principal amount and accrued and unpaid
interest equal to the Redemption Price of such Series A Preferred Securities
until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made with respect to
such Series A Debentures) and (iv) all rights of Holders of Series A Preferred
Securities will cease, except the right of such Holders to
-7-
8
receive Series A Debentures upon surrender of certificates representing Series A
Preferred Securities.
7. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company (other than
in connection with or after the exchange of the Series A Preferred Securities
for the Series A Debentures as set forth in Section 5(c)), the Holders of
Series A Preferred Securities then outstanding will be entitled to receive out
of the assets of the Company (including any Eligible Investments or amounts
deposited in the Eligible Investment Account) legally available for
distribution to Members, after satisfaction of liabilities of creditors as
required by the Delaware Act but before any distribution of assets is made with
respect to any Interest in the Company ranking junior to the Series A Preferred
Securities as to the distribution of assets upon such liquidation, dissolution
or winding-up of the Company, but together with Preferred Members holding
Preferred Securities or any other Interests in the Company then outstanding
ranking pari passu with the Series A Preferred Securities as to the
distribution of assets upon such liquidation, dissolution or winding-up of the
Company, an amount equal to the aggregate of the liquidation preference of
$25.00 per Series A Preferred Security plus all accumulated and unpaid
Dividends (whether or not earned or declared), including any Additional
Dividends, to the date of payment (the "Liquidation Distribution"). A merger,
consolidation, replacement, conveyance, transfer or lease in accordance with
the provisions of Section 2.8 of the Agreement shall not be deemed to be a
liquidation, dissolution or winding-up of the Company for purposes of this
Section 7.
8. Sinking Fund. The Series A Preferred Securities shall not be
subject to the operation of a retirement or sinking fund.
9. Guarantee of Liabilities. It shall be a condition precedent to
the issuance of the Series A Preferred Securities that American General execute
and deliver to the Company the Guarantee, the Indenture and the Series A
Debentures.
10. Book-Entry-Only Issuance. (a) The Depository Trust Company,
New York, New York ("DTC"), will initially act as the Clearing Agency. The
Series A Preferred Securities will be issued only as fully-registered securities
and will be initially registered in the name of Cede & Co. (DTC's partnership
nominee).
(b) Redemption notices shall be sent to Cede & Co. or any
successor thereof. If less than all of the Series A Preferred Securities are
being redeemed, such securities shall be redeemed in accordance with DTC's then
current practice.
(c) DTC may discontinue providing its services as Clearing
Agency with respect to the Series A Preferred Securities by giving reasonable
notice to the Company as provided in the agreement between the Company and DTC.
Under such circumstances, if a successor Clearing Agency is not obtained, the
Company at its expense shall cause certificates for Series A Preferred
Securities to be printed and delivered as promptly as practicable. If an Event
of Default occurs under the Indenture with respect to the Series A Debentures or
if the Company (with the consent of American General) decides to
-8-
9
discontinue use of the system of book-entry transfers through DTC (or a
successor Clearing Agency), the Company at its expense shall cause certificates
for Series A Preferred Securities to be printed and delivered to the beneficial
owners of the Series A Preferred Securities as promptly as practicable.
(d) In the event that the Series A Preferred Securities do not
remain in book-entry-only form, the following provisions will apply:
(i) Registration of transfers of Series A Preferred Securities
will be effected without charge by or on behalf of the Company, but
upon payment (and/or the giving of such indemnity as the Company or the
Managing Member may require) in respect of any tax or other
governmental charges which may be imposed in connection therewith.
(ii) Exchanges of Series A Preferred Securities for Series A
Debentures will be effected without charge by or on behalf of the
Company, but upon payment (and/or the giving of such indemnity as the
Company or the Managing Member may require) in respect of any tax or
other governmental charges which may be imposed in connection with the
issuance of any Series A Debenture in the name of any person other than
the Holder of the Series A Preferred Security for which the Series A
Debenture is being exchanged or for any reason other than such
exchange.
(iii) The Company will not be required to register or cause to
be registered the transfer of Series A Preferred Securities after such
Series A Preferred Securities have been called for redemption or
exchange.
11. Registrar and Transfer Agent. The Company hereby appoints
Chemical Mellon Shareholder Services, LLC as its initial registrar, transfer
agent and paying agent for the Series A Preferred Securities. The Company may
at any time designate an additional or substitute registrar, transfer agent and
paying agent for the Series A Preferred Securities.
12. Governing Law. This Written Action shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflict of laws thereof.
-9-
10
IN WITNESS WHEREOF, the undersigned Managing Member of the Company has
hereto set its hand as of the day and year first above written.
AMERICAN GENERAL DELAWARE
MANAGEMENT CORPORATION
By:
--------------------------
Name:
Title:
-10-