AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 22, 2004
REGISTRATION NO. 333-107945
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AMERICAN INTERNATIONAL GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 6331 13-2592361
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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KATHLEEN E. SHANNON, ESQ.
SENIOR VICE PRESIDENT, SECRETARY AND DEPUTY GENERAL COUNSEL
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET
NEW YORK, NEW YORK 10270
(212) 770-7000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPY TO:
ROBERT W. REEDER, ESQ.
SULLIVAN & CROMWELL LLP
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this registration
statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MARCH 22, 2004
AMERICAN INTERNATIONAL GROUP, INC.
OFFER TO EXCHANGE
$500,000,000 2.875% Notes Due 2008; and
$1,000,000,000 4.250% Notes Due 2013
FOR ANY AND ALL OUTSTANDING
2.875% Notes Due 2008; and
4.250% Notes Due 2013
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THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 2004, UNLESS
EXTENDED BY US
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The terms of the new notes are substantially identical to the terms of the
old notes, except that the new notes are registered under the Securities Act of
1933 and the transfer restrictions and registration rights and related
additional interest provisions currently applicable to the old notes do not
apply to the new notes.
We do not intend to apply for listing of the new notes on any securities
exchange or to arrange for them to be quoted on any automated quotation system.
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SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF FACTORS YOU
SHOULD CONSIDER BEFORE TENDERING YOUR OLD NOTES FOR NEW NOTES.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is March , 2004
TABLE OF CONTENTS
PAGE
----
Cautionary Statement Pursuant to the Private Securities
Litigation Reform Act of 1995............................. i
Where You Can Find More Information......................... ii
Prospectus Summary.......................................... 1
Risk Factors................................................ 6
Use of Proceeds............................................. 6
Ratio of Earnings to Fixed Charges.......................... 6
The Exchange Offer.......................................... 7
Description of the New Notes................................ 15
Important Federal Income Tax Considerations................. 24
Plan of Distribution........................................ 24
Validity of the Notes....................................... 25
Independent Accountants..................................... 25
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR
INFORMATION CONTAINED IN DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS AN OFFER TO EXCHANGE ONLY
THE NOTES OFFERED BY THIS PROSPECTUS AND ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS ACCURATE ONLY AS OF ITS DATE.
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
We have included or incorporated by reference in this prospectus statements
that may constitute "forward-looking statements" within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are not historical facts but instead represent only
AIG's belief regarding future events, many of which, by their nature, are
inherently uncertain and outside of AIG's control. It is possible that AIG's
actual results may differ, possibly materially, from the anticipated results
indicated in these forward-looking statements.
Information regarding important factors that could cause actual results to
differ, perhaps materially, from those in our forward-looking statements is
contained under the caption "Cautionary Statement Regarding Forward-Looking
Information" in AIG's Annual Report on Form 10-K for the year ended December 31,
2003, which is incorporated into this prospectus by reference. See "Where You
Can Find More Information" below for information about how to obtain a copy of
the Annual Report.
i
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and current reports, proxy
statements and other information with the SEC. These reports, proxy statements
and other information can be inspected and copied at:
SEC Public Reference Room
450 Fifth Street, N.W.
Washington, D.C. 20549
Please call the SEC at 1-800-SEC-0330 for further information.
AIG's filings are also available to the public through:
- The SEC web site at http://www.sec.gov
- The New York Stock Exchange
20 Broad Street
New York, New York 10005
AIG's common stock is listed on the NYSE and trades under the symbol "AIG."
The SEC allows AIG to "incorporate by reference" the information AIG files
with the SEC, which means that AIG can disclose important information to you by
referring to those documents. The information incorporated by reference in this
prospectus is considered to be part of this prospectus. Any reports filed by AIG
with the SEC after the date of this prospectus and until the exchange offer is
completed will automatically update, and where applicable, supercede any
information contained in this prospectus or incorporated by reference in this
prospectus. AIG incorporates by reference into this prospectus the document
listed below and any filings made with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act of 1934 after the time of initial filing
of the registration statement and before effectiveness of the registration
statement, and after the date of this prospectus and until the exchange offer is
completed. This prospectus is a part of a registration statement AIG filed with
the SEC and does not contain all of the information in the registration
statement. Whenever a reference is made in the prospectus to a document, please
be aware that the reference is only a summary and that you should refer to the
exhibits that are a part of the registration statement for a copy of the
document. You may review a copy of the registration statement at the SEC's
public reference room or its web site, as set forth above.
- Annual Report on Form 10-K for the year ended December 31, 2003.
We will provide without charge a copy of this filing, other than any
exhibits unless the exhibits are specifically incorporated by reference into
this prospectus.
Requests for such documents should be directed to AIG's Director of
Investor Relations, 70 Pine Street, New York, New York 10270, telephone (212)
770-6293.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE REQUESTED DOCUMENTS, REQUESTS
SHOULD BE MADE NO LATER THAN APRIL , 2004. In the event that we extend the
exchange offer, you must submit your request at least five business days before
the expiration date, as extended.
ii
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and does not contain all of the information that you should consider before
participating in this exchange offer. You should read the entire prospectus, the
accompanying letter of transmittal and documents incorporated by reference
carefully.
AMERICAN INTERNATIONAL GROUP, INC.
AIG, a Delaware corporation, is a holding company which through its
subsidiaries is engaged in a broad range of insurance and insurance-related
activities in the United States and abroad. AIG's primary activities include
both general and life insurance operations. Other significant activities include
financial services and retirement savings and asset management.
AIG's principal executive offices are located at 70 Pine Street, New York,
New York 10270, and its telephone number is 212-770-7000.
THE EXCHANGE OFFER
The Exchange Offer............ We are offering to exchange up to
$1,500,000,000 principal amount of our new
notes which have been registered under the
Securities Act for a like principal amount of
our old notes. You may tender old notes only in
integral multiples of $1,000 principal amount.
You should read the discussion under the
heading "The Exchange Offer" below for further
information about the exchange offer and resale
of the new notes.
Expiration Date............... 5:00 p.m., New York City time, on ,
2004, unless we extend the exchange offer.
Resale of New Notes........... Based on interpretive letters of the SEC staff
to third parties, we believe that you may
resell and transfer the new notes issued
pursuant to the exchange offer in exchange for
old notes without compliance with the
registration and prospectus delivery provisions
of the Securities Act of 1933, if you:
- are not a broker-dealer that acquired the old
notes from us or in market-making
transactions;
- acquire the new notes in the ordinary course
of your business;
- do not have an arrangement or understanding
with any person to participate in the
distribution of the new notes; and
- are not our affiliate as defined under Rule
405 of the Securities Act of 1933.
If you fail to satisfy any of these conditions,
you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with a resale of
the new notes.
Broker-dealers that acquired old notes directly
from us, but not as a result of market-making
activities or other trading activities, must
comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with a resale of the new notes.
Each broker-dealer that receives new notes for
its own account pursuant to the exchange offer
in exchange for old notes that it acquired as a
result of market-making or other trading
activities must deliver a prospectus in
connection with any resale of the new notes and
provide us with a signed acknowledgement of
this obligation.
1
Consequences If You Do Not
Exchange Your Old Notes....... Old notes that are not tendered in the exchange
offer or are not accepted for exchange will
continue to bear legends restricting their
transfer. You will not be able to offer or sell
the old notes unless:
- an exemption from the requirements of the
Securities Act is available to you; or
- you sell the old notes outside the United
States in accordance with Regulation S under
the Securities Act.
Conditions to the Exchange
Offer......................... The exchange offer is subject to certain
conditions, which we may waive, as described
below under "The Exchange Offer -- Conditions
to the Exchange Offer."
Procedures for Tendering Old
Notes......................... If you wish to accept the exchange offer, the
following must be delivered to the exchange
agent:
- an agent's message from The Depository Trust
Company, which we refer to as DTC, stating
that the tendering participant agrees to be
bound by the letter of transmittal and the
terms of the exchange offer;
- your old notes by timely confirmation of
book-entry transfer through DTC; and
- all other documents required by the letter of
transmittal.
These actions must be completed before the
expiration of the exchange offer.
You must comply with DTC's standard procedures
for electronic tenders, by which you will agree
to be bound by the letter of transmittal.
Guaranteed Delivery Procedures
for Tendering Old Notes....... If you cannot meet the expiration deadline,
deliver any necessary documentation or comply
with the applicable procedures under DTC
standard operating procedures for electronic
tenders in a timely fashion, you may tender
your old notes according to the guaranteed
delivery procedures set forth under "The
Exchange Offer -- Guaranteed Delivery
Procedures."
Withdrawal Rights............. You may withdraw your tender of old notes any
time before the exchange offer expires.
Tax Consequences.............. The exchange pursuant to the exchange offer
generally will not be a taxable event for U.S.
federal income tax purposes. See "Important
Federal Income Tax Considerations."
Use of Proceeds............... We will not receive any proceeds from the
exchange or the issuance of new notes in
connection with the exchange offer.
Exchange Agent................ The Bank of New York is serving as exchange
agent in connection with the exchange offer.
The address and telephone number of the
exchange agent are set forth under "The
Exchange Offer -- Exchange Agent."
2
THE NEW NOTES
Issuer........................ The new notes will be the obligations of AIG.
The New Notes................. - $500,000,000 of 2.875% Notes Due 2008; and
- $1,000,000,000 of 4.250% Notes Due 2013.
The form and terms of the new notes are the
same as the form and terms of the old notes of
that series, except that:
- the new notes will be registered under the
Securities Act and will therefore not bear
legends restricting their transfer; and
- the new notes will not contain provisions for
payment of additional interest in case of
non-registration.
The same indenture, as supplemented on May 15,
2003, will govern both the old notes and the
new notes. You should read the discussion under
the heading "Description of the New Notes"
below for further information about the new
notes.
Maturity Dates................ May 15, 2008 for the 2.875% Notes Due 2008.
May 15, 2013 for the 4.250% Notes Due 2013.
Interest Payment Dates........ May 15 and November 15, commencing on May 15,
2004.
Optional Redemption........... Like the old notes, the new notes are
redeemable at our option at any time, in whole
or in part at the redemption prices described
under "Description of the New Notes -- Optional
Redemption" below.
Ranking....................... Like the old notes, the new notes will be our
unsecured obligations and will rank equally
with all of our other unsecured and
unsubordinated and senior indebtedness.
Further Issues................ We may create and issue further notes of either
series ranking equally and ratably with the new
notes of that series in all respects, so that
those further notes would be consolidated and
form a single series with the new notes of that
series.
Trustee....................... The Bank of New York
3
SELECTED FINANCIAL INFORMATION
The following selected consolidated financial data, which has been restated
to give retroactive effect to AIG's acquisitions of American General Corporation
and SunAmerica Inc. on a pooling of interests basis, is presented in accordance
with generally accepted accounting principles. This data should be read in
conjunction with the financial statements and accompanying notes included in
AIG's Annual Report on Form 10-K for the year ended December 31, 2003, which is
incorporated by reference herein.
YEARS ENDED DECEMBER 31, 2003 2002 2001 2000 1999
------------------------ -------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Revenues(a):
Premiums and other considerations......... $ 54,613 $ 44,589 $ 38,428 $ 34,570 $ 31,020
Net investment income..................... 16,662 15,034 13,977 12,663 11,449
Realized capital gains (losses)........... (1,433) (2,441) (836) (314) 103
Other revenues............................ 11,461 10,300 10,197 9,419 8,162
Total revenues.............................. 81,303 67,482 61,766 56,338 50,734
Benefits and expenses:
Incurred policy losses and benefits....... 46,886 41,927 35,054 30,864 27,495
Insurance acquisition and other operating
expenses............................... 20,509 17,413 16,556 15,136 13,840
Acquisition, restructuring and related
charges................................ -- -- 2,017 315 -
Total benefits and expenses................. 67,395 59,340 53,627 46,315 41,335
Income before income taxes, minority
interest and cumulative effect of
accounting changes(b)..................... 13,908 8,142 8,139 10,023 9,399
Income taxes................................ 4,264 2,328 2,339 2,971 2,833
Income before minority interest and
cumulative effect of accounting changes... 9,644 5,814 5,800 7,052 6,566
Minority interest........................... (379) (295) (301) (413) (380)
Income before cumulative effect of
accounting changes........................ 9,265 5,519 5,499 6,639 6,186
Cumulative effect of accounting changes, net
of tax.................................... 9 -- (136) -- --
Net income.................................. 9,274 5,519 5,363 6,639 6,186
Earnings per common share(c):
Basic
Income before cumulative effect of
accounting changes................... 3.55 2.11 2.10 2.55 2.37
Cumulative effect of accounting
changes, net of tax.................. -- -- (0.05) -- --
Net income............................. 3.55 2.11 2.05 2.55 2.37
Diluted
Income before cumulative effect of
accounting changes................... 3.53 2.10 2.07 2.52 2.34
Cumulative effect of accounting
changes, net of tax.................. -- -- (0.05) -- --
Net income............................. 3.53 2.10 2.02 2.52 2.34
Cash dividends per common share(d).......... .22 .18 .16 .14 .13
Total assets................................ 678,346 561,229 493,061 426,671 383,685
Long-term debt(e)
Guaranteed by AIG...................... 6,427 5,259 5,539 2,370 1,968
Matched/not guaranteed by AIG.......... 64,913 57,514 48,300 38,906 34,261
Commercial paper
Guaranteed by AIG...................... 1,223 1,645 3,370 1,565 1,363
Not guaranteed by AIG.................. 4,715 7,467 8,522 11,482 8,718
Shareholders' equity........................ 71,253 59,103 52,150 47,439 39,641
4
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(a) Represents the sum of general insurance net premiums earned, GAAP life
premiums, net investment income, financial services commissions, transaction
and other fees, retirement savings & asset management commissions and other
fees, and realized capital gains (losses).
(b) Includes net loss reserve charge of $2.8 billion in 2002 and World Trade
Center losses of $900 million in 2001.
(c) Per share amounts for all periods presented have been retroactively adjusted
to reflect all stock dividends and splits and reflect the adoption of the
Statement of Financial Accounting Standards No. 128 "Earnings per Share."
(d) Cash dividends have not been restated to reflect dividends paid by American
General Corporation which was acquired by AIG on August 29, 2001.
(e) Including the portion of long-term debt maturing in less than one year.
5
RISK FACTORS
Before tendering old notes in the exchange offer, you should consider
carefully each of the following risks and all other information contained in
this prospectus.
IF YOU FAIL TO EXCHANGE THE OLD NOTES, THEY WILL REMAIN SUBJECT TO TRANSFER
RESTRICTIONS
Any old notes that remain outstanding after this exchange offer will
continue to be subject to restrictions on their transfer. After this exchange
offer, holders of old notes will not have any further rights to have their old
notes exchanged for new notes or registered under the Securities Act. The
liquidity of the market for old notes that are not exchanged could be adversely
affected by this exchange offer and you may be unable to sell your old notes.
LATE DELIVERIES OF OLD NOTES AND OTHER REQUIRED DOCUMENTS COULD PREVENT A HOLDER
FROM EXCHANGING ITS OLD NOTES
Noteholders are responsible for complying with all exchange offer
procedures. The issuance of new notes in exchange for old notes will only occur
upon completion of the procedures described in this prospectus under "The
Exchange Offer." Therefore, holders of old notes who wish to exchange them for
new notes should allow sufficient time for timely completion of the exchange
procedure. Neither we nor the exchange agent are obligated to extend the offer
or notify you of any failure to follow the proper procedure.
IF YOU ARE A BROKER-DEALER, YOUR ABILITY TO TRANSFER THE NEW NOTES MAY BE
RESTRICTED
A broker-dealer that purchased old notes for its own account as part of
market-making or trading activities must deliver a prospectus when it sells the
new notes. Our obligation to make this prospectus available to broker-dealers is
limited. Consequently, we cannot guarantee that a proper prospectus will be
available to broker-dealers wishing to resell their new notes.
THERE HAS NOT BEEN, AND THERE MAY NOT BE, A PUBLIC MARKET FOR THE NEW NOTES
The new notes are a new issuance of securities. There can be no assurance
as to the development of any market or the liquidity of any market that may
develop for the new notes. The liquidity of, and trading markets for, the new
notes may also be adversely affected by general economic conditions and by our
financial performance.
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the new notes, we will receive old notes from you in the same
principal amount. The old notes surrendered in exchange for the new notes will
be retired and canceled and cannot be reissued. Accordingly, issuance of the new
notes will not result in any change in our indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth (i) the historical ratios of earnings to
fixed charges of AIG and its consolidated subsidiaries and (ii) the secondary
historical ratios of earnings to fixed charges of AIG and its consolidated
subsidiaries, in each case for the periods indicated. For more information on
our consolidated ratios of earnings to fixed charges, see our Annual Report on
Form 10-K for the year ended December 31, 2003, which is incorporated by
reference into this prospectus as described under "Where You Can Find More
Information."
YEAR ENDED DECEMBER 31,
--------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Ratio of earnings to fixed charges................. 3.34 2.50 2.43 2.96 3.37
Secondary ratio of earnings to fixed charges....... 7.53 4.85 4.48 5.34 5.75
6
The secondary ratio is disclosed for the convenience of fixed income
investors and the rating agencies that serve them and is more comparable to the
ratios disclosed by other issuers of fixed income securities. The secondary
ratio removes interest credited to guaranteed investment contract, or GIC,
policyholders and guaranteed investment agreement, or GIA, contractholders. Such
expenses are also removed from earnings used in this calculation. GICs and GIAs
are entered into by AIG's insurance subsidiaries, principally SunAmerica Life
Insurance Company and AIG Financial Products Corp. and its subsidiaries,
respectively. The proceeds from GICs and GIAs are invested in a diversified
portfolio of securities, primarily investment grade bonds. The assets acquired
yield rates greater than the rates on the related policyholders obligation or
contract, with the intent of earning a profit from the spread.
Earnings represent:
- Income from operations before income taxes and adjustments for minority
interest
plus
- Fixed charges other than capitalized interest
- Amortization of capitalized interest
- The distributed income of equity investees
less
- The minority interest in pre-tax income of subsidiaries that do not have
fixed charges.
Fixed charges include:
- Interest, whether expensed or capitalized
- Amortization of debt issuance costs
- One-third of rental expense. Our management believes this is
representative of the interest factor.
As of the date of this prospectus, we have no preferred stock outstanding.
THE EXCHANGE OFFER
The following summary of the exchange and registration rights agreement and
letter of transmittal is not complete and is subject to, and is qualified in its
entirety by, all of the provisions of the exchange and registration rights
agreement and the letter of transmittal, each of which is filed as an exhibit to
the registration statement of which this prospectus is part. See "Where You Can
Find More Information" for information on how you can obtain copies of the
exchange and registration rights agreement and the letter of transmittal.
PURPOSE AND EFFECT OF EXCHANGE OFFER; REGISTRATION RIGHTS
We are offering to exchange our 2.875% Notes Due 2008 and 4.250% Notes Due
2013, which have been registered under the Securities Act and which we refer to
as the new notes, for our outstanding 2.875% Notes Due 2008 and 4.250% Notes Due
2013, which have not been so registered and which we refer to as the old notes.
We refer to this exchange offer as the exchange offer.
The old notes were purchased by Citigroup Global Markets Inc., Banc of
America Securities LLC and Goldman, Sachs & Co., whom we refer to as the initial
purchasers, on May 15, 2003 for resale to qualified institutional buyers in
compliance with Rule 144A under the Securities Act and outside of the United
States in compliance with Regulation S under the Securities Act. In connection
with the sale of the old notes, we and the initial purchasers entered into an
exchange and registration rights agreement, dated May 15, 2003, which requires
us, among other things,
- to file with the SEC an exchange offer registration statement under the
Securities Act with respect to new notes identical in all material
respects to the old notes, to use commercially reasonable efforts to
cause this registration statement to be declared effective under the
Securities Act and to make an exchange offer for the old notes as
discussed below, or
7
- in very limited circumstances to register the old notes on a shelf
registration statement under the Securities Act.
We are obligated, upon the effectiveness of the exchange offer registration
statement referred to above, to offer the holders of the old notes the
opportunity to exchange their old notes for a like principal amount of new notes
which will be issued without a restrictive legend and may be reoffered and
resold by the holder generally without restrictions or limitations under the
Securities Act. The exchange offer is being made pursuant to the exchange and
registration rights agreement to satisfy our obligations under that agreement.
Under the terms of the old notes and the registration rights agreement,
additional interest accrues on the old notes until the exchange offer is
completed. However, once the exchange offer is completed, no additional interest
will accrue on any old note.
TERMS OF THE EXCHANGE OFFER
For each of the old notes properly surrendered and not withdrawn before the
expiration date of the exchange offer, a new note having a principal amount
equal to that of the surrendered old note will be issued.
The form and terms of the new notes will be the same as the form and terms
of the old notes of that series except that:
- the new notes will be registered under the Securities Act and, therefore,
the global securities representing the new notes will not bear legends
restricting the transfer of interests in the new notes; and
- the new notes will not contain provisions for payment of additional
interest in case of non-registration.
The new notes will evidence the same indebtedness as the old notes they
replace, and will be issued under, and be entitled to the benefits of, the same
indenture that authorized the issuance of the old notes. As a result, each
series of old notes and the respective replacement new notes will be treated as
a single series of notes under the indenture.
No interest will be paid in connection with the exchange. The new notes
will bear interest from and including the last interest payment date on which
interest has been paid on the old notes. Accordingly, the holders of old notes
that are accepted for exchange will not receive accrued but unpaid interest on
old notes at the time of tender. Rather, that interest will be payable on the
new notes delivered in exchange for the old notes on the first interest payment
date after the expiration date.
We intend to conduct the exchange offer in accordance with the provisions
of the exchange and registration rights agreement and the applicable
requirements of the Securities Exchange Act of 1934 and the related rules and
regulations of the SEC thereunder.
Under existing SEC interpretations, the new notes would generally be freely
transferable after the exchange offer without further registration under the
Securities Act, except that broker-dealers receiving the new notes in the
exchange offer will be subject to a prospectus delivery requirement with respect
to their resale. This view is based on interpretations by the staff of the SEC
in no-action letters issued to other issuers in exchange offers like this one.
We have not, however, asked the SEC to consider this particular exchange offer
in the context of a no-action letter. Therefore, the SEC might not treat it in
the same way it has treated other exchange offers in the past. You will be
relying on the no-action letters that the SEC has issued to third parties in
circumstances that we believe are similar to ours. Based on these no-action
letters, the following conditions must be met:
- you must not be a broker-dealer that acquired the old notes from us or in
market-making transactions;
- you must acquire the new notes in the ordinary course of your business;
- you must have no arrangements or understandings with any person to
participate in the distribution of the new notes within the meaning of
the Securities Act; and
- you must not be an affiliate of ours, as defined in Rule 405 of the
Securities Act.
8
If you wish to exchange old notes for new notes in the exchange offer you
must represent to us that you satisfy all of the above listed conditions. If you
do not satisfy all of the above listed conditions:
- you cannot rely on the position of the SEC set forth in the no-action
letters referred to above; and
- you must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a resale of the new
notes.
The SEC considers broker-dealers that acquired old notes directly from us,
but not as a result of market-making activities or other trading activities, to
be making a distribution of the new notes if they participate in the exchange
offer. Consequently, these broker-dealers must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
resale of the new notes.
A broker-dealer that has bought old notes for market-making or other
trading activities must deliver a prospectus in order to resell any new notes it
receives for its own account in the exchange offer. The SEC has taken the
position that broker-dealers may fulfill their prospectus delivery requirements
with respect to the new notes by delivering the prospectus contained in the
registration statement for the exchange offer. This prospectus may be used by a
broker-dealer to resell any of its new notes. We have agreed in the exchange and
registration rights agreement to send a prospectus to any broker-dealer that
requests copies in the notice and questionnaire included in the letter of
transmittal accompanying the prospectus for a period of up to 30 days after the
date of expiration of this exchange offer.
Unless you are required to do so because you are a broker-dealer, you may
not use this prospectus for an offer to resell, resale or other retransfer of
new notes. We are not making this exchange offer to, nor will we accept tenders
for exchange from, holders of old notes in any jurisdiction in which the
exchange offer or the acceptance of it would not be in compliance with the
securities or blue sky laws of that jurisdiction.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date for the exchange offer is 5:00 p.m., New York City
time, on , 2004. We may extend this expiration date in our sole
discretion. If we so extend the expiration date, the term "expiration date"
shall mean the latest date and time to which we extend the exchange offer.
We reserve the right, in our sole discretion:
- to delay accepting any old notes;
- to extend the exchange offer;
- to terminate the exchange offer if, in our sole judgment, any of the
conditions described below under "-- Conditions to the Exchange Offer"
shall not have been satisfied; or
- to amend the terms of the exchange offer in any way we determine is
advantageous to holders of the old notes or which is not a material
change to the terms of the exchange offer.
We will give oral or written notice of any delay, extension or termination
to the exchange agent. In addition, we will give, as promptly as practicable,
oral or written notice regarding any delay in acceptance, extension or
termination of the offer to the registered holders of old notes. If we amend the
exchange offer in a manner that we determine to constitute a material change, or
if we waive a material condition, we will promptly disclose the amendment or
waiver in a manner reasonably calculated to inform the holders of old notes of
the amendment or waiver, and extend the offer if required by law.
We intend to make public announcements of any delay in acceptance,
extension, termination, amendment or waiver regarding the exchange offer through
a timely release to a financial news service.
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CONDITIONS TO THE EXCHANGE OFFER
We will not be required to accept for exchange, or exchange new notes for,
any old notes, and we may terminate the exchange offer as provided in this
prospectus before the acceptance of the old notes, if:
- any law, rule or regulation shall have been proposed, adopted or enacted,
or interpreted in a manner, which, in our judgment, would impair our
ability to proceed with the exchange offer;
- any action or proceeding is instituted or threatened in any court or by
the SEC or any other governmental agency with respect to the exchange
offer which, in our judgment, would impair our ability to proceed with
the exchange offer;
- we have not obtained any governmental approval which we, in our sole
discretion, consider necessary for the completion of the exchange offer
as contemplated by this prospectus;
- any change, or any condition, event or development involving a
prospective change, shall have occurred or be threatened in the general
economic, financial, currency exchange or market conditions in the United
States or elsewhere that, in our judgment, would impair our ability to
proceed with the exchange offer;
- any other change or development, including a prospective change or
development, that, in our judgment, has or may have a material adverse
effect on us, the market price of the new notes or the old notes or the
value of the exchange offer to us; or
- there shall have occurred (i) any suspension or limitation of trading in
securities generally on the New York Stock Exchange or the
over-the-counter market; (ii) a declaration of a banking moratorium by
United States Federal or New York authorities; or (iii) a commencement or
escalation of a war or armed hostilities involving or relating to a
country where we do business or other international or national emergency
or crisis directly or indirectly involving the United States.
The conditions listed above are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any of these conditions. We may
waive these conditions in our sole discretion in whole or in part at any time
and from time to time. A failure on our part to exercise any of the above rights
shall not constitute a waiver of that right, and that right shall be considered
an ongoing right which we may assert at any time and from time to time.
If we determine in our sole discretion that any of the events listed above
has occurred, we may, subject to applicable law:
- refuse to accept any old notes and return all tendered old notes to the
tendering holders;
- extend the exchange offer and retain all old notes tendered before the
expiration of the exchange offer, subject, however, to the rights of
holders to withdraw these old notes; or
- waive unsatisfied conditions relating to the exchange offer and accept
all properly tendered old notes which have not been withdrawn.
Any determination by us concerning the above events will be final and
binding.
In addition, we reserve the right in our sole discretion to:
- purchase or make offers for any old notes that remain outstanding
subsequent to the expiration date; and
- purchase old notes in the open market, in privately negotiated
transactions or otherwise.
The terms of any such purchases or offers may differ from the terms of the
exchange offer.
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PROCEDURES FOR TENDERING
Except in limited circumstances, only a DTC participant listed on a DTC
securities position listing with respect to the old notes may tender old notes
in the exchange offer. To tender old notes in the exchange offer:
- you must instruct DTC and a DTC participant by completing the form
"Instruction to Registered Holder From Beneficial Owner" accompanying
this prospectus of your intention whether or not you wish to tender your
old notes for new notes; or
- you must comply with the guaranteed delivery procedures described below;
and
- DTC participants in turn need to follow the procedures for book-entry
transfer as set forth below under "-- Book-Entry Transfer" and in the
letter of transmittal.
By tendering, you will make the representations described below under
"-- Representations on Tendering Old Notes." In addition, each participating
broker-dealer must acknowledge that it will deliver a prospectus in connection
with any resale of the new notes. See "Plan of Distribution." The tender by a
holder of old notes will constitute an agreement between that holder and us in
accordance with the terms and subject to the conditions set forth in this
prospectus and in the letter of transmittal.
The method of delivery of old notes, the letter of transmittal and all
other required documents or transmission of an agent's message, as described
under "-- Book-Entry Transfer," to the exchange agent is at the election and
risk of the tendering holder of old notes. Instead of delivery by mail, we
recommend that holders use an overnight or hand delivery service. In all cases,
sufficient time should be allowed to assure timely delivery to the exchange
agent prior to the expiration of the exchange offer. No letter of transmittal or
old notes should be sent to us or DTC. Delivery of documents to DTC in
accordance with its procedures does not constitute delivery to the exchange
agent.
Signatures on a letter of transmittal or a notice of withdrawal, as
described in "-- Withdrawal of Tenders" below, must be guaranteed by a member of
the New York Stock Exchange Medallion Signature Program or an "eligible
guarantor institution," within the meaning of Rule 17Ad-15 under the Exchange
Act, which we refer to together as eligible institutions, unless the old notes
are tendered for the account of an eligible institution.
We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, and acceptance and withdrawal of
tendered old notes. We reserve the absolute right to reject any and all old
notes not properly tendered or any old notes whose acceptance by us would, in
the opinion of our counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to any particular old notes
either before or after the expiration date. Our interpretation of the terms and
conditions of the exchange offer, including the instructions in the letter of
transmittal, will be final and binding on all parties. Unless waived, holders
must cure any defects or irregularities in connection with tenders of old notes
within a period we determine. Although we intend to request the exchange agent
to notify holders of defects or irregularities relating to tenders of old notes,
neither we, the exchange agent nor any other person will have any duty or incur
any liability for failure to give this notification. We will not consider
tenders of old notes to have been made until these defects or irregularities
have been cured or waived. The exchange agent will return any old notes that are
not properly tendered and as to which the defects or irregularities have not
been cured or waived to the tendering holders, unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date.
BOOK-ENTRY TRANSFER
We understand that the exchange agent will make a request promptly after
the date of this prospectus to establish accounts with respect to the old notes
at DTC for the purpose of facilitating the exchange offer. Any financial
institution that is a participant in DTC's system may make book-entry delivery
of old notes by causing DTC to transfer such old notes into the exchange agent's
DTC account in accordance with DTC's
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electronic Automated Tender Offer Program procedures for such transfer. The
exchange of new notes for tendered old notes will only be made after timely:
- confirmation of book-entry transfer of the old notes into the exchange
agent's account; and
- receipt by the exchange agent of an executed and properly completed
letter of transmittal or an "agent's message" and all other required
documents specified in the letter of transmittal.
The confirmation, letter of transmittal or agent's message and any other
required documents must be received at the exchange agent's address listed below
under "-- Exchange Agent" on or before 5.00 p.m., New York time, on the
expiration date of the exchange offer, or, if the guaranteed delivery procedures
described below are complied with, within the time period provided under those
procedures.
As indicated above, delivery of documents to DTC in accordance with its
procedures does not constitute delivery to the exchange agent.
The term "agent's message" means a message, transmitted by DTC and received
by the exchange agent and forming part of the confirmation of a book-entry
transfer, which states that DTC has received an express acknowledgment from a
participant in DTC tendering old notes stating:
- the aggregate principal amount of old notes which have been tendered by
the participant;
- that such participant has received an appropriate letter of transmittal
and agrees to be bound by the terms of the letter of transmittal and the
terms of the exchange offer; and
- that we may enforce such agreement against the participant.
Delivery of an agent's message will also constitute an acknowledgment from
the tendering DTC participant that the representations contained in the letter
of transmittal and described below under "Representations on Tendering Old
Notes" are true and correct.
GUARANTEED DELIVERY PROCEDURES
The following guaranteed delivery procedures are intended for holders who
wish to tender their old notes but:
- the holders cannot deliver the letter of transmittal or any required
documents specified in the letter of transmittal before the expiration
date of the exchange offer; or
- the holders cannot complete the procedure under DTC's standard operating
procedures for electronic tenders before expiration of the exchange
offer.
The conditions that must be met to tender old notes through the guaranteed
delivery procedures are as follows:
- the tender must be made through an eligible institution;
- before expiration of the exchange offer, the exchange agent must receive
from the eligible institution either a properly completed and duly
executed notice of guaranteed delivery in the form accompanying this
prospectus, by facsimile transmission, mail or hand delivery, or a
properly transmitted agent's message in lieu of notice of guaranteed
delivery:
- setting forth the name and number of the account at DTC and the
principal amount of old notes tendered;
- stating that the tender offer is being made by guaranteed delivery;
- guaranteeing that, within three business days after expiration of the
exchange offer, the letter of transmittal, or facsimile of the letter of
transmittal, or an agent's message and a confirmation of a book-entry
transfer of the old notes into the exchange agent's account at DTC, and
any other documents required by the letter of transmittal will be
deposited by the eligible institution with the exchange agent; and
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- the exchange agent must receive the properly completed and executed
letter of transmittal, or facsimile of the letter of transmittal or an
agent's message in the case of a book-entry transfer, as well as a
confirmation of book-entry transfer of the old notes into the exchange
agent's account, and any other documents required by the letter of
transmittal, within three business days after expiration of the exchange
offer.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their old notes according to the guaranteed
delivery procedures set forth above.
REPRESENTATIONS ON TENDERING OLD NOTES
By surrendering old notes in the exchange offer, you will be representing
that, among other things:
- you are acquiring the new notes issued in the exchange offer in the
ordinary course of your business;
- you are not participating, do not intend to participate and have no
arrangement or understanding with any person to participate, in the
distribution of the new notes issued to you in the exchange offer;
- you are not an affiliate, as defined in Rule 405 under the Securities
Act, of AIG;
- you have full power and authority to tender, exchange, assign and
transfer the old notes tendered;
- we will acquire good, marketable and unencumbered title to the old notes
being tendered, free and clear of all security interests, liens,
restrictions, charges, encumbrances, or other obligations relating to
their sale or transfer, and not subject to any adverse claim when the old
notes are accepted by us; and
- you acknowledge and agree that if you are a broker-dealer registered
under the Exchange Act or you are participating in the exchange offer for
the purposes of distributing the new notes, you must comply with the
registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale of the new notes, and you cannot
rely on the position of the SEC's staff in their no-action letters.
If you are a broker-dealer and you will receive new notes for your own
account in exchange for old notes that were acquired as a result of
market-making activities or other trading activities, you will be required to
acknowledge in the letter of transmittal that you will deliver a prospectus in
connection with any resale of the new notes. The letter of transmittal states
that, by delivering a prospectus, a broker-dealer will not be deemed to be an
"underwriter" within the meaning of the Securities Act. See also "Plan of
Distribution."
WITHDRAWAL OF TENDERS
Your tender of old notes pursuant to the exchange offer is irrevocable
except as otherwise provided in this section. You may withdraw tenders of old
notes at any time prior to 5:00 p.m., New York time, on the expiration date.
For a withdrawal to be effective for DTC participants, holders must comply
with their respective standard operating procedures for electronic tenders and
the exchange agent must receive an electronic notice of withdrawal from DTC.
Any notice of withdrawal must specify the name and number of the account at
DTC to be credited with the withdrawn old notes and otherwise comply with the
procedures of DTC. We will determine in our sole discretion all questions as to
the validity, form and eligibility, including time of receipt, for such
withdrawal notices, and our determination shall be final and binding on all
parties. Any old notes so withdrawn will be deemed not to have been validly
tendered for purposes of the exchange offer and no new notes will be issued with
respect to them unless the old notes so withdrawn are validly retendered. Any
old notes which have been tendered but which are not accepted for exchange will
be returned to the holder without cost to such holder as soon as practicable
after withdrawal, rejection of tender or termination of the exchange offer.
Properly withdrawn old notes may be re-tendered by following the procedures
described above under "-- Procedures For Tendering" at any time prior to the
expiration date.
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EXCHANGE AGENT
We have appointed The Bank of New York as exchange agent in connection with
the exchange offer. Holders should direct questions, requests for assistance and
for additional copies of this prospectus, the letter of transmittal or notices
of guaranteed delivery to the exchange agent addressed as follows:
By Mail, Hand Delivery or Overnight Courier: By Facsimile Transmission:
The Bank of New York (212) 298-1915
Corporate Trust Operations
Reorganization Unit Attention: Ms. Diane Amoroso
101 Barclay Street - 7 East Confirm by telephone:
New York, NY 10286 (212) 815-3738
Attention: Ms. Diane Amoroso
Telephone: (212) 815-3738
Delivery of a letter of transmittal to any address or facsimile number
other than the one set forth above will not constitute a valid delivery.
FEES AND EXPENSES
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the exchange
agent reasonable and customary fees for its services and will reimburse it for
its related reasonable out-of-pocket expenses. We may also pay brokerage houses
and other custodians, nominees and fiduciaries the reasonable out-of-pocket
expenses incurred by them in forwarding copies of this prospectus, letters of
transmittal and related documents to the beneficial owners of the old notes and
in handling or forwarding tenders for exchange.
Holders who tender their old notes for exchange will not be obligated to
pay any transfer taxes. If, however, a transfer tax is imposed for any reason
other than the exchange of old notes in connection with the exchange offer, then
the tendering holder must pay the amount of any transfer taxes due, whether
imposed on the registered holder or any other persons. If the tendering holder
does not submit satisfactory evidence of payment of these taxes or exemption
from them with the letter of transmittal, the amount of these transfer taxes
will be billed directly to the tendering holder.
CONSEQUENCES OF FAILURE TO PROPERLY TENDER OLD NOTES IN THE EXCHANGE
We will issue the new notes in exchange for old notes under the exchange
offer only after timely receipt by the exchange agent of the old notes, a
properly completed and duly executed letter of transmittal and all other
required documents. Therefore, holders of the old notes desiring to tender old
notes in exchange for new notes should allow sufficient time to ensure timely
delivery. We are under no duty to give notification of defects or irregularities
of tenders of old notes for exchange. Old notes that are not tendered or that
are tendered but not accepted by us will, following completion of the exchange
offer, continue to be subject to the existing restrictions upon transfer under
the Securities Act.
Participation in the exchange offer is voluntary. In the event the exchange
offer is completed, we will not be required to register the remaining old notes.
Remaining old notes will continue to be subject to the following restrictions on
transfer:
- holders may resell old notes only if an exemption from registration is
available or, outside the U.S., to non-U.S. persons in accordance with
the requirements of Regulation S under the Securities Act; and
- the remaining old notes will bear a legend restricting transfer in the
absence of registration or an exemption.
To the extent that old notes are tendered and accepted in connection with
the exchange offer, any trading market for remaining old notes could be
adversely affected.
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DESCRIPTION OF THE NEW NOTES
GENERAL
The old notes were and the new notes will be issued under an indenture,
dated as of July 15, 1989, between us and The Bank of New York, as trustee, as
supplemented on May 15, 2003. The following summary of certain provisions of the
new notes and the indenture does not purport to be complete and is subject, and
qualified in its entirety by reference to, all of the provisions of the notes
and the indenture, including the definitions of terms therein. See "Where You
Can Find More Information" for information on how to obtain a copy of the
indenture.
The old notes were and the new notes will be issued in fully registered
form in denominations of $1,000 and integral multiples thereof and will be
represented by global notes registered in the name of DTC, as described in
"-- Book-Entry System" below.
The notes will be unsecured senior obligations of AIG and will rank equally
with all of our other unsecured senior indebtedness.
The old notes were and the new notes will be issued in two separate series,
which we refer to as the 5 year notes and the 10 year notes. The new 5 year
notes and the new 10 year notes will be identical in all material respects to
the old 5 year notes and the old 10 year notes, respectively, except that the
registration rights and the related additional interest provisions and transfer
restrictions applicable to the old notes do not apply to the new notes. The new
5 year notes and the old 5 year notes and the new 10 year notes and the old 10
year notes will each constitute a single series for all purposes under the
indenture. To the extent any old notes are not exchanged for new notes, those
old notes will remain outstanding under the indenture and will rank pari passu
with the new notes of that series. We refer to the old notes and the new notes
of each series collectively as the 5 year notes and the 10 year notes.
PRINCIPAL, MATURITY AND INTEREST
The new 5 year notes will be issued in an aggregate principal amount of up
to $500,000,000 and the new 10 year notes will be issued in an aggregate
principal amount of up to $1,000,000,000. We may, without the consent of the
holders of the notes, increase each such principal amount in the future on the
same terms and conditions and with the same CUSIP numbers as notes of that
series being offered in this prospectus.
The new 5 year notes will bear interest at 2.875% per annum and will mature
on May 15, 2008. The new 10 year notes will bear interest at 4.250% per annum
and will mature on May 15, 2013. Interest on the new 5 year notes and the new 10
year notes will be payable semiannually in arrears on May 15 and November 15 of
each year to holders of record on the immediately preceding May 1 and November
1. Interest on the new notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months. On the maturity date of the new notes,
holders will be entitled to receive 100% of the principal amount of the new
notes plus accrued and unpaid interest, if any. The new notes do not provide for
any sinking fund.
For so long as the new notes are issued in book-entry form, payments of
principal and interest will be made in immediately available funds by wire
transfer to DTC or its nominee. We may issue definitive notes in the limited
circumstances set forth in "-- Book-Entry System" below.
OPTIONAL REDEMPTION
We will have the right to redeem each series of the notes, in whole or in
part, at any time, at a redemption price equal to the greater of
- 100% of the principal amount of the applicable notes, or
- as determined by the quotation agent, the sum of the present values of
the remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date
of redemption) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
adjusted treasury rate, plus
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- 10 basis points in the case of the 5 year notes, or
- 12.5 basis points in the case of the 10 year notes
plus, in each case, accrued interest thereon to the date of redemption.
The definitions of certain terms used in the paragraph above are listed
below.
Adjusted treasury rate means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the comparable
treasury issue, assuming a price for the comparable treasury issue (expressed as
a percentage of its principal amount) equal to the comparable treasury price for
such redemption date.
Comparable treasury issue means the U.S. Treasury security selected by the
quotation agent as having a maturity comparable to the remaining term of the
notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such notes.
Comparable treasury price means, with respect to any redemption date, the
average of the reference treasury dealer quotations for such redemption date.
Quotation agent means AIG Financial Products Corp.
Reference treasury dealer means
- each of Citigroup Global Markets Inc., Banc of America Securities LLC or
Goldman, Sachs & Co., or its respective successors; provided, however,
that if any of the foregoing shall cease to be a primary U.S. government
securities dealer in New York City (a "primary treasury dealer"), we will
substitute therefor another primary treasury dealer; and
- any other primary treasury dealer selected by the quotation agent after
consultation with us.
Reference treasury dealer quotations means with respect to each reference
treasury dealer and any redemption date, the average, as determined by the
quotation agent, of the bid and asked prices for the comparable treasury issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the quotation agent by such reference treasury dealer at 5:00 p.m. on
the third business day preceding such redemption date.
If less than all of a series of notes is to be redeemed at any time,
selection of notes for redemption will be made by the trustee on a pro rata
basis, by lot or by such method as the trustee deems fair and appropriate;
provided that notes with a principal amount of $1,000 will not be redeemed in
part.
We will give to DTC a notice of redemption at least 30 but not more than 60
days before the redemption date. If any notes are to be redeemed in part only,
the notice of redemption that relates to such notes will state the portion of
the principal amount thereof to be redeemed. A new note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original note.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions thereof
called for redemption.
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
We are generally permitted to consolidate or merge with another company or
firm. We are also permitted to sell or lease substantially all of our assets to
another firm, or to buy or lease substantially all of the assets of another
firm. However, we may not take any of these actions unless all the following
conditions are met:
- When we merge out of existence or sell or lease substantially all of our
assets, the other firm may not be organized under a foreign country's
laws, that is, it must be a corporation, partnership or trust
16
organized under the laws of a state of the United States or the District
of Columbia or under federal law, and it must agree to be legally
responsible for the notes;
- The merger, sale of assets or other transaction must not cause a default
on the notes, and we must not already be in default (unless the merger or
other transaction would cure the default). For purposes of this
no-default test, a default would include an event of default that has
occurred and not been cured. A default for this purpose would also
include any event that would be an event of default if the requirements
for giving us default notice or our default having to exist for a
specific period of time were disregarded; and
- It is possible that the merger, sale of assets or other transaction would
cause some of the voting stock of our designated subsidiaries to become
subject to a mortgage or other legal mechanism giving lenders
preferential rights in that voting stock over the holders of the notes if
they are not paid back. We and our designated subsidiaries have promised
to limit these preferential rights on the voting stock of our designated
subsidiaries, called liens, as discussed below under "Restrictive
Covenant -- Restriction on Liens." If a merger or other transaction would
create any liens on the voting stock of our designated subsidiaries, we
and our designated subsidiaries must comply with that restrictive
covenant. We and our designated subsidiaries would do this by following
the requirements of the restrictive covenant to grant an equivalent or
higher-ranking lien on the voting stock of our designated subsidiaries to
the holders of the notes.
If the conditions described above are satisfied with respect to the notes,
we will not need to obtain the approval of the holders of the notes in order to
merge or consolidate or to sell our assets. Also, these conditions will apply
only if we wish to merge or consolidate with another entity or sell our assets
substantially as an entirety to another entity. We will not need to satisfy
these conditions if we enter into other types of transactions, including any
transaction in which we acquire the stock or assets of another entity, any
transaction that involves a change of control but in which we do not merge or
consolidate and any transaction in which we sell less than substantially all of
our assets.
MODIFICATION AND WAIVER OF THE NOTES
There are three types of changes we can make to the indenture and the
notes.
CHANGES REQUIRING APPROVAL OF ALL HOLDERS
First, the following modifications would require the consent of the holder
of each note affected thereby:
- change the stated maturity of the principal or interest on any note;
- reduce any amounts due on any note;
- reduce the amount of principal payable upon acceleration of the maturity
of any note following a default;
- change the place of payment on any note;
- impair a holder's right to sue for payment;
- reduce the percentage of holders of notes of that series whose consent is
needed to modify or amend the indenture;
- reduce the percentage of holders of notes of that series whose consent is
needed to waive compliance with certain provisions of the indenture or to
waive certain defaults; and
- modify any other aspect of the provisions dealing with modification and
waiver of the indenture.
CHANGES REQUIRING A MAJORITY VOTE
The second type of change to the indenture and the notes is the kind that
requires a vote in favor by holders of notes owning 66 2/3% of the principal
amount of that series. Most changes fall into this category,
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except for clarifying changes and certain other changes that would not adversely
affect holders of the notes. The same vote would be required for us to obtain a
waiver of all or part of the restrictive covenant described below. We may obtain
a waiver of a past default from the holders of notes owning a majority of the
principal amount of the series affected. However, we cannot obtain a waiver of a
payment default or any other aspect of the indenture or the notes listed in the
first category described above under "--Changes Requiring Approval of All
Holders" unless we obtain the individual consent of each holder to the waiver.
CHANGES NOT REQUIRING APPROVAL
The third type of change does not require any vote by holders of notes.
This type is limited to clarifications and certain other changes that would not
adversely affect holders of the notes.
FURTHER DETAILS CONCERNING VOTING
The notes will not be considered outstanding, and therefore will not be
eligible to vote, if we have deposited or set aside in trust for you money for
their payment or redemption. The notes will also not be eligible to vote if they
have been fully defeased as described below under "Defeasance -- Full
Defeasance."
We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding notes that are entitled to
vote or take other action under the indenture. In limited circumstances, the
trustee will be entitled to set a record date for action by holders. If we or
the trustee set a record date for a vote or other action to be taken by holders
of a particular series, that vote or action may be taken only by persons who are
holders of outstanding notes of that series on the record date and must be taken
within 90 days following the record date.
RESTRICTIVE COVENANT
RESTRICTION ON LIENS
Some of the voting stock of certain of our designated subsidiaries may be
subject to a mortgage or other legal mechanism that gives lenders preferential
rights in that voting stock of our designated subsidiaries over the holders of
the notes if they are not paid back. These preferential rights are called liens.
We promise that neither we nor our designated subsidiaries will become obligated
on any new debt for borrowed money that is secured by a lien on any shares of
voting stock of any of our designated subsidiaries, unless the holders of the
notes (and, if we elect, any other holders of debt issued by AIG) are granted an
equivalent or higher-ranking lien on the same property.
CERTAIN DEFINITIONS RELATING TO THE RESTRICTION ON LIENS
Following are the meanings of the terms that are important in understanding
the restrictive covenant previously described.
Designated subsidiary means American Home Assurance Company, National Union
Fire Insurance Company of Pittsburgh, Pa., and any subsidiary the assets of
which, determined as of the last day of the most recent calendar quarter ended
at least 30 days prior to the date of determination and in accordance with
generally accepted accounting principles as in effect on the last day of that
calendar quarter, exceed 20% of our consolidated assets. As of December 31,
2003, there were no subsidiaries of AIG with assets, determined in accordance
with generally accepted accounting principles as in effect on that date, in
excess of 20% of our consolidated assets.
Subsidiary means a corporation, partnership or trust in which we and/or one
or more of our other subsidiaries own at least 50% of the voting stock, which is
a kind of stock that ordinarily permits its owners to vote for election of
directors.
Our consolidated assets mean our assets and the assets of our consolidated
subsidiaries, to be determined as of the last day of the most recent calendar
quarter ended at least 30 days prior to the date of the
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determination and in accordance with generally accepted accounting principles as
in effect on the last day of that calendar quarter.
Except as noted above, the indenture does not restrict our ability to put
liens on our interests in subsidiaries other than certain of our designated
subsidiaries, nor does the indenture restrict our ability to sell or otherwise
dispose of our interests in any of our subsidiaries. In addition, the
restriction on liens in the indenture applies only to liens that secure debt for
borrowed money. For example, liens imposed by operation of law, such as liens to
secure statutory obligations for taxes or workers' compensation benefits, or
liens we create to secure obligations to pay legal judgments or surety bonds,
would not be covered by this restriction.
DEFEASANCE
FULL DEFEASANCE
If there is a change in U.S. federal tax law, as described below, we can
legally release ourselves from any payment or other obligations on the notes of
either series, called full defeasance, if we put in place the following other
arrangements for holders to be repaid:
- We must deposit in trust for the benefit of all holders of the notes of
that series a combination of money and U.S. government or U.S. government
agency notes or bonds that will generate enough cash to make interest,
principal and any other payments on the notes of that series on their
various due dates;
- There must be a change in current U.S. federal tax law or an IRS ruling
that lets us make the above deposit without causing the holders to be
taxed on the notes any differently than if we did not make the deposit
and just repaid the notes ourselves. Under current federal tax law, the
deposit and our legal release from the obligations pursuant to the notes
would be treated as though we took back your notes and gave you your
share of the cash and notes or bonds deposited in trust. In that event,
you could recognize gain or loss on the notes you give back to us; and
- We must deliver to the trustee a legal opinion of our counsel confirming
the tax law change described above.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the notes. You could
not look to us for repayment in the unlikely event of any shortfall.
COVENANT DEFEASANCE
Under current U.S. federal tax law, we can make the same type of deposit as
described above and we will be released from the restrictive covenants under the
notes of either series. This is called covenant defeasance. In that event, you
would lose the protection of these restrictive covenants but would gain the
protection of having money and securities set aside in trust to repay the notes
of that series. In order to achieve covenant defeasance, we must do the
following:
- We must deposit in trust for the benefit of all holders of the notes of
that series a combination of money and U.S. government or U.S. government
agency notes or bonds that will generate enough cash to make interest,
principal and any other payments on the notes of that series on their
various due dates; and
- We must deliver to the trustee a legal opinion of our counsel confirming
that under current U.S. federal income tax law we may make the above
deposit without causing the holders to be taxed on the notes any
differently than if we did not make the deposit and just repaid the notes
ourselves.
If we accomplish covenant defeasance in respect of a series of notes, the
following provisions of the indenture and the notes of that series would no
longer apply:
- Our promise not to create liens on the voting stock of our designated
subsidiaries described above under "Restrictive Covenant -- Restriction
on Liens;"
19
- The condition regarding the treatment of liens when we merge or engage in
similar transactions, as previously described above under "Special
Situations -- Mergers and Similar Events;" and
- The events of default relating to breach of covenants and acceleration of
maturity, described below under "Events of Default -- What Is an Event of
Default."
If we accomplish covenant defeasance in respect of a series of notes, you
can still look to us for repayment of the notes of that series if there were a
shortfall in the trust deposit. In fact, if one of the remaining events of
default occurred (such as a bankruptcy) and the notes become immediately due and
payable, there may be such a shortfall.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not
cured, as described later in this subsection.
WHAT IS AN EVENT OF DEFAULT?
The term "Event of Default" means, in respect of each series of notes, any
of the following:
- We do not pay the principal or any premium on any note of that series on
its due date.
- We do not pay interest on any note of that series within 30 days of its
due date.
- We remain in breach of the restrictive covenant described above or any
other term of the indenture for 60 days after we receive a notice of
default stating we are in breach. The notice must be sent by either the
trustee or holders of 25% of the principal amount of notes of that
series.
- If an event of default occurs with respect to a different series of debt
securities issued under the indenture and our obligation to repay such
other series of debt securities is accelerated, and this repayment
obligation remains accelerated for 30 days after we receive a notice of
default by the trustee or holders of 10% of the principal amount of the
debt securities of that series.
- We file for bankruptcy or certain other events of bankruptcy, insolvency
or reorganization occur with respect to us.
REMEDIES IF AN EVENT OF DEFAULT OCCURS
If an event of default occurs, the trustee will have special duties. In
that situation, the trustee will be obligated to use those of its rights and
powers under the indenture, and to use the same degree of care and skill in
doing so, that a prudent person would use in that situation in conducting his or
her own affairs. If an event of default has occurred and has not been cured with
respect to notes of a series, the trustee or the holders of at least 25% in
principal amount of the notes of that series may declare the entire principal
amount of all the notes of that series to be due and immediately payable. This
is called a declaration of acceleration of maturity. However, a declaration of
acceleration of maturity may be cancelled, but only before a judgment or decree
based on the acceleration has been obtained, by the holders of at least a
majority in principal amount of the notes of that series.
Except in cases of default, where the trustee has the special duties
described above, the trustee is not required to take any action under the
indenture at the request of any holders unless the holders offer the trustee
reasonable protection from expenses and liability called an indemnity. If
reasonable indemnity is provided, the holders of a majority in principal amount
of the outstanding notes of the relevant series may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy
available to the trustee. These majority holders may also direct the trustee in
performing any other action under the indenture with respect to the notes of
that series.
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Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the notes the following must occur:
- the registered holder of your note must give the trustee written notice
that an event of default has occurred and remains uncured;
- the holders of 25% in principal amount of all outstanding notes of that
series must make a written request that the trustee take action because
of the default, and must offer reasonable indemnity to the trustee
against the cost and other liabilities of taking that action; and
- the trustee must have not taken action for 60 days after receipt of the
above notice and offer of indemnity.
However, you are entitled at any time to bring a lawsuit for the payment of
money due on your note on or after its due date.
We will give to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the notes, or else specifying any default.
CONCERNING THE TRUSTEE
The Bank of New York from time to time provides normal banking services to
us and our subsidiaries.
GOVERNING LAW
The indenture and the notes will be governed by, and construed in
accordance with, the laws of the State of New York.
BOOK-ENTRY SYSTEM
Upon issuance, all new notes will be represented by a single global note.
Each global note will be deposited on behalf of DTC, and registered in the name
of Cede & Co., which we refer to as Cede, as DTC's nominee. Beneficial interests
in the global notes will be represented through book-entry accounts of financial
institutions acting on behalf of beneficial owners as direct and indirect
participants in DTC, which we refer to as DTC participants. Investors may elect
to hold interests in the global securities through either DTC in the United
States, or Euroclear System ("Euroclear") or Clearstream Banking, societe
anonyme, Luxembourg ("Clearstream") in Europe if they are participants of those
systems, or, indirectly, through organizations that are participants in those
systems. Clearstream and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Clearstream's and
Euroclear's names on the books of their respective depositaries, which in turn
will hold such interests in customers' securities accounts in the depositaries'
names on the books of DTC. DTC has advised us as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities for its participants and to facilitate the clearance
and settlement of securities transactions, such as transfers and pledges, among
participants in deposited securities through electronic book-entry charges to
accounts of its participants, thereby eliminating the need for physical movement
of securities certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
Certain of such participants (or other representatives), together with other
entities, own DTC. The rules applicable to DTC and its participants are on file
with the SEC.
Clearstream has advised us that it is incorporated under the laws of
Luxembourg as a professional depositary. Clearstream holds securities for its
participating organizations, which we refer to as Clearstream participants, and
facilitates the clearance and settlement of securities transactions between
Clearstream participants through electronic book-entry changes in accounts of
Clearstream participants, thereby eliminating the need for physical movement of
certificates. Clearstream provides to Clearstream participants, among
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other things, services for safekeeping, administration, clearance and settlement
of internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg
Monetary Institute. Clearstream participants are recognized financial
institutions around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to Clearstream is also available to others, such
as banks, brokers, dealers and trust companies that clear through, or maintain a
custodial relationship with, a Clearstream participant either directly or
indirectly.
Distributions with respect to the new notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream participants in
accordance with its rules and procedures, to the extent received by the U.S.
depositary for Clearstream.
Euroclear has advised us that it was created in 1968 to hold securities for
its participants, which we refer to as Euroclear participants, and to clear and
settle transactions between Euroclear participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Euroclear provides various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries. The Euroclear System is operated by Euroclear Bank
S.A./N.V., a bank incorporated under the laws of the Kingdom of Belgium as the
Euroclear operator.
The Euroclear operator holds securities and book-entry interests in
securities for participating organizations and facilitates the clearance and
settlement of securities transactions between Euroclear participants, and
between Euroclear participants and participants of certain other securities
intermediaries through electronic book-entry changes in accounts of such
participants or other securities intermediaries.
The Euroclear operator provides Euroclear participants, among other things,
with safekeeping, administration, clearance and settlement, securities lending
and borrowing, and related services.
Non-participants of Euroclear may hold and transfer book-entry interests in
the securities through accounts with a direct participant of Euroclear or any
other securities intermediary that holds a book-entry interest in the securities
through one or more securities intermediaries standing between such other
securities intermediary and the Euroclear operator.
Securities clearance accounts and cash accounts with the Euroclear operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian
law. These terms and conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear, and receipts of
payments with respect to securities in Euroclear. All securities in Euroclear
are held on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. The Euroclear operator acts under the
terms and conditions only on behalf of Euroclear participants, and has no record
of, or relationship with, persons holding through Euroclear participants.
Distributions with respect to each series of notes held beneficially
through Euroclear will be credited to the cash accounts of Euroclear
participants in accordance with the terms and conditions, to the extent received
by the U.S. depositary for Euroclear.
The trustee (or any registrar or paying agent) will not have any
responsibility for the performance by DTC, Euroclear or Clearstream or any DTC
participants, Clearstream participants or Euroclear participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised us that it will take any action permitted to be
taken by a holder of new notes only at the direction of one or more DTC
participants whose accounts are credited with DTC interests in a global note.
DTC has advised us that pursuant to procedures established by it (1) upon
the issuance by us of the global notes representing the new notes, DTC or its
nominee will credit the accounts of participants with the aggregate principal
amount of the individual beneficial interest represented by these global notes
and (2) ownership of beneficial interests in the new notes will be shown on, and
the transfer of that ownership will
22
be effected only through, records maintained by DTC with respect to its
participants' interests, the participants and the indirect participants. The
laws of some jurisdictions require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in the global notes is limited to such extent.
So long as a nominee of DTC is the registered owner of the global notes,
such nominee will be considered the sole owner or holder of the global notes for
all purposes under the indenture. Except as provided below, owners of beneficial
interests in the global notes will not be entitled to have the new notes
registered in their names, will not receive or be entitled to receive physical
delivery of the new notes in definitive form and will not be considered the
owners or holders thereof under the indenture.
Neither we, the trustee, any paying agent nor the registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Title to book-entry interests in the new notes will pass by book-entry
registration of the transfer within the records of Clearstream, Euroclear or
DTC, as the case may be, in accordance with their respective procedures.
Book-entry interests in the new notes may be transferred within Clearstream and
within Euroclear and between Clearstream and Euroclear in accordance with
procedures established for these purposes by Clearstream and Euroclear.
Book-entry interests in the new notes may be transferred within DTC in
accordance with procedures established for this purpose by DTC. Transfers of
book-entry interests in the new notes among Clearstream and Euroclear and DTC
may be effected in accordance with procedures established for this purpose by
Clearstream, Euroclear and DTC.
Principal and interest payments on the new notes will be made to DTC by
wire transfer of immediately available funds. DTC's practice is to credit
participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable date. Payments by participants to beneficial
owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such participant
and not of DTC or us, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal and interest to DTC is our
responsibility, disbursement of such payments to participants is the
responsibility of DTC, and disbursement of such payments to the beneficial
owners is the responsibility of participants and indirect participants. Neither
we nor the trustee will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in the global notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
DTC may discontinue providing its services as securities depositary with
respect to the notes at any time by giving reasonable notice to us.
New notes represented by a global note will be exchangeable for note
certificates with the same terms in authorized denominations only if:
- DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days;
- we determine not to require all of the notes of a series to be
represented by a global note and notify the trustee of our decision; or
- an Event of Default has occurred with respect to the notes of a series
and has not been cured.
In any such instance, an owner of a beneficial interest in the global notes
will be entitled to physical delivery in definitive form of new notes
represented by the global notes equal in principal amount to such beneficial
interest and to have such notes registered in its name. New notes so issued in
definitive form will be issued as registered notes in denominations of $1,000
and integral multiples thereof, unless otherwise specified by us. Our definitive
notes can be transferred by presentation for registration to the registrar at
its New York offices and must be duly endorsed by the holder or his attorney
duly authorized in writing, or accompanied by
23
a written instrument or instruments of transfer in form satisfactory to us or
the trustee duly executed by the holder or his attorney duly authorized in
writing. We may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any exchange or
registration of transfer of definitive notes.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC's rules and will be settled in immediately
available funds using DTC's Same-Day Funds Settlement System. Secondary market
trading between Clearstream participants and Euroclear participants will occur
in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream and Euroclear and will be settled using the procedures
applicable to conventional eurobonds in immediately available funds.
Cross-market transfers between DTC, on the one hand, and directly or
indirectly through Euroclear or Clearstream participants, on the other, will be
effected in DTC in accordance with DTC rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines.
Euroclear or Clearstream, as the case may be, will, if the transaction meets its
settlement requirements, deliver instructions to its U.S. depositary to take
action to effect final settlement on its behalf by delivering or receiving
beneficial interests in the relevant global note in DTC, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Clearstream participants and Euroclear participants may not
deliver instructions directly to the depositories for Clearstream and Euroclear.
Because of time zone differences, the securities account of a Euroclear
Participant or Clearstream Participant purchasing a beneficial interest in a
global note from a Participant will be credited during the securities settlement
processing day immediately following the DTC settlement date and such credit of
any transactions in beneficial interests in such global note settled during such
processing will be reported to the relevant Euroclear Participant or Clearstream
Participant on such business day. Cash received in Euroclear or Clearstream as a
result of sales of beneficial interests in a global note by or through a
Euroclear Participant or Clearstream Participant to a DTC Participant will be
received with value on the DTC settlement date but will be available in the
relevant Euroclear or Clearstream cash account only as of the business day
following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among participants of
DTC, Clearstream and Euroclear, they are under no obligation to perform or
continue to perform such procedures and they may discontinue the procedures at
any time.
IMPORTANT FEDERAL INCOME TAX CONSIDERATIONS
The exchange of the old notes for new notes will not be treated as a
taxable transaction for U.S. Federal income tax purposes. Your basis and holding
period in the new notes will equal your basis and holding period in the old
notes exchanged for them.
YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES
ARISING UNDER STATE, LOCAL OR FOREIGN LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account in
connection with the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of those new notes. A broker-dealer may
use this prospectus, as amended or supplemented from time to time, in connection
with resales of new notes received in exchange for old notes where such
broker-dealer acquired old notes as a result of
24
market-making activities or other trading activities. We have agreed that for a
period of 30 days after the expiration date of the exchange offer, we will make
available a prospectus, as amended or supplemented, meeting the requirements of
Securities Act to any broker-dealer for use in connection with those resales.
We will not receive any proceeds from any sale of new notes by
broker-dealers. Broker-dealers may sell new notes received by them for their own
account pursuant to the exchange offer from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the new notes or a combination of those methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any broker-dealer or
the purchasers of any new notes.
Any broker-dealer that resells new notes that were received by it for its
own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of new notes and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 30 days after the expiration date of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer, other than commission or concessions of any broker or dealers.
VALIDITY OF THE NOTES
The validity of the new notes will be passed upon by Sullivan & Cromwell
LLP, New York, New York. Partners of Sullivan & Cromwell LLP involved in the
representation of AIG beneficially own approximately 11,360 shares of AIG common
stock.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements and financial statement schedules of
AIG and its subsidiaries incorporated in this prospectus by reference to AIG's
Annual Report on Form 10-K for the year ended December 31, 2003 have been so
incorporated in reliance on the report by PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
25
AMERICAN INTERNATIONAL GROUP, INC.
OFFER TO EXCHANGE UP TO
$500,000,000 2.875% NOTES DUE 2008 AND
$1,000,000,000 4.250% NOTES DUE 2013
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
FOR
ANY AND ALL OUTSTANDING
2.875% NOTES DUE 2008 AND
4.250% NOTES DUE 2013
---------------------
PROSPECTUS
, 2004
---------------------
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The amended and restated certificate of incorporation of AIG provides that
AIG shall indemnify to the full extent permitted by law any person made, or
threatened to be made, a party to an action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or she,
his or her testator or intestate is or was a director, officer or employee of
AIG or serves or served any other enterprise at the request of AIG. Section 6.4
of AIG's by-laws contains a similar provision.
The amended and restated certificate of incorporation also provides that a
director will not be personally liable to AIG or its shareholders for monetary
damages for breach of fiduciary duty as a director, except to the extent that
the exemption from liability or limitation thereof is not permitted by the
Delaware General Corporation Law.
Section 145 of the Delaware General Corporation Law permits indemnification
against expenses, fines, judgments and settlements incurred by any director,
officer or employee of a company in the event of pending or threatened civil,
criminal, administrative or investigative proceedings, if such person was, or
was threatened to be made, a party by reason of the fact that he is or was a
director, officer or employee of the company. Section 145 also provides that the
indemnification provided for therein shall not be deemed exclusive of any other
rights to which those seeking indemnification may otherwise be entitled.
In addition, AIG and its subsidiaries maintain a directors' and officers'
liability insurance policy.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
See Exhibits Index which is incorporated herein by reference.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date for the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unexchanged at the
termination of the offering.
II-1
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(7) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on this 22nd day of March, 2004.
AMERICAN INTERNATIONAL GROUP, INC.
By: /s/ MARTIN J. SULLIVAN
------------------------------------
Name: Martin J. Sullivan
Title: Vice Chairman and
Co-Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman, Chief Executive March 22, 2004
------------------------------------------------ Officer
(M. R. Greenberg) and Director
(Principal Executive Director)
* Vice Chairman, Chief Financial March 22, 2004
------------------------------------------------ Officer, Chief Administrative
(Howard I. Smith) Officer and Director
(Principal Financial Officer)
* Vice President and Comptroller March 22, 2004
------------------------------------------------ (Principal Accounting Officer)
(Michael J. Castelli)
Director
------------------------------------------------
(M. Bernard Aidinoff)
* Director March 22, 2004
------------------------------------------------
(Pei-yuan Chia)
* Director March 22, 2004
------------------------------------------------
(Marshall A. Cohen)
Director
------------------------------------------------
(William S. Cohen)
* Director March 22, 2004
------------------------------------------------
(Martin S. Feldstein)
Director
------------------------------------------------
(Ellen V. Futter)
* Director March 22, 2004
------------------------------------------------
(Carla A. Hills)
II-3
SIGNATURE TITLE DATE
--------- ----- ----
* Director March 22, 2004
------------------------------------------------
(Frank J. Hoenemeyer)
* Director March 22, 2004
------------------------------------------------
(Richard C. Holbrooke)
/s/ MARTIN J. SULLIVAN Director March 22, 2004
------------------------------------------------
(Martin J. Sullivan)
Director
------------------------------------------------
(Edward S.W. Tse)
* Director March 22, 2004
------------------------------------------------
(Jay S. Wintrob)
* Director March 22, 2004
------------------------------------------------
(Frank G. Wisner)
* Director March 22, 2004
------------------------------------------------
(Frank G. Zarb)
*By: /s/ MARTIN J. SULLIVAN
-----------------------------------------------
Martin J. Sullivan, as attorney-in-fact
II-4
EXHIBITS INDEX
EXHIBIT
NUMBER DESCRIPTION LOCATION
------- ----------- --------
3.1 Restated Certificate of Incorporation of Incorporation by reference to Exhibit
AIG 3(i) to AIG's Annual Report on Form 10-K
for the year ended December 31, 1996
(File No. 1-8787)
3.2 Certificate of Amendment of Certificate Incorporated by reference to Exhibit 3(i)
of Incorporation of AIG, filed June 3, to AIG's Quarterly Report on Form 10-Q
1998 for the quarter ended June 30, 1998 (file
No. 1-8787)
3.3 Certificate of Merger of Sun America Inc. Incorporated by reference to Exhibit 3(i)
with and into AIG, filed December 30, to AIG's Annual Report on Form 10-K for
1998 and effective January 1, 1999 the year ended December 31, 1998 (File
No. 1-8787)
3.4 Certificate of Amendment to Certificate Incorporated by reference to Exhibit
of Incorporation of AIG, filed June 5, 3(i)(c) to AIG's Registration Statement
2000 on Form S-4 (File No. 333-45828)
3.5 By-laws of AIG Incorporated by reference to Exhibit
3(ii) to AIG's Annual Report on Form 10-K
for the year ended December 31, 2000
(File No. 1-8787)
4.1 Indenture, dated as of July 15, 1989, Incorporated by reference to Exhibit 4 to
between AIG and The Bank of New York, as AIG's Registration Statement on Form S-3
Trustee (File No. 33-25291)
4.2 First Supplemental Indenture, dated as of Previously filed
May 15, 2003, between AIG and The Bank of
New York, as Trustee, including the form
of note
5.1 Validity Opinion of Sullivan & Cromwell Filed herewith
LLP
12 Statement regarding computation of ratios Incorporated by reference to Exhibit 12
of earnings to fixed charges to AIG's Annual Report on Form 10-K for
the year ended December 31, 2003 (File
No. 1-8787)
23.1 Consent of PricewaterhouseCoopers LLP, Filed herewith
independent accountants for AIG
23.3 Consent of Sullivan & Cromwell LLP Included in Exhibit 5.1
24 Powers of Attorney Previously filed
25.1 Form T-1 Statement of Eligibility under Filed herewith
the Trust Indenture Act of 1939 of The
Bank of New York, as Trustee
99.1 Form of Letter of Transmittal Filed herewith
99.2 Form of Notice of Guaranteed Delivery Filed herewith
99.3 Form of Letter to DTC Participants Filed herewith
99.4 Form of Letter to Clients Filed herewith
99.5 Form of Instructions to DTC Participant Filed herewith
from Beneficial Owner
99.6 Form of Exchange Agent Agreement Filed herewith