As filed with the Securities and Exchange Commission on March 20, 1995
Registration No. 33-56961 and 33-56961-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________
SUNAMERICA CAPITAL TRUST I SUNAMERICA INC.
(Exact name of Registrant as (Exact name of
specified in its charter) Registrant as specified in its charter)
Delaware Maryland
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
To Be Applied For 86-0176061
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1 SunAmerica Center 1 SunAmerica Center
Los Angeles, California 90067-6022 Los Angeles, California 90067-6022
(310) 772-6000 (310) 772-6000
(Address and telephone number (Address and telephone number
of principal executive offices) of principal executive offices)
Susan L. Harris, Esq.
Vice President and General Counsel - Corporate Affairs
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Name, address and telephone number
of agent for service)
__________
Copies to:
David W. Ferguson, Esq. Gregg A. Noel, Esq.
Davis Polk & Wardwell Skadden, Arps, Slate, Meagher & Flom
450 Lexington Avenue 300 South Grand Avenue, Suite 3400
New York, New York 10017 Los Angeles, California 90071
(212) 450-4000 (213) 687-5000
__________
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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 Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
CROSS REFERENCE SHEET
SUNAMERICA INC.
SUNAMERICA CAPITAL TRUST I
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING
LOCATION IN PROSPECTUS OF ITEMS OF FORM S-4
<TABLE>
CAPTION IN OFFERING
FORM S-4 ITEM NO. CIRCULAR/PROSPECTUS
___________________________________________________________________________________________________________
<S> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus. . . . . . . . . . . Outside Front Cover Page; Inside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus. . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Page; Available Information;
Incorporation of Certain Documents by Reference; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information . . . . . . . . . . . . . . . . . Offering Circular/Prospectus Summary; Special
Considerations Relating to the Offer; SunAmerica;
SunAmerica Capital Trust I; Ratio of Earnings to Fixed
Charges; Selected Consolidated Financial Data
4. Terms of the Transaction. . . . . . . . . . . . . . . . The Offer; Description of the Preferred Securities;
Description of the Junior Subordinated Debentures;
Description of the Preferred Securities Guarantee; Taxation
5. Pro Forma Financial Information. . . . . . . . . . . Not Applicable
6. Material Contacts with the Company Being
Acquired. . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters. . . . . . . . . . . . . . . . . . . . . . . Not Applicable
.
8. Interests of Named Experts and Counsel. . . . . . Legal Matters
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities. . . Not Applicable
10. Information with Respect to S-3 Registrants. . . . Not Applicable
11. Incorporation of Certain Information by
Reference. . . . . . . . . . . . . . . . . . . . . . . . . Incorporation of Certain Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
13. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
14. Information with Respect to Registrants Other
than S-3 or S-2 Registrants. . . . . . . . . . . . . . Not Applicable
15. Information With Respect to S-3 Companies. . . . Not Applicable
16. Information with Respect to S-2 or S-3
Companies. . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
17. Information with Respect to Companies Other
Than S-3 or S-2 Companies. . . . . . . . . . . . . . Not Applicable
18. Information if Proxies, Consents or
Authorizations are to be Solicited. . . . . . . . . . Not Applicable
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in an
Exchange Offer. . . . . . . . . . . . . . . . . . . . . Incorporation of Certain Documents by Reference
</TABLE>
SUBJECT TO COMPLETION, DATED MARCH 20, 1995
OFFERING CIRCULAR/PROSPECTUS
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
% TRUST ORIGINATED PREFERRED SECURITIESSM ("TOPrSSM")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth herein
by SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
THE OFFER, THE PRORATION PERIOD
AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M. NEW YORK CITY TIME, ON MARCH , 1995,
UNLESS THE OFFER IS EXTENDED.
SunAmerica Capital Trust I, a Delaware statutory business trust (the
"Trust"), hereby offers, upon the terms and subject to the conditions set
forth in this Offering Circular/Prospectus and the accompanying Letter of
Transmittal (the "Letter of Transmittal" which, together with this Offering
Circular/Prospectus, constitute the "Offer"), to exchange its % Trust
Originated Preferred Securities ("TOPrS"), representing preferred undivided
beneficial interests in the assets of the Trust (the "Preferred Securities"),
for up to 5,500,000 shares of outstanding 9 1/4% Preferred Stock, Series B
(the "Series B Preferred") of SunAmerica Inc., a Maryland corporation
("SunAmerica"). Exchanges will be made on the basis of one Preferred Security
for each share of Series B Preferred validly tendered and accepted for exchange
in the Offer. Shares of Series B Preferred not accepted for exchange because
of proration will be returned. Concurrently with the issuance of Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer,
SunAmerica will deposit in the Trust as trust assets its % Junior
Subordinated Debentures, Series A, due 2044 (the "Junior Subordinated
Debentures") having an aggregate principal amount equal to the aggregate
stated liquidation amount of the Preferred Securities to be issued by the
Trust.
Holders of Series B Preferred may participate in the Offer by
properly completing and signing the Letter of Transmittal and tendering their
shares of Series B Preferred as described in "The Offer -- Procedures for
Tendering" in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date (as defined herein). In
order to participate in the Offer, holders of Series B Preferred must submit a
Letter of Transmittal and comply with the other procedures for tendering in
accordance with the instructions contained herein and in the Letter of
Transmittal prior to the Expiration Date.
For a description of the other terms of the Offer, see "The Offer --
Terms of the Offer"; "-- Expiration Date; Extensions; Amendments;
Termination"; "-- Withdrawal of Tenders" and "-- Acceptance of Shares and
Proration". The Trust expressly reserves the right to extend, amend or modify
the terms of the Offer, and not accept for exchange any Series B Preferred, at
any time prior to the Expiration Date (as defined herein) for any reason,
including (without limitation) if fewer than 2,810,000 shares of Series B
Preferred are tendered (which condition may be waived). Application has been
made to list the Preferred Securities on the New York Stock Exchange (the
"NYSE"). In order to satisfy the NYSE listing requirements, acceptance of
Series B Preferred validly tendered in the Offer is subject to the condition
that as of the Expiration Date there be at least 400 record or beneficial
holders of Preferred Securities to be issued in exchange for such Series B
Preferred, which condition may not be waived. See "The Offer -- Expiration
Date; Extensions; Amendments; Termination".
SunAmerica will own directly or indirectly all of the securities
representing common undivided beneficial interests in the assets of the Trust
(the "Common Securities" and, together with the Preferred Securities, the
"Trust Securities"). The Trust exists for the purpose of (a) issuing (i) its
Preferred Securities in exchange for Series B Preferred validly tendered in
the Offer and in consideration for the deposit by SunAmerica of Junior
Subordinated Debentures in the Trust as trust assets and (ii) its Common
Securities to SunAmerica in exchange for cash and investing the proceeds
thereof in an equivalent amount of Junior Subordinated Debentures and (b)
engaging in such other activities as are necessary and incidental thereto.
The Preferred Securities and the Common Securities will rank pari passu with
each other and will have equivalent terms; provided that (i) if an Event of
Default (as defined herein) with respect to the Junior Subordinated Debentures
occurs and is continuing, the holders of Preferred Securities will have a
priority over holders of the Common Securities with respect to payments in
respect of distributions and payments upon liquidation, redemption and
maturity and (ii) holders of Common Securities have the exclusive right
(subject to the terms of the Declaration) to appoint, replace or remove
Trustees and to increase or decrease the number of Trustees.
Cash distributions on the Preferred Securities will be cumulative
from the first day following the Expiration Date (the "Accrual Date") at an
annual rate of % of the liquidation amount of $25 per Preferred Security,
and will be payable monthly in arrears on the last day of each month of each
year, commencing on the last day of the month in which the Expiration Date
occurs ("distributions"). Cash distributions in arrears for more than one
month will bear interest thereon at the rate per annum of % of the stated
liquidation amount of $25 per Preferred Security (to the extent permitted by
law). The term "distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. In
addition, holders of the Preferred Securities will be entitled to an
additional cash distribution at the rate of 9 1/4% per annum of the
liquidation amount thereof from March 15, 1995 through the Expiration Date in
lieu of dividends accumulating after March 15, 1995 on their Series B
Preferred accepted for exchange, such additional distribution to be made at
the time the first distribution on the Preferred Securities is made. The
payment of distributions out of moneys held by the Property Trustee (as defined
herein) or, if no Property Trustee is then required under the Declaration, the
Trust and payments on liquidation of the Trust and the redemption of Preferred
Securities, as set forth below, are guaranteed by SunAmerica on a subordinated
basis as and to the extent described herein (the "Preferred Securities
Guarantee"). See "Description of the Preferred Securities Guarantee". The
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of issuance of the Preferred Securities, but does not cover payment of
distributions when the Trust does not have sufficient funds to make such
distributions. For a description of redemption rights with respect to the
Preferred Securities, the possible dissolution of the Trust and distribution of
Junior Subordinated Debentures held by the Trust to holders of the Trust
Securities and the liquidation amount on the Preferred Securities, see "Risk
Factors"; "Description of the Preferred Securities -- Special Event Redemption
or Distribution"; "-- Liquidation Distribution Upon Dissolution" and
"Description of the Junior Subordinated Debentures".
The Junior Subordinated Debentures to be deposited in the Trust as
trust assets and held for the benefit of the holders of the Trust Securities
will mature on , 2044 and will bear interest at an annual rate of
% of the principal amount thereof from the Accrual Date. In addition, the
Property Trustee, as the owner and holder of the Junior Subordinated
Debentures will be entitled to interest at the rate of 9 1/4% per annum of the
principal amount thereof from March 15, 1995 through the Expiration Date,
payable at the time of the first interest payment on the Junior Subordinated
Debentures. Interest will be payable monthly in arrears on the last day of
each month of each year, commencing on the last day of the month in which the
Expiration Date occurs; provided that, so long as SunAmerica shall not be in
default in the payment of interest on the Junior Subordinated Debentures,
SunAmerica shall have the right to extend the interest payment period from
time to time for a period not exceeding 60 consecutive months (each, an
"Extension Period"). No interest shall be due and payable during an Extension
Period, but at the end of such Extension Period SunAmerica shall pay all
interest then accrued and unpaid on the Junior Subordinated Debentures,
together with interest thereon at the rate specified for the Junior
Subordinated Debentures to the extent permitted by applicable law, compounded
monthly ("Compounded Interest"). All references herein to interest shall
include Compounded Interest unless otherwise stated. There could be multiple
Extension Periods of varying lengths (up to eight Extension Periods of 60
consecutive months each or more numerous shorter Extension Periods) throughout
the term of the Junior Subordinated Debentures. If SunAmerica were not to
make interest payments on the Junior Subordinated Debentures, the Trust will
not make distributions on the Preferred Securities or the Common Securities.
During any such Extension Period, SunAmerica may not declare or pay dividends
on, or purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock; provided that
SunAmerica will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any of its Series D Mandatory
Conversion Premium Dividend Preferred Stock (the "Series D Preferred Stock") in
accordance with the terms of such stock. See "Risk Factors"; "Description of
the Junior Subordinated Debentures -- Interest" and "-- Option to Extend
Interest Payment Period".
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO
THE PREFERRED SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE JUNIOR
SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES MAY BE DEFERRED AND THE
RELATED FEDERAL INCOME TAX CONSEQUENCES.
The Series B Preferred is listed and principally traded on the NYSE.
On December 19, 1994, the last full day of trading prior to the first public
announcement of the Offer, the closing sales price of the Series B Preferred
on the NYSE as reported on the Composite Tape was $25 3/8 per share. The
closing sales price of the Series B Preferred on the NYSE on March 16, 1995
was $26 1/8. Stockholders are urged to obtain current market quotations for
the Series B Preferred. To the extent that Series B Preferred is tendered and
accepted in the Offer, the terms on which untendered Series B Preferred could
subsequently be sold could be adversely affected. See "Listing and Trading of
Preferred Securities and Series B Preferred".
Neither the board of directors of SunAmerica nor SunAmerica nor the
Trustees nor the Trust makes any recommendation to holders of Series B
Preferred as to whether to tender or refrain from tendering in the Offer.
Holders of Series B Preferred are urged to consult their financial and tax
advisors in making their decisions on what action to take in light of their
own particular circumstances.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS OFFERING CIRCULAR/PROSPECTUS,
AND ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THE OFFER NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR/PROSPECTUS.
Merrill Lynch & Co. has been retained as Dealer Manager to solicit
exchanges of Series B Preferred for Preferred Securities. See "The Offer --
Dealer Manager". Georgeson & Company Inc. has been retained by SunAmerica and
the Trust to act as Information Agent to assist in connection with the Offer.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
The date of this Offering Circular/Prospectus is March , 1995.
SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co.
DIAGRAM OF OFFERS
[GRAPHIC A]
(SEE APPENDIX A FOR DESCRIPTION OF GRAPHIC MATERIAL)
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN
THIS OFFERING CIRCULAR/PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
SUNAMERICA, THE TRUST, THE TRUSTEES OR THE DEALER MANAGER. NEITHER THE
DELIVERY OF THIS OFFERING CIRCULAR/PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF SUNAMERICA OR THE TRUST SINCE THE RESPECTIVE DATES AS
OF WHICH INFORMATION IS GIVEN HEREIN. THE OFFER IS NOT BEING MADE TO (NOR
WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SERIES B PREFERRED
IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF
WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER,
SUNAMERICA AND THE TRUST MAY, AT THEIR DISCRETION, TAKE SUCH ACTION AS THEY MAY
DEEM NECESSARY TO MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER
TO HOLDERS OF SERIES B PREFERRED IN SUCH JURISDICTION. IN ANY JURISDICTION
THE SECURITIES LAWS OR BLUE SKY LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY
A LICENSED BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF THE TRUST BY
THE DEALER MANAGER OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE
LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
AVAILABLE INFORMATION
SunAmerica is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information concerning SunAmerica can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024;
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material can also be inspected and copied at the
offices of the NYSE, 20 Broad Street, New York, N.Y. 10005.
This Offering Circular/Prospectus constitutes a part of a
registration statement on Form S-4 (together with all amendments and exhibits,
the "Registration Statement") filed by SunAmerica and the Trust with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Offering Circular/Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements contained herein concerning the provisions of any document do not
purport to be complete and, in each instance, are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
subject to and qualified in its entirety by such reference. Reference is made
to such Registration Statement and to the exhibits relating thereto for
further information with respect to SunAmerica, the Trust and the securities
offered hereby.
No separate financial statements of the Trust have been included or
incorporated by reference herein. SunAmerica and the Trust do not consider
that such financial statements would be material to holders of Preferred
Securities because the Trust is a newly-formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and
does not propose to engage in, any activity other than its holding as trust
assets the Junior Subordinated Debentures of SunAmerica and its issuance of
Trust Securities. See "SunAmerica Capital Trust I", "Description of the
Preferred Securities", "Description of the Preferred Securities Guarantee" and
"Description of the Junior Subordinated Debentures". The Trust is a statutory
business trust formed under the laws of the State of Delaware. SunAmerica, as
of the date hereof, beneficially owns all of the beneficial interests in the
Trust. Each holder of Preferred Securities will be furnished annually with
unaudited financial statements of the Trust as soon as available after the end
of the Trust's fiscal year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SunAmerica's Annual Report on Form 10-K for the year ended September
30, 1994 and its Quarterly Report on Form 10-Q for the quarter ended December
31, 1994 have been filed with the Commission and are incorporated herein by
reference.
All documents filed by SunAmerica pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Offering
Circular/Prospectus and prior to the Expiration Date shall be deemed to be
incorporated by reference in this Offering Circular/Prospectus and to be a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Offering Circular/Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified and superseded, to constitute a part of this Offering
Circular/Prospectus.
This Offering Circular/Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. SunAmerica will provide
without charge to each person, including any beneficial owner of the Series B
Preferred, to whom this Offering Circular/Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such documents should be directed to Shareholder
Communications of SunAmerica at 1 SunAmerica Center, Los Angeles, California
90067-6022 (Telephone (310) 772-6000). In order to ensure timely delivery of
the documents, any request should be made not later than five business days
prior to the Expiration Date.
TABLE OF CONTENTS
Page
Offering Circular/Prospectus Summary..................................... 4
Risk Factors. . . .......................................................13
Comparison of Preferred Securities
and Series B Preferred.................................................18
SunAmerica...............................................................22
SunAmerica Capital Trust I...............................................23
Ratio of Earnings to Fixed Charges.......................................27
Selected Consolidated Financial Data.....................................28
Capitalization...........................................................30
The Offer................................................................31
Listing and Trading of Preferred
Securities and Series B Preferred......................................38
Transactions and Arrangements Concerning
the Offer..............................................................38
Fees and Expenses; Transfer Taxes........................................38
Price Range of Series B Preferred........................................39
Description of the Preferred Securities..................................40
Description of the Preferred Securities Guarantee........................51
Description of the Junior Subordinated
Debentures.............................................................53
Relationship Between the Preferred
Securities, the Junior Subordinated
Debentures and the Preferred Securities Guarantee......................61
Taxation.................................................................62
Legal Matters............................................................66
Experts..................................................................66
ERISA Matters............................................................66
OFFERING CIRCULAR/PROSPECTUS SUMMARY
The following summary does not purport to be complete and is
qualified in its entirety by the detailed information contained elsewhere in,
or incorporated by reference in, this Offering Circular/Prospectus.
SunAmerica
SunAmerica is a diversified financial services company with more than
$24 billion of assets owned or under management. At December 31, 1994, these
assets consisted of $14.78 billion of assets owned by SunAmerica, $2.04
billion of assets managed in mutual funds and private accounts and $7.63
billion under custody in retirement trust accounts. Together, the SunAmerica
life insurance companies rank among the largest U.S. issuers of annuities.
Complementing these annuity operations are SunAmerica's asset management
operations; its two broker-dealers, which SunAmerica believes, based on
industry data, represent the largest network of independent registered
representatives in the nation; and its trust company which provides
administrative and custodial services to qualified retirement plans. Through
these subsidiaries, SunAmerica specializes in the sale of tax-deferred
long-term savings products and investments to the expanding preretirement
savings market. SunAmerica markets fixed annuities and fee-generating
variable annuities, mutual funds and trust services, as well as guaranteed
investment contracts. SunAmerica's products are distributed through a broad
spectrum of financial services distribution channels, including independent
registered representatives of SunAmerica's broker-dealer subsidiaries and
unaffiliated broker-dealers, independent general insurance agents and
financial institutions.
SunAmerica Capital Trust I
SunAmerica Capital Trust I is a statutory business trust that was
formed under the Delaware Business Trust Act (the "Trust Act") on March ,
1995. The Trust's original declaration of trust will be amended and restated
in its entirety as of the date the Trust accepts Series B Preferred in the
Offer (as so amended and restated, the "Declaration") substantially in the
form filed as an exhibit to the Registration Statement of which this Offering
Circular/Prospectus forms a part. See "The Offer -- Terms of the Offer" and
"-- Acceptance of Shares and Proration" for information regarding the Trust's
acceptance of Series B Preferred in the Offer. Upon issuance of the Preferred
Securities, the holders thereof will own all of the issued and outstanding
Preferred Securities. In this Offering Circular/Prospectus, the phrase,
"holders of Preferred Securities," refers to the beneficial owners of the
Preferred Securities. See "Description of the Preferred Securities --
Book-Entry-Only Issuance -- The Depository Trust Company." SunAmerica has
agreed to acquire Common Securities in an amount equal to at least 3% of the
total capital of the Trust and will own all of the issued and outstanding
Common Securities. The Preferred Securities and the Common Securities will
rank pari passu with each other and will have equivalent terms; provided that
(i) if an Event of Default with respect to the Junior Subordinated Debentures
occurs and is continuing, the holders of Preferred Securities will have a
priority over the holders of the Common Securities with respect to payments in
respect of distributions and payments upon liquidation, redemption and
maturity and (ii) holders of Common Securities have the exclusive right
(subject to the terms of the Declaration) to appoint, replace or remove
Trustees and to increase or decrease the number of Trustees.
The number of trustees (the "Trustees") of the Trust shall initially
be five. Three of the Trustees (the "Regular Trustees") are individuals who
are employees or officers of, or affiliated with, SunAmerica. The fourth
trustee is The Bank of New York, which is unaffiliated with SunAmerica and
which will serve as property trustee (the "Property Trustee"). The fifth
trustee is an affiliate of The Bank of New York that has its principal place
of business in the State of Delaware (the "Delaware Trustee"). For so long as
a Property Trust is required under the provisions of the Declaration, legal
title to the Junior Subordinated Debentures will be held by the Property
Trustee for the benefit of the holders of the Trust Securities. In addition,
the Property Trustee will maintain exclusive control of a segregated bank
account (the "Property Account") to hold all payments in respect of the Junior
Subordinated Debentures for the benefit of the holders of Trust Securities.
The Property Trustee or, if a Property Trustee is not then required under the
Declaration, the Trust will promptly make distributions to the holders of the
Trust Securities out of funds in the Property Account. SunAmerica, as direct
or indirect owner of all of the Common Securities has the exclusive right
(subject to the provisions of the Declaration) to appoint, remove or replace
Trustees and to increase or decrease the number of Trustees, provided that the
number of Trustees shall at least be three, a majority of which shall be
Regular Trustees.
The Trust exists for the purpose of (a) issuing (i) its Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer
and in consideration for the deposit by SunAmerica of Junior Subordinated
Debentures in the Trust as trust assets and to deliver such Series B Preferred
to SunAmerica in connection with and at the time of such deposit, and (ii) its
Common Securities to SunAmerica in exchange for cash and investing the
proceeds thereof in an equivalent amount of Junior Subordinated Debentures and
(b) engaging in such other activities as are necessary and incidental thereto.
The rights of the holders of the Trust Securities, including economic rights,
rights to information and voting rights, are set forth in the Declaration and
the Trust Act. See "SunAmerica Capital Trust I" and "Description of the
Preferred Securities". The Declaration does not permit the incurrence by the
Trust of any indebtedness for borrowed money or the making of any investment
other than in the Junior Subordinated Debentures. In the Declaration,
SunAmerica has agreed to pay for all (and the Trust shall not be obligated to
pay, directly or indirectly, for any) debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of the Trust,
including the fees and expenses of the Trustees and any Special Representative
(as defined herein) and any income taxes, duties and other governmental
charges, and all costs and expenses with respect thereto, to which the Trust
may become subject, except for United States withholding taxes. See "Risk
Factors", "SunAmerica Capital Trust I" and "Description of the Preferred
Securities".
Certain Potential Benefits and Risks to Investors
Prospective investors should carefully review the information
contained elsewhere in this Offering Circular/Prospectus prior to making a
decision regarding the Offer and should particularly consider the following
matters:
Potential Benefits to Exchanging Holders
o The cash distributions rate on the Preferred Securities will
be basis points greater than the dividend rate on the Series B Preferred.
See "Comparison of Preferred Securities and Series B Preferred".
o Cash distributions on the Preferred Securities will be made
monthly and thus more frequently than dividends on the Series B Preferred
which are payable quarterly. See "Comparison of Preferred Securities and
Series B Preferred".
o So long as payments of interest and other payments are made
when due on the Junior Subordinated Debentures, such payments will be
sufficient to cover cash distributions and other payments made on the
Preferred Securities (and the Common Securities) because (i) the aggregate
principal amount of Junior Subordinated Debentures deposited as trust assets
will be equal to the sum of (x) the aggregate stated liquidation amount of
the Preferred Securities issued by the Trust in exchange for the Series B
Preferred accepted in the Offer and (y) the amount of proceeds received by the
Trust from the issuance of the Common Securities to SunAmerica, which proceeds
will be used by the Trust to purchase an equal principal amount of Junior
Subordinated Debentures, (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the distribution rate
and distribution and other payment dates for the Preferred Securities, (iii)
the Declaration provides that SunAmerica shall pay for all (and the Trust
shall not be obligated to pay, directly or indirectly, for any) debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust, and (iv) the Declaration further provides that the
Trustees shall not permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust. See "Offering
Circular/Prospectus Summary -- The Offer -- Description of Preferred
Securities and Junior Subordinated Debentures" and "SunAmerica Capital Trust
I."
o The Trust will have no independent operations and will exist
for the sole purpose of effecting the Offer and issuing the Trust Securities
as described herein and owning and holding through the Property Trustee the
Junior Subordinated Debentures. See "SunAmerica Capital Trust I."
o If (i) the Trust fails to pay distributions in full on the
Preferred Securities for 18 consecutive monthly distribution periods; (ii) an
Event of Default with respect to the Junior Subordinated Debentures occurs and
is continuing; or (iii) SunAmerica is in default on any of its payment or
other obligations under the Preferred Securities Guarantee, then the
Declaration provides a mechanism whereby holders of the Preferred Securities
may appoint a Special Representative which shall be authorized to direct the
Property Trustee to enforce the Property Trustee's creditor rights, or if no
Property Trustee is then required under the Declaration the Special
Representative shall be authorized to directly enforce the Trust's creditor
rights, under the Junior Subordinated Debentures. The Special Representative
shall also be authorized to enforce the rights of the holders of the Preferred
Securities under the Preferred Securities Guarantee and to enforce the rights
of the holders of the Preferred Securities to receive distributions on the
Preferred Securities. See "Description of the Preferred Securities -- Voting
Rights".
o The Offer will allow SunAmerica to achieve certain tax
efficiencies while preserving its flexibility with respect to future
financings because, in contrast to dividend payments on the Series B Preferred
which are not deductible by SunAmerica, SunAmerica will be able to deduct
interest payments on the Junior Subordinated Debentures for United States
federal income tax purposes. See "The Offer -- Purpose of the Offer".
Potential Risks to Exchanging Holders
o Participation in the Offer will be a taxable event. See "Risk
Factors -- Tax Consequences of the Offer".
o The obligations of SunAmerica under (i) the Junior Subordinated
Debentures are subordinate in right of payment to Senior Indebtedness (as
defined herein) of SunAmerica, (ii) SunAmerica's payment obligations under the
Preferred Securities Guarantee are subordinate in right of payment to all
liabilities of SunAmerica, including the Junior Subordinated Debentures and
(iii) the Junior Subordinated Debentures and the Preferred Securities
Guarantee are effectively subordinated to all liabilities of subsidiaries of
SunAmerica. See "Risk Factors -- Subordination of Preferred Securities
Guarantee and Junior Subordinated Debentures; Dependence on SunAmerica".
o The Trust's ability to make distributions on the Preferred
Securities is solely dependent upon SunAmerica making interest payments on the
Junior Subordinated Debentures when and as required, and the interest payment
period on the Junior Subordinated Debentures may be extended under certain
circumstances by SunAmerica in its sole discretion for up to 60 consecutive
months during which no interest would be payable thereon. See "Risk Factors
- -- Subordination of Preferred Securities Guarantee and Junior Subordinated
Debentures; Dependence on SunAmerica; "-- Option to Extend Interest Payment
Period; Tax Impact of Extension" and "-- Potential Market Volatility During
Extension Period".
o Should SunAmerica not make payments on the Junior Subordinated
Debentures for any reason, including as a result of SunAmerica's election to
extend the interest payment period on the Junior Subordinated Debentures, the
Trust will not make distributions on the Trust Securities. In such an event,
holders of the Preferred Securities would not be able to rely on the Preferred
Securities Guarantee since such Guarantee does not cover payment of
distributions on the Preferred Securities when the Trust does not have
sufficient funds to make the distributions. See "Risk Factors --
Subordination of Preferred Securities Guarantee and Junior Subordinated
Debentures; Dependence on SunAmerica".
o If SunAmerica elects to extend the interest period on the
Junior Subordinated Debentures, the Trust will continue to accrue interest
income in respect of such Debentures which will be taxable to beneficial
owners of Preferred Securities. As a result, beneficial owners of Preferred
Securities during an Extension Period will include their pro rata share of the
interest in gross income in advance of the receipt of cash. See "Taxation --
Income from the Preferred Securities".
o Holders of Preferred Securities will have limited voting rights
and will not be able to appoint, remove or replace, or to increase or decrease
the number of, Trustees, which voting rights are vested exclusively in the
Common Securities.
o While dividends on the Series B Preferred are eligible for the
dividends received deduction for corporate holders, distributions on the
Preferred Securities are not eligible for the dividends received deduction for
corporate holders. See "Comparison of Preferred Securities and Series B
Preferred".
o The Preferred Securities are a new issue of securities with no
established trading market. See "Risk Factors -- Listing and Trading of
Preferred Securities and Series B Preferred".
Potential Risk to Non-Exchanging Holders
o The liquidity and trading market for untendered Series B
Preferred could be adversely affected to the extent Series B Preferred is
tendered and accepted in the Offer. See "Risk Factors -- Listing and Trading
of Preferred Securities and Series B Preferred".
The Offer
Purpose of the Offer
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies while
preserving SunAmerica's flexibility with respect to future financings. This
refinancing will permit SunAmerica to deduct interest payable on the Junior
Subordinated Debentures for United States federal income tax purposes;
dividends payable on the Series B Preferred are not deductible. See "The
Offer -- Purpose of the Offer".
Terms of the Offer
Upon the terms and subject to the conditions set forth herein and in
the Letter of Transmittal, the Trust hereby offers to exchange its Preferred
Securities for up to 5,500,000 outstanding shares of Series B Preferred of
SunAmerica. Exchanges will be made on the basis of one Preferred Security for
each share of Series B Preferred validly tendered and accepted for exchange in
the Offer. See "The Offer -- Terms of the Offer".
Expiration Date; Withdrawals
Upon the terms and conditions of the Offer, including the provisions
relating to proration described herein, the Trust will accept for exchange up
to 5,500,000 shares of Series B Preferred, validly tendered and not withdrawn
prior to 5:00 p.m., New York City time, on March , 1995, or if the Offer is
extended by the Trust, in its sole discretion, the latest date and time to
which the Offer has been extended (the "Expiration Date"). Tenders of Series
B Preferred pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless accepted for exchange by the Trust, may be
withdrawn at any time after 40 Business Days (as defined herein) after the
date of this Offering Circular/Prospectus. Shares of Series B Preferred not
accepted because of proration will be returned to the tendering Holders at the
Trust's expense as promptly as practicable following the Expiration Date. A
"Business Day" shall mean any day other than a day on which banking
institutions in the City of New York are authorized or required by law to
close. See "The Offer -- Withdrawal of Tenders"; "-- Expiration Date;
Extensions; Amendments; Termination" and "-- Acceptance of Shares and
Proration".
Extensions; Amendments; Termination
Except as set forth in the following sentence, the Trust expressly
reserves the right to (i) extend, amend or modify the terms of the Offer in
any manner and (ii) withdraw or terminate the Offer and not accept for
exchange any Series B Preferred, at any time prior to the Expiration Date for
any reason, including (without limitation) if fewer than 2,810,000 shares of
Series B Preferred are tendered (which conditions may be waived by the Trust).
See "The Offer -- Expiration Date; Extensions; Amendments; Termination". In
addition, the Trust will not accept shares of Series B Preferred validly
tendered in the Offer if as of the Expiration Date there would be fewer than
400 record or beneficial holders of Preferred Securities to be issued in
exchange for such Series B Preferred, which condition may not be waived.
Procedures for Tendering
Each Holder of Series B Preferred wishing to participate in the Offer
must (i) properly complete and sign the Letter of Transmittal or a facsimile
thereof (all references in this Offering Circular/Prospectus to the Letter of
Transmittal shall be deemed to include a facsimile thereof) in accordance with
the instructions contained herein and in the Letter of Transmittal, together
with any required signature guarantees, and deliver the same to The First
National Bank of Chicago, as Exchange Agent, at one of its addresses set forth
in "The Offer -- Exchange Agent and Information Agent" prior to the Expiration
Date and either (a) certificates for the Series B Preferred must be received
by the Exchange Agent at such address or (b) such Series B Preferred must be
transferred pursuant to the procedures for book-entry transfer described
herein and a confirmation of such book-entry transfer must be received by the
Exchange Agent, in each case prior to the Expiration Date or (ii) comply with
the guaranteed delivery procedures described herein.
In order to participate in the Offer, Holders of Series B Preferred
must submit a Letter of Transmittal and comply with the other procedures for
tendering in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date.
LETTERS OF TRANSMITTAL, SERIES B PREFERRED AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO SUNAMERICA, THE TRUST, THE
DEALER MANAGER OR THE INFORMATION AGENT.
Special Procedure for Beneficial Owners
Any beneficial owner whose Series B Preferred is registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender such Series B Preferred should contact such registered
Holder promptly and instruct such registered Holder to tender on such
beneficial owner's behalf. If such beneficial owner wishes to tender on its
own behalf, such owner must, prior to completing and executing a Letter of
Transmittal and delivering its Series B Preferred, either make appropriate
arrangements to register ownership of the Series B Preferred in such owner's
name or obtain a properly completed stock power from the registered Holder.
The transfer of registered ownership may take considerable time and may not be
able to be completed prior to the Expiration Date. See "The Offer --
Procedures for Tendering -- Special Procedure for Beneficial Owners".
Guaranteed Delivery Procedures
If a Holder desires to accept the Offer and time will not permit a
Letter of Transmittal or Series B Preferred to reach the Exchange Agent before
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected in accordance with the
guaranteed delivery procedures set forth in "The Offer -- Procedures for
Tendering -- Guaranteed Delivery".
Acceptance of Shares and Proration
Upon the terms and subject to the conditions of the Offer, if
5,500,000 or fewer shares of Series B Preferred have been validly tendered and
not withdrawn prior to the Expiration Date, the Trust will accept for exchange
all such shares of Series B Preferred. Upon the terms and subject to the
conditions of the Offer, if more than 5,500,000 shares of Series B Preferred
(or, if decreased as described herein, such lesser number as the Trust may
elect to purchase pursuant to the Offer) have been validly tendered and not
withdrawn prior to the Expiration Date, the Trust will accept for exchange
shares of Series B Preferred from each tendering Holder on a pro rata basis,
subject to adjustment to avoid the acceptance for exchange of fractional
shares.
If the Trust decreases the amount of Series B Preferred sought, and
the Offer is scheduled to expire less than ten Business Days from and
including the date that notice of such decrease is first published, sent or
given in the manner specified in "Terms of the Offer -- Expiration Date;
Extensions; Amendments; Termination", then the Offer will be extended for ten
Business Days from and including the date of such notice.
All shares of Series B Preferred not accepted pursuant to the Offer,
including shares not purchased because of proration, will be returned to the
tendering Holders at the Trust's expense as promptly as practicable following
the Expiration Date.
Delivery of Preferred Securities
Subject to the terms and conditions of the Offer, the delivery of the
Preferred Securities to be issued pursuant to the Offer will occur as promptly
as practicable following the Expiration Date. See "The Offer -- Terms of the
Offer" and "-- Expiration Date; Extensions; Amendments; Termination".
If proration of tendered shares of Series B Preferred is required,
because of the difficulty in determining the number of shares of Series B
Preferred validly tendered (including shares tendered by the guaranteed
delivery procedures described in "Terms of the Offer -- Procedures for
Tendering"), the Trust does not expect that it would be able to announce the
final proration factor or to commence the exchange for any shares of Series B
Preferred pursuant to the Offer until approximately seven Business Days after
the Expiration Date. Preliminary results of the proration will be announced
by press release as promptly as practicable after the Expiration Date.
Holders of shares of Series B Preferred may obtain such preliminary
information from the Dealer Manager or the Information Agent and may also be
able to obtain such information from their brokers.
Description of Preferred Securities and Junior Subordinated Debentures
The Preferred Securities evidence preferred undivided beneficial
interests in the assets of the Trust and will rank pari passu with, and have
terms substantially equivalent to, the Common Securities; provided that (i) if
an Event of Default with respect to the Junior Subordinated Debentures occurs
and is continuing, the holders of Preferred Securities will have a priority
over holders of the Common Securities with respect to payments in respect of
distributions and payments upon liquidation, redemption and maturity and (ii)
holders of Common Securities have the exclusive right (subject to the terms of
the Declaration) to appoint, remove and replace Trustees and to increase or
decrease the number of Trustees. The Declaration does not permit the issuance
by the Trust of any securities or beneficial interests in the assets of the
Trust other than the Preferred Securities and the Common Securities, the
incurrence of any indebtedness for borrowed money by the Trust or the making
of any investments other than in the Junior Subordinated Debentures.
Periodic cash distributions on each Preferred Security will be fixed
at a rate per annum of % of the stated liquidation amount of $25 per
Preferred Security. Distributions in arrears for more than one month will
bear interest thereon at the rate per annum of % of the stated liquidation
amount of $25 per Preferred Security (to the extent permitted by law).
Distributions on the Preferred Securities will be cumulative, will accrue from
the Accrual Date and, except as otherwise described herein, will be made
monthly in arrears, on the last day of each month of each year, commencing on
the last day of the month in which the Expiration Date occurs, but only if,
and to the extent that, the Property Trustee or, if a Property Trustee is not
then required under the Declaration, the Trust has funds available in the
Property Account to make such distribution. In addition, holders of Preferred
Securities will be entitled to an additional cash distribution at the rate of
9 1/4% per annum of the liquidation amount thereof from March 15, 1995 through
the Expiration Date in lieu of dividends accumulating after March 15, 1995 on
their Series B Preferred accepted for exchange, such additional distribution
to be made at the time the first distribution on the Preferred Securities is
made.
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica has the right under
the Indenture (as defined herein) to extend the interest payment period from
time to time on the Junior Subordinated Debentures for a period not exceeding
60 consecutive months and, as a consequence, monthly distributions on the
Preferred Securities would not be made (but would continue to accrue with
interest thereon at the rate of % per annum, compounded monthly) by the
Trust during any such Extension Period. If SunAmerica exercises this right,
SunAmerica may not declare or pay dividends on, or purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock or
preferred stock or make any guarantee payments with respect thereto during
such Extension Period; provided that SunAmerica will be permitted to pay
accrued dividends (and cash in lieu of fractional shares) upon the conversion
of any of its Series D Preferred Stock in accordance with the terms of such
stock. Prior to the termination of any such Extension Period, SunAmerica may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
60 consecutive months. Upon the termination of any Extension Period and the
payment of all amounts then due, SunAmerica may commence a new Extension
Period, subject to the above requirements. SunAmerica may also prepay at any
time all or any portion of the interest accrued during an Extension Period.
Consequently, there could be multiple Extension Periods of varying lengths (up
to six Extension Periods of 60 consecutive months each or more numerous
shorter Extension Periods) throughout the term of the Junior Subordinated
Debentures. See "Risk Factors"; "Description of the Junior Subordinated
Debentures -- Interest" and "-- Option to Extend Interest Payment Period".
There will be deposited in the Trust as trust assets (i) Junior
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities issued by the
Trust in exchange for the Series B Preferred accepted in the Offer and (ii)
Junior Subordinated Debentures having an aggregate principal amount equal to
the amount of proceeds received by the Trust from the sale of the Common
Securities to SunAmerica. Under the Declaration, if and to the extent
SunAmerica does make interest payments on the Junior Subordinated Debentures
deposited in the Trust as trust assets, the Property Trustee or, if a Property
Trustee is not then required under the Declaration, the Trust is obligated to
make distributions promptly on the Preferred Securities. The payment of
distributions on the Preferred Securities and payments on liquidation of the
Trust and the redemption of Preferred Securities, as set forth below, in each
case out of moneys held by the Property Trustee or, if a Property Trustee is
not then required under the Declaration, the Trust in the Property Account,
are guaranteed by SunAmerica on a subordinated basis as and to the extent set
forth under "Description of the Preferred Securities Guarantee". The
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of issuance of the Preferred Securities, but does not apply to the
payment of distributions and other payments on the Preferred Securities when
the Property Trustee or, if a Property Trustee is not then required under the
Declaration, the Trust does not have sufficient funds in the Property Account
to make such distributions or other payments.
The Preferred Securities and Common Securities are redeemable on a
pro rata basis from time to time, in whole or in part, to the same extent as
the Junior Subordinated Debentures are redeemable by SunAmerica, on or after
June 15, 1997, upon not less than 30 nor more than 60 days' notice, at $25 per
Preferred Security plus accrued and unpaid distributions thereon to the date
of redemption (the "Redemption Price"), payable in cash. The Preferred
Securities will be redeemed upon the maturity or earlier redemption of the
Junior Subordinated Debentures. See "Description of the Preferred Securities
- -- Mandatory Redemption".
In addition, upon the occurrence and during the continuation of a Tax
Event or an Investment Company Event (each as hereinafter defined) arising
from a change in law or a change in legal interpretation or other specified
circumstances, the Trust shall be dissolved with the result that the Junior
Subordinated Debentures will be distributed to the holders of the Preferred
Securities and the Common Securities on a pro rata basis, in lieu of any cash
distribution. In the case of a Tax Event, SunAmerica will also have the right
in certain circumstances to redeem the Junior Subordinated Debentures. If the
Junior Subordinated Debentures are distributed to the holders of the Preferred
Securities, SunAmerica will use its best efforts to have the Junior
Subordinated Debentures listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities -- Special Event Redemption or Distribution".
The Junior Subordinated Debentures will be issued pursuant to an
indenture, dated as of March 15, 1995 (as supplemented by the First
Supplemental Indenture (the "First Supplemental Indenture") to be dated as of
March 15, 1995, the "Indenture") between SunAmerica and The First National
Bank of Chicago, as trustee (the "Indenture Trustee"). See "Description of
the Junior Subordinated Debentures". The Junior Subordinated Debentures will
mature on , 2044 and will bear interest at an annual rate of
% from the Accrual Date. Interest will be payable monthly in arrears on the
last day of each month of each year, commencing on the last day of the month
in which the Expiration Date occurs; provided that, as described above, so
long as SunAmerica shall not be in default in the payment of interest on the
Junior Subordinated Debentures, SunAmerica shall have the right to extend the
interest payment period from time to time for a period not exceeding 60
consecutive months. SunAmerica has no current intention of exercising its
right to extend an interest payment period. However, should SunAmerica
determine to exercise such right in the future, the market price of the
Preferred Securities is likely to be affected. See "Risk Factors" and
"Description of the Junior Subordinated Debentures -- Option to Extend
Interest Payment Period".
The Junior Subordinated Debentures will also accrue interest at the
rate of 9 1/4% per annum of the principal amount thereof from March 15, 1995
through the Expiration Date, payable at the time of the first interest payment
on the Junior Subordinated Debentures. No extension of interest will be
permitted with respect to interest accruing from March 15, 1995 through the
Expiration Date.
SunAmerica shall have the right to redeem the Junior Subordinated
Debentures, in whole or in part, from time to time, on or after June 15, 1997,
upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount to be redeemed, plus any accrued and
unpaid interest, to the redemption date, payable in cash. In addition, upon
the occurrence of a Tax Event, SunAmerica will also have the right if certain
conditions are met to redeem the Junior Subordinated Debentures at any time.
Certain United States Federal Income Tax Considerations
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable event. Gain or loss generally will be
recognized in an amount equal to the difference between the fair market value
on the Expiration Date of the holder's pro rata share of the Junior
Subordinated Debentures represented by the Preferred Securities received in
the exchange and the exchanging Holder's tax basis in the shares of Series B
Preferred surrendered. For this purpose, the fair market value of the Junior
Subordinated Debentures deemed issued in exchange for Series B Preferred on
the Expiration Date will equal the fair market value of the Series B Preferred
on that date. See "Taxation -- Exchange of Series B Preferred for Preferred
Securities".
The Junior Subordinated Debentures will be treated as issued with
"original issue discount" for United States federal income tax purposes.
Holders of Preferred Securities will be required to include their pro rata
share of original issue discount in gross income as it accrues on the Junior
Subordinated Debentures in advance of the receipt of cash. See "Taxation --
Accrual of Original Issue Discount and Premium" and -- Potential Extension of
Payment Period on the Junior Subordinated Debentures".
No portion of the amounts received on the Preferred Securities will
be eligible for the dividends received deduction.
The Preferred Securities are expected to trade "flat," that is, at
a price that does not take into account accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. A Securityholder
who disposes of his Preferred Securities between record dates for payments of
distributions thereon will nevertheless be required to include accrued but
unpaid interest on the Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. Accordingly, such a Securityholder will
recognize a capital loss to the extent the selling price (which does not
include accrued but unpaid interest) is less than the Securityholder's adjusted
tax basis (which does include accrued but unpaid interest). Subject to
certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
Untendered Shares
Holders of Series B Preferred who do not tender their Series B
Preferred in the Offer or whose Series B Preferred is not accepted for
exchange will continue to hold such Series B Preferred and will be entitled to
all the rights and preferences, and will be subject to all of the limitations,
applicable thereto.
To the extent that Series B Preferred is tendered and accepted in the
Offer, the terms on which untendered Series B Preferred could subsequently be
sold could be adversely affected. See "Risk Factors -- Listing and Trading of
Preferred Securities and Series B Preferred".
Exchange Agent and Information Agent
The First National Bank of Chicago has been appointed as Exchange
Agent in connection with the Offer. Questions and requests for assistance,
requests for additional copies of this Offering Circular/Prospectus or of the
Letter of Transmittal and requests for Notices of Guaranteed Delivery should
be directed to Georgeson & Company, Inc. which has been retained by SunAmerica
and the Trust to act as Information Agent for the Offer. The addresses and
telephone numbers of the Exchange Agent and the Information Agent are set
forth in "The Offer -- Exchange Agent and Information Agent" and on the
outside back cover of this Offering Circular/Prospectus.
Dealer Manager
Merrill Lynch & Co. has been retained as Dealer Manager in connection
with the Offer. Questions with respect to the Offer may be directed to the
Capital Markets Desk at (212) 449-4906.
RISK FACTORS
Prospective exchanging Holders of Series B Preferred who plan to
participate in the Offer should carefully consider, in addition to the other
information set forth elsewhere in this Offering Circular/ Prospectus, the
following:
Tax Consequences of the Offer
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable event. Generally, gain or loss will be
recognized in an amount equal to the difference between the fair market value
on the Expiration Date of the holder's pro rata share of the Junior
Subordinated Debentures represented by the Preferred Securities received in
the exchange and the exchanging Holder's tax basis in the Series B Preferred
exchanged therefor. See "Taxation -- Exchange of Series B Preferred and
Issuance of Preferred Securities". All Holders of Series B Preferred are
advised to consult their tax advisors regarding the United States federal,
state, local and foreign tax consequences of the exchange of Series B
Preferred and the issuance of Preferred Securities.
Subordination of Preferred Securities Guarantee and Junior Subordinated
Debentures; Dependence on SunAmerica
The obligations of SunAmerica under the Junior Subordinated
Debentures are unsecured obligations of SunAmerica and will be subordinate and
junior in right of payment to Senior Indebtedness of SunAmerica but senior to
its capital stock. At December 31, 1994, Senior Indebtedness of SunAmerica
(on an unconsolidated basis) aggregated approximately $472.8 million. Because
SunAmerica is a holding company, the Junior Subordinated Debentures (and
SunAmerica's obligations under the Preferred Securities Guarantee) are also
effectively subordinated to all existing and future liabilities, including
trade payables, of SunAmerica's subsidiaries, except to the extent that
SunAmerica is a creditor of the subsidiaries recognized as such. Claims on
SunAmerica's subsidiaries by creditors other than SunAmerica include
substantial claims for policy benefits, as well as other liabilities incurred
in the ordinary course of business. At December 31, 1994, SunAmerica's
subsidiaries had outstanding approximately $8.47 billion of liabilities
(excluding variable annuity liabilities, with respect to which assets are
segregated in separate accounts). In addition, since many of SunAmerica's
subsidiaries are insurance companies subject to regulatory control by various
state insurance departments, the ability of such subsidiaries to pay dividends
or make loans or advances to SunAmerica without prior regulatory approval is
limited by applicable laws and regulations. There are no terms in the
Preferred Securities, the Junior Subordinated Debentures or the Preferred
Securities Guarantee that limit SunAmerica's ability to incur additional
indebtedness, including indebtedness that ranks senior to or pari passu with
the Junior Subordinated Debentures and the Preferred Securities Guarantee, or
the ability of its subsidiaries to incur additional indebtedness. See
"Description of the Preferred Securities Guarantee -- Status of the Guarantee"
and "Description of the Junior Subordinated Debentures -- Subordination".
The Trust's ability to make distributions on the Preferred Securities
is solely dependent upon SunAmerica making interest payments on the Junior
Subordinated Debentures deposited as trust assets as and when required. If
SunAmerica were not to make payments on the Junior Subordinated Debentures for
any reason, including as a result of SunAmerica's election to extend the
interest period on the Junior Subordinated Debentures, the Trust will not make
distributions on the Trust Securities. In such an event, holders of the
Preferred Securities would not be able to rely on the Preferred Securities
Guarantee since such Guarantee does not cover payment of distributions on the
Preferred Securities when the Trust does not have sufficient funds to make the
distribution. If the Trust's failure to make distributions on the Preferred
Securities is a consequence of SunAmerica's exercise of its right to extend
the interest payment period for the Junior Subordinated Debentures, the
Property Trustee will have no right to enforce the payment of distributions on
the Preferred Securities until an Event of Default shall have occurred.
SunAmerica's obligations under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all other liabilities of
SunAmerica, including the Junior Subordinated Debentures, except those made
pari passu (that is, equal in priority) or subordinate by their terms to the
Preferred Securities Guarantee and senior to its capital stock or to any
guarantee of SunAmerica in respect of its capital stock.
The Declaration provides that SunAmerica shall pay for all (and the
Trust shall not be obligated to pay, directly or indirectly, for any) debts
and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Trust, including any taxes and all costs and
expenses with respect thereto, to which the Trust may become subject, except
for United States withholding taxes. No assurance can be given that
SunAmerica will have sufficient resources to enable it to pay such debts,
obligations, costs and expenses on behalf of the Trust.
Option to Extend Interest Payment Period; Tax Impact of Extension
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica has the right under
the Indenture to extend the interest payment period from time to time on the
Junior Subordinated Debentures for an Extension Period not exceeding 60
consecutive months, during which no interest shall be due and payable. In
such an event, monthly distributions on the Preferred Securities would not be
made (but would continue to accrue with interest thereon at the rate of %
per annum, compounded monthly) by the Trust during any such Extension Period.
If SunAmerica exercises the right to extend an interest payment period,
SunAmerica may not during such Extension Period declare or pay dividends on,
or purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock; provided that
SunAmerica will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any of its Series D Preferred Stock.
SunAmerica has outstanding 5,002,500 $2.78 Depositary Shares (the "Series D
Depositary Shares"), each representing one-fiftieth of a share of Series D
Preferred Stock. Dividends accrue on each Series D Depositary Share at the
rate of $2.78 per year. On March 1, 1996, unless previously redeemed, each of
the outstanding Series D Depositary Shares will convert into one share of
SunAmerica's common stock and the right to receive an amount in cash equal to
all accrued and unpaid dividends.
Prior to the termination of any Extension Period, SunAmerica may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
60 consecutive months. Upon the termination of any Extension Period and the
payment of all amounts then due, SunAmerica may commence a new Extension
Period, subject to the above requirements. SunAmerica may also prepay at any
time all or any portion of the interest accrued during an Extension Period.
Consequently, there could be multiple Extension Periods of varying lengths (up
to six Extension Periods of 60 consecutive months each or more numerous
shorter Extension Periods) throughout the term of the Junior Subordinated
Debentures. See "Description of the Preferred Securities -- Dividends" and
"Description of the Junior Subordinated Debentures -- Option to Extend Interest
Payment Period".
Because SunAmerica has the right to extend the interest payment
period up to 60 months on various occasions, the Junior Subordinated
Debentures will be treated as issued with "original issue discount" for United
States federal income tax purposes. As a result, holders of Preferred
Securities will be required to include their pro rata share of original issue
discount in gross income as it accrues for United States federal income tax
purposes in advance of the receipt of cash. See "Taxation -- Potential
Extension of Payment Period on the Junior Subordinated Debentures".
Listing and Trading of Preferred Securities and Series B Preferred
The Preferred Securities constitute a new issue of securities with
no established trading market. While application has been made to list the
Preferred Securities on the NYSE, there can be no assurance that an active
market for the Preferred Securities will develop or be sustained in the future
on such exchange. Although the Dealer Manager has indicated to SunAmerica and
the Trust that it intends to make a market in the Preferred Securities as
permitted by applicable laws and regulations prior to the commencement of
trading on the NYSE, it is not obligated to do so and may discontinue any such
market-making at any time without notice. Accordingly, no assurance can be
given as to the liquidity of, or trading markets for, the Preferred
Securities. In order to satisfy the NYSE listing requirements, acceptance of
Series B Preferred validly tendered in the Offer is subject to the condition
that as of the Expiration Date there be at least 400 record or beneficial
holders of Preferred Securities to be issued in exchange for such Series B
Preferred, which condition may not be waived by SunAmerica or the Trust.
To the extent Series B Preferred is tendered and accepted in the
Offer, the liquidity and trading market for the Series B Preferred to be
outstanding following the Offer, and the terms upon which such shares of
Series B Preferred could be sold, could be adversely affected. In addition,
if the Offer is substantially subscribed or oversubscribed, there would be a
significant risk that round lot holdings of Series B Preferred outstanding
following the Offer would be limited. See "Listing and Trading of Preferred
Securities and Series B Preferred."
The Offer is for up to 5,500,000 shares of Series B Preferred or
97.9% of the 5,620,000 shares of Series B Preferred outstanding. The Offer is
for up to this number of shares (rather than for all the outstanding shares of
Series B Preferred) to reduce the risk that the Series B Preferred would be
subject to delisting following consummation of the Offer (or in the event of
under subscription if all outstanding shares of Series B Preferred were
tendered for).
Under the rules of the NYSE, preferred securities such as the
Series B Preferred are subject to delisting if (i) the aggregate value of
publicly-held shares is less than $2 million and (ii) the number of
publicly-held shares is less than 100,000. Since at least 120,000 shares of
Series B Preferred will remain outstanding following consummation of the
Offer, the number of outstanding shares of Series B Preferred will exceed the
delisting criteria set forth in clause (ii) above. In addition, based on the
market price of the Series B Preferred on the NYSE ($25 3/8 on December 19,
1994, the closing sales price of the Series B Preferred on the NYSE on the
last full trading day immediately prior to SunAmerica's first public
announcement of the Offer, and $26 1/8 on March 16, 1995), the Company
believes that the aggregate value of the minimum number (120,000) of shares of
Series B Preferred which will be outstanding following consummation of the
Offer should exceed the delisting criteria set forth in clause (i) above. See
"Price Range of Series B Preferred". If less than 5,500,000 shares of Series
B Preferred are validly tendered, then the number of shares of Series B
Preferred outstanding, and the market value thereof, will be even greater.
Special Event Redemption or Distribution
Upon the occurrence and during the continuation of a Tax Event or
Investment Company Event (as defined herein), which may occur at any time, the
Trust shall be dissolved with the result that, in the manner described in
"Description of the Preferred Securities -- Liquidation Distribution Upon
Dissolution", Junior Subordinated Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, and bearing
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Preferred Securities and Common Securities would be distributed on a pro rata
basis to the holders of the Preferred Securities and Common Securities in
liquidation of the Trust. In the case of a Tax Event (as defined herein), in
certain circumstances, SunAmerica shall also have the right to redeem the
Junior Subordinated Debentures, in whole or in part, in which event the Trust
will redeem Preferred Securities and Common Securities on a pro rata basis to
the same extent as the Junior Subordinated Debentures are redeemed. There can
be no assurance as to the market prices for Preferred Securities or the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Preferred Securities or the Junior Subordinated Debentures
which the investor may receive on dissolution and liquidation of the Trust,
may trade at a discount to the price of the Series B Preferred exchanged. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Description of the Junior Subordinated Debentures --
General".
Under current United States federal income tax law, a distribution
of the Junior Subordinated Debentures upon a Tax Event or Investment Company
Event would not be a taxable event to holders of the Preferred Securities.
See "Taxation -- Distribution of Junior Subordinated Debentures to Holders of
Preferred Securities".
Potential Market Volatility During Extension Period
As described above, SunAmerica has the right to extend an interest
payment period on the Junior Subordinated Debentures from time to time for a
period not exceeding 60 consecutive months. If SunAmerica determines to
extend an interest payment period, or if SunAmerica thereafter extends an
Extension Period or prepays interest accrued during an Extension Period as
described above, the market price of the Preferred Securities is likely to be
affected. In addition, as a result of such rights, the market price of the
Preferred Securities (which represent an undivided interest in Junior
Subordinated Debentures) may be more volatile than other securities on which
original issue discount accrues that do not have such rights. A holder that
disposes of its Preferred Securities during an Extension Period, therefore,
may not receive the same return on its investment as a holder that continues to
hold its Preferred Securities. See "Description of the Junior Subordinated
Debentures -- Option to Extend Interest Payment Period".
COMPARISON OF PREFERRED SECURITIES AND SERIES B PREFERRED
The following is a brief summary of certain terms of the Preferred
Securities and the Series B Preferred. For a more complete description of the
Preferred Securities, see "Description of the Preferred Securities". For a
complete description of the Junior Subordinated Debentures which will be
deposited in the Trust as trust assets and will represent the sole source for
the payment of distributions and other payments on the Preferred Securities,
see "Description of the Junior Subordinated Debentures".
<TABLE>
<CAPTION>
Preferred Securities Series B Preferred
--------------------------------- ---------------------------
<S> <C> <C>
Issuer The Trust. Payment of SunAmerica.
distributions and on
liquidation or redemption is
guaranteed on a subordinated
basis as and to the extent
described herein by
SunAmerica.
Distribution/Interest/ % per annum distribution 9 1/4% per annum dividend
Dividend Rate payable monthly, from and payable on the 15th day of
including the Accrual Date, March, June, September and
but only if, and to the extent December of each year, out
that, the Property Trustee or, of funds legally available
if a Property Trustee is not therefor, when, as and if
then required under the declared by SunAmerica's
Declaration, the Trust has Board of Directors.
funds available in the Dividends are cumulative.
Property Account to make such Accumulated unpaid
distribution. During any dividends do not bear
Extension Period on the Junior interest.
Subordinated Debentures,
distribution payments on the
Preferred Securities will not
be made but would continue to
accrue, and, in the case of
distributions in arrears for
more than one month, would
bear interest at the rate of
% per annum, compounded
monthly.
Optional Redemption See "Maturity/Mandatory Redeemable at the option
Redemption" below. of SunAmerica on and after
June 15, 1997, in whole or
in part, at a redemption
price equal to 100% of the
liquidation preference of
the shares to be redeemed,
plus accrued and unpaid
dividends, if any, to the
redemption date.
Maturity/Mandatory The Preferred Securities will None.
Redemption be redeemed upon the maturity
or earlier redemption of the
Junior Subordinated
Debentures, at a redemption
price equal to 100% of the
liquidation amount of the
Preferred Securities to be
redeemed, plus accrued and
unpaid distributions, if any,
to the redemption date. See
"Description of the Preferred
Securities -- Mandatory
Redemption" and "-- Special
Event Redemption or
Distribution".
Subordination Subordinated to claims of Subordinated to claims of
creditors of the Trust, if creditors of SunAmerica,
any. The Preferred Securities including holders of
and the Common Securities will SunAmerica's outstanding
rank pari passu with each debt securities and the
other and will have equivalent Junior Subordinated
terms; provided that (i) if an Debentures, and effectively subordinated to all
Event of Default with respect obligations of
to the Junior Subordinated SunAmerica's subsidiaries,
Debentures occurs and is but senior to the common
continuing, the holders of stock of SunAmerica and
Preferred Securities will have pari passu with all other
a priority over holders of the outstanding series of
Common Securities with respect preferred stock of
to payments in respect of SunAmerica.
distributions and payments
upon liquidation, redemption
and maturity and (ii) holders
of Common Securities have the
exclusive right (subject to
the terms of the Declaration)
to appoint, remove or replace
Trustees and to increase or
decrease the number of
Trustees. The Trust is not
permitted to incur any
indebtedness for borrowed
money. The Declaration
provides that SunAmerica shall
pay for all (and the Trust
shall not be obligated to pay,
directly or indirectly, for
any) debts and obligations
(other than with respect to
the Trust Securities) and all
costs and expenses of the
Trust, including any income
taxes, duties and other
governmental charges, and all
costs and expenses with
respect thereto, to which the
Trust may become subject,
except for United States
withholding taxes.
SunAmerica's obligations under
the Preferred Securities
Guarantee will rank
subordinate and junior to all
other liabilities of
SunAmerica, including the
Junior Subordinated
Debentures, except those made
pari passu or subordinate by
their terms, and will be
effectively subordinated to
all obligations of
SunAmerica's subsidiaries, and
senior to all capital stock
now or hereafter issued by
SunAmerica and to any
guarantee now or hereafter
entered into by SunAmerica in
respect of any of its capital
stock.
Listing Application has been made to The Series B Preferred is
list the Preferred Securities listed on the NYSE.
on the NYSE. In order to
satisfy the NYSE listing
requirements, acceptance of
Series B Preferred validly
tendered in the Offer is
subject to the condition that
as of the Expiration Date
there be at least 400 record
or beneficial holders of
Preferred Securities to be
issued in exchange for such
Series B Preferred, which
condition may not be waived by
SunAmerica or the Trust.
Dividends Received Dividends are not eligible for Dividends are eligible for
Deduction the dividends received the dividends received
deduction for corporate deduction for corporate
holders. holders.
Voting Rights/ Holders of Preferred If dividends shall be in
Enforcement Securities have no voting arrears in an aggregate
rights other than as provided amount equivalent to six
under the Trust Act unless quarterly dividend
either (i) distributions on payments, the Holders have
the Preferred Securities shall the right (together with
be in arrears for 18 other classes of preferred
consecutive monthly stock ranking on a parity
distribution periods; (ii) an with the Series B
Event of Default (as defined Preferred either as to
herein) occurs and is dividends or on the
continuing with respect to the distribution of assets
Junior Subordinated upon liquidation) to elect
Debentures; or (iii) two directors.
SunAmerica is in default on
any of its payment obligations
under the Preferred Securities
Guarantee, in which case
holders have the right to
appoint a Special
Representative which shall be
authorized to direct the
Property Trustee to enforce
the Property Trustee's
creditor rights, or if no
Property Trustee is required
under the Declaration the
Special Representative shall
be authorized to directly
enforce the Trust's creditor
rights, under the Junior
Subordinated Debentures. The
Special Representative shall
also be authorized to enforce
the rights of holders of
Preferred Securities under the
Preferred Securities Guarantee
and the rights of the holders
to receive distributions on
the Preferred Securities. If
the Trust's failure to make
distributions is a consequence
of SunAmerica's exercise of
its right to extend the
interest payment period for
the Junior Subordinated
Debentures as described under
"Distribution/Interest/
Dividend Rate", the Property
Trustee or the Special
Representative, as applicable,
will have no right to enforce
the payment of distributions
until an Event of Default
shall have occurred.
</TABLE>
SUNAMERICA
SunAmerica is a diversified financial services company with more than
$24 billion of assets owned or under management. At December 31, 1994, these
assets consisted of $14.78 billion of assets owned by SunAmerica, $2.04
billion of assets managed in mutual funds and private accounts and $7.63
billion under custody in retirement trust accounts. Together, the SunAmerica
life insurance companies rank among the largest U.S. issuers of annuities.
Complementing these annuity operations are SunAmerica's asset management
operations; its two broker-dealers, which SunAmerica believes, based on
industry data, represent the largest network of independent registered
representatives in the nation; and its trust company which provides
administrative and custodial services to qualified retirement plans. Through
these subsidiaries, SunAmerica specializes in the sale of tax-deferred
long-term savings products and investments to the expanding preretirement
savings market. SunAmerica markets fixed annuities and fee-generating
variable annuities, mutual funds and trust services, as well as guaranteed
investment contracts. SunAmerica's products are distributed through a broad
spectrum of financial services distribution channels, including independent
registered representatives of SunAmerica's broker-dealer subsidiaries and
unaffiliated broker-dealers, independent general insurance agents and
financial institutions.
The principal executive offices of SunAmerica are located at 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
Recent Developments
For its first quarter ended December 31, 1994, SunAmerica reported
net income of $45.1 million or $.98 per share, up 15% on a per share basis
from $39.6 million or $.85 per share in the first quarter of fiscal 1994
(before cumulative effect of change in accounting for income taxes of $33.5
million or $.80 per share).
Net investment income for the three months ended December 31, 1994
increased by 10.5% and fee income increased by 5.4% as compared to the year
earlier period. These increases occurred despite a difficult environment
characterized by higher interest rates and volatile stock and bond markets.
The increases in investment spread and fee income were coupled with a 1.0%
decrease in general and administrative expenses, as SunAmerica continued to
closely control these expenses through a company-wide cost containment program.
Net investment income for the first quarter of fiscal 1995 rose to
$78.1 million from $70.7 million in the fiscal 1994 quarter. The spread on
average invested assets was 3.33%, up from 3.18% a year ago. Fee income rose
to $39.7 million, up from $37.6 million in fiscal 1994. Included in the
fiscal 1995 quarter was $1.8 million of loan servicing fees resulting from
SunAmerica's recent acquisition of the net assets of Imperial Premium Finance,
Inc.
Sales of financial services products rose to $833.1 million from
$625.2 million in the first quarter of fiscal 1994, primarily as a result of a
near five-fold increase in fixed annuity premiums and a doubling of premiums
from guaranteed investment contracts.
The United States Supreme Court recently affirmed the ability of a
national bank to sell annuities issued by a life insurance company. This
decision confirms the ability of the Company to sell its products through
national banks.
SUNAMERICA CAPITAL TRUST I
The Trust is a statutory business trust that was formed under the
Trust Act on March , 1995 pursuant to a declaration of trust dated such date
among the Trustees and SunAmerica and the filing of a certificate of trust
with the Secretary of State of Delaware. Such declaration of trust will be
amended and restated in its entirety as of the date the Trust accepts Series B
Preferred in the Offer (see "The Offer -- Terms of the Offer") substantially
in the form filed as an exhibit to the Registration Statement of which this
Offering Circular/Prospectus forms a part. Upon issuance of the Preferred
Securities, the holders thereof will own all of the issued and outstanding
Preferred Securities. SunAmerica has agreed to acquire Common Securities in
an amount equal to at least 3% of the total capital of the Trust and will own
all of the issued and outstanding Common Securities. The Preferred Securities
and the Common Securities will rank pari passu with each other and will have
equivalent terms; provided that (i) if an Event of Default with respect to the
Junior Subordinated Debentures occurs and is continuing, the holders of
Preferred Securities will have a priority over holders of the Common
Securities with respect to payments in respect of distributions and payments
upon liquidation, redemption and maturity and (ii) holders of Common
Securities have the exclusive right (subject to the terms of the Declaration)
to appoint, remove or replace Trustees and to increase or decrease the number
of Trustees.
The number of Trustees of the Trust shall initially be five. Three
of the Trustees will be the Regular Trustees. The fourth trustee is The Bank
of New York, which is unaffiliated with SunAmerica and which will serve as the
Property Trustee. The fifth trustee is an affiliate of The Bank of New York
and will serve as the Delaware Trustee. For so long as a Property Trustee is
required under the provisions of the Declaration, legal title to the Junior
Subordinated Debentures will be held by the Property Trustee for the benefit
of the holders of the Trust Securities. In addition, the Property Trustee
will maintain exclusive control of the Property Account to hold all payment of
all funds in respect of the Junior Subordinated Debentures for the benefit of
the holders of Trust Securities. The Property Trustee or, if a Property
Trustee is not then required under the Declaration, the Trust will promptly
make distributions to the holders of the Trust Securities out of funds from
the Property Account. SunAmerica, as the direct or indirect owner of all of
the Common Securities, has the exclusive right (subject to the terms of the
Declaration) to appoint, remove or replace Trustees and to increase or
decrease the number of Trustees, provided that the number of Trustees shall at
least be three, a majority of which shall be Regular Trustees. The
Declaration further provides that at such time as the Trust is no longer
required under applicable law to have a Property Trustee, the holders of
Common Securities may elect to terminate the services of the Property Trustee,
in which event legal title to the Junior Subordinated Debentures will be
transferred to the Trust and the Property Account will be maintained by the
Regular Trustees, who will make distributions promptly to the holders of the
Trust Securities therefrom.
The Trust exists for the purpose of (a) issuing (i) its Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer
and in consideration for the deposit by SunAmerica of Junior Subordinated
Debentures in the Trust as trust assets and to deliver such Series B Preferred
to SunAmerica in connection with and at the time of such deposit, and (ii) its
Common Securities to SunAmerica in exchange for cash and investing the
proceeds thereof in an equivalent amount of Junior Subordinated Debentures and
(b) engaging in such other activities as are necessary or incidental thereto.
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration and the Trust Act.
Under the Declaration, the Trustees shall have no right or power to
do any act or thing contrary to or inconsistent with the actions of any duly
appointed Special Representative taken in accordance with the terms of the
Preferred Securities. In addition, the Declaration provides that the Trust
shall not, and the Trustees shall cause the Trust not to, engage in any
activity other than in connection with the purposes of the Trust or other than
as required or authorized by the Declaration. In particular, the Trust shall
not and the Trustees shall not (a) invest any proceeds received by the Trust
from holding the Junior Subordinated Debentures but shall promptly distribute
from the Property Account all such proceeds to holders of Trust Securities
pursuant to the terms of the Declaration and of the Trust Securities; (b)
acquire any assets other than as expressly provided in the Declaration; (c)
possess Trust property for other than a Trust purpose; (d) make any loans,
other than loans represented by the Junior Subordinated Debentures; (e)
possess any power or otherwise act in such a way as to vary the Trust assets
or the terms of the Trust Securities in any way whatsoever; (f) issue any
securities or other evidences of beneficial ownership of, or beneficial
interests in, the Trust other than the Trust Securities; (g) incur any
indebtedness for borrowed money or (h)(i) direct the time, method and place of
conducting any proceeding or any remedy available to the Indenture Trustee, or
executing any trust or power conferred upon the Indenture Trustee with respect
to the Junior Subordinated Debentures, (ii) waive any past default that is
waivable under the Indenture, (iii) exercise any right to rescind or annul any
declaration that the principal of all of the Junior Subordinated Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Junior Subordinated Debentures, where such
consent shall be required, unless in the case of this clause (h) the Property
Trustee or, if a Property Trustee is not then required under the Declaration,
the Regular Trustees, shall have received an unqualified opinion of nationally
recognized independent tax counsel recognized as expert in such matters to the
effect that such action will not cause the Trust to be classified for United
States federal income tax purposes as an association taxable as a corporation
or a partnership or have that result and that the Trust will continue to be
classified as a grantor trust for United States federal income tax purposes.
The books and records of the Trust will be maintained at the
principal office of the Trust and will be open for inspection by a holder of
Preferred Securities or his representative for any purpose reasonably related
to its interest in the Trust during normal business hours. Each holder of
Preferred Securities will be furnished annually with unaudited financial
statements of the Trust as soon as available after the end of the Trust's
fiscal year.
Except as provided below or under the Trust Act, holders of Preferred
Securities will have no voting rights. If (i) distributions on the Preferred
Securities are in arrears for 18 consecutive monthly distribution periods,
(ii) an Event of Default (as defined in the Indenture) occurs and is
continuing with respect to the Junior Subordinated Debentures or (iii)
SunAmerica is in default on any of its payment obligations under the Preferred
Securities Guarantee, holders of Preferred Securities shall have the right to
vote, as a single class, for the appointment of a special representative of
the Trust and the holders of the Preferred Securities (a "Special
Representative") who shall not be an affiliate of SunAmerica and which shall
be authorized to direct the Property Trustee to enforce the Property Trustee's
creditor rights, or if a Property Trustee is not then required under the
Declaration the Special Representative shall be authorized to directly enforce
the Trust's creditor rights, under the Junior Subordinated Debentures. The
Special Representative shall also be authorized to enforce the rights of
holders of Preferred Securities under the Preferred Securities Guarantee and
the rights of holders of Preferred Securities to receive distributions on the
Preferred Securities. If the Trust's failure to make distributions on the
Preferred Securities is a consequence of SunAmerica's exercise of its right to
extend the interest payment period for the Junior Subordinated Debentures, the
Property Trustee or the Special Representative, as applicable, will have no
right to enforce the payment of distributions on the Preferred Securities
until an Event of Default shall have occurred. See "Description of the
Preferred Securities -- Voting Rights".
The Property Trustee, for the benefit of the holders of the Trust
Securities, is required under the Declaration to enforce the Property
Trustee's creditor rights under the Indenture with respect to the Junior
Subordinated Debentures whether or not a Special Representative has been
appointed or, if so appointed, has failed to direct the Property Trustee to
enforce such rights. If a Property Trustee is not then required under the
Declaration and the Junior Subordinated Debentures are held by the Trust, the
Regular Trustees, for the benefit of holders of the Trust Securities, are
required under the Declaration to enforce the Trust's creditor rights under
the Indenture with respect to the Junior Subordinated Debentures if a Special
Representative has not been appointed as provided in the Declaration. The
Property Trustee and the Regular Trustees, as applicable, shall act in
accordance with any written direction given by a Special Representative.
The Declaration provides that the Trustees may treat the person in
whose name a Preferred Security is registered on the books and records of the
Trust as the sole holder thereof and of the Preferred Securities represented
thereby for purposes of receiving distributions and for all other purposes
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such certificate or in the Preferred Securities represented
thereby on the part of any person, whether or not the Trust shall have actual
or other notice thereof. Certificates representing the Preferred Securities
will be issued in the form of one or more global certificates as discussed
under "Description of Preferred Securities -- Book-Entry-Only Issuance -- The
Depository Trust Company" and registered on the books and records of the Trust
in the name of Cede & Co., the nominee of The Depository Trust Company
("DTC"). Except as described in such section, no person owning Preferred
Securities (a "Preferred Security Beneficial Owner") registered in the name of
and held by the DTC or its nominee will receive definitive Preferred
Securities. Unless definitive Preferred Securities have been issued to
Preferred Security Beneficial Owners in accordance with the Declaration:
(i) the Trust and the Trustees shall be entitled to deal with
DTC (or any successor depositary) for all purposes, including the
payment of distributions and receiving approvals, votes or consents
under the Declaration, and except as set forth in the Declaration
with respect to the Property Trustee, shall have no obligation to
Preferred Security Beneficial Owners; and
(ii) the rights of Preferred Security Beneficial Owners shall
be exercised only through DTC (or any successor depositary) and shall
be limited to those established by law and agreements between such
Owners and DTC and/or its participants. See "Description of the
Preferred Securities -- Book-Entry-Only Issuances -- The Depository
Trust Company." Until definitive Preferred Securities are issued to
Preferred Security Beneficial Owners, all notices and other
communications required under the Declaration shall be given to, and
all distributions on the Preferred Securities shall be given or made
to, DTC (or its successor).
In the Declaration, SunAmerica has agreed to pay for all (and the
Trust shall not be obligated to pay, directly or indirectly, for any) debts
and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Trust, including the fees and expenses of the
Trustees and any Special Representative (as defined herein) and any taxes and
all costs and expenses with respect thereto, to which the Trust may become
subject, except for United States withholding taxes. See "Risk Factors" and
"Description of the Preferred Securities". The foregoing obligations of
SunAmerica under the Declaration are for the benefit of, and shall be
enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (a "Creditor") whether or not such Creditor has
received notice hereof. Any such Creditor may enforce such obligations of
SunAmerica directly against SunAmerica and SunAmerica has irrevocably waived
any right or remedy to require that any such Creditor take any action against
the Trust or any other person before proceeding against SunAmerica.
SunAmerica has agreed in the Declaration to execute such additional agreements
as may be necessary or desirable in order to give full effect to the foregoing.
The foregoing summary of certain provisions of the Declaration does
not purport to be complete and is qualified in its entirety by reference to
the Declaration which have been filed as exhibits to the Registration
Statement of which this Offering Circular/Prospectus is a part.
The business address of the Trust is c/o SunAmerica Inc., 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
Three months ended
Years ended September 30, December 31,
------------------------------------------------ -------------------------------
1990 1991 1992 1993 1994 1993 1994
------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (excluding interest
on fixed annuities,
guaranteed investment
contracts and trust
deposits) (1) 2.4 2.7 4.0 6.1 5.8 6.2 5.5
======= ======= ======= ======= ======== ======== ========
Ratio of earnings to fixed
charges (including interest
on fixed annuities,
guaranteed investment
contracts and trust
deposits) (2) 1.1 1.1 1.2 1.4 1.5 1.5 1.5
======= ======= ======= ======= ======== ======== ========
Ratio of earnings to combined
fixed charges and
preferred stock dividends
(excluding interest on
fixed annuities, guaranteed
investment contracts
and trust deposits) (3) 2.0 2.3 2.7 2.8 2.8 2.8 3.1
======= ======= ======= ======= ======== ======== ========
Ratio of earnings to combined
fixed charges and
preferred stock dividends
(including interest on
fixed annuities, guaranteed
investment contracts
and trust deposits) (4) 1.1 1.1 1.2 1.3 1.4 1.3 1.4
======= ======= ======= ======= ======== ======== ========
_______________
<FN>
<F1>
(1) In computing the ratio of earnings to fixed charges (excluding interest on fixed annuities, guaranteed investment contracts and
trust deposits), fixed charges consist of interest expense on senior and subordinated indebtedness. Earnings are computed by
adding interest incurred on senior and subordinated indebtedness to pretax income.
<F2>
(2) In computing the ratio of earnings to fixed charges (including interest on fixed annuities, guaranteed investment contracts and
trust deposits), fixed charges consist of interest expense on senior and subordinated indebtedness, fixed annuity contracts,
guaranteed investment contracts and trust deposits. Earnings are computed by adding interest incurred on senior and
subordinated indebtedness, fixed annuity contracts, guaranteed investment contracts and trust deposits to pretax income.
<F3>
(3) In computing the ratio of earnings to combined fixed charges and preferred stock dividends (excluding interest on fixed
annuities, guaranteed investment contracts and trust deposits), combined fixed charges and preferred stock dividends consist of
interest expense on senior and subordinated indebtedness and dividends on preferred stock on a tax equivalent basis. Earnings
are computed by adding interest incurred on senior and subordinated indebtedness to pretax income.
<F4>
(4) In computing the ratio of earnings to combined fixed charges and preferred stock dividends (including interest on fixed
annuities, guaranteed investment contracts and trust deposits), combined fixed charges and preferred stock dividends consist of
interest expense on senior and subordinated indebtedness, fixed annuity contracts, guaranteed investment contracts and trust
deposits and dividends on preferred stock on a tax equivalent basis. Earnings are computed by adding interest incurred on
senior and subordinated indebtedness, fixed annuity contracts, guaranteed investment contracts and trust deposits to pretax
income.
</FN>
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
Reference is made to SunAmerica's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994 (the "Form 10-K"), which is incorporated
by reference in this Offering Circular/Prospectus and which contains
SunAmerica's audited consolidated financial statements, including the
consolidated income statement for SunAmerica's three fiscal years in the
period ended September 30, 1994, consolidated balance sheets as of September
30, 1993 and 1994, and the related notes. Selected unaudited financial
information as of and for the three months ended December 31, 1993 and 1994
should be read in conjunction with the audited consolidated financial
statements and related notes contained in the Form 10-K and the unaudited
consolidated financial statements contained in SunAmerica's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1994 (the "Form 10-Q"), which
report is also incorporated by reference in this Offering Circular/Prospectus.
Such unaudited information reflects, in the opinion of management, all
adjustments, consisting of only normal accruals, necessary for a consistent
presentation with the audited financial information. Results of operations
for the three months ended December 31, 1994 may not necessarily be indicative
of the results to be expected for the full fiscal year.
<TABLE>
Three months ended
Years ended September 30, December 31,
1990 1991 1992 1993 1994 1993 1994
----------- ----------- ----------- ----------- ----------- ---------- ----------
(In thousands, except per common share amounts and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Results of operations
Net investment income ... $ 132,947 $ 162,412 $ 219,384 $ 263,791 $ 294,454 $ 70,714 $ 78,109
Net realized investment
losses ..................... (29,319) (46,060) (56,364) (21,287) (21,124) (5,367) (7,066)
Fee income ................. 72,327 92,689 112,831 134,305 150,736 37,627 39,661
General and administrative
expenses.................... (112,860) (120,475) (133,058) (135,790) (132,743) (33,457) (33,108)
Provision for future
guaranty fund assessments . --- --- --- (22,000) --- --- ---
Amortization of deferred
acquisition costs .......... (27,872) (40,088) (48,375) (51,860) (66,925) (15,243) (18,674)
Other income and expenses,
net ........................ 25,644 24,903 16,673 16,852 15,603 2,990 4,612
----------- ----------- ----------- ----------- ------------ ---------- ----------
Pretax income .............. 60,867 73,381 111,091 184,011 240,001 57,264 63,534
Income tax expense ......... (22,100) (25,900) (34,300) (57,000) (74,700) (17,700) (18,400)
----------- ----------- ----------- ----------- ------------ ---------- ----------
Income before cumulative
effect of change in
accounting for income
taxes ..................... 38,767 47,481 76,791 127,011 165,301 39,564 45,134
Cumulative effect of change
in accounting for income
taxes ..................... --- --- --- --- (33,500) (33,500) ---
----------- ----------- ----------- ----------- ------------------------- ----------
Net income ................. $ 38,767 $ 47,481 $ 76,791 $ 127,011 $ 131,801 $ 6,064 $ 45,134
=========== =========== =========== =========== ========================= ==========
Earnings per share:
Income before cumulative
effect of change in
accounting for income
taxes................... $ 1.02 $ 1.32 $ 1.80 $ 2.75 $ 3.58 $ 0.85 $ 0.98
Cumulative effect of
change in accounting
for income taxes.. --- --- --- --- (.81) (0.80) ---
----------- ----------- ----------- ----------- ----------- -------------- ----------
Net income ............... $ 1.02 $ 1.32 $ 1.80 $ 2.75 $ 2.77 $ 0.05 $ 0.98
=========== =========== =========== =========== =========== ============== ==========
Cash dividends per share
paid to common
shareholders:
Nontransferable Class B
Stock ................ $ 0.180 $ 0.180 $ 0.180 $ 0.252 $ 0.360 $ 0.090 $ 0.135
=========== =========== =========== =========== =========== ============== ==========
Common Stock .......... $ 0.200 $ 0.200 $ 0.200 $ 0.280 $ 0.400 $ 0.100 $ 0.150
=========== =========== =========== =========== =========== ============== ==========
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA (continued)
<TABLE>
At September 30,
1990 1991 1992 1993 1994
------------- ------------- ------------- ------------- -------------
(In thousands, except book value per common share)
<S> <C> <C> <C> <C> <C>
Financial Position
Investments.................. $ 7,275,401 $ 7,596,275 $ 9,428,266 $10,364,952 $ 9,280,390
Variable annuity assets...... 2,145,196 2,746,685 3,293,343 4,194,970 4,513,093
Deferred acquisition costs... 356,088 392,278 436,209 475,917 581,874
Other assets ................ 301,906 279,007 245,833 231,582 280,868
------------- ------------- ------------- ------------- -------------
Total assets ................ $10,078,591 $11,014,245 $13,403,651 $15,267,421 $14,656,225
============= ============= ============= ============= =============
Reserves for fixed annuity
contracts.................... $ 5,523,320 $ 5,359,757 $ 5,143,339 $ 4,934,871 $ 4,519,623
Reserves for guaranteed
investment contracts........ 1,294,338 1,598,963 2,023,048 2,216,104 2,783,522
Trust deposits .............. --- --- 367,458 378,986 442,320
Variable annuity
liabilities................. 2,145,196 2,746,685 3,293,343 4,194,970 4,513,093
Other payables and
accrued liabilities.......... 159,416 344,789 1,372,010 1,828,153 860,763
Long-term notes and
debentures................ --- --- 225,000 380,560 472,835
Collateralized mortgage
obligations and reverse
repurchase agreements..... 368,907 299,343 182,784 112,032 28,662
Other senior indebtedness.... 43,503 38,035 25,919 15,119 ---
Subordinated notes........... 119,485 117,985 --- --- ---
Deferred income taxes........ 40,353 58,779 40,682 96,599 74,319
Shareholders' equity......... 384,073 449,909 730,068 1,110,027 961,088
------------- ------------- ------------- ------------- -------------
Total liabilities and
=============
shareholders' equity...... $10,078,591 $11,014,245 $13,403,651 $15,267,421 $14,656,225
============= ============= ============= ============= =============
Book value per common
=============
share..................... $ 9.98 $ 12.24 $ 14.54 $ 22.64 $ 18.90
============= ============= ============= ============= =============
At December 31,
1993 1994
------------- -------------
(In thousands, except book value per common share)
Financial Position
Investments.................. $10,387,761 $ 9,493,129
Variable annuity assets...... 4,432,876 4,359,290
Deferred acquisition costs... 483,092 603,954
Other assets ................ 237,346 322,176
------------- -------------
Total assets ................ $15,541,075 $14,778,549
============= =============
Reserves for fixed annuity
contracts.................... $ 4,810,948 $ 4,545,686
Reserves for guaranteed
investment contracts........ 2,378,606 3,018,234
Trust deposits .............. 382,315 464,840
Variable annuity
liabilities................. 4,432,876 4,359,290
Other payables and
accrued liabilities.......... 1,678,885 901,347
Long-term notes and
debentures................ 404,835 472,835
Collateralized mortgage
obligations and reverse
repurchase agreements..... 241,383 ---
Other senior indebtedness.... --- ---
Subordinated notes...........
Deferred income taxes........ 119,396 54,369
Shareholders' equity......... 1,091,831 961,948
------------- -------------
Total liabilities and
shareholders' equity...... $15,541,075 $14,778,549
============= =============
Book value per common
share..................... $ 22.12 $ 18.76
============= =============
</TABLE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of
SunAmerica and its subsidiaries at December 31, 1994 and as adjusted to give
effect to the issuance of Preferred Securities in exchange for the Series B
Preferred. Interest rates are as of December 31, 1994. The "As Adjusted"
capitalization described in the table below assumes that Holders of 5,500,000
shares of Series B Preferred elect to participate in the Offer. To the extent
holders of Series B Preferred do not participate in the Offer, Minority
interests in consolidated subsidiary would be reduced and Preferred Stock
would be increased by an amount equal to the additional liquidation value of
the Series B Preferred which remained outstanding.
<TABLE>
December 31, 1994
-------------------------------
Actual As Adjusted
------------- --------------
(In thousands)
<S> <C> <C>
Indebtedness:
Long-term notes and debentures:
Medium-term notes due 1998 through 2005
(5-3/8% to 6-3/4%).................... $ 147,835 $ 147,835
8-1/8% debentures due
April 28, 2023........................ 100,000 100,000
9.95% debentures due
February 1, 2012...................... 100,000 100,000
9% notes due January 15, 1999........... 125,000 125,000
------------- --------------
Total indebtedness......................... 472,835 472,835
------------- --------------
Minority interests in consolidated
subsidiary (Preferred Securities of
the Trust)............................. --- 137,500
------------- --------------
Shareholders' equity:
Preferred Stock......................... 374,273 236,773
Nontransferable Class B Stock........... 6,826 6,826
Common Stock............................ 29,327 29,327
Additional paid-in capital.............. 201,536 201,536
Retained earnings....................... 545,020 545,020
Net unrealized losses on debt and
equity securities available for sale.. (195,034) (195,034)
------------- --------------
Total shareholders' equity ............. 961,948 824,448
------------- --------------
Total capitalization....................... $1,434,783 $1,434,783
============= ==============
</TABLE>
THE OFFER
Purpose of the Offer
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies while
preserving SunAmerica's flexibility with respect to future financings. This
refinancing will permit SunAmerica to deduct interest payable on the Junior
Subordinated Debentures for United States federal income tax purposes;
dividends payable on the Series B Preferred are not deductible.
Following the Offer, and depending on the number of shares of Series
B Preferred tendered, SunAmerica may take additional actions to reduce further
or eliminate the remaining Series B Preferred, including by making purchases
of Series B Preferred in the open market, by making subsequent tender or
exchange offers or by undertaking a recapitalization transaction. Such
transactions could be undertaken on terms which are more favorable or less
favorable than the exchange ratios in the Offer. SunAmerica has made no
decision to take any such actions, and there is no assurance that SunAmerica
will take any such actions.
General
Participation in the Offer is voluntary and Holders of Series B
Preferred should carefully consider whether to accept. Neither the board of
directors of SunAmerica nor SunAmerica nor the Trustees nor the Trust makes
any recommendation to Holders as to whether to tender or refrain from
tendering in the Offer. Holders of Series B Preferred are urged to consult
their financial and tax advisors in making their decisions on what action to
take in light of their own particular circumstances.
Unless the context requires otherwise, the term "Holder" with respect
to the Offer means (i) any person in whose name any shares of Series B
Preferred are registered on the books of SunAmerica or (ii) any other person
who has obtained a properly completed stock power from the registered holder,
or (iii) any person whose shares of Series B Preferred are held of record by
The Depository Trust Company ("DTC") who desires to deliver such Series B
Preferred by book-entry transfer at DTC.
Terms of the Offer
Upon the terms and subject to the conditions set forth herein and in
the Letter of Transmittal, the Trust will exchange its Preferred Securities
for up to 5,500,000 outstanding shares of Series B Preferred. The Offer will
be effected on a basis of one Preferred Security for each share of Series B
Preferred validly tendered and accepted for exchange. See " -- Procedures for
Tendering". Upon the terms and subject to the conditions set forth herein and
in the Letter of Transmittal, the Trust will accept up to 5,500,000 shares of
Series B Preferred validly tendered and not withdrawn prior to the Expiration
Date and, unless the Offer has been withdrawn or terminated, will deliver
Preferred Securities in exchange therefor to tendering Holders of Series B
Preferred as promptly as practicable following the Expiration Date. The Trust
expressly reserves the right, in its sole discretion, to delay acceptance for
exchange of Series B Preferred tendered under the Offer and the delivery of
the Preferred Securities with respect to the Series B Preferred accepted for
exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act, which
require that the Trust consummate the Offer or return the Series B Preferred
deposited by or on behalf of the Holders thereof promptly after the
termination or withdrawal of the Offer), or to withdraw or terminate the Offer
at any time prior to the Expiration Date for any reason.
In all cases, except to the extent waived by the Trust, delivery of
Preferred Securities issued with respect to the Series B Preferred accepted
for exchange pursuant to the Offer will be made only after timely receipt by
the Exchange Agent of Series B Preferred (or confirmation of book-entry
transfer thereof), a properly completed and duly executed Letter of
Transmittal and any other documents required thereby.
As of the date of this Offering Circular/Prospectus, there were
5,620,000 shares of Series B Preferred outstanding. This Offering
Circular/Prospectus, together with the Letter of Transmittal, is being sent to
all registered Holders as of March , 1995.
The Trust shall be deemed to have accepted validly tendered Series
B Preferred (or defectively tendered Series B Preferred with respect to which
the Trust has waived such defect) when, as and if the Trust has given oral or
written notice thereof to the Exchange Agent. The Exchange Agent will act as
agent for the tendering Holders for the purpose of receiving Series B
Preferred from, and remitting Preferred Securities to, tendering Holders who
are participating in the Offer. Upon the terms and subject to the conditions
of the Offer, delivery of Preferred Securities to tendering Holders will be
made as promptly as practicable following the Expiration Date.
If proration of tendered shares of Series B Preferred is required,
because of the difficulty in determining the number of shares of Series B
Preferred validly tendered (including shares tendered by the guaranteed
delivery procedures described in "-- Procedures for Tendering"), the Trust
does not expect that it would be able to announce the final proration factor
or to commence the exchange for any shares of Series B Preferred pursuant to
the Offer until approximately seven Business Days after the Expiration Date.
Preliminary results of the proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of shares of
Series B Preferred may obtain such preliminary information from the Dealer
Manager, the Information Agent or the Exchange Agent and may also be able to
obtain such information from their brokers.
If any tendered shares of Series B Preferred are not accepted for
exchange because of an invalid tender, proration, the occurrence of certain
other events set forth herein or otherwise, unless otherwise requested by the
Holder under "Special Delivery Instructions" in the Letter of Transmittal,
such shares of Series B Preferred will be returned, without expense, to the
tendering Holder thereof (or in the case of shares of Series B Preferred
tendered by book-entry transfer into the Exchange Agent's account at DTC, such
shares of Series B Preferred will be credited to an account maintained at DTC
designated by the participant therein who so delivered such Series B
Preferred), as promptly as practicable after the Expiration Date or the
withdrawal or termination of the Offer.
Holders of Series B Preferred will not have any appraisal or
dissenters' rights under the Maryland General Corporation Law in connection
with the Offer. The Trust intends to conduct the Offer in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of
the Commission thereunder.
Holders who tender Series B Preferred in the Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the Letter of Transmittal, transfer taxes with respect to the exchange of
Series B Preferred pursuant to the Offer. See "Fees and Expenses; Transfer
Taxes".
Expiration Date; Extensions; Amendments; Termination
The Offer will expire on the Expiration Date. The Trust reserves the
right to extend the Offer in its sole discretion at any time and from time to
time by giving oral or written notice to the Exchange Agent and by timely
public announcement communicated, unless otherwise required by applicable law
or regulation, by making a release to the Dow Jones News Service. During any
extension of the Offer, all Series B Preferred previously tendered pursuant to
the Offer and not withdrawn will remain subject to the Offer.
Except as provided below, the Trust expressly reserves the right to
(i) extend, amend or modify the terms of the Offer in any manner and (ii)
withdraw or terminate the Offer and not accept for exchange any Series B
Preferred at any time prior to the Expiration Date for any reason, including
(without limitation) if fewer than 2,810,000 shares of Series B are tendered
in the Offer (which conditions may be waived by SunAmerica and the Trust). If
the Trust makes a material change in the terms of the Offer or if it waives a
material condition of the Offer, the Trust will extend the Offer. The minimum
period for which the Offer will be extended following a material change or
waiver, other than a change in the amount of Series B Preferred sought for
exchange, will depend upon the facts and circumstances, including the relative
materiality of the change or waiver. With respect to a change in the amount
of Series B Preferred sought, the Offer will be extended for a minimum of ten
Business Days following public announcement of such change. Any withdrawal or
termination of the Offer will be followed as promptly as practicable by public
announcement thereof. If the Trust withdraws or terminates the Offer, it will
give immediate notice to the Exchange Agent, and all Series B Preferred
theretofore tendered pursuant to the Offer will be returned promptly to the
tendering Holders thereof. See "-- Withdrawal of Tenders". In order to
satisfy the NYSE listing requirements, acceptance of Series B Preferred
validly tendered in the Offer is subject to the condition that as of the
Expiration Date there be at least 400 record or beneficial holders of
Preferred Securities to be issued in exchange for such Series B Preferred,
which condition may not be waived.
Procedures for Tendering
The tender of Series B Preferred by a Holder thereof pursuant to one
of the procedures set forth below will constitute an agreement between such
Holder and the Trust in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Each Holder of the Series B Preferred wishing to participate in the
Offer must (i) properly complete and sign the Letter of Transmittal in
accordance with the instructions contained herein and in the Letter of
Transmittal, together with any required signature guarantees, and deliver the
same to the Exchange Agent, at one of its addresses set forth in "-- Exchange
Agent and Information Agent" prior to the Expiration Date and either (a)
certificates for the Series B Preferred must be received by the Exchange Agent
at such address or (b) such Series B Preferred must be transferred pursuant to
the procedures for book-entry transfer described below and a confirmation of
such book-entry transfer must be received by the Exchange Agent, in each case
prior to the Expiration Date or (ii) comply with the guaranteed delivery
procedures described below.
In order to participate in the Offer, Holders of Series B Preferred
must submit a Letter of Transmittal and comply with the other procedures for
tendering in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date.
LETTERS OF TRANSMITTAL, SERIES B PREFERRED AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE TRUST, THE DEALER
MANAGER OR THE INFORMATION AGENT.
Special Procedure for Beneficial Owners. Any beneficial owner whose
Series B Preferred is registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender should contact
such registered Holder promptly and instruct such registered Holder to tender
on such beneficial owner's behalf. If such beneficial owner wishes to tender
on its own behalf, such owner must, prior to completing and executing the
Letter of Transmittal and delivering its Series B Preferred, either make
appropriate arrangements to register ownership of the Series B Preferred in
such owner's name or obtain a properly completed stock power from the
registered Holder. The transfer of registered ownership may take considerable
time and may not be able to be completed prior to the Expiration Date.
THE METHOD OF DELIVERY OF SERIES B PREFERRED AND ALL OTHER DOCUMENTS
IS AT THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED
THAT REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, INSURANCE BE
OBTAINED, AND THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION
DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.
Signature Guarantees. If tendered Series B Preferred is registered
in the name of the signer of the Letter of Transmittal and the Preferred
Securities to be issued in exchange therefor are to be issued (and any
untendered Series B Preferred is to be reissued) in the name of the registered
Holder (which term, for the purposes described herein, shall include any
participant in DTC whose name appears on a security listing as the owner of
Series B Preferred), the signature of such signer need not be guaranteed. If
the tendered Series B Preferred is registered in the name of someone other
than the signer of the Letter of Transmittal, such tendered Series B Preferred
must be endorsed or accompanied by written instruments of transfer in form
satisfactory to the Trust and duly executed by the registered Holder, and the
signature on the endorsement or instrument of transfer must be guaranteed by a
financial institution (including most banks, savings and loans associations
and brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program or the Stock Exchange Medallion Program (any of the
foregoing hereinafter referred to as an "Eligible Institution"). If the
Preferred Securities and/or the Series B Preferred not exchanged are to be
delivered to an address other than that of the registered Holder appearing on
the register for the Series B Preferred, the signature in the Letter of
Transmittal must be guaranteed by an Eligible Institution.
Book-Entry Transfer. The Trust understands that the Exchange Agent
will make a request promptly after the date of this Offering
Circular/Prospectus to establish accounts with respect to the Series B
Preferred at DTC for the purpose of facilitating the Offer, and subject to the
establishment thereof, any financial institution that is a participant in
DTC's system may make book-entry delivery of Series B Preferred by causing DTC
to transfer such Series B Preferred into the Exchange Agent's account with
respect to the Series B Preferred in accordance with DTC's Automated Tender
Offer Program ("ATOP") procedures for such book-entry transfers. However, the
exchange for the Series B Preferred so tendered will only be made after timely
confirmation (a "Book-Entry Confirmation") of such Book-Entry Transfer of
Series B Preferred into the Exchange Agent's account, and timely receipt by the
Exchange Agent of an Agent's Message (as such term is defined in the next
sentence) and any other documents required by the Letter of Transmittal. The
term "Agent's Message" means a message, transmitted by DTC and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from a participant tendering
Series B Preferred that is the subject of such Book-Entry Confirmation that
such participant has received and agrees to be bound by the terms of the
Letter of Transmittal, and that the Trust may enforce such agreement against
such participant.
Guaranteed Delivery. If a Holder desires to participate in the Offer
and time will not permit a Letter of Transmittal or Series B Preferred to
reach the Exchange Agent before the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if the Exchange Agent has received at its office prior to the
Expiration Date, a letter, telegram or facsimile transmission from an Eligible
Institution setting forth the name and address of the tendering Holder, the
name(s) in which the Series B Preferred is registered and, if the Series B
Preferred is held in certificated form, the certificate numbers of the Series
B Preferred to be tendered, and stating that the tender is being made thereby
and guaranteeing that within five NYSE trading days after the date of
execution of such letter, telegram or facsimile transmission by the Eligible
Institution, the Series B Preferred in proper form for transfer together with
a properly completed and duly executed Letter of Transmittal (and any other
required documents), or a confirmation of book-entry transfer of such Series B
Preferred into the Exchange Agent's account at DTC, will be delivered by such
Eligible Institution. Unless the Series B Preferred being tendered by the
above-described method is deposited with the Exchange Agent within the time
period set forth above (accompanied or preceded by a properly completed Letter
of Transmittal and any other required documents) or a confirmation of
book-entry transfer of such Series B Preferred into the Exchange Agent's
account at DTC in accordance with DTC's ATOP procedures is received, the Trust
may, at its option, reject the tender. In addition to the copy being
transmitted herewith, copies of a Notice of Guaranteed Delivery which may be
used by Eligible Institutions for the purposes described in this paragraph are
available from the Exchange Agent and the Information Agent.
Miscellaneous. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Series B Preferred will be determined by the Trust, whose determination will
be final and binding. The Trust reserves the absolute right to reject any or
all tenders not in proper form or the acceptance for exchange of which may, in
the opinion of the Trust's counsel, be unlawful. The Trust also reserves the
absolute right to waive any defect or irregularity in the tender of any Series
B Preferred, and the Trust's interpretation of the terms and conditions of the
Offer (including the instructions in the Letter of Transmittal) will be final
and binding. None of the Trust, the Exchange Agent, the Dealer Manager, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Tenders of Series B Preferred involving any irregularities will not
be deemed to have been made until such irregularities have been cured or
waived. Series B Preferred received by the Exchange Agent that is not validly
tendered and as to which the irregularities have not been cured or waived will
be returned by the Exchange Agent to the tendering Holder (or in the case of
Series B Preferred tendered by book-entry transfer into the Exchange Agent's
account at DTC, such Series B Preferred will be credited to an account
maintained at DTC designated by the participant therein who so delivered such
Series B Preferred), unless otherwise requested by the Holder in the Letter of
Transmittal, as promptly as practicable after the Expiration Date or the
withdrawal or termination of the Offer.
Letter of Transmittal
The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Offer.
The party tendering Series B Preferred for exchange (the
"Transferor") exchanges, assigns and transfers the Series B Preferred to the
Trust, and irrevocably constitutes and appoints the Exchange Agent as the
Transferor's agent and attorney-in-fact to cause the Series B Preferred to be
assigned, transferred and exchanged. The Transferor represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Series B Preferred and to acquire Preferred Securities issuable upon the
exchange of such tendered Series B Preferred and that, when such Transferor's
shares of Series B Preferred are accepted for exchange, the Trust will acquire
good and unencumbered title to such shares of tendered Series B Preferred, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim. The Transferor also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Trust to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Series B Preferred or transfer ownership of such Series B Preferred
on the account books maintained by DTC. All authority conferred by the
Transferor will survive the death, bankruptcy or incapacity of the Transferor
and every obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
Withdrawal of Tenders
Tenders of Series B Preferred pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date and, unless accepted for exchange by
the Trust, may be withdrawn at any time after 40 Business Days after the date
of this Offering Circular/Prospectus.
To be effective, a written notice of withdrawal delivered by mail,
hand delivery or facsimile transmission must be timely received by the
Exchange Agent at the address set forth below under "-- Exchange Agent and
Information Agent". The method of notification is at the risk and election of
the Holder. Any such notice of withdrawal must specify (i) the Holder named
in the Letter of Transmittal as having tendered Series B Preferred to be
withdrawn, (ii) if the Series B Preferred is held in certificated form, the
certificate numbers of the Series B Preferred to be withdrawn, (iii) that such
Holder is withdrawing his election to have such Series B Preferred exchanged
and (iv) the name of the registered Holder of such Series B Preferred, and
must be signed by the Holder in the same manner as the original signature on
the Letter of Transmittal (including any required signature guarantees) or be
accompanied by evidence satisfactory to the Trust that the person withdrawing
the tender has succeeded to the beneficial ownership of the Series B Preferred
being withdrawn. The Exchange Agent will return the properly withdrawn Series
B Preferred promptly following receipt of notice of withdrawal. If Series B
Preferred has been tendered pursuant to the procedure for book-entry transfer,
any notice of withdrawal must specify the name and number of the account at
DTC to be credited with the withdrawn Series B Preferred and otherwise comply
with DTC's procedures. All questions as to the validity of notice of
withdrawal, including time of receipt, will be determined by the Trust, and
such determination will be final and binding on all parties. Withdrawals of
tenders of Series B Preferred may not be rescinded and any Series B Preferred
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Properly withdrawn Series B Preferred, however, may be retendered by
following the procedures therefor described elsewhere herein at any time prior
to the Expiration Date. See "-- Procedures for Tendering."
Acceptance of Shares and Proration
Upon the terms and subject to the conditions of the Offer, if
5,500,000 or fewer shares of Series B Preferred have been validly tendered and
not withdrawn prior to the Expiration Date, the Trust will accept for exchange
all such shares of Series B Preferred. Upon the terms and subject to the
conditions of the Offer, if more than 5,500,000 shares of Series B Preferred
(or, if decreased as described herein, such lesser number as the Trust may
elect to purchase pursuant to the Offer) have been validly tendered and not
withdrawn prior to the Expiration Date, the Trust will accept for exchange
shares of Series B Preferred from each tendering Holder on a pro rata basis,
subject to adjustment to avoid the acceptance for exchange of fractional
shares.
If the Trust decreases the amount of Series B Preferred sought, and
the Offer is scheduled to expire less than ten Business Days from and
including the date that notice of such decrease is first published, sent or
given in the manner specified in "-- Expiration Date; Extensions; Amendments;
Termination", then the Offer will be extended for ten Business Days from and
including the date of such notice.
All shares of Series B Preferred not accepted pursuant to the Offer,
including shares not purchased because of proration, will be returned to the
tendering Holders at the Trust's expense as promptly as practicable following
the Expiration Date.
Exchange Agent and Information Agent
The First National Bank of Chicago has been appointed as Exchange
Agent for the Offer.
The Exchange Agent:
The First National Bank of Chicago
By Hand or Overnight Courier in By Hand or Overnight Courier in
Chicago: New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission
(For Eligible Institutions Only):
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
Georgeson & Company Inc. has been retained by SunAmerica and the
Trust as the Information Agent to assist in connection with the Offer.
Questions and requests for assistance regarding the Offer, requests for
additional copies of this Offering Circular/Prospectus, the Letter of
Transmittal and requests for Notice of Guaranteed Delivery may be directed to
the Information Agent at Wall Street Plaza, New York, New York 10005,
telephone (800) 223-2064.
SunAmerica will pay the Exchange Agent and Information Agent
reasonable and customary fees for their services and will reimburse them for
all their reasonable out-of-pocket expenses in connection therewith.
Dealer Manager
Merrill Lynch & Co., as Dealer Manager, has agreed to solicit
exchanges of Series B Preferred for Preferred Securities. SunAmerica will pay
the Dealer Manager a fee that is dependent on the number of shares of Series B
Preferred accepted pursuant to the Offer. The maximum fee payable is
approximately $3.44 million. SunAmerica will also reimburse the Dealer
Manager for certain reasonable out-of-pocket expenses in connection with the
Offer and will indemnify the Dealer Managers against certain liabilities,
including liabilities under the Securities Act. Additional solicitation may
be made by telephone or in person by officers and regular employees of
SunAmerica and its affiliates. No additional compensation will be paid to any
such officers and employees who engage in soliciting tenders. Merrill Lynch
& Co. engages in transactions with, and from time to time has performed
services for, SunAmerica, including acting as lead underwriter for the
issuance of the Series B Preferred.
LISTING AND TRADING OF PREFERRED SECURITIES AND SERIES B PREFERRED
The Preferred Securities constitute a new issue of securities with
no established trading market. While application has been made to list the
Preferred Securities on the NYSE, there can be no assurance that an active
market for the Preferred Securities will develop or be sustained in the future
on such exchange. Although the Dealer Manager has indicated to the Trust that
it intends to make a market in the Preferred Securities as permitted by
applicable laws and regulations prior to the commencement of trading on the
NYSE, it is not obligated to do so and may discontinue any such market-making
at any time without notice. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Preferred Securities. In order to
satisfy the NYSE listing requirements, acceptance of Series B Preferred validly
tendered in the Offer is subject to the condition that as of the Expiration
Date there be at least 400 record or beneficial holders of Preferred
Securities to be issued in exchange for such Series B Preferred, which
condition may not be waived.
To the extent that Series B Preferred is tendered and accepted in the
Offer, the terms on which untendered Series B Preferred could subsequently be
sold could be adversely affected. See "Risk Factors -- Listing and Trading of
Preferred Securities and Series B Preferred".
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFER
Except as described herein, there are no contracts, arrangements,
understandings or relationships in connection with the Offer between
SunAmerica or any of its directors or executive officers, the Trust or the
Trustees and any person with respect to any securities of SunAmerica or the
Trust, including the Junior Subordinated Debentures, the Series B Preferred
and the Preferred Securities.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the Series B Preferred will be
borne by SunAmerica. For compensation to be paid to the Dealer Manager see
"The Offer -- Dealer Manager". The total cash expenditures to be incurred by
SunAmerica in connection with the Offer, other than fees payable to the Dealer
Manager, but including the expenses of the Dealer Manager, printing,
accounting and legal fees, and the fees and expenses of the Exchange Agent,
the Information Agent, the Property Trustee, the Delaware Trustee and the
Indenture Trustee, are estimated to be approximately $600,000.
SunAmerica will pay all transfer taxes, if any, applicable to the
exchange of Series B Preferred pursuant to the Offer. If, however,
certificates representing Preferred Securities or shares of Series B Preferred
not tendered or accepted for exchange, are to be delivered to, or are to be
issued in the name of, any person other than the registered Holder of the
Series B Preferred tendered or if a transfer tax is imposed for any reason
other than the exchange of Series B Preferred pursuant to the Offer, then the
amount of any such transfer taxes (whether imposed on the registered Holder or
any other persons) will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering Holder.
PRICE RANGE OF SERIES B PREFERRED
The Series B Preferred is listed and principally traded on the NYSE.
The following table sets forth, for each period shown, the high and low sales
prices of the Series B Preferred as reported on the NYSE Composite Tape.
Fiscal Year Ended High Low
September 30, 1993
1st Quarter.............................. $26 3/8 $24 7/8
2nd Quarter.............................. $27 $25 1/2
3rd Quarter.............................. $27 7/8 $26 5/8
4th Quarter.............................. $28 1/4 $27 1/8
Fiscal Year Ended High Low
September 30, 1994
1st Quarter.............................. $28 5/8 $26 1/2
2nd Quarter.............................. $27 7/8 $25 1/2
3rd Quarter.............................. $26 1/2 $25
4th Quarter.............................. $26 1/2 $25 1/4
Fiscal Year Ending High Low
September 30, 1995
1st Quarter.............................. $25 1/2 $24 1/2
2nd Quarter (through March 16, 1995)..... $26 1/2 $25
On December 19, 1994, the last full day of trading prior to the first
public announcement of the Offer, the closing sales price of the Series B
Preferred on the NYSE as reported on the Composite Tape was $25 3/8 per share.
Stockholders are urged to obtain a current market quotation for the Series B
Preferred.
DESCRIPTION OF THE PREFERRED SECURITIES
The summary of certain material terms and provisions of the Preferred
Securities set forth below does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the Declaration, which has been
filed as an exhibit to the Registration Statement of which this Offering
Circular/Prospectus forms a part, and the Trust Act.
General
The Declaration authorizes the Trust to issue the Preferred
Securities, which represent preferred undivided beneficial interests in the
assets of the Trust, and the Common Securities, which represent common
undivided beneficial interests in the assets of the Trust. All of the Common
Securities will be owned, directly or indirectly, by SunAmerica. The Common
Securities and the Preferred Securities rank pari passu with each other and
will have equivalent terms except that (i) if an Event of Default occurs and
is continuing under the Indenture, the rights of the holders of the Common
Securities to payment in respect of periodic distributions and payments upon
liquidation, redemption and maturity are subordinated to the rights of the
holders of the Preferred Securities and (ii) holders of Common Securities have
the exclusive right (subject to the terms of the Declaration) to appoint,
remove or replace Trustees and to increase or decrease the number of Trustees.
The Declaration does not permit the issuance by the Trust of any securities or
other evidences of beneficial ownership of, or beneficial interests in, the
Trust other than the Preferred Securities and the Common Securities, the
incurrence of any indebtedness for borrowed money by the Trust or the making
of any investment other than in the Junior Subordinated Debentures. Pursuant
to the Declaration, for so long as a Property Trustee is required thereunder,
the Property Trustee will own and hold the Junior Subordinated Debentures as
trust assets for the benefit of the holders of the Preferred Securities and
the Common Securities. The payment of distributions out of moneys held by the
Property Trustee or, if a Property Trustee is not then required under the
Declaration, the Trust, and payments on redemption of the Preferred Securities
or liquidation of the Trust, are guaranteed by SunAmerica on a subordinated
basis as and to the extent described under "Description of the Preferred
Securities Guarantee." The Preferred Securities Guarantee does not cover
payment of distributions on the Preferred Securities when the Property Trustee
or, if a Property Trustee is not then required under the Declaration, the
Trust does not have sufficient funds in the Property Account to make such
distributions. See "Voting Rights."
Distributions
Distributions on the Preferred Securities will be fixed at a rate per
annum of % of the stated liquidation amount of $25 per Preferred
Security. Distributions in arrears for more than one month will bear interest
thereon at the rate per annum of % of the stated liquidation amount of
$25 per Preferred Security (to the extent permitted by law). The term
"distributions" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will
accrue from the Accrual Date and, except as otherwise described below, will be
payable monthly in arrears, on the last day of each month of each year,
commencing on the last day of the month in which the Expiration Date occurs,
but only if, and to the extent that, the Property Trustee or, if a Property
Trustee is not then required under the Declaration, the Trust has funds
available in the Property Account to make such distribution. In addition,
holders of Preferred Securities will be entitled to an additional cash
distribution at the rate of 9 1/4% per annum of the liquidation amount
thereof from March 15, 1995 through the Expiration Date in lieu of
dividends accumulating after March 15, 1995 on their Series B Preferred
accepted for exchange, such additional distribution to be made at the time
the first distribution on the Preferred Securities is made.
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica has the right under
the Indenture to extend the interest payment period from time to time on the
Junior Subordinated Debentures for a period not exceeding 60 consecutive
months and, as a consequence, monthly distributions on the Preferred
Securities would not be made (but would continue to accrue with interest
thereon at the rate of % per annum, compounded monthly) by the Trust
during any such Extension Period. If SunAmerica exercises the right to extend
an interest payment period, SunAmerica may not declare or pay dividends on, or
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock during such Extension Period;
provided that SunAmerica will be permitted to pay accrued dividends (and cash
in lieu of fractional shares) upon the conversion of any of its Series D
Preferred Stock in accordance with the terms of such stock. Prior to the
termination of any such Extension Period, SunAmerica may further extend such
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 60 consecutive months.
Upon the termination of any Extension Period and the payment of all amounts
then due, SunAmerica may commence a new Extension Period, subject to the above
requirements. SunAmerica may also prepay at any time all or any portion of
the interest accrued during an Extension Period. Consequently, there could be
multiple Extension Periods of varying lengths (up to six Extension Periods of
60 consecutive months each or more numerous shorter Extension Periods)
throughout the term of the Junior Subordinated Debentures. See "Risk
Factors"; "Description of the Junior Subordinated Debentures -- Interest" and
"-- Option to Extend Interest Payment Period". Payments of accrued
distributions will be payable to holders of Preferred Securities as they
appear on the books and records of the Trust on the first record date after
the end of an Extension Period.
Distributions on the Preferred Securities must be paid on the dates
payable to the extent that the Property Trustee or, if a Property Trustee is
not then required under the Declaration, the Trust has cash on hand in the
Property Account to permit such payment. The funds available for distribution
to the holders of the Preferred Securities will be limited to payments
received by the Property Trustee or, if a Property Trustee is not then
required under the Declaration, the Trust in respect of the Junior
Subordinated Debentures that are deposited in the Trust as trust assets. See
"Description of the Junior Subordinated Debentures". If SunAmerica does not
make interest payments on the Junior Subordinated Debentures, the Property
Trustee or, if a Property Trustee is not then required under the Declaration,
the Trust will not make distributions on the Preferred Securities. Under the
Declaration, if and to the extent SunAmerica does make interest payments on the
Junior Subordinated Debentures deposited in the Trust as trust assets, the
Property Trustee or, if a Property Trustee is not then required under the
Declaration, the Trust is obligated to make distributions on the Preferred
Securities. The payment of distributions on the Preferred Securities is
guaranteed by SunAmerica on a subordinated basis as and to the extent set
forth under "Description of the Guarantee". The Preferred Securities
Guarantee is a full and unconditional guarantee from the time of issuance of
the Preferred Securities but does not apply to the payment of distributions
and other payments on the Preferred Securities when the Property Trustee or,
if a Property Trustee is not then required under the Declaration, the Trust
does not have sufficient funds in the Property Account to make such
distributions or other payments.
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in
book-entry-only form, will be one Business Day prior to the relevant payment
dates. The Declaration provides that the payment dates or record dates for
the Preferred Securities shall be the same as the payment dates and record
dates for the Junior Subordinated Debentures. Distributions on the Preferred
Securities will be paid through the Property Trustee or, if a Property Trustee
is not then required under the Declaration, the Regular Trustees who will hold
amounts received in respect of the Junior Subordinated Debentures in the
Property Account for the benefit of the holders of the Preferred and Common
Securities. Subject to any applicable laws and regulations and the provisions
of the Declaration, each such payment will be made as described under
"Book-Entry-Only Issuance - The Depository Trust Company" below. If the
Preferred Securities shall not continue to remain in book-entry-only form, the
Regular Trustees shall select relevant record dates, which shall be the same
as the record dates for the Junior Subordinated Debentures. If any date on
which distributions are to be made on the Preferred Securities is not a
Business Day, then payment of the distribution to be made on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
Special Event Redemption or Distribution
If a Tax Event or an Investment Company Event (each as hereinafter
defined, and each a "Special Event") shall occur and be continuing, the Trust
shall be dissolved with the result that, after satisfaction of creditors of
the Trust, Junior Subordinated Debentures with an aggregate principal amount
equal to the aggregate stated liquidation amount of the Preferred Securities
and the Common Securities would be distributed on a pro rata basis (based on
the aggregate liquidation amount of all outstanding Preferred Securities on
the one hand and of all outstanding Common Securities on the other) to the
holders of the Preferred Securities and the Common Securities in liquidation
of such holders' interests in the Trust, within 90 days following the
occurrence of such Special Event; provided, however, that in the case of the
occurrence of a Tax Event, as a condition of such dissolution and
distribution, the Regular Trustees shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on any then applicable
published revenue rulings of the Internal Revenue Service, to the effect that
the holders of the Preferred Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of such dissolution
and distribution of Junior Subordinated Debentures; and, provided, further,
that, if at the time there is available to the Trust the opportunity to
eliminate, within such 90 day period, the Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure, which has no adverse effect on the
Trust or SunAmerica or the holders of the Preferred Securities, the Trust will
pursue such measure in lieu of dissolution. Furthermore, if in the case of
the occurrence of a Tax Event, after receipt of a Dissolution Tax Opinion (as
defined below), (i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more
than an insubstantial risk that SunAmerica would be precluded from deducting
the interest on the Junior Subordinated Debentures for United States federal
income tax purposes even if the Junior Subordinated Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holders' interests in the Trust as described above or (ii)
the Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, SunAmerica shall have
the right, upon not less than 30 nor more than 60 days notice, to redeem the
Junior Subordinated Debentures in whole or in part for cash within 90 days
following the occurrence of such Tax Event, and promptly following such
redemption Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a pro rata basis (determined as provided above); provided,
however, that if at the time there is available to SunAmerica or the Regular
Trustees the opportunity to eliminate, within such 90 day period, the Tax
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure, which has no
adverse effect on the Trust, SunAmerica or the holders of the Preferred
Securities, SunAmerica will pursue such measure in lieu of redemption. The
Common Securities will be redeemed on a pro rata basis (as described above)
with the Preferred Securities, except that if an Event of Default under the
Indenture has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after the
Expiration Date as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation and
the publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the Expiration Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges or (iii) interest payable by SunAmerica to the Trust on the Junior
Subordinated Debentures is not, or within 90 days of the date thereof will not
be, deductible by SunAmerica for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced
in practice under the Investment Company Act of 1940, as amended (the "1940
Act"), that as a result of the occurrence of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Trust is or will be considered an "investment
company" which is required to be registered under the 1940 Act, which Change
in 1940 Act Law becomes effective on or after the Expiration Date. In case of
any uncertainty regarding an Investment Company Event, the good faith
determination of the Regular Trustees (based on the advice of counsel) shall
be conclusive.
On the date fixed for any distribution of Junior Subordinated
Debentures, upon dissolution of the Trust, (i) the Preferred Securities and
the Common Securities will no longer be deemed to be outstanding, (ii) DTC or
its nominee, as the record holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution and (iii) any
certificates representing Preferred Securities not held by DTC or its nominee
will be deemed to represent Junior Subordinated Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accrued and unpaid distributions on, such
Preferred Securities until such certificates are presented to SunAmerica or
its agent for transfer or reissuance.
There can be no assurance as to the market price for the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Junior Subordinated Debentures which the investor may
subsequently receive on dissolution and liquidation of the Trust, may trade at
a discount to the price of the Preferred Securities exchanged. If the Junior
Subordinated Debentures are distributed to the holders of Preferred Securities
upon the dissolution of the Trust, SunAmerica will use its best efforts to
list the Junior Subordinated Debentures on the NYSE or on such other exchange
on which the Preferred Securities are then listed.
Mandatory Redemption
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity or upon redemption, the proceeds from such repayment or payment will
be promptly applied to redeem pro rata the Preferred Securities and the Common
Securities having an aggregate liquidation amount equal to the Junior
Subordinated Debentures so repaid, upon not less than 30 nor more than 60
days' notice, at the Redemption Price. The Common Securities will be entitled
to be redeemed pro rata with the Preferred Securities, except that if an Event
of Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a preference over the Common Securities. Subject to the
foregoing, if fewer than all outstanding Preferred Securities and Common
Securities are to be redeemed, the Preferred Securities and Common Securities
will be redeemed on a pro rata basis (based on the aggregate liquidation
amount of all outstanding Preferred Securities on the one hand and of all
outstanding Common Securities on the other). In the event fewer than all
outstanding Preferred Securities are to be redeemed, the Preferred Securities
will be redeemed pro rata as described under "Book-Entry-Only Issuance -- The
Depositary Trust Company" below.
Redemption Procedures
The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all monthly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Trust will deposit irrevocably with DTC
funds sufficient to pay the applicable Redemption Price and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders of the Preferred Securities. See "-- Book-Entry-Only Issuance - The
Depository Trust Company". If notice of redemption shall have been given and
funds deposited as required, then immediately prior to the close of business
on the date of such deposit, all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the
holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Preferred Securities which have been so called for redemption. If any date
fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If SunAmerica fails to repay Junior
Subordinated Debentures on maturity or on the date fixed for this redemption
or if payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property Trustee or,
if a Property Trustee is not then required under the Declaration, the Trust or
by SunAmerica pursuant to the Preferred Securities Guarantee described under
"Description of the Preferred Securities Guarantee", distributions on such
Preferred Securities will continue to accrue, from the original redemption
date of the Preferred Securities to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
If a partial redemption of the Preferred Securities would result in
the delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed,
SunAmerica pursuant to the Indenture will only redeem Debentures in whole and,
as a result, the Trust may only redeem the Preferred Securities in whole.
Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), SunAmerica or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary dissolution,
liquidation, winding-up or termination of the Trust, the holders of the
Preferred Securities and Common Securities at the date of dissolution,
winding-up or termination of the Trust will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities of creditors (to the
extent not satisfied by SunAmerica as provided in the Declaration), an amount
equal to the aggregate of the stated liquidation amount of $25 per Trust
Security plus accrued and unpaid distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, liquidation, winding-up or termination, Junior Subordinated
Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Trust Securities and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid distributions on such
Trust Securities, shall be distributed on a pro rata basis (based on the
aggregate liquidation amount of all outstanding Preferred Securities on the
one hand and of all outstanding Common Securities on the other) to the holders
of the Preferred Securities and Common Securities in exchange therefor.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next sentence, on a pro rata basis (determined
as described above). The holders of the Common Securities will be entitled to
receive distributions upon any such dissolution pro rata (determined as
described above) with the holders of the Preferred Securities, except that if
an Event of Default under the Indenture has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
Pursuant to the Declaration, the Trust shall terminate: (i) on
December 31, 2044, (ii) when all of the Trust Securities shall have been
called for redemption and the amounts necessary for redemption thereof shall
have been paid to the holders of Trust Securities in accordance with the terms
of the Trust Securities; or (iii) when all of the Junior Subordinated
Debentures shall have been distributed to the holders of Trust Securities in
exchange for all of the Trust Securities in accordance with the terms of the
Trust Securities.
No Merger, Consolidation or Amalgamation of the Trust
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity.
Voting Rights
Except as provided below and under "Description of the Preferred
Securities Guarantee -- Amendments and Assignment" and as otherwise required
by the Trust Act and the Declaration, the holders of the Preferred Securities
will have no voting rights.
If (i) the Trust fails to make distributions in full on the Preferred
Securities for 18 consecutive monthly distribution periods; (ii) an Event of
Default (as defined in the Indenture) occurs and is continuing on the Junior
Subordinated Debentures; or (iii) SunAmerica is in default on any of its
payment or other obligations under the Preferred Securities Guarantee, then
the holders of the Preferred Securities, acting as a single class, will be
entitled, by the vote of holders of Preferred Securities representing a
majority in aggregate liquidation amount of the outstanding Preferred
Securities, to appoint a Special Representative (who may not be an affiliate
of SunAmerica) which will be authorized to direct the Property Trustee to
enforce the Property Trustee's creditor rights, or if a Property Trustee is
not then required under the Declaration the Special Representative shall be
authorized to directly enforce the Trust's creditor rights, under the Junior
Subordinated Debentures. The Special Representative shall also be authorized
to enforce the rights of the holders of the Preferred Securities under the
Preferred Securities Guarantee and to enforce the rights of the holders of the
Preferred Securities to receive distributions on the Preferred Securities. In
the case of clause (i) above, if the Trust's failure to pay distributions is a
consequence of SunAmerica's exercise of its right to extend the interest
payment period for the Junior Subordinated Debentures as described under
"Description of the Junior Subordinated Debentures -- Option to Extend Interest
Payment Period", the Special Representative will have no right to enforce the
payment of distributions until an Event of Default shall have occurred. The
Special Representative, by virtue of acting in such capacity, shall not be
considered to be a trustee of the Trust or a holder of beneficial interests in
the Trust, shall have no rights other than described herein and shall have no
liability for the debts, obligations or liabilities of the Trust. For
purposes of determining whether the Trust has failed to pay distributions in
full for 18 consecutive monthly distribution periods, distributions shall be
deemed to remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative distributions have been or contemporaneously are paid
with respect to all monthly distribution periods terminating on or prior to
the date of payment of such cumulative distributions. Not later than 30 days
after such right to appoint a Special Representative arises, the Regular
Trustees will convene a meeting for the purpose of appointing a Special
Representative. If the Regular Trustees fail to convene such meeting within
such 30-day period, the holders of Preferred Securities representing 10% in
liquidation amount of the outstanding Preferred Securities will be entitled to
convene such meeting. The provisions of the Declaration relating to the
convening and conduct of the meetings of the holders will apply with respect
to any such meeting. If, at any such meeting, holders of less than a majority
in aggregate liquidation amount of Preferred Securities entitled to vote for
the appointment of a Special Representative vote for such appointment, no
Special Representative shall be appointed. Any Special Representative may be
removed at any time by holders of Preferred Securities representing a majority
in liquidation amount of the Preferred Securities. Any Special Representative
appointed shall cease to be a Special Representative if the Trust (or
SunAmerica pursuant to the Preferred Securities Guarantee) shall have paid in
full all accrued and unpaid distributions on the Preferred Securities or such
default or breach under clause (ii) or (iii) above, as the case may be, shall
have been cured. Notwithstanding the appointment of any such Special
Representative, SunAmerica shall retain all rights under the Indenture,
including the right to extend the interest payment period as provided under
"Description of the Junior Subordinated Debentures -- Option to Extend
Interest Payment Period." If such an extension occurs, there will be no Event
of Default under the Indenture for failure to make any scheduled interest
payment during the Extension Period on the date originally scheduled. The
Property Trustee, for the benefit of the holders of the Trust Securities, is
required under the Declaration to enforce the Property Trustee's creditor
rights under the Indenture with respect to the Junior Subordinated Debentures
whether or not a Special Representative has been appointed or, if so
appointed, has failed to direct the Property Trustee to enforce such rights.
If a Property Trustee is not then required under the Declaration and the Junior
Subordinated Debentures are held by the Trust, the Regular Trustees, for the
benefit of holders of the Trust Securities, are required under the Declaration
to enforce the Trust's creditor rights under the Indenture with respect to the
Junior Subordinated Debentures if a Special Representative has not been
appointed as provided in the Declaration. The Trustees shall have no right or
power to do any act or thing contrary to or inconsistent with the actions of
any duly appointed Special Representative.
If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Junior Subordinated Debentures held by the
Property Trustee or, if a Property Trustee is not then required under the
Declaration, the Trust, upon the occurrence of a Special Event or in
connection with the redemption of Preferred Securities as a consequence of a
redemption of Junior Subordinated Debentures, then the holders of outstanding
Preferred Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the holders of Preferred Securities representing 66 2/3% in
liquidation amount of such outstanding Preferred Securities.
So long as any Junior Subordinated Debentures are held by the
Property Trustee, the Property Trustee shall not and, if a Property Trustee is
not then required under the Declaration and Junior Subordinated Debentures are
held by the Trust, the Regular Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or executing any trust or power conferred on the Indenture
Trustee with respect to the Junior Subordinated Debentures, (ii) waive any past
default that is waivable under Section 6.06 of the Indenture, (iii) exercise
any right to rescind or annul a declaration that the principal of all the
Junior Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the holders of at least 66 2/3% in
liquidation amount of the Preferred Securities affected thereby; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Junior Subordinated Debentures affected thereby, no such
consent shall be given by the Property Trustee or the Regular Trustees, as the
case may be, without the prior consent of each holder of all Preferred
Securities affected thereby. The Property Trustee or the Regular Trustees, as
the case may be, shall not revoke any action previously authorized or approved
by a vote of the holders of Preferred Securities. The Property Trustee or the
Regular Trustees, as the case may be, shall notify all holders of record of
Preferred Securities of any notice of default received from the Indenture
Trustee with respect to the Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Property Trustee or the
Regular Trustees, as the case may be, shall obtain an opinion of nationally
recognized independent tax counsel recognized as expert in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action.
Any required approval of holders of Preferred Securities may be given
at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities in accordance
with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by SunAmerica or by any
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with SunAmerica shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
The procedures by which holders of Preferred Securities may exercise
their voting rights are described under "Book-Entry-Only-Issuance -- The
Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to increase
or decrease the number of Trustees or to appoint, remove or replace a Trustee,
which voting rights are vested exclusively in the holders of the Common
Securities.
Book-Entry-Only Issuance - The Depository Trust Company
DTC will act as securities depository for the Preferred Securities.
The Preferred Securities will be issued only as fully registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more fully
registered global Preferred Security certificates will be issued, representing
in the aggregate the total number of Preferred Securities, and will be
deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
DTC is a limited-purpose trust company organized under the New York
Banking Law, 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 Exchange
Act. DTC holds securities that its participants ("Participants") deposit with
DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by
the NYSE, the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made
by or through Direct Participants, which will receive a credit for the
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of each Preferred Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Preferred
Securities, except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Preferred Securities are being redeemed, DTC will reduce pro rata (subject
to adjustment to eliminate fractional Preferred Securities) the amount of
interest of each Direct Participant in the Preferred Securities to be redeemed.
Although voting with respect to the Preferred Securities is limited,
in those instances in which a vote is required, neither DTC nor Cede & Co.
itself will consent or vote with respect to Preferred Securities. Under its
usual procedures, DTC would mail an Omnibus Proxy to the Trust as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participants and not of DTC,
the Trust or SunAmerica, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository
with respect to the Preferred Securities at any time by giving reasonable
notice to the Trust. Under such circumstances, if a successor securities
depository is not obtained, Preferred Security certificates will be required
to be printed and delivered. Additionally, the Trust may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depository). In that event, certificates for the Preferred
Securities will be printed and delivered. In each of the above circumstances,
the Trustees will appoint the Property Trustee or other appropriate banking
institution as paying agent with respect to the Preferred Securities.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and SunAmerica believe to
be reliable, but the Trust and SunAmerica take no responsibility for the
accuracy thereof.
Registrar and Transfer Agent
If the book-entry system for the Preferred Securities is
discontinued, it is anticipated that The Bank of New York or one of its
affiliates will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or SunAmerica may require) in respect of any
tax or other governmental charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
Miscellaneous
Application has been made to list the Preferred Securities on the
NYSE.
The Regular Trustees are authorized and directed to take such action
as they deem reasonable in order that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act or that the
Trust will not be classified for United States federal income tax purposes as
an association taxable as a corporation or a partnership and will be treated
as a grantor trust for United States federal income tax purposes. In this
connection, the Regular Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the Declaration,
that the Regular Trustees determine in their discretion to be reasonable and
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of holders of the Trust Securities.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by SunAmerica for the
benefit of the holders from time to time of Preferred Securities. The summary
does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Preferred
Securities Guarantee, which is filed as an exhibit to the Registration
Statement of which this Offering Circular/Prospectus forms a part.
General
Pursuant to the Preferred Securities Guarantee, SunAmerica will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities, the Guarantee Payments
(as defined below) (without duplication of amounts theretofore paid by the
Trust), to the extent not paid by the Trust, regardless of any defense, right
of set-off or counterclaim that the Trust may have or assert. The following
payments or distributions with respect to the Preferred Securities to the
extent not paid or made by the Trust (the "Guarantee Payments") will be
subject to the Guarantee (without duplication): (i) any accrued and unpaid
distributions on the Preferred Securities and the redemption price, including
all accrued and unpaid distributions to the date of the redemption, with
respect to the Preferred Securities called for redemption by the Trust but if
and only to the extent that in each case SunAmerica has made a payment to the
Property Trustee or, if a Property Trustee is not then required pursuant to
the Declaration, the Trust of interest or principal on the Debentures and (ii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Trust (other than in connection with the exchange of Preferred Securities for
Junior Subordinated Debentures), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of payment and (b) the amount of assets of the Trust
remaining available for distribution to holders of Preferred Securities in
liquidation of the Trust. SunAmerica's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by SunAmerica to
the holders of Preferred Securities or by causing the Trust to pay such
amounts to such holders.
Certain Covenants of SunAmerica
In the Preferred Securities Guarantee, SunAmerica will covenant that,
so long as the Preferred Securities remain outstanding, SunAmerica will not
declare or pay any dividends on, or purchase, acquire or make a distribution
or liquidation payment with respect to, any of its common stock or preferred
stock or make any guarantee payment with respect thereto if at such time (i)
SunAmerica shall be in default with respect to its Guarantee Payments or other
payment obligations under the Guarantee, (ii) there shall have occurred any
Event of Default under the Indenture or (iii) SunAmerica shall have given
notice of its selection of an Extension Period as provided in the Indenture
and such period, or any extension thereof, is continuing; provided that
SunAmerica will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any of its Series D Preferred Stock
in accordance with the terms of such stock. In addition, so long as the
Preferred Securities remain outstanding, SunAmerica has agreed (i) to remain
the sole direct or indirect owner of all of the outstanding Common Securities
and shall not cause or permit the Common Securities to be transferred except
to the extent permitted by the Declaration; provided that any permitted
successor of SunAmerica under the Indenture may succeed to SunAmerica's
ownership of the Common Securities and (ii) to use reasonable efforts to cause
the Trust to continue to be treated as a grantor trust for United States
federal income tax purposes except in connection with a distribution of Junior
Subordinated Debentures.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no consent will be
required), the Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount
of the outstanding Preferred Securities. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth under
"Description of the Preferred Securities -- Voting Rights". All guarantees
and agreements contained in the Preferred Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of SunAmerica and
shall inure to the benefit of the holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving SunAmerica that is permitted under the Indenture, SunAmerica may not
assign its obligations under the Preferred Securities Guarantee.
Termination of the Preferred Securities Guarantee
The Preferred Securities Guarantee will terminate and be of no
further force and effect as to the Preferred Securities upon full payment of
the redemption price of all Preferred Securities, or upon distribution of the
Junior Subordinated Debentures to the holders of Preferred Securities in
exchange for all of the Preferred Securities, or upon full payment of the
amounts payable upon liquidation of the Trust. See "Description of the Junior
Subordinated Debentures -- Events of Default" for a description of the events
of default and enforcement rights of the holders of Junior Subordinated
Debentures. Notwithstanding the foregoing, the Preferred Securities Guarantee
will continue to be effective or will be reinstated, as the case may be, if
at any time any holder of Preferred Securities must restore payment of any
sums paid with respect to the Preferred Securities or the Preferred Securities
Guarantee.
Status of the Preferred Securities Guarantee
SunAmerica's obligations under the Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of
SunAmerica and will rank (i) subordinate and junior in right of payment to all
other liabilities of SunAmerica, including the Junior Subordinated Debentures,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by SunAmerica and to any guarantee
now or hereafter entered into by SunAmerica in respect of any of its capital
stock. Because SunAmerica is a holding company, SunAmerica's obligations
under the Preferred Securities Guarantee are also effectively subordinated to
all existing and future liabilities, including trade payables, of SunAmerica's
subsidiaries, except to the extent that SunAmerica is a creditor of the
subsidiaries recognized as such. The Declaration provides that each holder of
Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under
the guarantee without first instituting a legal proceeding against any other
person or entity). The Preferred Securities Guarantee will be deposited with
the Regular Trustees to be held for the benefit of the holders of the
Preferred Securities. If no Special Representative has been appointed to
enforce the Preferred Securities Guarantee, or if the Special Representative
fails to enforce the rights of holders of Preferred Securities under the
Preferred Securities Guarantee, the Regular Trustees have the right to enforce
the Preferred Securities Guarantee on behalf of the holders of the Preferred
Securities. The holders of not less than a majority in aggregate liquidation
amount of the Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available in respect of
the Preferred Securities Guarantee, including the giving of directions to
either the Regular Trustees or the Special Representative, as the case may be.
If the Regular Trustees or the Special Representative fails to enforce the
Preferred Securities Guarantee as above provided, any holder of Preferred
Securities may, after a period of 30 days has elapsed from such holder's
written request to the Regular Trustees or the Special Representative, as the
case may be, to enforce the Preferred Securities Guarantee, institute a legal
proceeding directly against SunAmerica to enforce its rights under the
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Trust or any other person or entity. The Preferred Securities
Guarantee will not be discharged except by payment of the Guarantee Payments
in full (without duplication of amounts theretofore paid by the Trust).
Governing Law
The Preferred Securities Guarantee will be governed by and construed
in accordance with the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the Junior Subordinated
Debentures which will be deposited in the Trust as trust assets. The terms of
the Junior Subordinated Debentures include those stated in the Indenture and
the First Supplemental Indenture, forms of which have been filed as exhibits
to the Registration Statement of which this Offering Circular/Prospectus forms
a part, and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The following description does not purport to be complete and is
qualified in its entirety by reference to the Indenture and the Trust
Indenture Act. Whenever particular provisions or defined terms in the
Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section and Article references used herein
are references to provisions of the Indenture.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that junior
subordinated debentures may be issued thereunder from time to time in one or
more series (collectively, together with the Junior Subordinated Debentures,
the "Subordinated Debentures"). The Junior Subordinated Debentures constitute
a separate series under the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Junior Subordinated Debentures
may be distributed to the holders of the Preferred Securities in liquidation
of the Trust. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution".
General
The Junior Subordinated Debentures are unsecured, subordinated
obligations of SunAmerica, limited in aggregate principal amount to an amount
equal to the sum of (i) the stated liquidation amount of the Preferred
Securities issued by the Trust in the Offer and (ii) the proceeds received by
the Trust upon issuance of the Common Securities to SunAmerica (which proceeds
will be used to purchase an equal principal amount of Junior Subordinated
Debentures).
The entire principal amount of the Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, on , 2044.
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities in dissolution of the Trust, such Junior Subordinated
Debentures will initially be so issued as global securities. As described
herein, under certain limited circumstances Junior Subordinated Debentures may
be issued in certificated form in exchange for global securities. If Junior
Subordinated Debentures are issued in certificated form, such Junior
Subordinated Debentures will be in denominations of $25 and integral multiples
thereof and may be transferred or exchanged at the offices described below.
Payments on Junior Subordinated Debentures issued as global
securities will be made to DTC, as the depository for the Junior Subordinated
Debentures. If Junior Subordinated Debentures are issued in certificated
form, principal and interest will be payable, the transfer of the Junior
Subordinated Debentures will be registrable, and Junior Subordinated
Debentures will be exchangeable for Junior Subordinated Debentures of other
denominations of a like aggregate principal amount, at the corporate trust
office of the Indenture Trustee in The City of New York; provided that payment
of interest may be made at the option of SunAmerica by check mailed to the
address of the persons entitled thereto.
If the Junior Subordinated Debentures are distributed to the holders
of Preferred Securities upon the dissolution of the Trust, SunAmerica will use
its best efforts to list the Junior Subordinated Debentures on the NYSE or on
such other exchange on which the Preferred Securities are then listed.
Optional Redemption
Except as provided below, the Junior Subordinated Debentures may not
be redeemed prior to June 15, 1997. SunAmerica shall have the right to redeem
the Junior Subordinated Debentures, in whole or in part, from time to time, on
or after June 15, 1997, upon not less than 30 nor more than 60 days' notice,
at a redemption price equal to 100% of the principal amount to be redeemed,
plus any accrued and unpaid interest, to the redemption date. SunAmerica will
also have the right to redeem the Junior Subordinated Debentures at any time
upon the occurrence of a Tax Event and if certain conditions are met as
described under "Description of the Preferred Securities -- Special Event
Redemption or Distribution".
If SunAmerica gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, SunAmerica will deposit
irrevocably with the Indenture Trustee or, if the Junior Subordinated
Debentures are then issued in book entry form, with DTC, funds sufficient to
pay the applicable redemption price and will give DTC irrevocable instructions
and authority to pay such redemption price to the holders of the Junior
Subordinated Debentures. See "-- Book Entry and Settlement". If notice of
redemption shall have been given and funds deposited as required, then upon
the date of such deposit, all rights of holders of such Junior Subordinated
Debentures so called for redemption will cease, except the right of the
holders of such Junior Subordinated Debentures to receive the applicable
redemption price, but without interest on such redemption price. If any date
fixed for redemption of Junior Subordinated Debentures is not a Business Day,
then payment of the redemption price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the redemption price in
respect of Junior Subordinated Debentures is improperly withheld or refused
and not paid by SunAmerica, interest on such Junior Subordinated Debentures
will continue to accrue, from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the applicable redemption
price.
Interest
The Junior Subordinated Debentures will bear interest at an annual
rate of % from the Accrual Date. In addition, holders of the Junior
Subordinated Debentures will be entitled to interest at the rate of 9 1/4% per
annum of the principal amount thereof from March 15, 1995 through the
Expiration Date, payable at the time of the first interest payment on the
Junior Subordinated Debentures. Interest will be payable monthly in arrears
on the last day of each month of each year (each, an "Interest Payment Date"),
commencing on the last day of the month in which the Expiration Date occurs,
to the person in whose name such Junior Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the Business Day
next preceding such Interest Payment Date. If the Junior Subordinated
Debentures shall not continue to remain in book-entry-only form, SunAmerica
shall have the right to select record dates that shall be more than one
Business Day prior to the Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. If any date on which
interest is payable on the Junior Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
Compounded Interest
Payments of Compounded Interest on the Junior Subordinated Debentures
held by the Trust will make funds available to pay any interest on
distributions in arrears in respect of the Preferred Securities pursuant to
the terms thereof.
Option to Extend Interest Payment Period
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica shall have the
right to extend the interest payment period from time to time for a period not
exceeding 60 consecutive months. SunAmerica has no current intention of
exercising its right to extend an interest payment period. No extension of
interest will be permitted with respect to interest accruing from March 15,
1995 through the Expiration Date. No interest shall be due and payable during
an Extension Period, except at the end thereof. During any Extension Period,
SunAmerica shall not declare or pay any dividends on, or purchase, acquire or
make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock or make any guarantee payments with respect thereto;
provided that SunAmerica will be permitted to pay accrued dividends (and cash
in lieu of fractional shares) upon the conversion of any of its Series D
Preferred Stock in accordance with the terms of such stock. Prior to the
termination of any such Extension Period, SunAmerica may further extend the
interest payment period; provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 60 consecutive
months. On the interest payment date occurring at the end of each Extension
Period, SunAmerica shall pay to the holders of Junior Subordinated Debentures
of record on the record date for such interest payment date (regardless of who
the holders of record may have been on other dates during the Extension
Period) all accrued and unpaid interest on the Junior Subordinated Debentures.
Upon the termination of any Extension Period and the payment of all amounts
then due, SunAmerica may commence a new Extension Period, subject to the above
requirements. SunAmerica may also prepay at any time all or any portion of
the interest accrued during an Extension Period. Consequently, there could be
multiple Extension Periods of varying lengths (up to six Extension Periods of
60 consecutive months each or more numerous shorter Extension Periods)
throughout the term of the Junior Subordinated Debentures. The failure by
SunAmerica to make interest payments during an Extension Period would not
constitute a default or an event of default under SunAmerica's currently
outstanding indebtedness.
If the Property Trustee shall be the sole holder of the Junior
Subordinated Debentures, SunAmerica shall give the Property Trustee notice of
its selection of such Extension Period one Business Day prior to the earlier
of (i) the date the distributions on the Preferred Securities are payable or
(ii) the date the Trust is required to give notice to the NYSE or other
applicable self-regulatory organization or to holders of the Preferred
Securities of the record date or the date such distribution is payable, but in
any event not less than one Business Day prior to such record date. The Trust
shall give notice of SunAmerica's selection of such Extension Period to the
holders of the Preferred Securities.
If Junior Subordinated Debentures have been distributed to holders
of Trust Securities, SunAmerica shall give the holders of the Junior
Subordinated Debentures notice of its selection of such Extension Period ten
Business Days prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date SunAmerica is required to give notice to the NYSE (if
the Junior Subordinated Debentures are then listed thereon) or other
applicable self-regulatory organization or to holders of the Junior
Subordinated Debentures of the record or payment date of such related interest
payment, but in any event not less than two Business Days prior to such record
date.
Set-Off
Notwithstanding anything to the contrary in the Indenture, SunAmerica
shall have the right to set-off any payment it is otherwise required to make
thereunder if and to the extent SunAmerica has theretofore made, or is
concurrently on the date of such payment making, a payment under the Preferred
Securities Guarantee.
Subordination
The Indenture provides that the Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness of
SunAmerica. In the event (a) of any insolvency or bankruptcy proceedings, or
any receivership, liquidation, reorganization or other similar proceedings in
respect of SunAmerica or its property or any proceeding for voluntary
liquidation, dissolution or other winding up of SunAmerica, or (b) that
Subordinated Debentures of any series are declared due and payable before
their expressed maturity because of the occurrence of an Event of Default
pursuant to Section 6.01 of the Indenture (under circumstances other than as
set forth in clause (a) above), then the holders of all Senior Indebtedness
shall first be entitled to receive payment of the full amount due thereon in
money, before the holders of any of the Subordinated Debentures are entitled to
receive a payment on account of the principal of, premium, if any, or interest
on the indebtedness evidenced by such Subordinated Debentures. In the event
and during the continuation of any default in payment of any Senior
Indebtedness or if any event of default shall exist under any Senior
Indebtedness, as "event of default" is defined therein or in the agreement
under which the same is outstanding, no payment of the principal of, premium,
if any, or interest on the Subordinated Debentures shall be made. (Section
14.02)
The term "Senior Indebtedness" shall mean the principal of and
premium, if any, and interest on (a) all indebtedness of SunAmerica, whether
outstanding on the date of the Indenture or thereafter created, (i) for money
borrowed by SunAmerica (including, without limitation, indebtedness issued or
to be issued pursuant to the Indenture dated as of April 15, 1993 between
SunAmerica and The First National Bank of Chicago, as Trustee), (ii) for money
borrowed by, or obligations of, others and either assumed or guaranteed,
directly or indirectly, by SunAmerica, (iii) in respect of letters of credit
and acceptances issued or made by banks, or (iv) constituting purchase money
indebtedness, or indebtedness secured by property included in the property,
plant and equipment accounts of SunAmerica at the time of the acquisition of
such property by SunAmerica, for the payment of which SunAmerica is directly
liable, and (b) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any such indebtedness. As used
in the preceding sentence the term "purchase money indebtedness" means
indebtedness evidenced by a note, debenture, bond or other instrument (whether
or not secured by any lien or other security interest) issued or assumed as
all or a part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of SunAmerica.
Notwithstanding anything to the contrary in the Indenture or the Subordinated
Debentures, Senior Indebtedness shall not include (i) any indebtedness of
SunAmerica which, by its terms or the terms of the instrument creating or
evidencing it, is subordinate in right of payment to or pari passu with the
Subordinated Debentures or (ii) any indebtedness of SunAmerica to a subsidiary
of SunAmerica. (Section 1.01)
The Indenture does not limit the aggregate amount of indebtedness,
including Senior Indebtedness, that may be issued. As of December 31, 1994,
Senior Indebtedness of SunAmerica (on an unconsolidated basis) aggregated
approximately $472.8 million all of which is unsecured. Because SunAmerica is
a holding company, the Junior Subordinated Debentures are also effectively
subordinated to all existing and future liabilities, including trade payables,
of SunAmerica's subsidiaries, except to the extent that SunAmerica is a
creditor of the subsidiaries recognized as such. Claims on SunAmerica's
subsidiaries by creditors other than SunAmerica include substantial claims for
policy benefits, as well as other liabilities incurred in the ordinary course
of business. At December 31, 1994, SunAmerica's subsidiaries had outstanding
approximately $8.47 billion of liabilities (excluding variable annuity
liabilities, with respect to which assets are segregated in separate
accounts). In addition, since many of SunAmerica's subsidiaries are insurance
companies subject to regulatory control by various state insurance
departments, the ability of such subsidiaries to pay dividends or make loans
or advances to SunAmerica without prior regulatory approval is limited by
applicable laws and regulations. There are no terms in the Preferred
Securities, the Junior Subordinated Debentures or the Preferred Securities
Guarantee that limit SunAmerica's ability to incur additional indebtedness,
including indebtedness that ranks senior to or pari passu with the Junior
Subordinated Debentures and the Preferred Securities Guarantee, or the ability
of its subsidiaries to incur additional indebtedness. See "Description of the
Preferred Securities Guarantee -- Status of the Preferred Securities
Guarantee".
Events of Default
The Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an "Event
of Default" with respect to a series of Subordinated Debentures:
(a) failure for 30 days to pay interest on the Subordinated
Debentures of such series when due; provided that a valid extension of the
interest payment period by SunAmerica shall not constitute a default in the
payment of interest for this purpose; or
(b) failure to pay principal of or premium, if any, on the
Subordinated Debentures of such series when due whether at maturity, upon
redemption, by declaration or otherwise; or
(c) failure to observe or perform any other covenant contained in
the Indenture with respect to such series for 90 days after written notice to
SunAmerica from the Indenture Trustee or the holders of at least 25% in
principal amount of the outstanding Subordinated Debentures of such series; or
(d) certain events in bankruptcy, insolvency or reorganization of
SunAmerica.
In each and every such case, unless the principal of all the
Subordinated Debentures of that series shall have already become due and
payable, either the Indenture Trustee or the holders of not less than 25% in
aggregate principal amount of the Subordinated Debentures of that series then
outstanding, by notice in writing to SunAmerica (and to the Indenture Trustee
if given by such holders), may declare the principal of all the Subordinated
Debentures of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable.
(Section 6.01).
The holders of a majority in aggregate outstanding principal amount
of the Subordinated Debentures of that series have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee. (Section 6.06). The Indenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Subordinated Debentures of that series may declare the principal due and
payable immediately upon an Event of Default with respect to such series, but
the holders of a majority in aggregate outstanding principal amount of
Subordinated Debentures of such series may annul such declaration and waive the
default if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by acceleration and any
premium has been deposited with the Indenture Trustee. (Sections 6.01 and
6.06).
The holders of a majority in aggregate outstanding principal amount
of the Subordinated Debentures of that series may, on behalf of the holders of
all the Subordinated Debentures of that series, waive any past default, except
a default in the payment of principal, premium, if any, or interest (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by acceleration and any
premium has been deposited with the Indenture Trustee) or a call for
redemption of Junior Subordinated Debentures. (Section 6.06). SunAmerica is
required to file annually with the Indenture Trustee a certificate as to
whether or not SunAmerica is in compliance with all the conditions and
covenants under the Indenture.
Enforcement of Certain Rights by Special Representative
If (i) the Trust fails to make distributions on the Preferred
Securities for 18 consecutive monthly distribution periods; (ii) an Event of
Default occurs and is continuing on the Junior Subordinated Debentures; or
(iii) SunAmerica is in default on any of its payment or other obligations
under the Preferred Securities Guarantee, under the terms of the Preferred
Securities, the holders of outstanding Preferred Securities will have the
rights referred to under "Description of the Preferred Securities -- Voting
Rights", including the right to appoint a Special Representative, which
Special Representative shall, if an Event of Default occurs under the
Indenture, be authorized to direct the Property Trustee to enforce the
Property Trustee's creditor rights, or if a Property Trustee is not then
required under the Declaration the Special Representative shall be authorized
to directly enforce the Trust's creditor rights, under the Junior Subordinated
Debentures, including the right to accelerate the principal amount of the
Junior Subordinated Debentures. In the case of clause (i) above, if the
Trust's failure to make distributions is a consequence of SunAmerica's
exercise of its right to extend the interest payment period for the Junior
Subordinated Debentures as described under "-- Option to Extend Interest
Payment Period", the Special Representative will have no right to enforce the
payment of distributions until an Event of Default shall have occurred.
Notwithstanding the appointment of any such Special Representative, SunAmerica
shall retain all rights under the Indenture including the right to extend the
interest payment period. See " -- Option to Extend Interest Payment Period."
If such an extension occurs, there will be no Event of Default under the
Indenture for failure to make any scheduled interest payment during the
Extension Period on the date originally scheduled.
Modification of the Indenture
The Indenture contains provisions permitting SunAmerica and the
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of the outstanding Subordinated Debentures of each series
affected, to modify the Indenture or any supplemental indenture affecting the
rights of the holders of such Subordinated Debentures; provided, that no such
modification may, without the consent of the holder of each outstanding
Subordinated Debenture affected thereby, (i) extend the fixed maturity of any
Subordinated Debentures of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, without the consent of
the holder of each Subordinated Debenture so affected or (ii) reduce the
percentage of Subordinated Debentures, the holders of which are required to
consent to any such modification, without the consent of the holders of each
Subordinated Debenture then outstanding and affected thereby. (Section 9.02).
Book-Entry and Settlement
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities (see "Description of the Preferred Securities"), such
Junior Subordinated Debentures will be issued in the form of one or more
global certificates registered in the name of Cede & Co., the nominee of DTC.
For a description of DTC and DTC's book-entry system, see
"Description of the Preferred Securities -- Book-Entry-Only Issuance - The
Depository Trust Company". As of the date of this Offering
Circular/Prospectus, the description herein of DTC's book-entry system and
DTC's practices as they relate to purchases, transfers, notices and payments
with respect to the Preferred Securities apply in all material respects to any
debt obligations of SunAmerica represented by one or more global securities
held by DTC.
Consolidation, Merger and Sale
The Indenture will provide that SunAmerica may not consolidate with
or merge into any other person or transfer or lease its properties and assets
substantially as an entirety to any person and may not permit any person to
merge into or consolidate with SunAmerica unless (i) either SunAmerica will be
the resulting or surviving entity or any successor or purchaser is a
corporation organized under the laws of the United States of America, any
State or the District of Columbia, and any such successor or purchaser
expressly assumes SunAmerica's obligations under the Indenture and (ii)
immediately after giving effect to the transaction no Event of Default shall
have occurred and be continuing.
Defeasance and Discharge
Under the terms of the Indenture, SunAmerica will be discharged from
any and all obligations in respect of the Junior Subordinated Debentures
(except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if (i) SunAmerica irrevocably deposits with the Indenture
Trustee cash or U.S. Government Obligations, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of, premium, if any, and interest on all outstanding Junior
Subordinated Debentures; (ii) SunAmerica delivers to the Indenture Trustee an
opinion of counsel to the effect that the holders of the Junior Subordinated
Debentures will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance and that defeasance will not
otherwise alter such holders' United States federal income tax treatment of
principal, premium and interest payments on such Junior Subordinated
Debentures (such opinion must be based on a ruling of the Internal Revenue
Service or a change in United States federal income tax law occurring after
the date of such Indenture, since such a result would not occur under current
tax law); and (iii) no event or condition shall exist that, pursuant to
certain provisions described under "Subordination" above, would prevent
SunAmerica from making payments of principal of, premium, if any, and interest
on the Junior Subordinated Debentures at the date of the irrevocable deposit
referred to above. (Section 11.01).
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.
(Section 13.05).
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. (Section 7.01). Subject to such
provision, the Indenture Trustee is under no obligation to exercise any of the
powers vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that might be incurred thereby.
(Section 7.02). The Indenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance
of its duties if the Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01). The Indenture
Trustee is one of a number of banks with which SunAmerica and its subsidiaries
maintain ordinary banking and trust relationships.
Miscellaneous
SunAmerica will have the right at all times to assign any of its
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of SunAmerica; provided, that, in the event of any such assignment,
SunAmerica will remain jointly and severally liable for all such obligations.
Subject to the foregoing, the Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns.
The Indenture provides that it may not otherwise be assigned by the parties
thereto other than by SunAmerica to a successor or purchaser pursuant to a
consolidation, merger or sale permitted by the Indenture. (Section 13.11).
RELATIONSHIP BETWEEN THE PREFERRED SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient to
cover distributions and other payments due on the Preferred Securities
primarily because (i) the aggregate principal amount of Junior Subordinated
Debentures held as trust assets will be equal to the sum of the aggregate
stated liquidation amount of the Preferred Securities and the proceeds
received by the Trust upon issuance of the Common Securities to SunAmerica;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debentures will match the distribution rate and distribution and
other payment dates for the Preferred Securities; (iii) the Declaration
provides that SunAmerica shall pay for all (and the Trust shall not be
obligated to pay, directly or indirectly, for any) debts and obligations
(other than with respect to the Trust Securities) and all costs and expenses
of the Trust, including any taxes and all costs and expenses with respect
thereto, to which the Trust may become subject, except for United States
withholding taxes; and (iv) the Declaration further provides that the Trustees
shall not cause or permit the Trust, among other things, to engage in any
activity that is not consistent with the limited purposes of the Trust. With
respect to clause (iii) above, however, no assurance can be given that
SunAmerica will have sufficient resources to enable it to pay such debts,
obligations, costs and expenses on behalf of the Trust.
Payments of distributions and other payments due on the Preferred
Securities are guaranteed by SunAmerica on a subordinated basis as and to the
extent set forth under "Description of the Preferred Securities Guarantee".
If SunAmerica does not make interest payments on the Junior Subordinated
Debentures, the Trust will not make distributions on the Preferred Securities.
Under the Declaration, if and to the extent SunAmerica does make interest
payments on the Junior Subordinated Debentures, the Property Trustee or, if a
Property Trustee is not then required under the Declaration, the Trust is
obligated to make distributions on the Preferred Securities. The Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities, but does not apply to the payment of
distributions and other payments on the Preferred Securities when the Property
Trustee or, if no Property Trustee is required under the Declaration, the
Trust does not have sufficient funds in the Property Account to make such
distributions or other payments.
If an Event of Default occurs and is continuing, the Declaration
provides a mechanism whereby the holders of the Preferred Securities may
appoint a Special Representative which will be authorized to direct the
Property Trustee to enforce the Property Trustee's creditor rights, or if no
Property Trustee is required under the Declaration the Special Representative
may directly enforce the Trust's creditor rights under the Junior Subordinated
Debentures. The Declaration also provides, and SunAmerica, under the
Preferred Securities Guarantee, acknowledges, that the Special Representative
may enforce the Preferred Securities Guarantee if SunAmerica is in default on
any of its payment obligations thereunder. In addition, if no Special
Representative is appointed or if the Regular Trustees or the Special
Representative fails to enforce the Preferred Securities Guarantee, a holder
of a Preferred Security may, after a period of 30 days has elapsed from such
holder's written request to the Regular Trustees or the Special
Representative, as the case may be, to enforce the Preferred Securities
Guarantee, institute a legal proceeding directly against SunAmerica to enforce
its rights under the Preferred Securities Guarantee without first instituting
a legal proceeding against the Trust or any other person or entity.
If a Special Event shall occur and be continuing, the Trust may be
dissolved and Junior Subordinated Debentures held by the Trust having an
aggregate principal amount equal to the aggregate stated liquidation amount of
the Preferred Securities and Common Securities will be distributed in exchange
for the outstanding Preferred Securities and Common Securities, subject in the
case of a Tax Event to SunAmerica's right to redeem Junior Subordinated
Debentures as described under "Description of the Preferred Securities --
Special Event Redemption or Distribution". The Preferred Securities represent
preferred undivided beneficial interests in the assets of the Trust, a
statutory business trust which exists for the purpose of (a) issuing (i) its
Preferred Securities in exchange for Series B Preferred validly tendered in the
Offer and in consideration for the deposit by SunAmerica of Junior
Subordinated Debentures in the Trust as trust assets and to deliver such
Series B Preferred to SunAmerica in connection with and at the time of such
deposit, and (ii) its Common Securities to SunAmerica in exchange for cash and
investing the proceeds thereof in an equivalent amount of Junior Subordinated
Debentures and (b) engaging in such other activities as are necessary or
incidental thereto.
Upon any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the holders of Preferred Securities will be entitled
to receive the Liquidation Distribution in cash or Junior Subordinated
Debentures and will be entitled to the benefits of the Preferred Securities
Guarantee with respect to any such distribution. See "Description of the
Preferred Securities -- Liquidation Distribution Upon Dissolution". Upon any
voluntary or involuntary liquidation or bankruptcy of SunAmerica, the holders
of Junior Subordinated Debentures would be subordinated creditors of
SunAmerica, subordinated in right of payment to all Senior Indebtedness, but
entitled to receive payment in full of principal, premium, if any, and
interest, before any stockholders of SunAmerica receive payments or
distributions.
A default or event of default under any Senior Indebtedness would not
constitute a default or event of default under the Junior Subordinated
Debentures. However, in the event of payment defaults under, or acceleration
of, Senior Indebtedness, the subordination provisions of the Junior
Subordinated Debentures provide that no payments may be made in respect of the
Junior Subordinated Debentures. Failure to make required payments on the
Junior Subordinated Debentures would constitute an event of default under the
Indenture.
TAXATION
In the opinion of Davis Polk & Wardwell, counsel to SunAmerica and
the Trust, the following are the material United States federal income tax
consequences of the issuance of Preferred Securities in exchange for the
Series B Preferred pursuant to the Offer, and of the ownership and disposition
of Preferred Securities. Unless otherwise stated, this summary deals only
with Preferred Securities held as capital assets by holders who acquire the
Preferred Securities pursuant to the Offer ("Initial Holders"). It does not
deal with special classes of holders, such as dealers in securities or
currencies, life insurance companies, persons holding Preferred Securities as
a hedge against or which are hedged against currency risks or as part of a
straddle, or persons whose functional currency is not the United States
dollar. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change (possibly on a retroactive basis).
ALL SERIES B PREFERRED HOLDERS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF SERIES B
PREFERRED FOR PREFERRED SECURITIES AND OF THE OWNERSHIP AND DISPOSITION OF
PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
Exchange of Series B Preferred for Preferred Securities
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable transaction. In the case of a Holder who owns
solely Series B Preferred, or not more than one percent of such stock and not
more than one percent of any other class of SunAmerica stock, gain or loss
will be recognized in an amount equal to the difference between the fair
market value on the Expiration Date of the Preferred Securities (representing
an undivided interest in the Junior Subordinated Debentures) received in the
exchange and the exchanging Holder's tax basis in the Series B Preferred
exchanged therefor and will be long-term capital gain or loss if the Series B
Preferred has been held for more than one year as of such date. A holder's
aggregate tax basis in his pro rata share of the underlying Junior
Subordinated Debentures will be equal to his pro rata share of their "issue
price" on the Expiration Date as defined below.
Holders of Series B Preferred who actually or constructively own more
than one percent of any other class of SunAmerica stock are advised to consult
their tax advisors as to the income tax consequences of exchanging Series B
Preferred.
Classification of the Trust
In connection with the issuance of the Preferred Securities, Davis
Polk & Wardwell, counsel to SunAmerica and the Trust, will render its opinion
generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, each holder of Preferred
Securities (a "Securityholder") will be considered the owner of a pro rata
portion of the Junior Subordinated Debentures held by the Trust. Accordingly,
each Securityholder will be required to include in gross income his pro rata
share of the income accrued on the Junior Subordinated Debentures.
Accrual of Original Issue Discount and Premium
The Junior Subordinated Debentures will be considered to have been
issued with "original issue discount" and each Securityholder, including a
taxpayer who otherwise uses the cash method of accounting, will be required to
include his pro rata share of original issue discount on the Junior
Subordinated Debentures in income as it accrues, in accordance with a constant
yield method based on a compounding of interest, before the receipt of cash
distributions on the Preferred Securities. So long as the interest payment
period is not extended, cash distributions received by an initial Holder for
any month (assuming no disposition prior to the record date for such
distribution) will equal or exceed the sum of the daily accruals of income for
such month, unless the issue price of the Junior Subordinated Debentures (as
defined below) is less than $25.
The total amount of "original issue discount" on the Junior
Subordinated Debentures will equal the difference between the "issue price" of
the Junior Subordinated Debentures and their "stated redemption price at
maturity." Because SunAmerica has the right to extend the interest payment
period of the Junior Subordinated Debentures, all of the stated interest
payments on the Junior Subordinated Debentures will be includible in
determining their "stated redemption price at maturity." The "issue price" of
each $25 principal amount of the Junior Subordinated Debentures will be equal
to the fair market value of a share of Series B Preferred on the Expiration
Date (reduced by Pre-Issuance Accrued Interest), which may be more or less
than $25, with the result that the total amount of original issue discount on
the Junior Subordinated Debentures may be more or less than the amount of
stated interest payable with respect thereto.
A Securityholder's initial tax basis for his pro rata share of the
Junior Subordinated Debentures will be equal to his pro rata share of their
"issue price," as defined above, and will be increased by original issue
discount accrued with respect thereto, and reduced by the amount of cash
distributions (including the amount of Pre-issuance Accrued Interest) paid to
such Securityholder. No portion of the amounts received on the Preferred
Securities will be eligible for the dividends received deduction.
Potential Extension of Payment Period on the Junior Subordinated Debentures
Securityholders will continue to accrue original issue discount with
respect to their pro rata share of the Junior Subordinated Debentures during
an extended interest payment period, and any holders who dispose of Preferred
Securities prior to the record date for the payment of interest following such
extended interest payment period will not receive from the Trust any cash
related thereto.
Distribution of Junior Subordinated Debentures to Holders of Preferred
Securities
Under current law, a distribution by the Trust of the Junior
Subordinated Debentures as described under the caption "Description of the
Preferred Securities -- Special Event Redemption or Distribution", will be
non-taxable and will result in the Securityholder receiving directly his pro
rata share of the Junior Subordinated Debentures previously held indirectly
through the Trust, with a holding period and tax basis equal to the holding
period and adjusted tax basis such Securityholder was considered to have had
in his pro rata share of the underlying Junior Subordinated Debentures prior
to such distribution.
Treatment of the Payment of Pre-issuance Accrued Interest
"Pre-issuance Accrued Interest" payable on the first Interest Payment
Date should be treated as a return of capital with respect a Securityholder's
pro rata interest in the Junior Subordinated Debentures, reducing the
Securityholder's tax basis in his pro rata share of the Junior Subordinated
Debentures.
Market Discount and Bond Premium
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debentures with
market discount, acquisition premium or amortizable bond premium. Such
holders are advised to consult their tax advisors as to the income tax
consequences of the acquisition, ownership and disposition of the Preferred
Securities.
Disposition of the Preferred Securities
Upon on a sale, exchange or other disposition of the Preferred
Securities (including a distribution of cash in redemption of a
Securityholder's Preferred Securities upon redemption or repayment of the
underlying Junior Subordinated Debentures, but excluding the distribution of
Junior Subordinated Debentures), a Securityholder will be considered to have
disposed of all or part of his pro rata share of the Junior Subordinated
Debentures, and will recognize gain or loss equal to the difference between
the amount realized and the Securityholder's adjusted tax basis in his pro
rata share of the underlying Junior Subordinated Debentures deemed disposed
of. Gain or loss will be capital gain or loss (except to the extent of any
accrued market discount with respect to such Securityholder's pro rata share of
the Junior Subordinated Debentures not previously included in income). See
"Market Discount and Bond Premium" above. Such gain or loss will be long-term
capital gain or loss if the Preferred Securities have been held for more than
one year.
The Preferred Securities are expected to trade "flat," that is, at
a price that does not take into account accrued but unpaid interest with
respect to the underlying Junior Subordinated Debentures. A Securityholder
who disposes of his Preferred Securities between record dates for payments of
distributions thereon will nevertheless be required to include accrued but
unpaid interest on the Junior Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to his
adjusted tax basis in his pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. Accordingly, such a Securityholder will
recognize a capital loss to the extent the selling price (which does not
include accrued but unpaid interest) is less than the Securityholder's adjusted
tax basis (which does include accrued but unpaid interest). Subject to
certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is
any corporation, individual, partnership, estate or trust that is, as to the
United States, a foreign corporation, a non-resident alien individual, a
foreign partnership or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law:
(i) payments by the Trust or any of its paying agents to any
holder of a Preferred Security who or which is a United States Alien
Holder will not be subject to United States federal withholding tax,
provided that (a) the beneficial owner of the Preferred Security does
not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of SunAmerica entitled to vote,
(b) the beneficial owner of the Preferred Security is not a
controlled foreign corporation that is related to SunAmerica through
stock ownership, and (c) either (A) the beneficial owner of the
Preferred Security certifies to the Trust or its agent, under
penalties of perjury, that it is not a United States holder and
provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business
(a "Financial Institution") and holds the Preferred Security
certifies to the Trust or its agent under penalties of perjury that
such statement has been received from the beneficial owner by it or
by a Financial Institution between it and the beneficial owner and
furnishes the Trust or its agent with a copy thereof;
(ii) a United States Alien Holder of a Preferred Security will
not be subject to United States federal withholding tax on any gain
realized upon the sale or other disposition of a Preferred Security;
and
(iii) any gain realized by a United States Alien Holder upon
the exchange of Series B Preferred for Preferred Securities will not
be subject to United States federal withholding tax.
Information Reporting to Holders
The Trust will report the original issue discount that accrued during
the year with respect to the Junior Subordinated Debentures, and any gross
proceeds received by the Trust from the retirement or redemption of the Junior
Subordinated Debentures, annually to the holders of record of the Preferred
Securities and the Internal Revenue Service. The Trust currently intends to
deliver such reports to holders of record prior to January 31 following each
calendar year. It is anticipated that persons who hold Preferred Securities
as nominees for beneficial holders will report the required tax information to
beneficial holders on Form 1099.
Backup Withholding
Payments made on, and proceeds from the sale of Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will generally
be allowed as a credit against the holder's federal income tax, provided the
required information is timely filed with the Internal Revenue Service.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon for the Trust by Richards, Layton &
Finger, Wilmington, Delaware, special Delaware counsel to the Trust. The
validity of the Preferred Securities Guarantee and the Junior Subordinated
Debentures will be passed upon for the Trust and SunAmerica by Davis Polk &
Wardwell, New York, New York, special counsel to SunAmerica and the Trust.
Davis Polk & Wardwell will rely as to matters of Maryland law on Piper &
Marbury, Baltimore, Maryland. Certain legal matters in connection with the
Preferred Securities, the Preferred Securities Guarantee and the Junior
Subordinated Debentures will be passed upon for the Trust and SunAmerica by
Susan L. Harris, Vice President and General Counsel - Corporate Affairs of
SunAmerica. Ms. Harris holds options, granted under SunAmerica's Employee
Stock Plan, to purchase in the aggregate less than 1% of SunAmerica's common
stock. David W. Ferguson, a partner of Davis Polk & Wardwell, is a director
of First SunAmerica Life Insurance Company, a subsidiary of SunAmerica.
EXPERTS
The consolidated financial statements incorporated in this Offering
Circular/Prospectus by reference to the Annual Report on Form 10-K for the
year ended September 30, 1994 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
ERISA MATTERS
SunAmerica and certain affiliates of SunAmerica, including Anchor
National Life Insurance Company and Sun Life Insurance Company of America, may
each be considered a "party in interest" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a
"disqualified person" within the meaning of the Code with respect to many
employee benefit plans. Prohibited transactions within the meaning of ERISA
or the Code may arise, for example, if the securities offered hereby are
acquired by a pension or other employee benefit plan with respect to which
SunAmerica or any of its affiliates is a service provider, unless such
securities are acquired pursuant to an exemption for transactions effected on
behalf of such plan by a "qualified professional asset manager" or pursuant to
any other available exemption. Any such pension or employee benefit plan
proposing to invest in the securities offered hereby should consult with its
legal counsel.
Facsimile copies of the Letter of Transmittal will be accepted.
Letters of Transmittal, certificates representing shares of Series B Preferred
and any other required documents should be sent by each Holder of Series B
Preferred or his broker, dealer, commercial bank, trust company or other
nominee to the Exchange Agent at one of the addresses as set forth below:
The Exchange Agent is:
The First National Bank of Chicago
By Hand or Overnight Courier in By Hand or Overnight Courier in
Chicago: New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission
(For Eligible Institutions Only):
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
The Information Agent is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Call Toll-Free: (800) 223-2064
Any questions or requests for assistance or additional copies of this
Offering Circular/Prospectus, the Letter of Transmittal or for copies of the
Notice of Guaranteed Delivery may be directed to the Information Agent at its
telephone number and location set forth above. You may also contact your
broker, dealer, commercial bank or trust company or other nominee for
assistance concerning the Offer.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
APPENDIX A
Appendix A - Graphic Information Omitted from Electronic Filing
The diagram is entitled "Diagram of Offer". The diagram includes boxes
representing the Trust, the three Regular Trustees, the Property Trustee and
the Delaware Trustee, SunAmerica and the Holders of Series B Preferred. Arrows
between such boxes depict the exchange of Preferred Securities for Series B
Preferred in the Offer, the purchase of Common Securities of the Trust by
SunAmerica for cash, the purchase by the Trust with such cash of Junior
Subordinated Debentures of SunAmerica and the deposit of Junior Subordinated
Debentures of SunAmerica in the Trust in respect of the aggregate liquidation
amount of the Preferred Securities issued in connection with the Offer. There
are two explanatory notes at the bottom of the diagram, which state:
o Existing Holders of Series B Preferred who participate in the Offer
will receive one Preferred Security of the Trust for each outstanding
share of Series B Preferred that is validly tendered and accepted for
exchange.
o The principal amount of Junior Subordinated Debentures delivered to
SunAmerica Capital Trust I as trust assets will be equal to the sum
of (i) the aggregate liquidation amount of the Preferred Securities
issued in connection with the Offer and (ii) the purchase price of
the Common Securities issued to SunAmerica, all of which will be used
by the Trust to purchase an equal principal amount of Junior
Subordinated Debentures.
PART II
INFORMATION NOT REQUIRED IN OFFERING CIRCULAR/PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 2-418 of the Maryland General Corporation law permits the
indemnification of directors, officers, employees and agents of Maryland
corporations. Article Eighth of SunAmerica's Restated Articles of
Incorporation (the "Articles") authorizes the indemnification of directors and
officers to the full extent required or permitted by the General Laws of the
State of Maryland, now or hereafter in force, whether such persons are serving
SunAmerica, or, at its request, any other entity, which indemnification shall
include the advance of expenses under the procedures and to the full extent
permitted by law. Article Eighth further provides that the foregoing rights of
indemnification shall not be exclusive of any other rights to which those
seeking indemnification may be entitled and that no amendment or repeal of
Article Eighth shall apply to or have any effect on any right to
indemnification provided thereunder with respect to acts or omissions
occurring prior to such amendment or repeal. In addition, SunAmerica's
officers and directors are covered by certain directors' and officers'
liability insurance policies maintained by SunAmerica. Reference is made to
section 2-418 of the Maryland General Corporation Law and Article Eighth of
the Articles, which are incorporated herein by reference.
The Declaration provides that no Trustee, Special Representative,
affiliate of any Trustee or Special Representative or any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Trustee or Special Representative or any employee or agent of the Trust or its
affiliates (each an "Indemnified Person") shall be liable, responsible or
accountable in damages or otherwise to any employee or agent of the Trust or
its affiliates or any Special Representative, or any officers, directors,
shareholders, employees, representatives or agents of SunAmerica or its
affiliations or to any holders of securities of the Trust for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by the Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omission. The Declaration also
provides that, to the fullest extent permitted by applicable law, SunAmerica
shall indemnify and hold harmless each Trustee, any Special Representative,
any affiliate of a Trustee or any Special Representative or any officers,
directors, shareholders, members, partners, employees, representatives or
agents of the Trustees or any Special Representative, or any employee or agent
of the Trust or its affiliates (each, an "Indemnified Person") from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by the Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such acts or omissions. The Declaration further provides that
to the fullest extent permitted by applicable law, expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by SunAmerica
prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by SunAmerica of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified pursuant to the
Declaration.
Item 21. Exhibits.
EXHIBIT NO. DOCUMENT
1.1 Form of Dealer Manager Agreement*
4.1 Form of Indenture between SunAmerica and The
First National Bank of Chicago, as Trustee**
4.2 Form of First Supplemental Indenture to
Indenture**
4.3 Form of Declaration of Trust of SunAmerica
Capital Trust I*
4.4 Form of Certificate of Trust of SunAmerica
Capital Trust I (included in Exhibit 4.3)*
4.5 Form of Amended and Restated Declaration of
Trust of SunAmerica Capital Trust I*
4.6 Form of Preferred Security (included in Exhibit
4.5 above)*
4.7 Form of Junior Subordinated Debenture (included
in Exhibit 4.2)**
4.8 Form of Guarantee Agreement with respect to
Preferred Securities*
4.9 Senior Indenture, dated as of December 15,
1991, between SunAmerica and Bank of America NT
& SA (formerly Security Pacific National Bank),
as Trustee, defining the rights of the holders
of SunAmerica's 9% Notes due January 15, 199.995
and 9.95% Debentures due February 1, 2012, is
incorporated herein by reference to Exhibit No.
4.1 to SunAmerica's Registration Statement No.
33-44084 on Form S-3, filed November 20, 1991.
4.10 Senior Debt Indenture, dated as of April 15,
1993, between SunAmerica and The First National
Bank of Chicago, as Trustee, defining the
rights of the holders of SunAmerica's 8 1/8%
Debentures due April 28, 2023 and certain other
debt securities of SunAmerica, is incorporated
herein by reference to Exhibit 4(h) to
SunAmerica's Annual Report on Form 10-K, filed
December 16, 1993.
4.11 Tri-Party Agreement, dated as of July 1, 1993,
among The First National Bank of Chicago, Bank
of America, NT & SA and SunAmerica, appointing
The First National Bank of Chicago as Successor
Trustee to Bank of America NT & SA for
SunAmerica's 9% Notes due January 15, 1995 and
9.95% Debentures due February 1, 2012, is
incorporated herein by reference to Exhibit
4(i) to SunAmerica's Annual Report on Form
10-K, filed December 16, 1993.
5.1 Opinion of Davis Polk & Wardwell**
5.2 Opinion of Piper & Marbury**
5.3 Opinion of Richards, Layton & Finger**
8.1 Tax Opinion of Davis Polk & Wardwell**
12.1 Computations of consolidated ratio of earnings
to fixed charges and consolidated ratio of
earnings to combined fixed charges and
preferred stock dividends***
23.1 Consent of Price Waterhouse LLP*
23.2 Consents of Davis Polk & Wardwell (included in
Exhibits 5.1 and 8.1 above)**
23.3 Consent of Piper & Marbury (included in Exhibit
5.2 above)**
23.4 Consent of Richards, Layton & Finger (included
in Exhibit 5.3 above)**
24.1 Powers of Attorney for SunAmerica (included on
signature pages)***
24.2 Powers of Attorney for SunAmerica, as sponsor,
to sign this Registration Statement on behalf
of SunAmerica Capital Trust I (included in
Exhibit 4.3)**
25.1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Trustee
under the Indenture***
99.1 Proposed Form of Letter of Transmittal*
99.2 Proposed Form of Notice of Guaranteed Delivery*
99.3 Proposed Form of Letter to Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees*
99.4 Proposed Form of Letter to Clients*
99.5 Form of Exchange Agent Agreement*
99.6 Form of Information Agent Agreement*
99.7 Form of Newspaper Announcement*
99.8 Proposed Form of SunAmerica Letter to Holders
of 9 1/4% Preferred Stock, Series B*
_________________________________
*Filed herewith.
**To be filed by amendment.
***Previously filed.
Item 22. Undertakings.
Each of the Registrants hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of SunAmerica's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 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.
(2) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrants pursuant to the foregoing provisions, or otherwise,
the Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants 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 Registrants will, unless
in the opinion of their 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 Act
and will be governed by the final adjudication of such issue.
(3) To respond to requests for information that is incorporated by
reference into the Offering Circular/Prospectus pursuant to Item 4, 10(b), 11
or 13 of Form S-4, within one business day of receipt of such request, and to
send the incorporated documents by first-class mail or equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date responding to
the request.
(4) 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
SunAmerica Inc. has duly caused this Amendment No. 2 to the Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California, on this 17th
day of March, 1995.
SUNAMERICA INC.
By /s/ James R. Belardi
__________________________
Name: James R. Belardi
Title: Senior Vice President
and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
- ------------------------------------------ ------------------------------------ ----------------
* March 17, 1995
________________________________ Chairman, President and Chief
Eli Broad Executive Officer (Principal
Executive Officer) of SunAmerica
Inc. and President (Principal
Executive Officer) of SunAmerica
Financial, Inc.
*
________________________________ Senior Vice President and March 17, 1995
James R. Belardi Treasurer (Principal Financial
Officer)
*
________________________________ Senior Vice President and March 17, 1995
Scott L. Robinson Controller (Principal
Accounting Officer)
*
________________________________ Director March 17, 1995
Ronald J. Arnault
*
________________________________ Director March 17, 1995
Karen Hastie-Williams
*
________________________________ Director March 17, 1995
David O. Maxwell
*
________________________________ Director March 17, 1995
Barry Munitz
*
________________________________ Director March 17, 1995
Lester Pollack
*
________________________________ Director March 17, 1995
Richard D. Rohr
*
________________________________ Director March 17, 1995
Sanford C. Sigoloff
*
________________________________ Director March 17, 1995
Harold M. Williams
* By /s/ Jay S. Wintrob
________________________________
(Attorney-in-Fact)
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
SunAmerica Capital Trust I has duly caused this Amendment No. 2 to the
Registration Statement on Form S-4 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on this day of March, 1995.
SUNAMERICA CAPITAL TRUST I
By: SunAmerica Inc., as Sponsor
By
_______________________________
Name: James R. Belardi
Title: Senior Vice President
and Treasurer
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DOCUMENT PAGE
- --------------------- ------------------------------------------------------------------------ ------
NO.
- ---------------------
<S> <C> <C>
1.1 Form of Dealer Manager Agreement*
4.1 Form of Indenture between SunAmerica and The First National
Bank of Chicago, as Trustee**
4.2 Form of First Supplemental Indenture to Indenture**
4.3 Form of Declaration of Trust of SunAmerica Capital Trust I*
4.4 Form of Certificate of Trust of SunAmerica Capital Trust I
(included in Exhibit 4.3)*
4.5 Form of Amended and Restated Declaration of Trust of SunAmerica
Capital Trust I*
4.6 Form of Preferred Security (included in Exhibit 4.5 above)*
4.7 Form of Junior Subordinated Debenture (included in Exhibit 4.2)**
4.8 Form of Guarantee Agreement with respect to Preferred Securities*
4.9 Senior Indenture, dated as of December 15, 1991, between
SunAmerica and Bank of America NT & SA (formerly Security
Pacific National Bank), as Trustee, defining the rights of the holders
of SunAmerica's 9% Notes due January 15, 1995 and 9.95%
Debentures due February 1, 2012, is incorporated herein by
reference to Exhibit No. 4.1 to SunAmerica's Registration Statement
No. 33-44084 on Form S-3, filed November 20, 1991.
4.10 Senior Debt Indenture, dated as of April 15, 1993, between
SunAmerica and The First National Bank of Chicago, as Trustee,
defining the rights of the holders of SunAmerica's 8 1/8%
Debentures due April 28, 2023 and certain other debt securities of
SunAmerica, is incorporated herein by reference to Exhibit 4(h) to
SunAmerica's Annual Report on Form 10-K, filed December 16,
1993.
4.11 Tri-Party Agreement, dated as of July 1, 1993, among The First
National Bank of Chicago, Bank of America, NT & SA and
SunAmerica, appointing The First National Bank of Chicago as
Successor Trustee to Bank of America NT & SA for SunAmerica's
9% Notes due January 15, 1995 and 9.95% Debentures due
February 1, 2012, is incorporated herein by reference to Exhibit 4(i)
to SunAmerica's Annual Report on Form 10-K, filed December 16,
1993.
5.1 Opinion of Davis Polk & Wardwell**
5.2 Opinion of Piper & Marbury**
5.3 Opinion of Richards, Layton & Finger**
8.1 Tax Opinion of Davis Polk & Wardwell**
12.1 Computations of consolidated ratio of earnings to fixed charges and
consolidated ratio of earnings to combined fixed charges and
preferred stock dividends***
23.1 Consent of Price Waterhouse LLP*
23.2 Consents of Davis Polk & Wardwell (included in Exhibits 5.1 and
8.1 above)**
23.3 Consent of Piper & Marbury (included in Exhibit 5.2 above)**
23.4 Consent of Richards, Layton & Finger (included in Exhibit 5.3
above)**
24.1 Powers of Attorney for SunAmerica (included on signature
pages)***
24.2 Powers of Attorney for SunAmerica, as sponsor, to sign this
Registration Statement on behalf of SunAmerica Capital Trust I
(included in Exhibit 4.3)**
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under
the Indenture***
99.1 Proposed Form of Letter of Transmittal*
99.2 Proposed Form of Notice of Guaranteed Delivery*
99.3 Proposed Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees*
99.4 Proposed Form of Letter to Clients*
99.5 Form of Exchange Agent Agreement*
99.6 Form of Information Agent Agreement*
99.7 Form of Newspaper Announcement*
Stock, Series B*
</TABLE>
_________________________________
*Filed herewith.
**To be filed by amendment.
***Previously filed.
March [ ], 1995
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1201
Dear Sir or Madam:
SunAmerica Capital Trust I (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
Section3801 et seq.), proposes to issue its [ ]% Trust Originated Preferred
Securities ("TOPrS(SM)") (the "Preferred Securities") in exchange for up to
5,500,000 shares of 91/4% Preferred Stock, Series B (the "Target Securities")
of SunAmerica Inc., a Maryland corporation (the "Company" and, together with
the Trust, the "Offerors"). The Preferred Securities will be guaranteed (the
"Guarantee") by the Company to the extent described in the Offer Materials (as
hereinafter defined).
This Agreement will confirm the understanding between the
Offerors and you pursuant to which the Offerors have retained you to act as
their exclusive dealer manager, on the terms and subject to the conditions set
forth herein, in connection with the Offer.
1. Appointment and Duties as Dealer Manager. The
Offerors hereby authorize you to act as sole dealer manager and, subject to
the terms and conditions hereof, you agree to act as the Offerors' sole dealer
manager in connection with the Offer. The Offerors hereby authorize you to
act on their behalf in accordance with this Agreement and the terms of the
Offer Materials, which Offer Materials you and any other broker or dealer or
any commercial bank or trust company approved by the Offerors are entitled to
use in connection with the solicitation of exchanges in connection with the
Offer. In so soliciting, you shall not be deemed to act as agent of the
Offerors, and the Offerors shall not be deemed to act as your agent. In
addition, in so soliciting, no broker, dealer, commercial bank or trust
company shall be deemed to act as your agent or as agent of the Offerors, and
you shall not be deemed to act as the agent of any broker, dealer, commercial
bank or trust company. The Offerors shall retain their own legal, tax and
accounting advice from appropriate third party advisors.
You agree, in accordance with your customary practice, to
perform those services in connection with the Offer as are customarily
performed by investment banking concerns in connection with offers of like
nature, including, but not limited to, soliciting tenders pursuant to the
Offer and communicating generally regarding the Offer with brokers, dealers,
commercial banks and trust companies and other persons, including the holders
of Target Securities; notwithstanding the foregoing, we agree that nothing set
forth in this Agreement shall require you to continue to render services
hereunder (i) for the period during which any injunction, restraining order or
other adverse judicial or regulatory ruling, declaration, pronouncement,
motion or other order shall remain in effect with respect to the Offer or with
respect to any of the transactions in connection with, or contemplated by, the
Offer or this Agreement if in your judgment you believe it inadvisable to
render services pursuant hereto, or (ii) if your continuing so to act would,
in your judgment, violate any statute, regulation or other law of the United
States of America or any state thereof or other jurisdiction applicable to the
Offer.
We further agree that you shall not be under any liability
to the Offerors or any other person for any act on the part of any broker or
dealer (other than yourself in your capacity as dealer manager for the Offer,
which liability shall be governed by Section 6 hereof), commercial bank or
trust company which solicits holders of Target Securities; the Offerors
acknowledge and agree that, in your capacity as dealer manager, you shall act
as an independent contractor, and any of your duties arising out of your
engagement pursuant to this Agreement shall be owed solely to the Offerors.
The Offer Materials will be prepared and approved by the
Offerors; you and any other broker or dealer or any commercial bank or trust
company are authorized to use the Offer Materials in connection with the
solicitation of holders of Target Securities. You agree not to provide the
holders of Target Securities any written information regarding the Offer other
than information contained in the Offer Materials.
2. Duties of the Offerors.
(a) The Offerors shall not amend or supplement the
Offer Materials or prepare or approve any related material for use in
connection with the Offer without first having submitted a copy thereof to you
within a reasonable period of time prior to the filing or use thereof,
including as set forth in Section 3; the Offerors agree, at their expense, to
furnish to you as many copies of the Offer Materials in final form for your
use in connection with the Offer as you may reasonably request.
(b) The Offerors agree to furnish to you cards or
lists or copies thereof showing the names and addresses of, and the number of
shares or principal amount, as applicable, of Target Securities held by the
registered holders of the Target Securities as of a reasonably appropriate
date, and shall advise you on each business day during the continuance of each
of the Offer as to any transfers known to the Offerors or of record of the
Target Securities.
(c) The Offerors shall or shall cause the exchange
agent to inform you during each business day during the Offer (to be followed
on a daily basis by written confirmation) as to the respective amounts of
Target Securities which have been tendered pursuant to the Offer during the
interval since its previous daily report to you pursuant to this provision,
and the names and addresses of any holders who have so tendered Target
Securities.
(d) The Offerors agree to advise you promptly of the
occurrence of any event which could cause the Offerors to withdraw, rescind,
or modify the Offer and shall also advise you promptly of any proposal or
requirement to amend or supplement any filing required by the Securities Act
of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or "blue sky" or other state securities
laws; the Offerors will prepare and, if necessary, file with the Securities
and Exchange Commission (the "Commission"), as required by applicable law or
regulation, any and all necessary amendments and supplements to the Offer
Materials; prior to and during the continuance of the Offer, the Offerors will
inform you promptly after either receives notice or becomes aware of the
happening of any event, or the discovery of any fact, that would require the
making of any change in any Offer Materials then being used or would affect
the truth or completeness of any representation or warranty contained in this
Agreement if such representation or warranty were being made immediately after
the happening of such event or the discovery of such fact.
(e) The Offerors shall arrange for each information
agent and depositary named in the Offer Materials relating to the Offer to
cooperate with you in all respects reasonably requested by you.
(f) The Offerors acknowledge and agree that you may
use the Offer Materials as specified herein without any independent
investigation or verification on your part and the Offerors represent and
warrant to you that you may rely on the accuracy and adequacy of any
information delivered to you by or on behalf of the Offerors without any
independent verification of such information or an appraisal or evaluation of
the Offerors' assets and liabilities and that such information will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Offer Materials and Withdrawal Rights. Prior to the
commencement of the Offer, the Offerors agree to furnish you with as many
copies as you may reasonably request of (i) each of the documents that is
filed with the Commission, including each registration statement, preliminary
and final prospectus filed with the Commission, in connection with the Offer,
and all documents incorporated therein by reference, (ii) each offering
circular, sales memorandum, term sheet, proposed agreement, solicitation
statement, disclosure document, or other explanatory statement, or other
report, filing, document, release or communication mailed, delivered,
published, or filed by or on behalf of the Offerors in connection with the
Offer, (iii) each document required to be filed with the Commission pursuant
to the provisions of the Exchange Act pertaining to the Offerors during the
term of this Agreement and (iv) each appendix, attachment, modification,
amendment or supplement to any of the foregoing and all related documents,
including but not limited to each related letter of transmittal (each of (i),
(ii), (iii) and (iv), together with each document incorporated by reference
into any of the foregoing, an "Offer Material" and, collectively, the "Offer
Materials"). At the commencement of the Offer, the Offerors shall cause
timely to be delivered to each registered holder of any Target Securities
legally or contractually entitled thereto, such of the Offer Materials as may
be required by the Securities Act or the Exchange Act to be delivered to such
holder and any other offering materials prepared expressly for use by holders
of Target Securities tendering in the Offer, together with a return envelope.
Thereafter, to the extent practicable, until the expiration of the Offer, the
Offerors shall use their best efforts to cause copies of such materials and a
return envelope to be mailed to each person who becomes a holder of any
applicable Target Securities.
In connection with the Offer, if either of the Offerors (a)
uses or permits the use of, or files with the Commission or any other
governmental or regulatory agency, authority or instrumentality, any Offer
Material that (i) has not been submitted to you on a timely basis for your
comments as required in Section 2(a) hereof or (ii) has been so submitted and
with respect to which you reasonably object or (b) shall have breached any of
its representations, warranties, agreements or covenants herein, then you
shall be entitled to withdraw as dealer manager in connection with the Offer,
without any liability or penalty to you or any other Indemnified Party (as
hereinafter defined) for such withdrawal and without loss of any right to
indemnification or contribution provided in this Agreement, to the payment of
all fees and expenses payable hereunder that have accrued to the date of such
withdrawal or to the benefit of any other provisions surviving such withdrawal
pursuant to Section 11. In the event of any such withdrawal, for the purpose
of determining the fees payable to you pursuant to this Section 3, the amount
of Target Securities tendered for exchange as of the close of business on the
date of such withdrawal that are thereafter exchanged pursuant to the Offer
shall be deemed to have been exchanged, pursuant to the Offer, as of the date
of such withdrawal. If you should withdraw, the fees accrued and
reimbursement for your expenses through the date of such withdrawal shall be
paid to you in cash on or promptly after such date.
4. Compensation and Expense Reimbursement. In
consideration of the services to be rendered by you pursuant hereto, the
character and sufficiency of which the Offerors hereby acknowledge, the
Company agrees to pay you, in cash, the following non-refundable amounts:
(a) A fee, payable upon the consummation of the
Offer, equal to 2.5% of the aggregate liquidation preference of the Target
Securities tendered pursuant to the Offer.
(b) In addition, and without regard to whether the
Offer is commenced or consummated or whether this Agreement is terminated, the
Company agrees to pay promptly, in cash, all of the reasonable out-of-pocket
expenses you incurred in connection with the services rendered or to be
rendered by you pursuant to this Agreement, including all reasonable fees (not
to exceed $ ) and expenses of your counsel. Nothing in this paragraph
shall in any way limit or affect your or any other Indemnified Party's right
to receive all expenses (including reasonable counsel fees and expenses) under
the indemnification provisions of this Agreement.
(c) Whether or not the Offer is commenced or
consummated and whether or not this Agreement has been terminated, the Company
shall pay (i) all expenses of preparation, printing, mailing and dissemination
of the Offer Materials and any other documents related to the Offer; (ii) all
fees and expenses paid by brokers, dealers (including you), commercial banks,
trust companies and nominees for their customary mailing and handling expenses
incurred in forwarding Offer Materials and any other documents related to the
Offer to their customers; (iii) all fees and expenses of the exchange agent
and any depositary, information agent or other persons rendering services in
connection with the Offer, including, without limitation, fees payable and
expenses incurred in respect of any agent of the Offerors engaged to solicit
holders of the Target Securities; (iv) all advertising charges incurred with
the approval of the Company; (v) all filing fees applicable to any transaction
addressed herein required to be paid to any governmental or regulatory agency
(including those required of you by the Commission; (vi) any fees payable in
connection with the rating of the Preferred Securities; (vii) the fees and
expenses incurred in connection with the listing on the New York Stock
Exchange of the Preferred Securities; and (viii) all other expenses incurred
in connection with the Offer.
5. Termination. Subject to Section 11, you may resign
and, following 10 days notice, the Offerors may terminate your engagement
hereunder at any time. If this Agreement were to terminate for any reason,
however, in addition to any fees earned pursuant to Section 3, you shall be
entitled to receive all of the amounts payable in respect of expenses incurred
in accordance with Sections 4(b) and (c) hereof up to and including the
effective date of such termination (but without duplication of any amounts
payable pursuant to Section 3); provided that if this Agreement were to be
terminated by you for cause or by the Offeror other than for cause, and on or
prior to February 28, 1996, either or both of the Offerors or any affiliate of
the Offerors proceed or proceeds with any exchange offer the terms of which do
not differ substantially from the terms set forth in any Offer Material or as
recommended by you prior to such termination, you also shall be entitled to
receive all of the amounts due and payable pursuant to Section 4(a) hereof as
if this Agreement were to remain in effect with respect to such subsequent
exchange offer.
6. Indemnification, Contribution and Other Provisions.
(a) The Company agrees to indemnify and hold harmless
you and your affiliates and your and their respective directors, officers,
employees, agents and controlling persons (you and each such person being an
"Indemnified Party") as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to which such
Indemnified Party may become subject under any applicable federal
or state law, or otherwise, and related to or arising out of (A)
an untrue statement or alleged untrue statement of a material fact
contained in the Offer Materials, other than the Prospectus (as
hereinafter defined), or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary in order to make the statements therein not misleading,
(B) an untrue statement or alleged untrue statement of a material
fact contained in the Prospectus, or the omission or alleged
omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
(C) any breach by either or both of the Offerors of any of their
representations, warranties and agreements contained in this
Agreement, (D) either or both of the Offerors' failure to make the
Offer, or either or both of their withdrawal, termination or
extension of the Offer or any other failure on their part to
comply with the terms and conditions specified in the Offer
Materials, and (E) the Offer, the engagement of you pursuant to,
and the performance by you of the services contemplated by, this
Agreement;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon the occurrence
of any matter described in clause (i) above, if such settlement is
effected with the written consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the last sentence of Section 6(d) hereof,
reasonable fees and disbursements of counsel chosen by you),
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon the occurrence of any matter described in
clause (i) above, whether or not such Indemnified Party is a party
and whether or not such claim, action or proceeding is initiated
or brought by or on behalf of the Offerors, to the extent that any
such expense is not paid under clause (i) or (ii) above.
The Offerors shall not, however, be liable to an Indemnified
Party for any loss, liability, claim, settlement, damage or expense under (A)
clauses (i)(A) and (B) of this subsection 6(a) to the extent arising out of an
untrue statement or omission or alleged untrue statement or omission made in
the Offer Materials in reliance upon and in conformity with written information
furnished to the Offerors by you expressly for use in the Offer Materials and
(B) clause (i)(E) of this subsection 6(a) that is found in a final judgment by
a court of competent jurisdiction to have resulted from your bad faith or
gross negligence. Each of the Offerors recognizes and acknowledges for all
purposes of this Agreement that the only information covered by clause (A)
above consists of the third sentence of the first paragraph under the caption
"Listing and Trading of Preferred Securities and Series B Preferred" in the
Prospectus.
The Offerors also agree that no Indemnified Party shall have
any liability (whether direct or indirect, in contract or tort or otherwise)
to the Offerors or their security holders or creditors related to or arising
out of the Offer or the engagement of you pursuant to, or the performance by
you of the services contemplated by, this Agreement except to the extent that
any loss, liability, claim, damage or expense is found in a final judgment by
a court of competent jurisdiction to have resulted from your bad faith or
gross negligence.
The Offerors agree that, without your prior written consent,
they will not settle, compromise or consent to the entry of any judgment in
any pending or threatened claim, action or proceeding in respect of which
indemnification could be sought under the indemnification provisions of this
Section 6 (whether or not you or any other Indemnified Party is an actual or
potential party to such claim, action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action or proceeding.
(b) If the indemnification of an Indemnified Party
provided for in this Agreement is for any reason held unenforceable, the
Company and such Indemnified Party shall contribute to the aggregate losses,
liabilities, claims, damages and expenses for which such indemnification is
held unenforceable, as incurred, in the proportion that your compensation
payable hereunder bears to the aggregate liquidation value of the Target
Securities, with such Indemnified Party paying the smaller portion and the
Offerors paying the larger portion. The Indemnified Parties, in the
aggregate, shall not be required to contribute any amount in excess of the
amount of fees received by you under this Agreement. The foregoing
contribution agreement shall be in addition to any rights that any Indemnified
Party may have at common law or otherwise. No investigation or failure to
investigate by any Indemnified Party shall impair the foregoing
indemnification and contribution agreement or any rights an Indemnified Party
may have.
(c) In the event that an Indemnified Party is
requested or required to appear as a witness in any action brought by or on
behalf of or against the Offerors in which such Indemnified Party is not named
as defendant, the Company agrees to reimburse you for all expenses incurred by
you in connection with such Indemnified Party's appearing and preparing to
appear as such a witness, including, without limitation, the reasonable fees
and disbursements of your legal counsel, and to compensate you in an amount to
be mutually agreed upon.
(d) The Offerors agree to notify you promptly of the
assertion against you or any other person of any claim or the commencement of
any action or proceeding relating to a transaction contemplated by this
Agreement. Promptly after receipt by an Indemnified Party of written notice
of any claim or commencement of any action or proceeding with respect to which
indemnification is being sought hereunder, such Indemnified Party will notify
the Offerors in writing of such claim or of the commencement of such action or
proceeding, but failure so to notify the Offerors will not relieve the Company
from any liability which it may have to such Indemnified Party (i) under the
indemnification agreement, except to the extent that the Company is materially
prejudiced by such failure, and (ii) otherwise than under this indemnification
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the Indemnified Parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such Indemnified Parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of counsel for the
Indemnified Parties incurred thereafter in connection with such action. In no
event shall the indemnifying parties be liable for reasonable fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all Indemnified Parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
7. Representations and Warranties. The Company
represents and warrants to you that at the commencement of each Offer, at each
mailing or other dissemination of any Offer Material, and upon the consummation
of each Offer:
(a) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Offer Materials; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise.
(b) Each of Sun Life Insurance Company of America,
First SunAmerica Life Insurance Company, Anchor National Life Insurance
Company, SunAmerica Asset Management Corp., Resources Trust Company, Royal
Alliance Associates, Inc. and SunAmerica Securities, Inc. (together, the
"Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and operate
its properties and to conduct its business as presently conducted and as
described in the Offer Materials, and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or business affairs of the
Company and its subsidiaries, considered as one enterprise; and all of the
issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and nonassessable and is owned
(except for directors qualifying shares) directly or through subsidiaries, by
the Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(c) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act, is and
will be treated as a "grantor trust" for Federal income tax purposes under
existing law, has the business trust power and authority to conduct its
business as presently conducted and as described in the Offer Materials, and
is not required to be authorized to do business in any other jurisdiction.
(d) The Offerors have taken all corporate and
business trust action necessary to authorize this Agreement and the making and
consummation of the Offer and the transactions contemplated hereby and
thereby. This Agreement has been validly executed and delivered by each of
the Offerors.
(e) Each of the Offer Materials and the Offer will
comply in all material respects with the Securities Act and the Exchange Act,
as such Acts may be applicable, and in each case the applicable rules and
regulations of the Commission promulgated pursuant thereto, and with all
applicable rules or regulations of any governmental or regulatory authority or
body, including applicable "blue sky" or similar securities laws, and no
authorization, consent or approval of, or filing with, any court or
governmental body or agency is required in connection with the commencement or
consummation of the Offer and the other transactions contemplated hereby,
other than those which have been obtained or any filing which will have been
made prior to the commencement or consummation, as the case may be, of the
Offer. Neither of the Offerors nor any of their affiliates is presently doing
business with the government of Cuba or with any person or affiliate located
in Cuba.
(f) None of the Offer Materials will contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements made therein not
misleading; provided, however, that the representations and warranties in this
subsection shall not apply to statements or omissions made in the Offer
Materials in reliance upon and in conformity with written information
furnished to the Offerors by you expressly for use in the Offer Materials.
(g) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Offer Materials (except for
subsequent issuances, if any, pursuant to reservations, stock option
agreements, employee benefit plans or the exercise of convertible securities
referred to in the Offer Materials); all of the issued and outstanding shares
of capital stock have been duly authorized and validly issued and are fully
paid, nonassessable and not subject to any preemptive or similar rights.
(h) The Preferred Securities to be issued pursuant
to the Offer have been duly authorized by the Trust's Amended and Restated
Declaration of Trust (the "Declaration") and, when issued in exchange for
Target Securities pursuant to the Offer, will be validly issued and (subject
to the terms of the Declaration) fully paid and nonassessable undivided
beneficial interests in the assets of the Trust, not subject to any preemptive
or similar rights, and will conform to all statements relating thereto
contained in the Offer Materials. Holders of Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit.
(i) The Declaration has been duly authorized by the
Company and, as of the date of acceptance (the "Acceptance Date") of Target
Securities in the Offer, will have been duly executed and delivered by the
Company. Assuming due authorization, execution and delivery of the
Declaration by the Trustees of the Trust (the "Trustees"), the Declaration
will, as of the Acceptance Date, be a valid and binding obligation of the
Company and the Trustees, enforceable against the Company and the Trustees in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(j) The Indenture between the Company and First
National Bank of Chicago, as trustee (including the related supplemental
indenture governing the Company's Junior Subordinated Debentures, Series A,
due 2044 (the "Debentures") to be deposited in the Trust, the "Indenture"),
has been duly qualified under the Trust Indenture Act of 1939, as amended,
and, assuming due authorization, execution and delivery by the Company, each
of the Indenture and the Debentures are a valid and binding agreement of the
Company, enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (b) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability, and will conform to all statements relating thereto
contained in the Offer Materials.
(k) Neither of the Offerors nor any of the
Subsidiaries is in violation of its respective declaration of trust, charter
or bylaws, as applicable, or in default in the performance of any material
obligation, agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Trust, the Company or any of the Subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets of
the Trust, the Company or of any of the Subsidiaries is subject, or in
violation of any applicable law, administrative regulation or administrative
or court order or decree, which violation or default would, singly or in the
aggregate, have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Trust, the Company and
its subsidiaries, considered as one enterprise; and the execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated herein and in the Offer Materials will not conflict with or
constitute a breach of, or a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Trust, the Company or any of the Subsidiaries pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which the Trust, the Company or any of the Subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets of
the Trust, the Company or any of the Subsidiaries is subject, except for a
conflict, breach, default, lien, charge or encumbrance which would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Trust, the Company and its subsidiaries
considered as one enterprise, nor will such action result in any violation of
the provisions of the respective Declaration, charter or bylaws of the Trust,
the Company or any of the Subsidiaries, as applicable, or any applicable law,
administrative regulation or administrative or court decree.
(l) There is no action, suit, or proceeding before
or by any court or governmental agency or body, domestic or foreign, pending
against or, to the knowledge of the Company, threatened against or affecting
either of the Offerors or any subsidiaries of the Company, or any of their
respective assets or properties, which is required to be disclosed in the
Offer Materials (other than as disclosed therein), or which is reasonably
likely to result in any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust or the Company
and its subsidiaries, considered as one enterprise, or which would be
reasonably likely to materially and adversely affect a material portion of the
properties or assets thereof or which is reasonably likely to materially and
adversely affect the consummation of this Agreement; all pending legal or
governmental proceedings to which the Trust or the Company or any of its
subsidiaries is a party or of which any of their respective property or assets
is the subject which are not described in the Offer Materials, including
ordinary routine litigation incidental to the business of the Trust or the
Company or any of its subsidiaries, are, considered in the aggregate, not
material; and there are no contracts or documents of the Trust or the Company
or any of its subsidiaries which are required to be filed as exhibits to the
Offer Materials by the Securities Act, the Exchange Act or the rules and
regulations promulgated thereunder, which have not been filed.
(m) Price Waterhouse LLP, the accountants who
certified the financial statements and supporting schedules of the Company
included or incorporated by reference in the Offer Materials, are independent
public accountants with respect to the Offerors and the subsidiaries of the
Company as required by the Securities Act and the rules and regulations
promulgated thereunder.
(n) The financial statements of the Company included
or incorporated by reference in the Offer Materials present fairly the
financial position of the Company and the consolidated subsidiaries of the
Company as of the dates indicated and the results of their operations for the
periods specified; except as otherwise stated in the Offer Materials, said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; the ratios of earnings to
combined fixed charges (including preferred stock dividends) included in the
Offer Materials have been calculated in compliance with Item 503(d) of
Regulation S-K of the Commission; and the supporting schedules included or
incorporated by reference in the Offer Materials present fairly the
information required to be included therein.
(o) Since the respective dates as of which
information is given in the Offer Materials, and except as otherwise stated or
contemplated therein, (A) there has been no material adverse change and no
development involving a prospective material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company
and its subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business, (B) there have been no transactions entered
into by the Company or any of the Subsidiaries which are material to the
Company and its subsidiaries, considered as one enterprise, other than those
entered into in the ordinary course of business, and (C) except for regular
quarterly dividends, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(p) The Offerors and the Subsidiaries possess such
certificates, authorizations or permits issued by the appropriate state or
federal regulatory agencies or bodies as are necessary to conduct the business
as now conducted by them and as described in the Offer Materials, except where
the failure to so possess such certificates, authorizations or permits would
not have a material adverse effect on the condition, financial or otherwise,
or the earnings or business affairs of the Trust or the Company and its
subsidiaries, considered as one enterprise; and neither of the Offerors nor
any of the Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, is reasonably likely to have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of the Trust or the Company and its subsidiaries, considered
as one enterprise.
(q) Neither of the Offerors is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(r) The Offerors meet, and at the respective times
of commencement and consummation of the Offer will meet, the registrant
requirements for use of Form S-3 under the Securities Act and the rules and
regulations promulgated thereunder.
(s) The Offerors represent that they have not
retained or caused to be retained and, during the term of this Agreement, will
not retain or cause to be retained as financial advisor, placement agent,
dealer manager or underwriter any other person to advise or assist it with the
Offer or otherwise directly or indirectly to use any other person to contact,
approach or negotiate with holders of the Target Securities with respect to
the Offer other than you as dealer manager as its exclusive agent.
(t) Any certificate signed by any officer of either
of the Offerors and delivered to you or to your counsel shall be deemed a
representation and warranty by the Offerors to you as to the matters covered
thereby.
8. Covenants of Offerors and Conditions to Obligations.
Your obligation to render services pursuant to this Agreement shall at all
times be subject, in your discretion, to the following conditions, which the
Offerors covenant to effect:
(a) The Offerors shall at all times during the Offer
have performed all of their obligations hereunder theretofore to be performed.
(b) All representations, warranties and other
statements of the Offerors contained in this Agreement are now, at the
commencement of, and at all times during the continuance, and upon the
consummation of, the Offer, shall be, true and correct.
(c) On the commencement date (the "Commencement
Date") of the Offer and on the Acceptance Date, the Offerors' counsel shall
deliver to you the opinions, in each case satisfactory to you, covering the
matters set forth in Appendix A hereto. The Offerors agree to furnish to you,
at your request, (i) a letter, satisfactory in form to you and your counsel,
dated the Commencement Date (and reaffirmed and updated upon the Acceptance
Date) and addressed to you, of Price Waterhouse LLP, independent certified
public accountants for the Offerors, containing statements and information of
the type ordinarily included in accountants' comfort letters with respect to
the financial statements and certain financial information contained in the
Offer Materials, (ii) a certificate from Bank of New York and Bank of New York
(Delaware), as Trustees, dated the Commencement Date (and reaffirmed upon the
Acceptance Date) and signed by appropriate officers of such Trustees,
containing statements and information ordinarily included in such certificates,
and (iii) a certificate from the Company upon the Acceptance Date and signed
by appropriate officers of the Company reaffirming that the representations
and warranties of the Company contained in Section 7 are true and correct as
of such date and that the Offerors have complied with all of the agreements
and satisfied all of the conditions on their part to be performed or satisfied
on or before the consummation of the Offer.
(d) No stop order, restraining order or injunction
has been issued by the Commission or any court and no litigation shall have
been commenced or threatened before the Commission or any court with respect
to (i) the making or consummation of the Offer, (ii) the execution, delivery
or performance by the Offerors of this Agreement, or (iii) any of the
transactions in connection with, or contemplated by, the Offer Materials which
you or your legal counsel believe makes it inadvisable for you to continue to
render services pursuant hereto.
(e) It shall not have become unlawful under any law
or regulation, Federal, state or local, for you to render services pursuant to
this Agreement, or to continue so to act, as the case may be.
(f) The Offerors will have advised you promptly of
(i) the occurrence of any event that could cause the Offerors to withdraw or
terminate the Offer or would permit the Offerors not to consummate the Offer
and (ii) the issuance of any comment or order by the Commission or any other
governmental or regulatory agency or instrumentality concerning either of the
Offer.
(g) The Preferred Securities shall have been
approved for listing on the New York Stock Exchange upon notice of issuance.
(h) At the commencement of, and at all times during
the continuance, and upon consummation of, the Offer, the Preferred Securities
shall have a rating of at least A- from Moody's Investors Service, Inc. and
at least Baa2 from Standard & Poor's Corporation as evidenced in a letter from
such rating agencies or other evidence satisfactory to you; no securities of
either of the Offerors shall have been downgraded or placed on any "watch
list" for possible downgrading by any nationally recognized statistical rating
organization.
9. Reference to You. The Offerors agree that any
reference to you or any of your affiliates in any Offer Material, or any other
release, publication or communication to any party outside the Offerors, is
subject to your prior approval. If you resign or are terminated prior to the
dissemination of any Offer Material or any other release or communication, no
reference shall be made therein to you without your prior written permission.
10. Access to Information. In connection with your
activities hereunder, the Offerors agree to furnish you and your counsel with
all information concerning the Offerors that you reasonably deem appropriate
and agree to provide you with reasonable access to the Offerors' officers,
directors, accountants, counsel, consultants and other appropriate agents and
representatives.
11. Survival of Certain Provisions. The indemnity and
contribution agreements and other provisions contained in Section 6 of this
Agreement, the covenants, representations and warranties of the Offerors made
pursuant to Sections 7 and 8 of this Agreement, the provisions contained in
Sections 4 and 5 of this Agreement and this Section 11 shall remain operative
and in full force and effect regardless of (a) any investigation made by or on
behalf of you or by or on behalf of any Indemnified Party, (b) consummation of
the Offer, or (c) any termination of this Agreement, and shall be binding
upon, and shall inure to the benefit of, any successors, assigns, heirs and
personal representatives of the Offerors, you, the Indemnified Persons and any
such person.
12. Notices. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and shall be mailed or
delivered (a) to the Offerors at:
1 SunAmerica Center
Los Angeles, CA 90067-6022
Attention: Susan L. Harris, Esq.
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: David W. Ferguson, Esq.
and (b) to you at:
10900 Wilshire Boulevard
9th Floor
Los Angeles, CA 90024
Attention: Scott Ryles
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, CA 90071
Attention: Gregg A. Noel, Esq.
13. Construction. This Agreement incorporates the entire
understanding of the parties and (except as otherwise provided herein)
supersedes all previous agreements, and shall be governed by, and construed in
accordance with, the laws of the State of New York as applied to contracts
made and performed in such State, without regard to principles of conflicts of
law.
14. Severability. Any determination that any provision of
this Agreement may be, or is, unenforceable shall not affect the
enforceability of the remainder of this Agreement.
15. Headings. The section headings in this Agreement have
been inserted as a matter of convenience of reference and are not to be deemed
to be part of this Agreement.
16. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which shall constitute but one and the same instrument.
17. Third Party Beneficiaries. This Agreement has been
and is made solely for the benefit of the Offerors, you and the other
Indemnified Parties referred to in Section 6 hereof and their respective
successors, heirs, personal representatives and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement.
18. Advertisements. The Offerors agree that you shall
have the right to place advertisements in financial and other newspapers and
journals at your own expense describing your services to the Offerors
hereunder; provided the publication of such advertisements shall comply with
applicable law.
19. Modification. This Agreement may not be modified or
amended except in writing, duly executed by the parties hereto.
20. Further Agreements. This Agreement does not
constitute any agreement, express or implied, on the part of you or any
commitment by you to underwrite, purchase, place, or cause the placement of
any securities or indebtedness.
If the foregoing terms correctly set forth our agreement,
please confirm this by signing and returning a duplicate copy of this letter.
Thereupon, this letter, as signed in counterpart, shall constitute our
agreement on the subject matter herein.
SUNAMERICA, INC.
By:________________________________
Name:
Title:
SUNAMERICA CAPITAL TRUST I,
a Delaware statutory business trust
BY: SUNAMERICA, INC., sponsor
By:________________________________
Name:
Title:
Confirmed and agreed to as
of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:________________________________
Name:
Title:
Investment Banking Group
Appendix A
(1) The favorable opinion of Piper & Marbury to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Maryland; and the Company has the corporate power under
the laws of the State of Maryland and under its charter to own,
lease and operate its properties and to conduct its business as
described in the Offer Materials.
(ii) This Agreement, the Declaration, the Indenture, the
Debentures and the Guarantee have been duly authorized and
executed for delivery by the Company.
(iii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Declaration, the Indenture, the Debentures and the
Guarantee will not contravene any provision of any material
applicable law or the articles of incorporation or bylaws of the
Company (excluding the securities or Blue Sky laws of the State of
Maryland, as to which no opinion is expressed).
(2) The favorable opinion of Susan L. Harris, Esq., Vice
President and General Counsel - Corporate Affairs of the Company, to the
effect that:
(i) To the best of such counsel's knowledge and information,
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify
or be in good standing would not have a material adverse effect on
the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries, considered as one
enterprise.
(ii) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation and has the corporate
power and authority to own, lease and operate its properties and
to conduct its business as presently conducted and as described in
the Offer Materials. Nothing has come to the attention of such
counsel to lead such counsel to believe that any of Sun Life
Insurance Company of America, Anchor National Life Insurance
Company or SunAmerica Asset Management Corp. is not duly qualified
as a foreign corporation to transact business or is not in good
standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries considered as one
enterprise. To the best of such counsel's knowledge and
information, all of the issued and outstanding capital stock of
each Subsidiary is owned (except for directors qualifying shares),
directly or through subsidiaries, by the Company, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(iii) The registration statement relating to the Offer (the
"Registration Statement") is effective under the Securities Act
and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act or proceedings
therefor initiated or threatened by the Commission.
(iv) At the time the Registration Statement became effective
and on the date hereof, the Registration Statement (other than the
financial statements, supporting schedules and other financial data
included or incorporated by reference therein and that part of the
Registration Statement that constitutes the Form T-1, as to which
no opinion need be rendered) appeared on its face to be
appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and regulations
promulgated thereunder.
(v) Each document filed pursuant to the Exchange Act and
incorporated by reference in the prospectus included in the
Registration Statement at the time it became effective (the
"Prospectus"), or that is otherwise delivered to holders of Target
Securities, at the time it was filed or last amended (other than
financial statements, supporting schedules and other financial
data included or incorporated by reference therein, as to which no
opinion need be rendered), appeared on its face to be
appropriately responsive in all material respects to the
applicable requirements of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder.
(vi) No authorization, consent or approval of, or other
order by, any court or administrative or governmental authority or
agency is required in connection with the Offer, except as have
been obtained.
(vii) To the best of such counsel's knowledge and
information, there are no statutes or regulations required to be
described in the Registration Statement or the Prospectus which
are not described as required and there are no legal or
governmental proceedings pending or threatened which are required
to be disclosed in the Registration Statement, other than those
disclosed therein.
(viii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred
to therein or filed as exhibits thereto, the descriptions thereof
or references thereto are correct and, to the best of such
counsel's knowledge and information, no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so
described, referred to or filed, which default could have a
material adverse effect on the Partnership or the Company and its
subsidiaries considered as one enterprise.
(ix) To the best of such counsel's knowledge and
information, the execution and delivery of this Agreement, the
Declaration, the Indenture, the Debentures and the Guarantee and
the consummation of the transactions contemplated herein and in the
Offer Materials will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Trust, the Company or any of the Subsidiaries pursuant to, any
material contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Trust, the Company or any
of the Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Trust, the
Company or any of the Subsidiaries is subject, except for a
conflict, breach, default, lien, charge or encumbrance which would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the Trust or the
Company and its subsidiaries considered as one enterprise nor will
such action result in any violation of the provisions of the
respective Declaration, charter or by-laws of the Trust, the
Company and the Subsidiaries, as applicable, or any material
applicable law, administrative regulation or administrative or
court decree.
In giving such opinion, such counsel may rely, as to matters
governed by laws other than the laws of the State of California
and the Federal law of the United States of America, on an opinion
or opinions of Davis Polk & Wardwell, Richards, Layton & Finger
and Piper & Marbury, so long as each such opinion shall be dated
as of such date and shall expressly permit the dealer manager to
rely thereon as if such opinion were addressed to the dealer
manager.
(3) The favorable opinion of Davis Polk & Wardwell with respect
to the matters set forth in (iii), (iv) (but not with respect to any documents
incorporated by reference) and (vi) (solely with respect to Federal law and
the laws of the State of New York) of subsection (2) of this Section and to
the effect that:
(i) The statements in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Junior Subordinated Debentures," "Description of the Guarantee"
and "Taxation," insofar as such statements constitute summaries of
the legal matters or documents referred to therein, have been
reviewed by such counsel and fairly summarize the matters referred
to therein.
(ii) The Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and, assuming due
authorization, execution and delivery by the Company, each of the
Indenture and the Debentures are a valid and binding agreement of
the Company, enforceable in accordance with its terms except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (b) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(iii) The Preferred Securities, the Debentures
and the Guarantee conform in all material respects to the
description thereof contained in Prospectus and the Registration
Statement.
(iv) Neither of the Offerors is an "investment company" or a
company "controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
In giving such opinion, such counsel may rely, as to matters
governed by laws other than the laws of the State of New York and
the Federal law of the United States of America, on an opinion or
opinions of Piper & Marbury and Richards, Layton & Finger so long
as each such opinion shall be dated as of such date and shall
expressly permit the dealer manager to rely thereon as if such
opinion were addressed to the dealer manager.
(4) The favorable opinion of Richards, Layton & Finger to the
effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act and has the business trust power and authority to
conduct its business as described in the Prospectus.
(ii) Assuming due authorization, execution and
delivery of the Declaration by the Company and the Trustees, the
Declaration is a legal, valid and binding agreement of the
Company and the Trustees, enforceable against the Company and
the Trustees in accordance with its terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (b)
the availability of equitable remedies may be limited by
equitable principles of general applicability (including
applicable law relating to fiduciary duties).
(iii) Under the Declaration and the Delaware
Act, the execution and delivery of this Agreement by the Trust,
and the performance by the Trust of its obligations hereunder,
have been duly authorized by all business trust action on the part
of the Trust.
(iv) The Preferred Securities have been duly authorized by
the Declaration and are duly and validly issued and, subject to
certain obligations set forth in the Declaration to pay taxes and
provide indemnity, fully paid and nonassessable beneficial
interests in the assets of the Trust. The holders of Preferred
Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit.
(v) Under the Declaration and the Delaware Act, the issuance
of the Preferred Securities is not subject to preemptive rights.
(5) Susan L. Harris, Esq. and Davis Polk & Wardwell shall each
additionally state that they have participated in conferences with officers
and other representatives of the Trust and the Company, and representatives of
the independent public accountants for the Company, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although they are not passing upon, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, and they have not
made any independent check or verification thereof, on the basis of the
foregoing, nothing has come to their attention that would lead them to believe
that the Registration Statement (except for (i) financial statements and other
financial data included or incorporated by reference therein, (ii) that part
of the Registration Statement that constitutes the Form T-1 and (iii) in the
case of Davis Polk & Wardwell only, any of the documents incorporated or
deemed to be incorporated by reference therein), at the time it became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for (i)
financial statements and other financial data included or incorporated by
reference therein, (ii) that part of the Registration Statement that
constitutes the Form T-1 and (iii) in the case of Davis Polk & Wardwell only,
any of the documents incorporated or deemed to be incorporated by reference
therein), at the time the Registration Statement became effective or at the
time of consummation of each Offer, included an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
DECLARATION OF TRUST, dated as of March , 1995, between
SunAmerica Inc., a Maryland corporation, as Sponsor, and James R. Belardi,
Scott Richland, Scott L. Robinson, The Bank of New York, a New York banking
corporation, and The Bank of New York (Delaware), a Delaware banking
corporation, not in their individual capacities but solely as Trustees. The
Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby shall be known as "SunAmerica
Capital Trust I", in which name the Trustees, or the Sponsor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets
over to the Trustees the sum of $10. The Trustees hereby acknowledge receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Sponsor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq. (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State
in the form attached hereto.
3. The Sponsor and the Trustees will enter into an amended and
restated Declaration of Trust, satisfactory to each such party and
substantially in the form included as Exhibit 4.5 to the 1933 Act Registration
Statement referred to below, to provide for the contemplated operation of the
Trust created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Declaration of Trust, the Trustees shall not have any duty
or obligation hereunder or with respect of the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior to
such execution and delivery any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct
the Sponsor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-4 (File Nos. 33-56961 and
33-56961-01) (the "1933 Act Registration Statement") including Amendment No. 3
thereto and any further pre-effective or post-effective amendments to such
Registration Statement, relating to the registration under the Securities Act
of 1933, as amended, of the Preferred Securities of the Trust, (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including all pre-effective and post-effective amendments thereto) relating
to the registration of the Preferred Securities of the Trust under Section
12(b) of the Securities Exchange Act of 1934, as amended and (c) an Issuer
Tender Offer Statement on Schedule 13E-4 and any other tender offer statement
required to be filed by the Trust with the Commission (including, if
necessary, Schedule 14D-1) relating to the exchange offer (the "Offer")
described in the 1933 Act Registration (collectively, the "Tender Offer
Schedules") and any amendment or supplement thereto; (ii) to file with the New
York Stock Exchange and execute on behalf of the Trust a listing application
and all other applications, statements, certificates, agreements and other
instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on the New York Stock Exchange; (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable and (iv) to execute on behalf of the Trust that certain Dealer
Manager Agreement among the Trust, the Sponsor and Merrill Lynch, Pierce,
Fenner & Smith Incorporated relating to the Offer, substantially in the form
included as Exhibit 1.1 to the 1933 Act Registration Statement. In the event
that any filing referred to in clauses (i)-(iii) above is required by the
rules and regulations of the Commission, the New York Stock Exchange or state
securities or blue sky laws, to be executed on behalf of the Trust by the
Trustees, James R. Belardi, Scott Richland and Scott L. Robinson, in their
capacities as Trustees of the Trust, are hereby authorized and directed to
join in any such filing and to execute on behalf of the Trust any and all of
the foregoing, it being understood that The Bank of New York and The Bank of
New York (Delaware), in their capacities as Trustees of the Trust, shall not
be required to join in any such filing or execute on behalf of the Trust any
such document unless required by the rules and regulations of the Commission,
the New York Stock Exchange or state securities or blue sky laws. In
connection with all of the foregoing, the Sponsor and each Trustee, solely in
its capacity as Trustee of the Trust, hereby constitutes and appoints Eli
Broad, Jay S. Wintrob, Susan L. Harris and James M. Lurie, and each of them,
as his, her or its, as the case may be, true and lawful attorneys-in-fact, and
agents, with full power of substitution and resubstitution, for the Sponsor or
such Trustee or in the Sponsor's or such Trustee's name, place and stead, in
any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement, the 1934
Act Registration Statement and the Tender Offer Schedules and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as the Sponsor or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees initially shall be five (5) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor which may increase
or decrease the number of Trustees; provided, however, that the number of
Trustees shall in no event be less than five (5); and provided, further that
to the extent required by the Business Trust Act, one Trustee shall either be
a natural person who is a resident of the State of Delaware or, if not a
natural person, an entity which has its principal place of business in the
State of Delaware. Subject to the foregoing, the Sponsor is entitled to
appoint or remove without cause any Trustee at any time. The Trustees may
resign upon thirty days prior notice to the Sponsor.
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration of Trust to be duly executed as of the day and year first above
written.
SunAmerica Inc.,
as Sponsor
By:_____________________
Name:
Title:
The Bank of New York,
not in its individual capacity
but solely as Trustee
By:___________________________
Name:
Title:
The Bank of New York (Delaware),
not in its individual capacity
but solely as Trustee
By:___________________________
Name:
Title:
______________________________
James R. Belardi,
not in his individual capacity
but solely as Trustee
_____________________________
Scott Richland,
not in his individual capacity
but solely as Trustee
______________________________
Scott L. Robinson,
not in his individual capacity
but solely as Trustee
CERTIFICATE OF TRUST
OF
SUNAMERICA CAPITAL TRUST I
This Certificate of Trust of SunAmerica Capital Trust I (the
"Trust"), dated March , 1995, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del.C. Section 3801 et seg.).
1. Name. The name of the business trust formed hereby is
SunAmerica Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York,
as trustee
By:_________________________
Name:
Title:
The Bank of New York (Delaware),
as trustee
By:________________________
Name:
Title:
________________________
James R. Belardi,
as trustee
_______________________
Scott Richland,
as trustee
________________________
Scott L. Robinson,
as trustee
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SunAmerica Capital Trust I
March __, 1995
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of March __, 1995 by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"),
SunAmerica Inc., a Maryland corporation, as trust sponsor ("SunAmerica" or the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and the Trustees entered into a
Declaration of Trust dated as of March __, 1995 (the "Original Declaration")
in order to establish a statutory business trust (the "Trust") under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust")
of the Trust was filed with the office of the Secretary of State of the State
of Delaware on March __, 1995;
WHEREAS, the Trustees and the Sponsor desire to continue the
Trust pursuant to the Business Trust Act for the purpose of, as described more
fully in Section 2.3 hereof, (i) issuing Preferred Securities (as defined
herein) representing undivided beneficial interests in the assets of the Trust
in exchange for Series B Preferred Stock (as hereinafter defined) of
SunAmerica pursuant to the Offer (as hereinafter defined) and in consideration
for the deposit by SunAmerica as trust assets of Debentures (as hereinafter
defined) of SunAmerica issued under the Indenture (as hereinafter defined) and
(ii) issuing and selling Common Securities (as defined herein) representing
undivided beneficial interests in the assets of the Trust to SunAmerica in
exchange for cash and investing the proceeds thereof in additional Debentures
of SunAmerica issued under the Indenture to be held as assets of the Trust; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets referred to in clauses
(i) and (ii) of the previous Whereas clause contributed to or purchased by the
Trust will be held in trust for the benefit of the Holders (as defined herein)
from time to time, of the Certificates (as defined herein) representing
undivided beneficial interests issued hereunder, subject to the provisions of
this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Amended and Restated Declaration of Trust (including Exhibits A, B
and C hereto (the "Exhibits")) as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; and
(e) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 8.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth in the second
Whereas clause above.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting
as depository for the Preferred Securities and in whose name or in the name of
a nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time or any successor legislation. A reference to a specific section
((Sec.)) of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 6.1(b).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
"Covered Person" means (i) any employee or agent of the Trust
or its Affiliates or any Special Representative Preferred, (ii) any officers,
directors, shareholders, employees, representatives or agents of SunAmerica
and its Affiliates and (iii) the Holders from time to time of the Securities.
"Dealer Manager Agreement" means the dealer manager agreement
entered into among SunAmerica, the Trust and Merrill Lynch, Pierce, Fenner &
Smith Incorporated with respect to, among other things, the Offer and the
Preferred Securities.
"Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Indenture until a successor is appointed thereunder and
thereafter means such successor trustee.
"Debentures" means the series of Junior Subordinated Debentures
issued by SunAmerica under the Indenture and entitled the "__% Junior
Subordinated Debentures due 2044".
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 8.4.
"Delaware Trustee" has the meaning set forth in Section 4.1.
"Distribution" means a distribution payable to Holders of
Securities of amounts of interest (including Compounded Interest (as defined
in the Debentures) and interest payable in respect of the period from March 15,
1995 to the Expiration Date), premium and principal paid by SunAmerica in
respect of the Debentures held by the Property Trustee or, if no Property
Trustee is required under the provisions of this Declaration, by the Trust.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Expiration Date" has the meaning set forth in the Offering
Circular/Prospectus.
"Fiscal Year" has the meaning specified in Section 10.1.
"Global Certificate" has the meaning specified in Section 8.4.
"Holder" means the Person in whose name a Certificate
representing a Security is registered.
"Indemnified Person" means any Trustee, any
Special Representative Preferred, any Affiliate of any Trustee or any Special
Representative Preferred or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, or any Special
Representative Preferred, or any employee or agent of the Trust or its
Affiliates.
"Indenture" means the Indenture dated as of March 15, 1995
between SunAmerica and the Debenture Trustee and the First Supplemental
Indenture thereto dated such date pursuant to which the Debentures are to be
issued.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"Liquidation Distribution" has the meaning set forth in
Exhibits B and C hereto establishing the terms of the Securities.
"Majority in liquidation amount of the Securities" means,
except as provided in the penultimate paragraph of paragraph 5 of Exhibit B
hereto, Holder(s) of Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption or maturity, plus accrued and unpaid Distributions to the
date upon which the voting percentages are determined) represents more than
50% of the liquidation amount of all Securities of such class.
"Offer" means the offer by the Trust to exchange Preferred
Securities of the Trust for outstanding Series B Preferred Stock of SunAmerica
in consideration for the deposit by SunAmerica as trust assets of Debentures
issued under the Indenture, all as described in the Offering
Circular/Prospectus.
"Offering Circular/Prospectus" means the Offering
Circular/Prospectus dated March __, 1995 relating to the Offer.
"Paying Agent" has the meaning specified in Section 8.7.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement to be dated
as of March __, 1995 of SunAmerica in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section
6.1(b).
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Annex I to
Exhibit B.
"Property Trustee" means the Trustee meeting the requirements
of Rule 3a-7 and having the duties set forth for the Property Trustee herein.
"Property Account" has the meaning specified in Section
2.8(c)(i).
"Quorum" means a majority of the Regular Trustees.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned
subsidiary of SunAmerica or any other Person which owns, directly or
indirectly, 100% of the outstanding voting securities of SunAmerica.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or
any successor rule thereunder.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Series B Preferred Stock" means the 9-1/4% Preferred Stock,
Series B of SunAmerica.
"66-2/3% in liquidation amount of the Securities" means, except
as provided in the penultimate paragraph of paragraph 5 of Exhibit B hereto,
Holder(s) of Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption of maturity, plus accrued and unpaid Distributions to the
date upon which the voting percentages are determined) represents 66-2/3% or
more of the liquidation amount of all Securities of such class.
"Special Representative Preferred" means a special
representative of the Trust and the Holders of the Preferred Securities
appointed in accordance with the terms of the Preferred Securities to enforce
the Trust's, or for so long as there is a Property Trustee, the Property
Trustee's creditor rights under the Debentures against SunAmerica, the
obligations undertaken by SunAmerica under the Preferred Guarantee and the
rights of the Holders of the Preferred Securities to receive Distributions.
"Successor Property Trustee" has the meaning specified in
Section 2.8(a).
"10% in liquidation amount of the Securities" means, except as
provided in the penultimate paragraph of paragraph 5 of Exhibit B hereto,
Holder(s) of Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption or maturity, plus accrued and unpaid Distributions to the
date upon which the voting percentages are determined) represents 10% or more
of the liquidation amount of all Securities of such class.
"Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust continued by this Declaration is named "SunAmerica
Capital Trust I" as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Securities. The Trust's
activities may be conducted under the name of the Trust or any other name
deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022.
Upon ten days written notice to the Holders, the Regular Trustees may change
the location of the Trust's principal office. The name of the registered agent
and office of the Trust in the State of Delaware is The Bank of New York
(Delaware), White Clay Center, Route 273, Newark, Delaware 19711. At any
time, the Regular Trustees may designate another registered agent and/or
registered office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a)(i) to
issue Preferred Securities in exchange for Series B Preferred Stock pursuant
to the Offer and in consideration for the deposit by SunAmerica as trust assets
of Debentures issued under the Indenture having an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Securities and to
deliver such Series B Preferred Stock to SunAmerica in connection with and at
the time of such deposit, (ii) to enter into such agreements and arrangements
as may be necessary in connection with the Offer and to take all action, and
exercise such discretion, as may be necessary or desirable in connection with
the Offer and to file such registration statements or make such other filings
under the Securities Act, the Exchange Act or state securities or "Blue Sky"
laws as may be necessary or desirable in connection with the Offer and the
issuance of the Preferred Securities, and (iii) to issue and sell Common
Securities to SunAmerica for cash and use the proceeds of such sale to
purchase as trust assets an equal aggregate principal amount of additional
Debentures issued under the Indenture, and (b) except as otherwise limited
herein, to engage in only those other activities necessary, or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, other than as permitted herein, pledge any of its
assets or at any time the Securities are outstanding, otherwise undertake (or
permit to be undertaken) any activity that would result in or cause the Trust
to be treated as anything other than a grantor trust for United States federal
income tax purposes.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 2.5 Title to Property of the Trust.
Except as provided in Section 2.8 with respect to the
Debentures and the Property Account or unless otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders of Certificates shall not have legal title to any part of
the assets of the Trust, but shall have an individual undivided beneficial
interest in the assets of the Trust.
SECTION 2.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust, and shall cause the Trust, to engage in the
following activities:
(a) to issue Preferred Securities and Common Securities, in
each case in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, there shall be no
interests in the Trust other than the Securities and the issuance of
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities;
(b) in connection with the Offer and the issuance of the
Preferred Securities, to effect or cause to be effected the filings, and to
execute or cause to be executed, the documents, set forth in Section 2.11.
(c) to acquire as trust assets Debentures upon consummation of
the Offer in connection with the exchange of Preferred Securities for Series B
Preferred Stock pursuant to the Offer and to acquire as trust assets additional
Debentures with the proceeds of the sale of the Common Securities; provided,
however, that for so long as there is a Property Trustee, the Regular Trustees
shall cause legal title to all of the Debentures to be vested in, and the
Debentures to be held of record in the name of, the Property Trustee for the
benefit of the Holders of the Preferred Securities and the Common Securities;
(d) unless there shall be a Property Trustee, to make
Distributions;
(e) unless there shall be a Property Trustee:
(i) to redeem the Preferred Securities and Common
Securities in accordance with their respective terms to the extent
the Debentures are redeemed or mature;
(ii) to distribute Debentures to Holders of Securities in
exchange for Securities upon the occurrence of certain special events
arising from a change in law or a change in legal interpretation or
other specified circumstances, as set forth in Exhibits B and C
hereto establishing the terms of the Securities;
(iii) to establish, maintain and have exclusive control
over the Property Account; and
(iv) for the benefit of Holders of the Securities, to
enforce the Trust's creditor rights under the Indenture with respect
to the Debentures if a Special Representative Preferred has not been
appointed as provided in this Declaration.
(f) to cause the Trust to enter into the Dealer Manager
Agreement and such other agreements and arrangements as may be necessary or
desirable in connection with the Offer and the consummation thereof, and to
take all action, and exercise all discretion, as may be necessary or desirable
in connection with the Offer or the consummation thereof;
(g) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including with
respect to Distributions, voting rights, redemptions, and exchanges, and, to
issue relevant notices to Holders of the Preferred Securities and Common
Securities as to such actions and applicable record dates; and, except for so
long as there shall be a Property Trustee, to make all required payments to
Holders of Common Securities and Preferred Securities as the Trust's paying
agent;
(h) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust;
(i) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and pay reasonable compensation for such services;
(j) to incur expenses which are necessary or incidental to
carry out any of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, transfer
agent for the Securities;
(l) to take all actions and perform such duties as may be
required of the Regular Trustee pursuant to the terms of the Securities set
forth in Exhibits B and C hereto;
(m) execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(n) to act in accordance with any written instrument given by
a Special Representative Preferred which is within the scope of the Special
Representative Preferred's rights under the terms of the Preferred Guarantee
and, unless there shall be a Property Trustee, under the terms of the
Preferred Securities;
(o) unless otherwise directed in a written instrument given by
a Special Representative Preferred, to hold the Preferred Guarantee for the
benefit of the Holders of the Preferred Securities;
(p) to take all action which may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust has been
created;
(q) to take all action, not inconsistent with this
Declaration or with applicable law, which the Regular Trustees determine in
their discretion to be reasonable and necessary or desirable in carrying out
the activities of the Trust as set out in this Section 2.6, in order that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States
federal income tax purposes as an association taxable as a
corporation or a partnership and will be treated as a grantor trust
for United States federal income tax purposes; and
(iii) the Trust comply with any requirements imposed by any
taxing authority on holders of instruments treated as indebtedness
for United States federal income tax purposes;
provided that such action does not adversely affect the interests of Holders;
and
(r) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 2.6 in a manner which is consistent with the purposes and functions of
the Trust set out in Section 2.3.
SECTION 2.7 Prohibition of Actions by Trust and Trustees.
Notwithstanding any other provision of this Declaration, the
Trustees (including the Property Trustee) shall have no right or power to do
any act or thing contrary to or inconsistent with the actions of any duly
appointed Special Representative Preferred taken in accordance with the terms
of the Preferred Securities.
The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Property Trustee) shall not:
(a) invest any proceeds received by the Trust from holding
the Debentures but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the
Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h) (i) direct the time, method and place of conducting any
proceeding or any remedy available to the Debenture Trustee, or executing any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, (iii) exercise any right to rescind or annul any declaration
that the principal of all of the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, unless in the case of this
clause (h) the Property Trustee or, if no Property Trustee is required under
the provisions of this Declaration, the Regular Trustees, shall have received
an unqualified opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that such action will not
cause the Trust to be classified for United States federal income tax purposes
as an association taxable as a corporation or partnership or have that result
and that the Trust will continue to be classified as a grantor trust for
United States federal income tax purposes.
SECTION 2.8 Powers and Duties of the Property Trustee.
For so long as there is a Property Trustee:
(a) the legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee (a "Successor Property Trustee") in
accordance with Article IV. Such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered.
(b) the Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or the Delaware Trustee.
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
bank account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and on the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Account and, without any further acts of the
Property Trustee or the Regular Trustees, promptly make payments to
the Holders of the Preferred Securities and Common Securities from
the Property Account in accordance with Section 5.1. Funds in the
Property Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Account shall be an
account which is maintained with a banking institution whose long
term unsecured indebtedness is rated by a "nationally recognized
statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act, at least equal
to (but in no event less than "A" or the equivalent) the rating
assigned to the Preferred Securities by a nationally recognized
statistical rating organization;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature;
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect promptly the distribution
pursuant to terms of the Securities of Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law
or a change in legal interpretation or other specified circumstances;
and
(iv) for the benefit of the Holders of the Securities, enforce
its creditor rights under the Indenture with respect to the
Debentures whether or not a Special Representative Preferred has been
appointed as provided in this Declaration or, if so appointed, has
failed to direct the Property Trustee to enforce such rights.
(d) the Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant
to the terms of the Securities set forth in Exhibits B and C hereto.
(e) all moneys deposited in the Property Account and all
Debentures held by the Property Trustee for the benefit of the Holders of the
Securities will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of, or for the benefit of that Property Trustee
or its agents or their creditors.
(f) the Property Trustee shall act in accordance with any
written instrument given by a Special Representative Preferred which is within
the scope of the Special Representative Preferred's rights under the terms of
the Preferred Securities and the Preferred Guarantee.
(g) the Property Trustee shall not resign as a Trustee unless
either:
(i) the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to
the Holders of Securities pursuant to the terms of
the Securities; or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with
Section 4.1.
(h) subject to this Section 2.8, the Property Trustee shall
have none of the powers or the authority of the Regular Trustees set forth in
Section 2.6.
(i) The Property Trustee shall exercise the powers, duties and
rights set forth in this Section 2.8 and Section 2.10 in a manner which is
consistent with the purposes and functions of the Trust set out in Section 2.3.
SECTION 2.9 Delaware Trustee.
Notwithstanding any other provision of this Declaration the
Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Regular
Trustees and the Property Trustee described in this Declaration. The Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 2.10 Certain Rights of the Property Trustee
and the Delaware Trustee.
(a) The Property Trustee and the Delaware Trustee undertake
to perform such duties and only such duties as are specifically set forth in
this Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee or the Delaware Trustee.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that the
Property Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written
direction of any duly appointed Special Representative Preferred, relating to
the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee.
(c) No provision of this Declaration shall require the
Property Trustee or the Delaware Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(d) Whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Property Trustee may, in the absence of bad faith on its part and, if the
Trust is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, rely upon a certificate
from the Regular Trustees, a Special Representative Preferred, or the Sponsor,
as the case may be.
(e) The Property Trustee may consult with counsel selected by
it in good faith and with due care and the written advice or opinion of such
counsel with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon and in accordance with such
advice and opinion.
(f) The Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
by it in good faith and with due care.
SECTION 2.11 Registration Statement and Related Matters.
In accordance with the Original Declaration, SunAmerica and the
Trustees have authorized and directed, and hereby confirm the authorization
of, SunAmerica, as the sponsor of the Trust, (i) to file with the Commission
and execute, in each case on behalf of the Trust, (a) the Registration
Statement on Form S-4 (File Nos. 33-56961 and 33-56961-01) (the "1933 Act
Registration Statement") including Amendment No. 3 thereto and any further
pre-effective or post-effective amendments to such Registration Statement,
relating to the registration under the Securities Act of the Preferred
Securities of the Trust, (b) a Registration Statement on Form 8-A or other
appropriate form (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of
the Exchange Act and (c) an Issuer Tender Offer Statement on Schedule 13E-4
and any other tender offer statement required to be filed by the Trust with
the Commission (including, if necessary, Schedule 14D-1) relating to the Offer
(collectively, the "Tender Offer Schedules") and any amendment or supplement
thereto; (ii) to file with the New York Stock Exchange and execute on behalf
of the Trust a listing application and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on the New York Stock
Exchange; (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or "Blue
Sky" laws of such jurisdictions as SunAmerica on behalf of the Trust, may deem
necessary or desirable and (iv) to execute on behalf of the Trust that certain
Dealer Manager Agreement among the Trust, SunAmerica and Merrill Lynch,
Pierce, Fenner & Smith, Inc. relating to the Offer, substantially in the form
included as Exhibit 1.1 to the 1933 Act Registration Statement. In the event
that any filing referred to in clauses (i)-(iii) above is required by the
rules and regulations of the Commission, the New York Stock Exchange or state
securities or blue sky laws, to be executed on behalf of the Trust by the
Trustees, the Regular Trustees, in their capacities as Trustees of the Trust,
are hereby authorized and directed to join in any such filing and to execute
on behalf of the Trust any and all of the foregoing, it being understood that
the Property Trustee and the Delaware Trustee, in their capacities as Trustees
of the Trust, shall not be required to join in any such filing or execute on
behalf of the Trust any such document unless required by the rules and
regulations of the Commission, the New York Stock Exchange or state securities
or blue sky laws. In connection with all of the foregoing, SunAmerica and
each Trustee, solely in its capacity as Trustee of the Trust, have constituted
and appointed, and hereby confirm the appointment of, Eli Broad, Jay S.
Wintrob, Susan L. Harris and James M. Lurie, and each of them, as his, her or
its, as the case may be, true and lawful attorneys-in-fact, and agents, with
full power of substitution and resubstitution, for SunAmerica or such Trustee
or in SunAmerica's or such Trustee's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement, the 1934 Act Registration
Statement and the Tender Offer Schedules and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as SunAmerica or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
SECTION 2.12 Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State
of the State of Delaware on March __, 1995 is attached hereto as Exhibit A.
On or after the date of execution of this Declaration, the Trustees shall cause
the filing with the Secretary of State of the State of Delaware of such
amendments to the Certificate of Trust as the Trustees shall deem necessary or
desirable.
SECTION 2.13 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Article VII hereof, shall have existence until December 31, 2044.
ARTICLE III
SPONSOR
SECTION 3.1 Purchase of Common Securities.
The Sponsor will purchase Common Securities issued by the Trust
at the same time as the Preferred Securities are issued in exchange for Series
B Preferred Stock pursuant to the Offer, such purchase to be in an amount
equal to 3% of the sum of (i) the aggregate stated preference amount payable
on redemption or maturity of the Preferred Securities issued in exchange for
Series B Preferred Stock pursuant to the Offer and (ii) the proceeds derived
from the sale of the Common Securities. The purchase price paid by the
Sponsor for the Common Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the Trust.
SECTION 3.2 Expenses.
(a) The Sponsor shall be responsible for and shall pay for
all (and the Trust shall not be obligated to pay, directly or indirectly, for
any) debts and obligations (other than with respect to the Securities) and all
costs and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization of the Trust, the issuance of the
Preferred Securities pursuant to the Offer, the fees and expenses of any
Special Representative Preferred, the fees and expenses (including reasonable
counsel fees and expenses) of the Property Trustee and the Delaware Trustee,
the costs and expenses relating to the operation of the Trust, including
without limitation, costs and expenses of accountants, attorneys, statistical
or bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the disposition of Trust
assets).
(b) The Sponsor will pay any and all taxes (other than United
States withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 3.2 shall be
for the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice hereof. Any such Creditor may
enforce the Sponsor's obligations under this Section 3.2 directly against the
Sponsor and the Sponsor irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to
the provisions of this Section 3.2.
ARTICLE IV
TRUSTEES
SECTION 4.1 Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At
any time (i) before the issuance of the Securities, the Sponsor may, by
written instrument, increase or decrease the number of, and appoint, remove
and replace the, Trustees, and (ii) after the issuance of the Securities, the
number of Trustees may be increased or decreased solely by, and Trustees may
be appointed, removed or replaced solely by, vote of Holders of Common
Securities representing a Majority in liquidation amount of the Common
Securities voting as a class; provided that in any case:
(1) the number of Trustees shall be at least five (5)
unless (x) the Trustee that acts as the Property Trustee also
acts as the Delaware Trustee or (y) subject to Section 4.1(e),
no Trustee is required to act as Property Trustee in accordance
with this Section 4.1, in which cases the number of Trustees
shall be at least three (3);
(2) at least a majority of the Trustees shall at all
times be officers, directors or employees of SunAmerica;
(3) if required by the Business Trust Act, one Trustee
(the "Delaware Trustee") shall be either a natural person who
is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware, except that if there is a Property
Trustee and such Property Trustee has its principal place of
business in the State of Delaware, then the Property Trustee
shall also be the Delaware Trustee and Section 2.9 shall have no
application; and
(4) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the
extent Rule 3a-7 requires for ownership purposes use by the
Trust of a trustee having certain qualifications, one Trustee
shall be a Person who possesses such qualifications and which
shall act as the Property Trustee.
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed
representatives.
(b) The initial Regular Trustees shall be:
James R. Belardi
Scott Richland
Scott L. Robinson
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
(c) The initial Trustee, which for so long as the Trust is
excluded from the definition of an Investment Company solely by reason of Rule
3a-7 shall be the Property Trustee, shall be The Bank of New York, whose
address is as set forth in Section 12.1(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is The Bank of New York (Delaware), whose address is as set forth in
Section 12.1(c).
(e) Unless a Successor Property Trustee is to be appointed in
accordance with this Declaration, prior to any removal of the Property
Trustee, the Regular Trustees shall have received an opinion of nationally
recognized independent counsel experienced in practice under the Investment
Company Act to the effect that the Trust is excluded from the definition of an
Investment Company other than by reason of Rule 3a-7 or, if excluded from the
definition of an Investment Company solely by reason of Rule 3a-7, Rule 3a-7
does not require use by the Trust of a Trustee having certain qualifications.
(f) Any action taken by Holders of Common Securities pursuant
to this Article IV shall be taken at a meeting of Holders of Common Securities
convened for such purpose or by written consent as provided in Section 11.2
(g) No amendment may be made to this Section 4.1 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees, except with the consent of each Holder of Common
Securities.
SECTION 4.2 Appointment, Removal and Resignation of
Trustees.
Trustees may be appointed or removed without cause at any time
(i) until the issuance of the Securities, by the Sponsor and (ii) after the
issuance of the Securities, by vote of Holders of Common Securities
representing a Majority in liquidation amount of the Common Securities;
provided, however, if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7, the Sponsor or the Holders
of Common Securities, as applicable, may not remove the Trustee that serves as
Property Trustee until a Successor Property Trustee possessing the
qualifications required by Rule 3a-7 has been appointed and has accepted such
appointment, and provided, further, the Trustee that acts as Delaware Trustee
may not be removed unless another Delaware Trustee has been appointed and
accepted such appointment or the Trustee that acts as Property Trustee also
serves as the Delaware Trustee. A Trustee appointed to office shall hold
office until such Trustee's successor shall have been appointed or until such
Trustee's termination, death, removal or resignation. Any Trustee may resign
(without need for prior or subsequent accounting) by an instrument in writing
signed by such Trustee and delivered to the Sponsor and the remaining
Trustees, which shall take effect upon such delivery or upon such later date
as is specified therein; provided, however, (i) if the Trust is excluded from
the definition of an Investment Company solely by reason of Rule 3a-7, no such
resignation of the Trustee that acts as the Property Trustee shall be
effective until the assets of the Trust have been completely liquidated and
the proceeds thereof distributed to the Holders of the Securities or a
Successor Property Trustee possessing the qualifications required by Rule 3a-7
has been appointed and has accepted such appointment; and (ii) no such
resignation of the Trustee that acts as the Delaware Trustee shall be
effective unless another Delaware Trustee has been appointed and accepted such
appointment or the Trustee that acts as Property Trustee also serves as the
Delaware Trustee.
SECTION 4.3 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 4.1 or if the number of
Trustees is increased pursuant to Section 4.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by a majority of the
Regular Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with the requirements of this Article IV.
SECTION 4.4 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of
a Trustee, or any one of them, shall not operate to annul the Trust. Whenever
a vacancy in the number of Regular Trustees shall occur until such vacancy is
filled as provided in Section 4.3, the Regular Trustees in office, regardless
of their number, shall have all the powers granted to the Regular Trustees and
shall discharge all the duties imposed upon the Regular Trustees by this
Declaration.
SECTION 4.5 Meetings.
Meetings of the Regular Trustees shall be held from time to
time upon the call of any Trustee. Regular meetings of the Regular Trustees
may be held at a time and place fixed by resolution of the Regular Trustees.
Notice of any in-person meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including
by facsimile, with a hard copy by overnight courier) not less than 24 hours
before a meeting. Notices shall contain a brief statement of the time, place
and anticipated purposes of the meeting. The presence (whether in person or
by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for
the express purpose of objecting to the transaction of any activity on the
ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the
unanimous written consent of the Regular Trustees.
SECTION 4.6 Delegation of Power.
(a) Any Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any registration statement or amendment
thereto or other document or schedule filed with the Commission or making any
other governmental filing (including, without limitation to filings referred
to in Section 2.11).
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited
by applicable law or contrary to the provisions of the Trust, as set forth
herein.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1 Distributions.
Holders shall receive periodic Distributions, redemption
payments and liquidation distributions in accordance with the applicable terms
of the relevant Holder's Securities. Distributions shall be made to the
Holders of Preferred Securities and Common Securities in accordance with the
terms of the Securities as set forth in Exhibits B and C hereto. If and to
the extent that SunAmerica makes a payment on the Debentures held by the
Property Trustee or, if no Property Trustee is required under the provisions
of this Declaration, the Trust (the amount of any such payment being a
"Payment Amount"), the Property Trustee or, if no Property Trustee is required
under the provisions of this Declaration, the Regular Trustees shall and are
directed, to promptly make a Distribution of the Payment Amount to Holders.
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall issue on behalf of the Trust
securities representing undivided beneficial interests in the assets of the
Trust in accordance with Section 6.1(b) and for the consideration specified in
Section 2.3.
(b) The Regular Trustees shall issue on behalf of the Trust
one class of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and made
a part of, this Declaration as if specifically set forth herein, and one class
of common securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Securities shall be signed on behalf of the Trust by
the Regular Trustees (or if there are more than two Regular Trustees by any
two of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Security. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Security so signed shall be delivered by the Trust,
such Security nevertheless may be delivered as though the person who signed
such Security had not ceased to be such Regular Trustee; and any Security may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Security, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee.
(d) The consideration received by the Trust for the issuance
of the Preferred Securities shall constitute a contribution to the capital of
the Trust and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
ARTICLE VII
TERMINATION OF TRUST
SECTION 7.1 Termination of Trust.
This Declaration and the Trust shall terminate and be of no
further force or effect when:
(i) all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders of Securities in accordance with the
terms of the Securities; or
(ii) all of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities in
accordance with the terms of the Securities,
and a certificate of cancellation is filed by the Trustees with the Secretary
of State of the State of Delaware.
The provisions of Sections 2.10 and 3.2 and Article IX shall
survive the termination of the Trust.
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration.
Any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.
(b) Subject to this Article VIII, Preferred Securities shall
be freely transferable.
(c) Subject to this Article VIII, SunAmerica and any Related
Party may only transfer Common Securities to SunAmerica or a Related Party
provided that any such transfer shall be subject to the condition that the
transferor shall have obtained either a ruling from the Internal Revenue
Service or an unqualified written opinion addressed to the Trust and delivered
to the Trustees of nationally recognized independent tax counsel experienced in
such matters to the effect that such transfer will not (i) cause the Trust to
be treated as issuing a class of interests in the Trust differing from the
class of interests represented by the Common Securities originally issued to
SunAmerica, (ii) result in the Trust acquiring or disposing of, or being
deemed to have acquired or disposed of, an asset, or (iii) result in or cause
the Trust to be treated as anything other than a grantor trust for United
States Federal income tax purposes.
SECTION 8.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 8.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
SECTION 8.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will
be issued in the form of one or more, fully registered, global Preferred
Security Certificates (each a "Global Certificate") representing the Book
Entry Interests, to be delivered to DTC, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Global Certificates shall initially be
registered on the books and records of the Trust in the name of Cede & Co.,
the nominee of DTC, and no Preferred Security Beneficial Owner will receive a
definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided
in Section 8.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section
8.7:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Preferred Security
Holder and the sole holder of the Global Certificates and, except as
set forth herein or in Rule 3a-7 with respect to the Property Trustee,
shall have no obligation to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 8.4
conflict with any other provisions of this Declaration, the
provisions of this Section 8.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred
Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency will make book
entry transfers among Clearing Agency Participants and receive and
transmit payments of Distributions on the Global Certificates to such
Clearing Agency Participants.
SECTION 8.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until
Definitive Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 8.7, the relevant
Trustees shall give all such notices and communications specified herein to be
given to the Preferred Security Holders to the Clearing Agency, and, except as
set forth herein or in Rule 3a-7 with respect to the Property Trustee, shall
have no obligations to the Preferred Security Beneficial Owners.
SECTION 8.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to the Preferred Securities.
SECTION 8.7 Definitive Preferred Securities Certificates;
Appointment of Paying Agent(s).
If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 8.6 or (ii) the Regular Trustees elect after consultation
with the Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Preferred Securities, then (a) Definitive Preferred
Security Certificates shall be prepared by the Regular Trustees on behalf of
the Trust with respect to such Preferred Securities and (b) subject to the
requirements of Rule 3a-7, the Regular Trustees may authorize one or more
Persons (each, a "Paying Agent") in addition to the Property Trustee to pay
Distributions, redemption payments or liquidation payments on behalf of the
Property Trustee or, if no Property Trustee is required pursuant to the terms
of this Declaration, the Trust with respect to such Preferred Securities. Any
Paying Agent may be removed by the Regular Trustees at any time and, subject
to the requirements of Rule 3a-7, a successor Paying Agent or additional Paying
Agents may be appointed at any time by the Regular Trustees. Upon surrender
of the Global Certificates representing the Book Entry Interests with respect
to the Preferred Securities by the Clearing Agency, accompanied by
registration instructions, the Regular Trustees shall cause Definitive
Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery
of such instructions and each of them may conclusively rely on and shall be
protected in relying on, such instructions. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
as the Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Preferred Securities may be
listed, or to conform to usage.
SECTION 8.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 8.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE IX
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 9.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 9.2 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of gross negligence or willful
misconduct with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 9.2(a).
ARTICLE X
ACCOUNTING
SECTION 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on
the accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax purposes. The books
and records of the Trust, together with a copy of this Declaration and a
certified copy of the Certificate of Trust, or any amendment thereto, shall at
all times be maintained at the principal office of the Trust and shall be open
for inspection for any examination by any Holder or its duly authorized
representative for any purpose reasonably related to its interest in the Trust
during normal business hours.
(b) The Regular Trustees shall, as soon as available after the
end of each Fiscal Year of the Trust, cause to be prepared and mailed to each
Holder of Securities unaudited financial statements of the Trust for such
Fiscal Year, prepared in accordance with generally accepted accounting
principles.
(c) The Regular Trustees shall cause to be prepared and mailed
to each Holder of Securities, an annual United States federal income tax
information statement, on such form as is required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after
the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on such form as is required by the Code, and any other annual
income tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority, such returns to be filed
as soon as practicable after the end of each Fiscal Year of the Trust.
SECTION 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that for so long as
there is a Property Trustee, all payments of funds in respect of the
Debentures held by the Property Trustee shall be made directly to the Property
Account and no other funds from the Trust shall be deposited in the Property
Account. The sole signatories for such accounts shall be designated by the
Regular Trustees provided, however, that if there is a Property Trustee such
Property Trustee shall designate the sole signatories for the account or
accounts maintained by it pursuant to Section 2.8.
SECTION 10.4 Withholding.
The Trust and the Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust
shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Trust shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be
deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction.
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and
only by, a written instrument executed by the Sponsor and the Trustees upon
approval by a majority of the Regular Trustees; provided, however, that (i) no
amendment to this Declaration shall be made unless the Regular Trustees shall
have obtained either a ruling from the Internal Revenue Service or a written
unqualified opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that such amendment will not cause
the Trust to be classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership or have such a result
and to the effect that the Trust will continue to be treated as a grantor
trust for purposes of United States federal income taxation, (ii) at such time
after the Trust has issued any Securities which remain outstanding, any
amendment which would adversely affect the rights, privileges or preferences
of any Holder of Securities may be effected only with such additional
requirements as may be set forth in the terms of such Securities, (iii) Section
3.2, Section 8.1(c) and this Section 11.1 shall not be amended without the
consent of all of the Holders of the Securities, (iv) Article III shall not be
amended without the consent of the Sponsor and (v) the rights of Holders of
Common Securities under Article IV to increase or decrease the number of, and
to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities.
(b) Notwithstanding Section 11.1(a)(ii), this Declaration may
be amended without the consent of the Holders of the Securities to (i) cure
any ambiguity, (ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration, (iii) to add to the covenants, restrictions or obligations of the
Sponsor, and (iv) to conform to any changes in Rule 3a-7 or any change in
interpretation or application of Rule 3a-7 by the Commission.
SECTION 11.2 Meetings of the Holders of Securities;
Action by Written Consent.
(a) Meetings of the Holders of Preferred Securities and/or
Common Securities may be called at any time by the Regular Trustees (or as
provided in the terms of the Securities) to consider and act on any matter on
which Holders of such class of Securities are entitled to act under the terms
of this Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for trading.
The Regular Trustees shall call a meeting of Holders of Preferred Securities
or Common Securities, if directed to do so by Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to all
the Holders of Securities having a right to vote thereat not less
than 7 days nor more than 60 days prior to the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at
a meeting of the Holders of Securities. Any action that may be taken
at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written ballot
submitted to the Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust within the
time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of the Security executing it. Except as
otherwise provided herein or in the terms of the Securities, all
matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if
the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act or this
Declaration the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Regular Trustees on behalf of the Trust may give notice of to the
Holders of the Securities):
SunAmerica Capital Trust I
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Attention: James R. Belardi
Scott Richland
Scott L. Robinson
Trustees
Facsimile No:
(b) if given to the Property Trustee, at the mailing address
of the Property Trustee set forth below (or such other address as the
Property Trustee may give notice of to the Holders of the Securities):
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Facsimile No:
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as the
Delaware Trustee may give notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention:
Facsimile No:
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Attention: Corporate Secretary
Facsimile No:
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware
Trustee shall also be sent to the Trust. All notices shall be deemed to have
been given, when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
SECTION 12.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 12.3 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 12.4 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 12.5 Counterparts.
This Declaration may contain more than one counterpart of the
signature pages and this Declaration may be executed by the affixing of the
signature of the Sponsor and each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
SECTION 12.6 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be
classified for United States federal income tax purposes an association
taxable as a corporation or partnership but be treated as a grantor trust for
United States federal income tax purposes. The provisions of this Declaration
shall be interpreted to further this intention of the parties.
SECTION 12.7 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
SunAmerica Inc.,
as Sponsor
By:___________________
Name:
Title:
________________________
James R. Belardi,
as Trustee
________________________
Scott L. Robinson,
as Trustee
________________________
Scott Richland,
as Trustee
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
The Bank of New York (Delaware),
as Trustee
By:________________________
Name:
Title:
[There personally appeared before me _____ (on behalf of
SunAmerica Inc.) James R. Belardi, Scott Richland, Scott L. Robinson,
__________ (on behalf of The Bank of New York (Delaware)) and __________ (on
behalf of The Bank of New York) who acknowledged the foregoing instrument to be
his or its free act and deed and the free act and deed of SunAmerica Inc. and
the Trustees of SunAmerica Capital Trust I.
Before me,
________________________
Notary Public
My Commission Expires:________________________]
EXHIBIT A
CERTIFICATE OF TRUST
OF
SUNAMERICA CAPITAL TRUST I
THIS Certificate of Trust of SunAmerica Capital Trust I (the
"Trust"), dated March __, 1995, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is SunAmerica Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Trustee
By:________________________
Name:
Title:
The Bank of New York,
as Trustee
By:________________________
Name:
Title:
___________________________
James R. Belardi,
as Trustee
___________________________
Scott Richland,
as Trustee
___________________________
Scott L. Robinson,
as Trustee
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 6.1 of the Amended and Restated Declaration
of Trust of SunAmerica Capital Trust I dated as of , 1995 (as
amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of $[137.5
million ($137,500,000)] and a liquidation amount in the assets of the Trust of
$25 per Preferred Security, are hereby designated as " % Trust Originated
Preferred Securities". The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Annex I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Preferred Securities are listed. The
Preferred Securities shall be issued to former holders of shares of 9 1/4%
Preferred Stock, Series B (the "Series B Preferred"), of SunAmerica Inc.
("SunAmerica") in exchange for such Series B Preferred pursuant to the Offer.
In connection with such Offer and the purchase by SunAmerica of the Common
Securities, SunAmerica will deposit, and the Trust will purchase,
respectively, as trust assets Debentures of SunAmerica having an aggregate
principal amount equal to $_________, and bearing interest at an annual rate
equal to the annual Distribution rate on the Preferred Securities and Common
Securities and having payment and redemption provisions which correspond to
the payment and redemption provisions of the Preferred Securities and Common
Securities.
2. Distributions. (a) Distributions payable on each
Preferred Security will be fixed at a rate per annum of % (the "Coupon
Rate") of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one month will bear interest at the
rate per annum of % thereof (to the extent permitted by law). The term
"Distributions" as used herein includes any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that interest
payments are made in respect of the Debentures held by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust. The
amount of Distributions payable for any period will be computed for any full
monthly Distribution period on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a full monthly Distribution period for
which Distributions are computed, Distributions will be computed on the basis
of the actual number of days elapsed in such a 30-day month.
(b) Distributions on the Preferred Securities will be
cumulative, will accrue from the first day following (*) , 1995 and will
be payable monthly in arrears, on the last day of each month of each year,
commencing on ____________, 1995, except as otherwise described below, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee or, if no Property Trustee is required
under the Declaration, the Trust. In addition, holders of Preferred Securities
will be entitled to a cash distribution at the rate of 9 1/4% per annum of the
liquidation amount thereof from March 15, 1995 through (*) , 1995,
payable at the time of the first Distribution payment on the Preferred
Securities. SunAmerica has the right under the Indenture for the Debentures
to extend the interest payment period from time to time on the Debentures for
a period not exceeding 60 consecutive months (each, an "Extension Period")
and, as a consequence, monthly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the rate of
% per annum, compounded monthly during any such Extension Period. Prior to
the termination of any such Extension Period, SunAmerica may further extend
such Extension Period; provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 60 consecutive
months. Payments of accrued Distributions will be payable to Holders of
Preferred Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
SunAmerica may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in
book-entry-only form, will be one Business Day prior to the relevant
Distribution date, which record and payment dates correspond to the record and
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each payment in respect of
the Preferred Securities will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry-Only Issuance - The
Depository Trust Company" in the Offering Circular/Prospectus. If the
Preferred Securities shall not continue to remain in book-entry-only form, the
Regular Trustees shall select relevant record dates which correspond to the
record dates on the Debentures. If any date on which Distributions are payable
on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(d) If an Event of Default under the Indenture has occurred and
is continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held
by or for the Trust that is not accounted for under the Declaration, such
______
(*)Fill in Expiration Date.
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the
date of the dissolution, winding-up or termination, as the case may be, will
be entitled to receive out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $25 per Preferred Security and Common
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, and after satisfaction of
liabilities to creditors, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount such Preferred Securities and Common
Securities and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, such Preferred Securities and Common
Securities, shall be distributed on a pro rata basis (based on the aggregate
liquidation amount of all outstanding Preferred Securities on the one hand and
of all outstanding Common Securities on the other) to the Holders of the
Preferred Securities and Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a pro rata basis (determined as
aforesaid).
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that if an Event of
Default under the Indenture has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
4. Redemption. The Preferred Securities and Common Securities
may only be redeemed if Debentures having an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred Securities and Common
Securities are repaid, redeemed or distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity, upon redemption at any time or from time to time on
or after June 15, 1997, the proceeds of such repayment will be promptly
applied to redeem Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and Common Security plus an
amount equal to accrued and unpaid Distributions thereon to the date of
redemption, payable in cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed on a pro rata basis (based on the aggregate
liquidation amount of all outstanding Preferred Securities on the one hand and
of all outstanding Common Securities on the other) and the Preferred
Securities to be redeemed will be redeemed as described in Section 4(f)(ii)
below. If a partial redemption would result in the delisting of the Preferred
Securities by any national securities exchange or other organization on which
the Preferred Securities are then listed, SunAmerica pursuant to the Indenture
will only redeem Debentures in whole and, as a result, the Trust may only
redeem the Preferred Securities in whole.
(c) If a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Regular Trustees may dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust having an
aggregate principal amount equal to the aggregate stated liquidation amount of
and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Preferred Securities and
Common Securities, to be distributed to the Holders of the Preferred
Securities and Common Securities on a pro rata basis (determined as provided
in Section 4(b) above) in liquidation of such Holders' interests in the Trust,
within 90 days following the occurrence of such Special Event (the "90 Day
Period"), provided, however, that in the case of the occurrence of a Tax
Event, as a condition of such dissolution and distribution, the Regular
Trustees shall have received an opinion of a nationally recognized independent
tax counsel experienced in such matters (a "No Recognition Opinion"), which
opinion may rely on any then applicable published revenue ruling of the
Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and distribution of
Debentures; and provided, further, that, if and as long as at the time there
is available to the Trust the opportunity to eliminate, within the 90 Day
Period, the Special Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, SunAmerica, or the Holders of the
Preferred Securities, the Trust will pursue such measure in lieu of
dissolution.
If in the case of the occurrence of a Tax Event, after receipt
of a Dissolution Tax Opinion (as defined below), (i) the Regular Trustees have
received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that SunAmerica would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in liquidation of such
Holder's interest in the Trust as described in this Section 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, SunAmerica shall have
the right, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash within 90 days following the occurrence
of such Tax Event, and promptly following such redemption Preferred Securities
and Common Securities with an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so redeemed will be redeemed by
the Trust at the Redemption Price on a pro rata basis (determined as provided
in Section 4(b) above); provided, however, that, if at the time there is
available to SunAmerica or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
the Trust, SunAmerica or the Holders of the Preferred Securities, SunAmerica
or the Regular Trustees on behalf of the Trust will pursue such measure in
lieu of redemption. The Common Securities will be redeemed on a pro rata basis
(as described above) with the Preferred Securities, except if an Event of
Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities.
"Tax Event" means that the Regular Trustees shall have obtained
an opinion of nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that on or after
___(**)_____, 1995 as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof
or therein, (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after
(***) , 1995, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date thereof, subject to United States
federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other
governmental charges or (iii) interest payable by SunAmerica to the Trust on
the Debentures is not, or within 90 days of the date thereof will not be,
deductible by SunAmerica for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"), the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after (***) , 1995. In case of any uncertainty
regarding an Investment Company Event, the good faith determination of the
Regular Trustees (based on the advice of counsel) shall be conclusive.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding, (ii) DTC or its nominee (or any successor Clearing
Agency or its Nominee), as the record Holder of the Preferred Securities, will
receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution and (iii) any certificates
representing Preferred Securities not held by the DTC or its nominee (or any
successor Clearing Agency or its Nominee) will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to accrued and unpaid Distributions on, such Preferred
Securities until such certificates are presented to SunAmerica or its agent
for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accrued and unpaid Distributions have been
paid on all Preferred Securities for all monthly Distribution periods
terminating on or prior to the date of redemption.
_______
(**)Insert Expiration Date.
(***)Insert Expiration Date.
(e) If Debentures are distributed to Holders of the Preferred
Securities, SunAmerica, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
(f) (i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Preferred Securities and
Common Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of Preferred
Securities and Common Securities to be redeemed or exchanged not less than 30
nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each Redemption/
Distribution Notice shall be addressed to the Holders of Preferred Securities
and Common Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred Securities to be
redeemed will be redeemed pro rata from each Holder of Preferred Securities
and, in the event that Preferred Securities are held in the DTC (or successor
Clearing Agency) pro rata from each Clearing Agency Participant (subject to
adjustment to eliminate fractional Preferred Securities).
(iii) If the Trust gives a Redemption/ Distribution Notice in
respect of a redemption of Preferred Securities as provided in this Section 4
(which notice will be irrevocable) then, by 12:00 noon, New York City time, on
the redemption or distribution date, the Trust will deposit irrevocably with
the DTC (or successor Clearing Agency) funds sufficient to pay the applicable
Redemption Price and will give the DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities, provided that if Definitive Preferred
Securities Certificates have been issued, the Trust will pay the relevant
Redemption Price to the Holders thereof by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date, as
applicable, all rights of Holders of such Preferred Securities so called for
redemption will cease, except the right of the Holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred Securities
which have been so called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.
If payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust or by
SunAmerica pursuant to the Preferred Securities Guarantee, Distributions on
such Preferred Securities will continue to accrue, from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustee on behalf of the Trust to the DTC or its nominee (or successor
Clearing Agency or its Nominee), provided that if Definitive Preferred
Securities Certificates have been issued, such notice shall be sent to the
Holders thereof.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, any Preferred
Security Certificates representing Preferred Securities outstanding shall be
deemed to represent beneficial interests in the Debentures so distributed, and
the Preferred Securities will no longer be deemed outstanding and may be
canceled by the Regular Trustees. The Debentures so distributed shall have an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities so distributed.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), SunAmerica or any
of its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders
of the Preferred Securities will have no voting rights.
(b) If (i) the Trust fails to make Distributions in full on
the Preferred Securities for 18 consecutive monthly Distribution periods; (ii)
an Event of Default (as defined in the Indenture) occurs and is continuing on
the Debentures; or (iii) SunAmerica is in default on any of its payment or
other obligations under the Preferred Securities Guarantee, then the Holders
of the Preferred Securities, acting as a single class, will be entitled by the
vote of Holders of Preferred Securities representing a majority in aggregate
liquidation amount of the outstanding Preferred Securities to appoint a
Special Representative Preferred (who shall not be an Affiliate of SunAmerica)
which will be authorized to direct the Property Trustee to enforce the
Property Trustee's creditor rights, or if no Property Trustee is required
under the Declaration the Special Representative Preferred shall be authorized
to directly enforce the Trust's creditor rights, under the Debentures. The
Special Representative Preferred shall also be authorized to enforce the
rights of the Holders of the Preferred Securities under the Preferred
Securities Guarantee in accordance with the terms thereof and to enforce the
rights of the Holders of the Preferred Securities to receive Distributions on
the Preferred Securities. In case of clause (i) above, if the Trust's failure
to pay Distributions is a consequence of SunAmerica's exercise of its right to
extend the interest payment period for the Debentures as described in Section
2(b), the Special Representative Preferred will have no right to enforce the
payment of Distributions until an Event of Default under the Indenture shall
have occurred. The Special Representative Preferred, by virtue of acting in
such capacity, shall not be considered to be a trustee of the Trust or a
holder of beneficial interests in the Trust, shall have no rights other than
described herein and shall have no liability for the debts, obligations or
liabilities of the Trust. For purposes of determining whether the Trust has
failed to pay Distributions in full for 18 consecutive monthly Distribution
periods, Distributions shall be deemed to remain in arrears, notwithstanding
any payments in respect thereof, until full cumulative Distributions have been
or contemporaneously are paid with respect to all monthly Distribution periods
terminating on or prior to the date of payment of such cumulative
Distributions. Not later than 30 days after such right to appoint a Special
Representative Preferred arises, the Regular Trustees will convene a meeting
for the purpose of appointing a Special Representative Preferred. If the
Regular Trustees fail to convene such meeting within such 30-day period, the
Holders of Preferred Securities representing 10% in liquidation amount of the
outstanding Preferred Securities will be entitled to convene such meeting.
The provisions of the Declaration relating to the convening and conduct of the
meetings of the Holders will apply with respect to any such meeting. If, at
any such meeting, Holders of less than a majority in aggregate liquidation
amount of Preferred Securities entitled to vote for the appointment of a
Special Representative Preferred vote for such appointment, no Special
Representative Preferred shall be appointed. Any Special Representative
Preferred may be removed at any time by the Holders of Preferred Securities
representing a majority in liquidation amount of the Preferred Securities.
Any Special Representative Preferred appointed shall cease to be a Special
Representative Preferred if the Trust (or SunAmerica pursuant to the Preferred
Securities Guarantee) shall have paid in full all accrued and unpaid
Distributions on the Preferred Securities or such default or breach under (ii)
or (iii) above, as the case may be, shall have been cured. Notwithstanding
the appointment of any such Special Representative Preferred, SunAmerica shall
retain all rights under the Indenture, including the right to extend the
interest payment period on Debentures, and any extension for a period not
exceeding 60 months of SunAmerica's interest payment period will not
constitute an Event of Default under the Indenture. The Trustees shall have
no right or power to do any act or thing contrary to or inconsistent with the
actions of any duly appointed Special Representative Preferred.
In furtherance of the foregoing, and without limiting the
powers of any Special Representative Preferred so appointed and for the
avoidance of any doubt concerning the powers of the Special Representative
Preferred, any Special Representative Preferred, in its own name, in the name
of the Trust, in the name of the Holders of the Preferred Securities, or
otherwise, may institute or cause to be instituted a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce (i) if no Property Trustee is required
under the Declaration, the Trust's rights, directly against SunAmerica as
issuer of the Debentures and, (ii) whether or not there is a Property Trustee,
the Trust's rights directly against SunAmerica as guarantor under the
Preferred Securities Guarantee or any other obligor in connection with the
rights of the Trust and the Holders which the Special Representative Preferred
was appointed to enforce (such rights in (i) and (ii), the "Rights"), and may
prosecute such proceeding to judgment or final decree, and enforce the same
against SunAmerica as issuer of the Debentures and/or as guarantor under the
Preferred Securities Guarantee, or any other obligor in connection with such
Rights.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Debentures held by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust, upon the
occurrence of a Special Event or in connection with the redemption of
Preferred Securities as a consequence of a redemption of Debentures, then the
Holders of outstanding Preferred Securities will be entitled to vote on such
amendment or proposal as a class and such amendment or proposal shall not be
effective except with the approval of the Holders of Preferred Securities
representing 66-2/3% in liquidation amount of such outstanding Preferred
Securities having a right to vote on the matter.
Subject to Section 2.7 of the Declaration, for so long as any
Debentures are held by the Property Trustee, the Property Trustee shall not
and, if no Property Trustee is required under the Declaration and the
Debentures are held by the Trust, the Regular Trustees shall not (i) direct the
time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or executing any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
that is waivable under Section 6.06 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders
of at least 66-2/3% in liquidation amount of all the Preferred Securities
affected thereby; provided, however, that where a consent under the Indenture
would require the consent of each Holder of Debentures affected thereby, no
such consent shall be given by the Property Trustee or the Regular Trustees,
as the case may be, without the prior consent of each Holder of all Preferred
Securities affected thereby. The Property Trustee or the Regular Trustees, as
the case may be, shall not revoke any action previously authorized or approved
by a vote of the Holders of Preferred Securities. The Property Trustee or the
Regular Trustees, as the case may be, shall notify all Holders of Preferred
Securities and Common Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to obtaining
the foregoing approvals of the Holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Property Trustee or the Regular
Trustees, as the case may be, shall obtain an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that the Trust will not be classified for United States federal income tax
purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action.
Any required approval of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holder of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities in
accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above,
any of the Preferred Securities at such time that are owned by SunAmerica or by
any entity directly or indirectly controlling or controlled by or under direct
or indirect common control with SunAmerica shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
Holders of the Preferred Securities will have no rights to
increase or decrease the number of Trustees or to appoint, remove or replace a
Trustee, which voting rights are vested solely in the Holders of the Common
Securities.
6. Ranking. The Preferred Securities rank pari passu with the
Common Securities except that where an Event of Default occurs and is
continuing under the Indenture in respect of the Debentures, the rights of
Holders of Preferred Securities to payment in respect of Distributions and
payments upon liquidation, redemption and maturity rank in priority to the
rights to payment of the Common Securities Holders.
7. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to,
any corporation or other body.
8. No Preemptive Rights. The Preferred Securities shall have
no preemptive rights to subscribe to any additional shares of Preferred
Securities or Common Securities.
These terms shall constitute a part of the Declaration.
Annex I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
B-1
CUSIP NO.
Certificate Evidencing Preferred Securities
of
SunAmerica Capital Trust I
__% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
SunAmerica Capital Trust I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________ (the "Holder") is the registered owner of _____ (______) preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the __% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities are set forth in, and this certificate and the
Preferred Securities represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of _________, 1995, as the same may
be amended from time to time (the "Declaration") including the designation of
the terms of Preferred Securities as set forth in Exhibit B thereto. The
Holder is entitled to the benefits of the Guarantee Agreement of SunAmerica
Inc., a Maryland corporation, dated as of _________, 1995 (the "Guarantee") to
the extent provided therein. The Trust will furnish a copy of the Declaration
and the Guarantee to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this ____ day of _________, 1995.
SUNAMERICA CAPITAL TRUST I
By:_________________________, as trustee
Name: James R. Belardi
Title: Trustee
By:_________________________, as trustee
Name: Scott L. Robinson
Title: Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 6.1 of the Amended and Restated Declaration
of Trust of SunAmerica Capital Trust I dated as of , 1995 (as
amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of $______ and
a liquidation amount in the assets of the Trust of $25 per Common Security,
are hereby designated as " % Trust Originated Common Securities". The Common
Security Certificates evidencing the Common Securities shall be substantially
in the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice. The Common Securities are to be issued and sold to SunAmerica Inc.
("SunAmerica") in consideration of $_____ in cash. In connection with the
Offer and the purchase by SunAmerica of the Common Securities, SunAmerica will
deposit, and the Trust will purchase, respectively, as trust assets Debentures
of SunAmerica having an aggregate principal amount equal to $_______, and
bearing interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and Common Securities.
2. Distributions. (a) Distributions payable on each Common
Security will be fixed at a rate per annum of % (the "Coupon Rate") of the
stated liquidation amount of $25 per Common Security. Distributions in
arrears for more than one month will bear interest at the rate per annum of
% thereof (to the extent permitted by applicable law). The term
"Distributions" as used herein includes any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that interest
payments are made in respect of the Debentures held by the Property Trustee
or, if no Property Trustee is required under the Declaration, the Trust. The
amount of Distributions payable for any period will be computed for any full
monthly Distribution period on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a full monthly Distribution period for
which Distributions are computed, Distributions will be computed on the basis
of the actual number of days elapsed in such a 30-day month.
(b) Distributions on the Common Securities will be cumulative,
will accrue from the first day following
(****) , 1995 and will be payable monthly in arrears, on the last
day of each month of each year, commencing on _____________, 1995, except as
otherwise described below, but only if and to the extent that payments are
made in respect of the Debentures held by the Property Trustee or, if no
Property Trustee is required under the Declaration, the Trust. In addition,
holders of Common Securities will be entitled to a cash distribution at the
rate of 9 1/4% per annum of the liquidation amount thereof from March 15, 1995
through (*), 1995, payable at the time of the first Distribution
payment on the Common Securities. SunAmerica has the right under the Indenture
for the Debentures to extend the interest payment period from time to time on
the Debentures for a period not exceeding 60 consecutive months (each, an
"Extension Period") and, as a consequence, monthly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the rate of % per annum, compounded monthly during any such Extension
Period. Prior to the termination of any such Extension Period, SunAmerica may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
60 consecutive months. Payments of accrued Distributions will be payable to
Holders of Common Securities as they appear on the books and records of the
Trust on the first record date after the end of the Extension Period. Upon
the termination of any Extension Period and the payment of all amounts then
due, SunAmerica may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which record and payment dates correspond to the record and
interest payment dates on the Debentures. If any date on which Distributions
are payable on the Common Securities is not a Business Day, then payment of
the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(d) If an Event of Default under the Indenture has occurred and
is continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held
by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and Common Securities.
_______
(****) Fill in Expiration Date.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the
date of the dissolution, winding-up or termination, as the case may be, will
be entitled to receive out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities, after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $25 per Preferred Security and Common
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, and after satisfaction of
liabilities to creditors, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Preferred Securities and Common
Securities bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, such Preferred Securities and Common
Securities, shall be distributed on a pro rata basis (based on the aggregate
liquidation amount of all outstanding Preferred Securities on the one hand and
of all outstanding Common Securities on the other) to the Holders of the
Preferred Securities and Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a pro rata basis (determined as
aforesaid).
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that if an Event of
Default under the Indenture has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
4. Redemption. The Preferred Securities and Common Securities
may only be redeemed if Debentures having an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred Securities and Common
Securities are repaid, redeemed or distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity, upon redemption at any time or from time to time on
or after June 15, 1997, the proceeds of such repayment will be promptly
applied to redeem Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and Common Security plus an
amount equal to accrued and unpaid Distributions thereon to the date of
redemption, payable in cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common Securities shall be
established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed on a pro rata basis (based on the aggregate
liquidation amount of all outstanding Preferred Securities on the one hand and
of all outstanding Common Securities on the other) and the Common Securities
to be redeemed will be redeemed as described in Section 4(e)(ii) below. If a
partial redemption would result in the delisting of the Preferred Securities
by any national securities exchange or other organization on which the
Preferred Securities are then listed, SunAmerica pursuant to the Indenture
will only redeem Debentures in whole and, as a result, the Trust may only
redeem the Common Securities in whole.
(c) If a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust having an
aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the Coupon Rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as the Preferred Securities and Common
Securities, to be distributed to the Holders of the Preferred Securities and
Common Securities on a pro rata basis (determined as provided in Section 4(b)
above) in liquidation of such Holders' interests in the Trust, within 90 days
following the occurrence of such Special Event (the "90 Day Period"),
provided, however, that in the case of the occurrence of a Tax Event, as a
condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may
rely on any then applicable published revenue rulings of the Internal Revenue
Service, to the effect that the Holders of the Preferred Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and distribution of Debentures; and
provided, further, that, if and as long as at the time there is available to
the Trust the opportunity to eliminate, within the 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure that has no
adverse effect on the Trust, SunAmerica, or the Holders of the Preferred
Securities, the Trust will pursue such measure in lieu of dissolution.
If in the case of the occurrence of a Tax Event, after receipt
of a Dissolution Tax Opinion (as defined below), (i) the Regular Trustees have
received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that SunAmerica would be
precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in liquidation of such
Holder's interest in the Trust as described in this Section 4(c) or (ii), the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, SunAmerica shall have
the right, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash within 90 days following the occurrence
of such Tax Event, and promptly following such redemption Preferred
Securities and Common Securities with an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so redeemed will be redeemed
by the Trust at the Redemption Price on a pro rata basis (determined as
provided in Section 4(b) above) provided, however, that, if at the time there
is available to SunAmerica or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
the Trust, SunAmerica or the Holders of the Preferred Securities, SunAmerica
or the Regular Trustees on behalf of the Trust will pursue such measure in
lieu of redemption. The Common Securities will be redeemed on a pro rata basis
(as described above) with the Preferred Securities, except if an Event of
Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities.
"Tax Event" means that the Regular Trustees shall have obtained
an opinion of nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that on or after
(*****) , 1995 as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after (******) , 1995, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges or (iii) interest payable by
SunAmerica to the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible by SunAmerica for United States federal
income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"), the
Trust is or will be considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after (***) , 1995. In case of any uncertainty
regarding an Investment Company Event, the good faith determination of the
Regular Trustees (based on the advice of counsel) shall be conclusive.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and (ii) any certificates representing Common Securities
will be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Common Securities until such certificates are presented to SunAmerica
or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accrued and unpaid Distributions have been paid
on all Common Securities for all monthly Distribution periods terminating on
or prior to the date of redemption.
(e)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and Common Securities
(a "Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of
______
(*****)Insert Expiration Date.
(******)Insert Expiration Date.
the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph (e)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and
Common Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Preferred Securities and Common Securities at the address of
each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed pro rata from each Holder of Common Securities (subject to adjustment
to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/ Distribution Notice in
respect of a redemption of Common Securities as provided in this Section 4
(which notice will be irrevocable) then the Trust will pay the applicable
Redemption Price to the Holders of the Common Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date, unless other arrangements satisfactory to the
Regular Trustees and the Property Trustee have been made. If
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on
the date of such deposit, or on the redemption date, as applicable, all rights
of Holders of such Common Securities so called for redemption will cease,
except the right of the Holders of such Common Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the
Trustees nor the Trust shall be required to register or cause to be registered
the transfer of any Common Securities which have been so called for
redemption. If any date fixed for redemption of Common Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Common Securities is improperly withheld or
refused and not paid by the Property Trustee or, if no Property Trustee is
required under the Declaration, the Trust, Distributions on such Common
Securities will continue to accrue, from the original redemption date to the
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common
Securities.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, any Common
Security Certificates representing Common Securities outstanding shall be
deemed to represent beneficial interests in the Debentures so distributed, and
the Common Securities will no longer be deemed outstanding and may be canceled
by the Regular Trustees. The Debentures so distributed shall have an
aggregate principal amount equal to the aggregate liquidation amount of the
Common Securities so distributed.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders
of the Common Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Common
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than in
connection with the distribution of Debentures held by the Property Trustee or,
if no Property Trustee is required under the Declaration, the Trust upon the
occurrence of a Special Event or in connection with the redemption of Common
Securities as a consequence of a redemption of Debentures, then the Holders
of outstanding Common Securities will be entitled to vote on such amendment or
proposal as a class and such amendment or proposal shall not be effective
except with the approval of the Holders of Common Securities representing
66-2/3% in liquidation amount of such outstanding Common Securities having a
right to vote on the matter; provided, however, that no such approval shall be
required if the dissolution, winding-up or termination of the Trust is
proposed or initiated upon the initiation of proceedings, or after proceedings
have been initiated, for the dissolution, winding-up, liquidation or
termination of SunAmerica, provided, however, that the rights of Holders of
Common Securities under Article IV of the Declaration to increase or decrease
the number of, and to appoint, replace or remove, Trustees shall not be
amended without the consent of each Holder of Common Securities.
Subject to Section 2.7 of the Declaration, for so long as any
Debentures are held by the Property Trustee, the Property Trustee shall not
and, if no Property Trustee is required under the Declaration and the
Debentures are held by the Trust, the Regular Trustees shall not (i) direct the
time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or executing any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
that is waivable under Section 6.06 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders
of at least 66-2/3% in liquidation amount of all the Common Securities affected
thereby; provided, however, that where a consent under the Indenture would
require the consent of each Holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee or the Regular Trustees, as the
case may be, without the prior consent of each Holder of all Common Securities
affected thereby. The Property Trustee or the Regular Trustees, as the case
may be, shall not revoke any action previously authorized or approved by a
vote of the Holders of Common Securities. The Property Trustee or the Regular
Trustees, as the case may be shall notify all Holders of Preferred Securities
and Common Securities of any notice of default received from the Debenture
Trustee with respect to the Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Common Securities, prior to taking
any of the foregoing actions, the Property Trustee or the Regular Trustees, as
the case may be, shall obtain an opinion of nationally recognized independent
tax counsel recognized as expert in such matters to the effect that the Trust
will not be classified for United States federal income tax purposes as an
association taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United States federal income
tax purposes following such action.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holder of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance
with the Declaration.
6. Ranking. The Common Securities rank pari passu with the
Preferred Securities except that where an Event of Default occurs and is
continuing under the Indenture in respect of the Debentures, the rights of
Holders of Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and maturity are subordinated to the
rights of Holders the Preferred Securities.
7. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to,
any corporation or other body.
8. No Preemptive Rights. The Common Securities shall have no
preemptive rights to subscribe to any additional shares of Common Securities
or Preferred Securities.
These terms shall constitute a part of the Declaration.
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
C-1
Certificate Evidencing Common Securities
of
SunAmerica Capital Trust I
__% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
SunAmerica Capital Trust I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
SunAmerica Inc. (the "Holder") is the registered owner of _____ (______) common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the __% Trust Originated Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer and satisfaction of the other
conditions set forth in the Declaration (as defined below) including, without
limitation Section 8.1(c) thereof. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the
terms and provisions of, the Amended and Restated Declaration of Trust of the
Trust dated as of _________, 1995, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Common
Securities as set forth in Exhibit C thereto. The Trust will furnish a copy
of the Declaration to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this _____ day of _________, 1995.
SUNAMERICA CAPITAL TRUST I
By________________________, as trustee
Name: James R. Belardi
Title: Trustee
By_________________________, as trustee
Name: Scott L. Robinson
Title: Trustee
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfer this Common Security
Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ agent
to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
EXHIBIT 4.8
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ___________, 1995, is
executed and delivered by SunAmerica Inc., a Maryland corporation (the
"Guarantor"), for the benefit of the Holders (as defined herein) from time to
time of the Preferred Securities (as defined herein) of SunAmerica Capital
Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of __________, 1995 among the Trustees of
the Issuer named therein, SunAmerica Inc., as Sponsor, and the Holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing as of the date hereof in accordance with the Offer (as
defined in the Declaration) $____ aggregate liquidation amount of its ___%
Trust Originated Preferred Securities (the "Preferred Securities")
representing undivided beneficial interests in the assets of the Issuer and
having the terms set forth in Exhibit B to the Declaration;
WHEREAS, the Preferred Securities will be issued by the Issuer
upon deposit of the Guarantor's Debentures (as defined in the Declaration)
with the Issuer as trust assets; and
WHEREAS, as incentive for the Holders to exchange shares of the
Guarantor's Series B Preferred Stock (as defined in the Declaration) for
Preferred Securities pursuant to the Offer, the Guarantor desires to
irrevocably and unconditionally agree, to the extent set forth herein, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the exchange of Series B
Preferred Stock for Preferred Securities, which exchange the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Preferred Securities.
ARTICLE I
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Declaration as in effect
on the date hereof.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but if and
only to the extent that in each case the Guarantor has made a payment to the
Property Trustee or, if no Property Trustee is required pursuant to the
Declaration, the Issuer of interest, premium or principal on the Debentures
and (ii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the exchange of
Preferred Securities for Debentures as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
ARTICLE II
SECTION 2.01. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer) regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 2.02. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
SECTION 2.03. The obligations, covenants, agreements and
duties of the Guarantor under this Guarantee Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of
the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of
the Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with,
the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 2.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 2.04. The Guarantor expressly acknowledges that (i)
this Guarantee Agreement will be deposited with the Regular Trustees to be
held for the benefit of the Holders of the Preferred Securities; (ii) in the
event of the appointment of a Special Representative Preferred by the Holders
of the Preferred Securities to, among other things, enforce this Guarantee
Agreement, the Special Representative Preferred may take possession of this
Guarantee Agreement for such purpose; (iii) if no Special Representative
Preferred has been appointed, or if the Special Representative Preferred fails
to enforce the rights of Holders of Preferred Securities hereunder, the Regular
Trustees have the right to enforce this Guarantee Agreement on behalf of the
Holders of the Preferred Securities; (iv) the Holders of Preferred Securities
representing not less than a majority in aggregate liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of this
Guarantee Agreement including the giving of directions to the Special
Representative Preferred or the Regular Trustees, as the case may be; and (v)
if the Regular Trustees or the Special Representative Preferred fails to
enforce this Guarantee Agreement as above provided, any Holder of the
Preferred Securities may, after a period of 30 days has elapsed from such
Holder's written request to the Regular Trustees or the Special Representative
Preferred, as the case may be, to enforce this Guarantee Agreement, institute
a legal proceeding directly against the Guarantor to enforce its rights under
this Guarantee Agreement, without first instituting a legal proceeding against
the Issuer or any other person or entity.
SECTION 2.05. This Guarantee Agreement creates a guarantee of
payment and not merely of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer).
SECTION 2.06. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Preferred Securities against the Issuer in
respect of any amounts paid to the Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce
or exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment,
any amounts are due and unpaid under this Guarantee Agreement. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 2.07. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Preferred Securities and that the Guarantor shall be liable as principal and
as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.03 hereof.
ARTICLE III
SECTION 3.01. So long as any Preferred Securities remain
outstanding, the Guarantor will not declare or pay any dividend on, or
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock, or make any guarantee payments
with respect thereto, if at such time (i) the Guarantor shall be in default
with respect to its Guarantee Payments or other payment obligations hereunder,
(ii) there shall have occurred any Event of Default under the Indenture or
(iii) the Guarantor shall have given notice of its selection of an Extension
Period (as defined in the Indenture) and such period, or any extension
thereof, is continuing; provided that the Guarantor will be permitted to pay
accrued dividends (and cash in lieu of fractional shares) upon the conversion
of any of its Series D Mandatory Conversion Premium Dividend Preferred Stock
in accordance with the terms of such stock. In addition, so long as any
Preferred Securities remain outstanding, the Guarantor (i) will remain the
sole direct or indirect owner of all of the outstanding Common Securities and
shall not cause or permit the Common Securities to be transferred except to
the extent such transfer is permitted under Section 8.1(c) of the Declaration;
provided that any permitted successor of the Guarantor under the Indenture may
succeed to the Guarantor's ownership of the Common Securities and (ii) will
use its reasonable efforts to cause the Issuer to continue to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures.
SECTION 3.02. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, including the
Debentures, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Guarantor and
to any guarantee now or hereafter entered into by the Guarantor in respect of
any of its capital stock.
ARTICLE IV
This Guarantee Agreement shall terminate and be of no further
force and effect upon full payment of the Redemption Price of all Preferred
Securities, upon the distribution of Debentures to Holders of Preferred
Securities in exchange for all of the Preferred Securities or upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with
respect to Preferred Securities or this Guarantee Agreement.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Guarantee Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is permitted
under Article Ten of the Indenture, the Guarantor shall not assign its
obligations hereunder.
SECTION 5.02. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than 66-2/3% in liquidation amount of all
the outstanding Preferred Securities. The provisions of Section 11.2 of the
Declaration concerning meetings of Holders shall apply to the giving of such
approval.
SECTION 5.03. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed
by the party giving such notice, and delivered, telecopied or mailed by first
class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders of
the Preferred Securities:
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Facsimile No.: (310) 772-6025
Attention: Treasurer
(b) if given to the Issuer, in care of the Regular Trustees
(with copy to the Property Trustee), at the Issuer's (and the Property
Trustee's) address set forth below or such other address as the Regular
Trustees on behalf of the Issuer (or the Property Trustee) may give notice to
the Holders of the Preferred Securities:
SunAmerica Capital Trust I
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Facsimile No.: (310) 772-6025
Attention: James R. Belardi, Trustee
Scott Richland, Trustee
Scott L. Robinson, Trustee
with copy to:
The Bank of New York
101 Barclay Street
New York, New York 10286
Facsimile No.: 212-815-5999
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall also be given to the Special
Representative Preferred, if any, at such address as the Special
Representative Preferred may give notice of to the Holders of the Preferred
Securities. All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 5.04. The masculine, feminine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
SECTION 5.05. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Preferred
Securities.
SECTION 5.06. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SUNAMERICA INC.
By:________________________
Name:
Title:
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of our report
dated November 9, 1994 appearing on page F-2 of SunAmerica Inc.'s Annual
Report on Form 10-K for the year ended September 30, 1994. We also consent to
the incorporation by reference of our report on the Financial Statement
Schedules, which appears on page S-2 of such Annual Report on Form 10-K. We
also consent to the reference to us under heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Los Angeles, California
March 17, 1995
LETTER OF TRANSMITTAL
To Tender Shares of 91/4% Preferred Stock,
Series B (the "Series B Preferred")
of
SUNAMERICA INC.
Pursuant to the offer by SUNAMERICA CAPITAL TRUST I to exchange
its % Trust Originated Preferred Securities ("TOPrS"),
for up to 5,500,000 outstanding shares of Series B Preferred
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MARCH , 1995, UNLESS THE OFFER IS EXTENDED.
The Exchange Agent for the Offer is: The First National Bank of Chicago
By Hand or Overnight Courier By Hand or Overnight Courier in
in Chicago: New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
(registered or certified mail recommended)
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission:
(For Eligible Institutions Only)
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of shares of
Series B Preferred, either (i) if certificates for shares of Series B
Preferred are to be forwarded herewith or (ii) unless an Agent's Message (as
defined in the accompanying Offering Circular/Prospectus of SunAmerica Inc. and
SunAmerica Capital Trust I dated March , 1995 (the "Offering
Circular/Prospectus")) is utilized, if tenders of shares of Series B Preferred
are to be made by book-entry transfer into the account of The First National
Bank of Chicago, as Exchange Agent (the "Exchange Agent"), at The Depository
Trust Company ("DTC") pursuant to the procedures described under "The Offer --
Procedures for Tendering" in the Offering Circular/Prospectus. Holders of
shares of Series B Preferred who tender shares of Series B Preferred by
book-entry transfer are referred to herein as "Book-Entry Shareholders."
Any holder of Series B Preferred who submits this Letter of Transmittal and
tenders shares of Series B Preferred in accordance with the instructions
contained herein prior to the Expiration Date (as defined in the Offering
Circular/Prospectus) will thereby have directed SunAmerica Capital Trust I
(the "Trust") to deliver its % Trust Originated Preferred Securities
("TOPrS") (the "Preferred Securities") in exchange for such holder's Series B
Preferred and in consideration of the deposit by SunAmerica Inc.
("SunAmerica") with the Trust as trust assets of its % Junior Subordinated
Debentures, Series A, due 2044 (the "Junior Subordinated Debentures") as set
forth in the Offering Circular/Prospectus. Tenders of Series B Preferred
pursuant to this Letter of Transmittal are subject to withdrawal as described
in the Offering Circular/Prospectus under the caption "The Offer -- Withdrawal
of Tenders".
DESCRIPTION OF SHARES OF SERIES B PREFERRED TENDERED
<TABLE>
<S> <C> <C> <C>
=====================================================================================================
Name(s) and Address(es) of Registered Holder(s) Shares of Series B Preferred Tendered
(Please fill in, if blank) (Attached additional list if necessary)
_____________________________________________________________________________________________________
Certificate Total Number of Number of
Number(s)* Shares Represented Shares
by Certificate(s)* Tendered
__________________________________________________
__________________________________________________
Total Shares
_____________________________________________________________________________________________________
* Need not be completed by stockholders tendering by book-entry transfer.
=====================================================================================================
</TABLE>
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTION ONLY)
CHECK HERE IF TENDERED SHARES OF SERIES B PREFERRED ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering
Institution...................................................................
Account No.
..............................................................................
Transaction Code No.
..............................................................................
CHECK HERE IF TENDERED SHARES OF SERIES B PREFERRED ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Stockholder(s)
..............................................................................
Date of Execution of Notice of Guaranteed Delivery
..............................................................................
Name of Institution which Guaranteed Delivery
..............................................................................
If delivery is by book-entry transfer:
Name of Tendering Institution
..............................................................................
Account No..............................
..............................................................................
Transaction Code No.
..............................................................................
__________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to SunAmerica Capital Trust I, a Delaware
statutory business trust (the "Trust"), the above-described shares of 9 1/4%
Preferred Stock, Series B, no par value (the "Series B Preferred"), pursuant
to the offer by the Trust to exchange its % Trust Originated Preferred
Securities ("TOPrS") (the "Preferred Securities") for up to 5,500,000 shares
of Series B Preferred of SunAmerica Inc. ("SunAmerica"), upon the terms and
subject to the conditions set forth in the Offering Circular/Prospectus,
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Offering Circular/Prospectus, constitute the
"Offer"). Shares of Series B Preferred not accepted for exchange because of
proration will be returned.
Subject to and effective upon acceptance for exchange of the shares of
Series B Preferred tendered herewith, the undersigned hereby sells, assigns
and transfers to or upon the order of the Trust all right, title and interest
in and to all the shares of Series B Preferred that are being tendered hereby
and appoints the Exchange Agent the true and lawful agent and attorney-in-fact
of the undersigned with respect to such shares of Series B Preferred, with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such shares of Series B Preferred or transfer ownership of such shares of
Series B Preferred on the account books maintained by DTC, together, in any
such case, with all accompanying evidences of transfer and authenticity, to
the Exchange Agent for the account of the Trust, (b) present such shares of
Series B Preferred for transfer on the books of SunAmerica and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
shares of Series B Preferred, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the shares
of Series B Preferred tendered hereby and to acquire Preferred Securities
issuable upon the exchange of such tendered Series B Preferred and that, when
the undersigned's shares of Series B Preferred are accepted for exchange, the
Trust will acquire good and unencumbered title to such shares of tendered
Series B Preferred, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Trust to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Series B Preferred or transfer ownership of such Series B Preferred
on the account books maintained by DTC.
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, legal representatives,
successors, assigns, executors and administrators of the undersigned. Except
as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of shares of Series B Preferred
pursuant to any one of the procedures described in "The Offer -- Procedures
for Tendering" of the Offering Circular/Prospectus and in the instructions
hereto will constitute agreements between the undersigned and the Trust upon
the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Exchange Instructions", please
cause beneficial interests in global securities representing Preferred
Securities to be recorded, and return any shares of Series B Preferred not
tendered or not accepted for tender, in the name(s) of the undersigned (and,
in the case of shares of Series B Preferred tendered by book-entry transfer,
by credit to the account at DTC). Similarly, unless otherwise indicated under
"Special Delivery Instructions", please mail any shares of Series B Preferred
not tendered or not accepted for exchange (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). If both "Special Exchange Instructions" and "Special Delivery
Instruction" are completed, please cause beneficial interests in global
securities representing Preferred Securities to be recorded, and return any
shares of Series B Preferred not tendered or not accepted for exchange, in the
name(s) of the person(s) so indicated. The undersigned recognizes that the
Trust has no obligation, pursuant to the "Special Exchange Instructions", to
transfer any shares of Series B Preferred from the name of the registered
holder(s) thereof if the Trust does not accept for exchange any of the shares
of Series B Preferred so tendered.
SPECIAL EXCHANGE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5, 6 and 7) (See Instructions 5 and 7)
To be completed ONLY if beneficial To be completed ONLY if certificates
interests in global securities for shares of Series B Preferred
representing Preferred Securities not tendered or not accepted for
are to be recorded, or certificates exchange are to be mailed to
for shares of Series B Preferred not someone other than the undersigned
tendered or not accepted for exchange or to the undersigned at an address
are to be issued, in the name of other than that shown below the
someone other than the undersigned. undersigned's signature(s).
Mail ( ) certificates for
shares of Series B
Preferred to:
Name...............................
(Please Print)
Record ( ) beneficial interests in
global securities representing
Preferred Securities
in the name of: Address............................
Issue ( ) certificates for
shares of Series B
Preferred to:
Record ( ) beneficial interests
in shares of Series B
Preferred to DTC
account of:
Name.................................... ...................................
(Please Print) (Zip Code)
Address.................................
........................................
(Zip Code)
........................................
(Taxpayer Identification No.)
SIGN HERE
(Please complete Substitute Form W-9 below)
...........................................
...........................................
Signature(s) of Owner(s)
Dated ..............................., 199_
Name(s)....................................
...........................................
(Please Print)
Capacity (full title)......................
Address....................................
...........................................
(Include Zip Code)
Area Code and
Telephone No........ ......................
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for shares of Series B Preferred or on a security position
listing or by person(s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 5.)
Guarantee of Signature(s)
(See Instructions 1 and 5)
Name of Firm................................
Authorized
Signature...................................
Dated ................................, 1995
PAYER'S NAME: SUNAMERICA INC.
______________________________________________________________________________
Name(s) as shown above on certificate(s) for shares of Series B Preferred
(if joint ownership, list first and circle the name of the person or entity
whose number you enter in Part I below).
______________________________________________________________________________
Address (if holder does not complete, signature in Part III below will
constitute a certification that the address on the reverse hereof is
correct).
______________________________________________________________________________
City, State, and Zip Code
______________________________________________________________________________
SUBSTITUTE | | Social Security
Form W-9 | | Number
Department of the | Part I -- PLEASE | OR
Treasury Internal | PROVIDE YOUR TIN IN | __________________________
Revenue Service | THE BOX AT RIGHT AND | Employer
Payer's Request For | CERTIFY BY SIGNING | Identification
Taxpayer | AND DATING BELOW | Number
Identification | | TIN Applied For ( )
Number (TIN) |_________________________________________________________
And Certification | Part II --
| For Payees exempt from backup withholding, write
| "Exempt" here.
| _________________
______________________________________________________________________________
Part III -- Certification. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions. You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax
return. However, if you have been notified by the IRS that you are no
longer subject to backup withholding, do not cross out item (2).
______________________________________________________________________________
SIGNATURE______________________________________ DATE ___________________
______________________________________________________________________________
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART I OF SUBSTITUTE FORM W-9
______________________________________________________________________________
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number within 60 days, thirty-one (31) percent of all
reportable payments made to me will be withheld until I provide a properly-
certified Taxpayer Identification Number to the Exchange Agent.
___________________________________________ ______________________________
Signature Date
______________________________________________________________________________
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offers
1. Guarantee of Signatures. No signature guarantee is
required on this Letter of Transmittal (i) if tendered shares of Series B
Preferred are registered in the name(s) of the undersigned and the
Preferred Securities to be issued in exchange therefor are to be issued
(and any untendered shares of Series B Preferred are to be reissued) in the
name of the registered holder(s) (which term, for the purposes described
herein, shall include any participant in DTC whose name appears on a
security listing as the owner of shares of Series B Preferred) and (ii)
such holder(s) have not completed the instruction entitled "Special
Exchange Instructions" on this Letter of Transmittal. If the tendered
shares of Series B Preferred are registered in the name(s) of someone other
than the undersigned, such tendered shares of Series B Preferred must be
endorsed or accompanied by written instruments of transfer in form
satisfactory to the Trust and duly executed by the registered holder, and
the signature on the endorsement or instrument of transfer must be
guaranteed by a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program or the Stock Exchange Medallion
Program (any of the foregoing hereinafter referred to as an "Eligible
Institution"). See Instruction 5.
2. Delivery of Letter of Transmittal and Series B Preferred.
This Letter of Transmittal is to be completed by holders of shares of
Series B Preferred either if certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if tenders are to be made pursuant
to the procedure for tender by book-entry transfer set forth under "The
Offer -- Procedures for Tendering -- Book-Entry Transfer" in the Offering
Circular/Prospectus. Certificates for shares of Series B Preferred, or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer
of such shares of Series B Preferred into the Exchange Agent's account at
DTC, as well as this Letter of Transmittal (or a facsimile hereof),
properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in the case of a book-entry delivery, and
any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at one of its addresses set forth herein
prior to the Expiration Date.
If a holder of Series B Preferred desires to participate in the
Offer and time will not permit this Letter of Transmittal or shares of
Series B Preferred to reach the Exchange Agent before the Expiration Date
or the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if the Exchange Agent has received at its
office prior to the Expiration Date, a letter, telegram or facsimile
transmission from an Eligible Institution setting forth the name and
address of the tendering Holder, the name(s) in which the shares of Series
B Preferred is registered and, if the shares of Series B Preferred are held
in certificated form, the certificate numbers of the shares of Series B
Preferred to be tendered, and stating that the tender is being made thereby
and guaranteeing that within five New York Stock Exchange, Inc. ("NYSE")
trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, the shares of Series B
Preferred in proper form for transfer together with a properly completed
and duly executed Letter of Transmittal (and any other required documents),
or a confirmation of book-entry transfer of such shares of Series B
Preferred into the Exchange Agent's account at DTC, will be delivered by
such Eligible Institution. Unless the shares of Series B Preferred being
tendered by the above-described method are deposited with the Exchange
Agent within the time period set forth above (accompanied or preceded by a
properly completed Letter of Transmittal and any other required documents)
or a confirmation of book-entry transfer of such Series B Preferred into
the Exchange Agent's account at DTC in accordance with DTC's Automated
Tender Offer Program ("ATOP") procedures is received, the Trust may, at its
option, reject the tender.
The method of delivery of shares of Series B Preferred and all
other required documents, including delivery through DTC, is at the option
and risk of the tendering shareholder. If certificates for shares of
Series B Preferred are sent by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be
accepted, and no fractional shares of Series B Preferred will be accepted
for exchange. By executing this Letter of Transmittal (or facsimile
hereof), the tendering holder waives any right to receive any notice of the
acceptance of the shares of Series B Preferred for exchange.
3. Inadequate Space. If the space provided herein is
inadequate, the certificate numbers and/or the number of shares of Series B
Preferred should be listed on a separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Book-Entry
Shareholders) If fewer than all the shares of Series B Preferred
represented by any certificate delivered to the Exchange Agent are to be
tendered, fill in the number of shares of Series B Preferred which are to
be tendered in the box entitled "Number of Shares Tendered". In such case,
a new certificate for the remainder of the shares of Series B Preferred
represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal, unless otherwise provided in the appropriate
box on this Letter of Transmittal, as promptly as practicable following the
Expiration Date. All shares of Series B Preferred represented by
certificates delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the shares of Series B Preferred tendered hereby, the
signature(s) must correspond with the name(s) as written on the face of the
certificates without alteration, enlargement or any change whatsoever.
If any of the shares of Series B Preferred tendered hereby are
held of record by two or more persons, all such persons must sign this
Letter of Transmittal.
If any of the shares of Series B Preferred tendered hereby are
registered in different names on different certificates, it will be
necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered
holder(s) of the shares of Series B Preferred tendered hereby, no
endorsements of certificates or separate stock powers are required unless
Preferred Securities issued in exchange therefor are to be issued, or
shares of Series B Preferred not tendered or not exchanged are to be
returned, in the name of any person other than the registered holder(s).
Signatures on any such certificates or stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the shares of Series B Preferred tendered
hereby, certificates must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the certificates for such shares of Series B
Preferred. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Trust of the authority of such person
so to act must be submitted.
6. Stock Transfer Taxes. SunAmerica will pay all stock
transfer taxes, if any, applicable to the exchange of any shares of Series
B Preferred pursuant to the Offer. If, however, certificates representing
Preferred Securities, or shares of Series B Preferred not tendered or
accepted for exchange, are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Series B
Preferred tendered or if a transfer tax is imposed for any reason other
than the exchange of Series B Preferred pursuant to the Offer, then the
amount of any such transfer taxes (whether imposed on the registered holder
or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is
not submitted with this Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
7. Special Exchange and Delivery Instructions. If beneficial
interests in global securities representing Preferred Securities are to be
recorded in the name of, or any shares of Series B Preferred not tendered
or not accepted for exchange are to be issued or to be returned to, a
person other than the person(s) signing this Letter of Transmittal or any
certificates for shares of Series B Preferred not tendered or not accepted
for exchange are to be mailed to someone other than the person(s) signing
this Letter of Transmittal or to the person(s) signing this Letter of
Transmittal at an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Book-Entry
Shareholders may request that shares of Series B Preferred not accepted for
exchange be credited to such account maintained at DTC as such Book-Entry
Shareholder may designate under "Special Exchange Instructions". If no
such instructions are given, such shares of Series B Preferred not accepted
for exchange will be returned by crediting the account at DTC.
8. Waiver of Conditions. The conditions of the Offer may be
waived by the Trust from time to time in accordance with, and subject to
the limitations described in, the Offering Circular/Prospectus, provided
that acceptance of Series B Preferred validly tendered in the Offer is
subject to the condition that as of the Expiration Date there be at least
400 record or beneficial holders of Preferred Securities to be issued in
exchange of such Series B Preferred, which condition may not be waived.
9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offering Circular/Prospectus and
this Letter of Transmittal may be obtained from the Trust or the
Information Agent at their respective addresses or telephone numbers set
forth below.
(DO NOT WRITE IN SPACES BELOW)
Date Received_________ Accepted By________ Checked By__________
______________________________________________________________________________
Shares of Shares of Shares of Shares of
Series B Series B Series B No. of Series B
Preferred Preferred Preferred Preferred Preferred Certificate
Surrendered Tendered Accepted Securities Returned Block No.
______________________________________________________________________________
______________________________________________________________________________
Delivery Prepared By _________ Checked By_________ Date________
SunAmerica Capital Trust I
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Call Toll-Free: (800) 871-2000
The Information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
250 Vesey Street
North Tower
New York, New York 10281-1201
(212) 449-4906
March , 1995
NOTICE OF GUARANTEED DELIVERY
This form, or a form substantially equivalent to this form, must be
used to accept the Offer (as defined below) if certificates for shares of 9
1/4% Preferred Stock, Series B (the "Series B Preferred") of SunAmerica Inc.
("SunAmerica") and all other documents required by the Letter of Transmittal
cannot be delivered to the Exchange Agent by the Expiration Date (as defined in
the Offering Circular/Prospectus of SunAmerica and SunAmerica Capital Trust I
dated March __, 1995 (the "Offering Circular/Prospectus")). Such form may be
delivered by hand or facsimile transmission, telex or mail to the Exchange
Agent. See the Offering Circular/Prospectus.
To: The First National Bank of Chicago, Exchange Agent
By Hand or Overnight By Hand or Overnight
Courier in Chicago: Courier in New York:
The First National Bank First Chicago Trust Company
of Chicago, of New York
Exchange Agent 14 Wall Street
One North State Street 8th Floor - Window 2
9th Floor New York, New York 10005
Attention: Securities Processing
Suite 0124
Chicago, Illinois 60602
By Mail:
(registered or certified mail recommended)
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission:
(For Eligible Institutions Only)
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
Delivery of this Notice of Guaranteed Delivery to an address
other than as set forth above or transmission of instructions via facsimile
transmission to a number other than as set forth above will not constitute a
valid delivery.
Ladies and Gentlemen:
The undersigned hereby tenders to SunAmerica Capital Trust I (the
"Trust"), upon the terms and conditions set forth in the Offering
Circular/Prospectus dated March , 1995 and the related Letter of Transmittal
(which constitute the "Offer"), receipt of which is hereby acknowledged,
shares of Series B Preferred, pursuant to the guaranteed delivery
procedure set forth in the Offering Circular/Prospectus.
SIGN HERE
Certificate Nos. (if available)
...................................
.........................................
.........................................
If shares of Series B Preferred will be ...................................
tendered by book-entry transfer: (Signature(s))
Name of Tendering ...................................
Institution:........................... (Name(s)) (Please Print)
......................................... ...................................
(Address)
Account No. .............................
...................................
(Zip Code)
...................................
(Area Code and Telephone No.)
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office branch or agency in the
United States, guarantees (a) that the above named person(s) "own(s)" the
shares of Series B Preferred tendered hereby within the meaning of Rule 14e-4
under the Securities Exchange Act of 1934, as amended, (b) that such tender of
shares of Series B Preferred complies with Rule 14e-4 and (c) to deliver to
the Exchange Agent the shares of Series B Preferred tendered hereby, together
with a properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof and any other required documents, all within five New
York Stock Exchange, Inc. trading days of the date hereof.
........................................
(Name of Firm)
........................................
(Authorized Signature)
........................................
(Name)
........................................
(Address)
........................................
(Zip Code)
Dated: ..................... ........................................
(Area Code and Telephone No.)
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
___% TRUST ORIGINATED PREFERRED SECURITIES ("TOPrS")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth in the
Offering Circular/Prospectus by
SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
March , 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees
We have been appointed by SunAmerica Inc., a Maryland corporation
("SunAmerica") and SunAmerica Capital Trust I, a Delaware statutory business
trust (the "Trust"), to act as Dealer Manager in connection with the offer
(the "Offer") by the Trust to exchange its ____% Trust Originated Preferred
Securities ("TOPrS") (the "Preferred Securities") for up to 5,500,000 shares
of outstanding 9 1/4% Preferred Stock, Series B (the "Series B Preferred") of
SunAmerica that are validly tendered and accepted for exchange pursuant to the
Offer. In connection with the Offer, SunAmerica will deposit in the Trust as
trust assets its ___% Junior Subordinated Debentures, Series A, due 2044 as
set forth in the Offering Circular/Prospectus referred to below.
Pursuant to the Offer, exchanges will be made on the basis of one
Preferred Security for each share of Series B Preferred validly tendered and
accepted for exchange in the Offer. Shares of Series B Preferred not accepted
for exchange because of proration will be returned.
The Trust will accept for exchange all shares of Series B Preferred
validly tendered and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to
proration described in the Offering Circular/Prospectus dated March ___, 1995
(the "Offering Circular/Prospectus").
For your information and for forwarding to your clients for whom you
hold shares of Series B Preferred registered in your name or in the name of
your nominee, we are enclosing the following documents:
1. Offering/Circular Prospectus dated , 1995;
2. Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing
information relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the shares of Series B Preferred and all other required
documents cannot be delivered to the Exchange Agent by the
Expiration Date (as defined in the Offering/Circular
Prospectus);
4. A form of letter that may be sent to your clients of whose
accounts you hold shares of Series B Preferred registered in
your name or in the name of your nominee, with space provided
for obtaining such clients' instructions with regard to the
Offer.
5. Return envelope addressed to The First National Bank of
Chicago, the Exchange Agent.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON MARCH , 1995, UNLESS THE OFFER IS EXTENDED.
Neither SunAmerica nor the Trust will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager as
described in the Offering Circular/Prospectus) for soliciting tenders of
shares of Series B Preferred pursuant to the Offer. SunAmerica will, however,
upon request, reimburse brokers, dealers, commercial banks and trust companies
for reasonable and necessary costs and expenses incurred by them in forwarding
materials to their customers. SunAmerica will pay all stock transfer taxes
applicable to the acceptance of shares of Series B Preferred pursuant to the
Offer, subject to Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent or the undersigned at the addresses and telephone
numbers set forth in the back cover of the Offering Circular/Prospectus.
Very truly yours,
MERRILL LYNCH & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF SUNAMERICA, THE TRUST, THE TRUSTEES OF THE TRUST,
THE DEALER MANAGER, THE INFORMATION AGENT OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
___% TRUST ORIGINATED PREFERRED SECURITIES ("TOPrS")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth in the
Offering Circular/Prospectus by
SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
March , 1995
To Our Clients:
Enclosed for your consideration are the Offering Circular/Prospectus
dated February ___, 1995 (the "Offering Circular/Prospectus") and the related
Letter of Transmittal in connection with the offer (the "Offer") by SunAmerica
Capital Trust I, a Delaware statutory business trust (the "Trust") to exchange
its ____% Trust Originated Preferred Securities ("TOPrS") (the "Preferred
Securities") for up to 5,500,000 shares of outstanding 9 1/4% Preferred Stock,
Series B (the "Series B Preferred") of SunAmerica Inc., a Maryland corporation
("SunAmerica") that are validly tendered and accepted for exchange pursuant to
the Offer. In connection with the Offer, SunAmerica will deposit in the Trust
as trust assets its ___% Junior Subordinated Debentures, Series A, due 2044 as
set forth in the Offering Circular/Prospectus.
Pursuant to the Offer, exchanges will be made on the basis of one (1)
Preferred Security for each share of Series B Preferred validly tendered and
accepted for exchange in the Offer. Shares of Series B Preferred not accepted
for exchange because of proration will be returned.
The Trust will accept for exchange all shares of Series B Preferred
validly tendered and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to
proration described in the Offering Circular/Prospectus. We are the holder
of record of shares of Series B Preferred held for your account. A tender of
such shares of Series B Preferred can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
shares of Series B Preferred held by us for your account.
We request instructions as to whether you wish us to tender any or
all of the shares of Series B Preferred held by us for your account, upon the
terms and subject to the conditions set forth in the Offering
Circular/Prospectus and the Letter of Transmittal.
Your attention is invited to the following:
1. The Offer, the proration period and withdrawal rights expire at
5:00 p.m., New York City time, on March ___, 1995, unless the Offer is
extended.
2. Subject to the next sentence, the Trust expressly reserves the
right to extend, amend or modify the terms of the Offer, and not accept for
exchange any Series B Preferred, at any time prior to the date of expiration
of the Offer for any reason, including (without limitation) if holders of
fewer than 2,810,000 shares of Series B Preferred are tendered (which
condition may be waived by the Trust). In addition, acceptance of Series B
Preferred validly tendered in the Offer is subject to the condition that there
be at least 400 record or beneficial holders of Preferred Securities to be
issued in exchange for Series B Preferred, which condition may not be waived.
3. Any stock transfer taxes applicable to the exchange of shares of
Series B Preferred pursuant to the Offer will be paid by SunAmerica, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your shares of Series B
Preferred, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An
envelope to return your instructions to us is enclosed. If you authorize
tender of your shares of Series B Preferred, all such shares of Series B
Preferred will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the Expiration Date.
As described in the Offering Circular/Prospectus, if fewer than all
shares of Series B Preferred validly tendered prior to the Expiration Date are
to be accepted by the Trust, the Trust will accept shares of Series B
Preferred from each tendering holder on a pro rata basis, subject to
adjustment to avoid the acceptance for exchange of fractional shares.
The Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of shares of Series B Preferred in any jurisdiction in
which the making of the Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction. In those jurisdictions the laws of which
require that the Offer be made by a licensed broker or dealer, the Offer shall
be deemed to be made on behalf of the Trust by Merrill Lynch & Co. or one of
more registered brokers or dealers licensed under the laws of such
jurisdiction.
Instructions with Respect to the Offer
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offering Circular/Prospectus dated March ___, 1995 and the related
Letter of Transmittal in connection with the Offer by the Trust to exchange
its Preferred Securities for up to 5,500,000 shares of outstanding 9 1/4%
Series B Preferred of SunAmerica that are validly tendered and accepted for
exchange. Pursuant to the Offer, exchanges will be made on the basis of one
Preferred Security for each share of Series B Preferred validly tendered and
accepted for exchange in the Offer. Shares of Series B Preferred not accepted
for exchange because of proration will be returned.
This will instruct you to tender the number of shares of Series B
Preferred indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Offering
Circular/Prospectus and the related Letter of Transmittal.
( ) By checking this box, all shares of Series B Preferred held by us for
your account, including fractional shares, will be tendered in the
Offer. If fewer than all shares of Series B Preferred are to be
tendered, please check the box and indicate below the aggregate
number of shares of Series B Preferred to be tendered by us.
_________________ shares(*)
_________
(*) Unless otherwise indicated, it will be assumed that all shares of
Series B Preferred held by us for your account are to be tendered.
SIGN HERE
...................................... ..................................
...................................... ..................................
Signature(s)
..................................
Please print name(s) and
address(es) here
Dated.................................
________ __, 1995
The First National Bank of Chicago
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
Re: SunAmerica Inc. ("SunAmerica") and SunAmerica Capital
Trust I (the "Trust" and, together with SunAmerica, the
"Offerors")
Ladies and Gentlemen:
Pursuant to The Offer section of the Offering
Circular/Prospectus dated ________________ (the "Offering
Circular/Prospectus"), we appoint you as Exchange Agent subject to the terms
hereof. Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Offering Circular/Prospectus.
The Offerors have delivered to you or will deliver to you (i) a
copy of the Letter of Transmittal, in the form attached hereto as Exhibit A,
(ii) copies of all other documents or materials to be forwarded to the Holders
and (iii) a copy of the resolutions adopted by the Board of Directors of
SunAmerica or a duly constituted committee thereof authorizing the Offer and
your appointment as Exchange Agent. SunAmerica has delivered or will deliver
to you (i) a list showing the names and addresses of the Holders as of the
close of business on March __, 1995, and the number of shares of Series B
Preferred held by each such Holder as of such date and (ii) a list of
certificates (giving the certificate number) stating which shares of Series B
Preferred have been or are, as of such date, lost, stolen, destroyed or
replaced or restricted as to transfer (noting the text of the restrictive
legends applicable thereto) or with respect to which a stop transfer order has
been noted.
1. Appointment of the Exchange Agent. This will confirm the Offerors'
appointment of The First National Bank of Chicago as the Exchange Agent
provided for in the Offering Circular/Prospectus and, in that capacity,
authorization to act solely as agent for the Offerors hereunder for the
purpose of receiving from the Holders the Series B Preferred tendered in
exchange for Preferred Securities of the Trust upon satisfaction of the
conditions set forth herein. You will not owe fiduciary duties to any other
person by reason of this appointment.
2. Duties and Obligations of the Exchange Agent. As Exchange Agent, you
are hereby instructed to perform the specific exchange agency duties set forth
in The Offer section of the Offering Circular/Prospectus and the related
Letter of Transmittal and to perform such duties as are specifically set forth
herein, and no implied covenants or obligations should be read into your
appointment as Exchange Agent against you. Without limiting and in
furtherance of the foregoing, you shall not be liable or responsible for any
of the provisions of the Offering Circular/Prospectus except for those
expressly referred to herein above. Further, as Exchange Agent you:
(i) will furnish reports from time to time at the request of
SunAmerica, the Trust, the Information Agent or the Dealer Manager
showing the number of shares of Series B Preferred tendered
(previous, herewith and total), the number of shares of Series B
Preferred validly tendered represented by certificates (or for which
confirmation of receipt of book-entry transfer of such shares into
the Exchange Agent's account pursuant to the procedures set forth in
the Offering Circular/Prospectus has been received) (previous,
herewith and total), the number of shares of Series B Preferred
represented by Notice of Guaranteed Delivery received on such date,
and the number of shares of Series B Preferred properly withdrawn on
such date;
(ii) will be regarded as making no representations or warranties
and having no responsibilities regarding the validity or adequacy of
the Offerors' power to make this appointment or the Offer;
(iii) will not be responsible in any manner whatsoever for the
correctness of the statements made in the Offering
Circular/Prospectus; the Letter of Transmittal or in any document
furnished to you by the Offerors;
(iv) shall not be liable for any action taken, suffered, or
omitted or for any error of judgment made by you in the performance
of your duties hereunder, in the absence of willful misconduct or
gross negligence on your part, nor shall you be liable for any error
of judgment made in good faith unless you shall have been grossly
negligent in ascertaining the pertinent facts;
(v) may rely and shall be protected in acting or refraining
from acting upon any communication authorized hereby and upon any
oral or written instruction, notice, request, direction, consent,
report, certificate, form of bond certificate or other instrument,
paper or document in good faith believed by you to be genuine;
(vi) may consult with counsel of your choice, and the advice of
such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by you hereunder
in good faith and in reliance thereon; and
(vii) may perform your duties and exercise your rights hereunder
directly or by or through agents or attorneys and shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by you with due care hereunder.
3. Maintenance of Records. You will keep and maintain complete and
accurate records and ledgers showing all Series B Preferred exchanged by you
and payments made by you. Letters of Transmittal and telegrams, telexes,
facsimile transmissions and other materials submitted to you shall be
preserved by you until delivered to, or otherwise disposed of in accordance
with the instructions of, the Offerors.
4. Indemnification, Compensation and Expenses. (a) In consideration of
your acceptance of the foregoing appointment by the Offerors, SunAmerica
hereby agrees:
(1) to indemnify you for, and to hold you harmless against,
any loss, liability or expense incurred without gross negligence or
willful misconduct on your part, arising out of or in connection with
the acceptance or administration of the agency created under the
foregoing appointment, including the costs and expenses (including
the reasonable fees and expenses of your counsel) of defending
yourself against any claim or liability in connection with the
exercise or performance of any of your duties thereunder and of
enforcing this indemnification provision; and
(ii) to pay to you a fee for all services rendered by you
under the foregoing appointment according to the fee schedule
attached hereto as Exhibit A; and
(iii) to reimburse you upon your request for all reasonable
expenses, disbursements and advances incurred or made by you in
accordance with any of your agency duties (including the reasonable
compensation and the expenses and disbursements of your agents and
counsel), except any such expenses, disbursement or advance as may be
attributable to your gross negligence or willful misconduct.
(b) You shall not be required to advance, expend or risk your
own funds or otherwise incur or become exposed to financial liability in the
performance of your duties hereunder.
5. IRS Filings. You shall arrange to comply with all requirements
under the tax laws of the United States, including those relating to missing
Taxpayer Identification Numbers, and shall file any appropriate reports with
the IRS (e.g., 1099, 1099B, etc.).
6. Governing Law. This agreement shall be construed and enforced in
accordance with the laws of the state of New York
Please confirm your acceptance of the arrangements herein
provided by signing and returning to us the enclosed duplicates of this letter.
SUNAMERICA INC.
By: ________________________
Name:
Title:
SUNAMERICA CAPITAL TRUST I
By: ________________________
Name: James R. Belardi
Title: Trustee
By: ________________________
Name: Scott L. Robinson
Title: Trustee
THE FIRST NATIONAL BANK
OF CHICAGO
By: _______________________________
Name:
Title:
EXHIBIT A
FIRST CHICAGO
FEE SCHEDULE
EXCHANGE AGENT SERVICES
SERIES B PREFERRED STOCK/EXCHANGE OFFER
SUNAMERICA INC.
SUNAMERICA CAPITAL TRUST I
I. Exchange Agency
A fee for the receipt of tendered shares of SunAmerica Inc. Series B
Preferred Stock will be charged at $6.50 per letter of transmittal.
The total charge will be subject to a minimum of $3,000 and maximum
of $10,000.
This fee covers examination and execution of all required
documentation, receipt of tendered shares and transmittal letters,
reporting as required to SunAmerica and other parties and
communication with DTC.
II. Miscellaneous
Fees for services not specifically covered in this schedule will be
assessed in amounts commensurate with the services rendered. The
fees in this schedule are subject to reasonable adjustments as
changes in laws, procedures, or costs of doing business demand. The
costs of supplies and other out-of-pocket expenses that can be
directly allocated will be added to our regular charges.
[Georgeson & Company Inc. Letterhead]
January 20, 1995
SunAmerica Inc.
1 SunAmerica Center 36-07
Century City
Los Angeles, CA 90067-6022
LETTER OF AGREEMENT
This Letter of Agreement (the "Agreement") sets forth the terms and conditions
under which Georgeson & Company Inc. ("Georgeson") has been retained by
SunAmerica Inc. ("SunAmerica") as Information Agent for its contemplated
exchange offer (the "Offer"). The term of the Agreement shall be the term of
the Offer, including any extensions thereof.
1. During the term of the Agreement, Georgeson will: provide
advice and consultation with respect to the planning and
execution of the Offer; assist in the preparation and placement
of newspaper ads; assist in the distribution of Offer documents
to brokers, banks, nominees, institutional investors, and other
shareholders and investment community accounts; answer collect
telephone inquiries from shareholders and their
representatives; and, if requested, call individuals who are
registered holders or non-objecting beneficial owners ("NOBOs").
2. SunAmerica will pay Georgeson a fee of $6,500, of which half is
payable in advance per the enclosed invoice and the balance at
the expiration of the Offer, plus an additional fee to be
mutually agreed upon if the Offer is extended more than fifteen
days beyond the initial expiration date. SunAmerica will pay
Georgeson an additional sum computed on the basis of $4.50 per
incoming call received in excess of 1,000, and if Georgeson is
requested to call registered holders or NOBOs, SunAmerica will
also pay Georgeson a sum computed on the basis of $4.50 per
such call, which fee will include all telephone charges. In
addition, SunAmerica will reimburse Georgeson for reasonable
costs and expenses incurred by Georgeson in fulfilling the
Agreement, including but not limited to: postage and freight
charges incurred by Georgeson in the delivery of Offer
documents; printing costs; charges for the production of
shareholder lists (paper, computer cards, etc.), mailing
labels, or other forms of information requested by SunAmerica
or its agents and other expenses or disbursements authorized by
SunAmerica or its agents.
3. Georgeson will review for accuracy the bills rendered by
brokers and banks forwarding Offer material to beneficial
owners, before forwarding such bills to SunAmerica for payment.
4. Georgeson hereby agrees not to make any representations not
included in the Offer documents.
5. SunAmerica agrees to indemnify and hold Georgeson harmless
against any loss, damage, expense (including, without
limitation, legal and other related fees and expenses),
liability or claim arising out of Georgeson's fulfillment of the
Agreement (except for any loss, damage, expense, liability or
claim arising out of Georgeson's own negligence or misconduct).
At its election, SunAmerica may assume the defense of any such
action. Georgeson hereby agrees to advise SunAmerica of any
such liability or claim promptly after receipt of any notice
thereof. The indemnification contained in this paragraph will
survive the term of the Agreement.
6. Georgeson agrees to preserve the confidentiality of all
non-public information provided by SunAmerica or its agents for
our use in providing services under this Agreement, or
information developed by Georgeson based upon such non-public
information.
By executing the Agreement below the undersigned agrees to be bound by its
terms.
ACCEPTED: Sincerely,
SUNAMERICA INC. GEORGESON & COMPANY INC.
By: /s/ Scott Richland By: /s/ Alan M. Miller
---------------------- ----------------------
Alan M. Miller
Title: Vice President and Title: Managing Director
Assistant Treasurer
Date: January 20, 1995
This is neither an offer to exchange or to sell nor a solicitation of an
offer to exchange or buy any of these securities. The Offer is made only
by the Offering Circular/Prospectus and the related Letter of Transmittal
and the Offer is not being made to, nor will tenders be accepted from or
on behalf of, holders of these securities in any jurisdiction in which
the making or acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction. In any jurisdiction
where the securities or blue sky laws require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Trust
by Merrill Lynch & Co. or one or more other brokers or dealers which are
licensed under the laws of such jurisdiction.
Notice of Offer to Holders of
SUNAMERICA INC.
9 1/4% Preferred Stock, Series B
SunAmerica Capital Trust I, a Delaware statutory business trust (the
"Trust") is offering, upon the terms and subject to the conditions set forth
in its Offering Circular/Prospectus dated March __, 1995 (the "Offering
Circular/Prospectus") and the accompanying Letter of Transmittal (the "Letter
of Transmittal" which, together with the Offering Circular/Prospectus,
constitute the "Offer"), to exchange its ___% Trust Originated Preferred
Securities (TOPrS") (the "Preferred Securities") for up to 5,500,000 shares of
outstanding 9 1/4% Preferred Stock, Series B (the "Series B Preferred") of
SunAmerica Inc., a Maryland corporation ("SunAmerica"). Exchanges will be
made on the basis of one (1) Preferred Security for each share of Series B
Preferred validly tendered and accepted for exchange in the Offer. Shares of
Series B Preferred not accepted for exchange because of proration will be
returned. In connection with the Offer, SunAmerica will deposit in the Trust
as trust assets its ___% Junior Subordinated Debentures, Series A, due 2044 as
set forth in the Offering Circular/Prospectus.
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_____________________, UNLESS EXTENDED.
Upon the terms and conditions of the Offer, including the provisions
relating to proration described in the Offering Circular/Prospectus, the Trust
will accept for exchange up to 5,500,000 shares of Series B Preferred, validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on March
___, 1995, or if the Offer is extended by the Trust, in its sole discretion,
the latest date and time to which the Offer has been extended (the "Expiration
Date"). Tenders of Series B Preferred pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date and, unless accepted for exchange by
the Trust, may be withdrawn at any time after 40 business days after ______,
1995. Shares of Series B Preferred not accepted because of proration will be
returned to the tendering holders at SunAmerica's expense as promptly as
practicable following the Expiration Date.
Subject to the next sentence, the Trust expressly reserves the right
to extend, amend or modify the terms of the Offer, and not accept for exchange
any Series B Preferred, at any time prior to the Expiration Date for any
reason, including (without limitation) if holders of fewer than 2,810,000
shares of Series B Preferred are tendered (which condition may be waived by
the Trust). In addition, acceptance of Series B Preferred validly tendered in
the Offer is subject to the condition that there be at least 400 record or
beneficial owners of Preferred Securities to be issued in exchange for Series
B Preferred, which condition may not be waived.
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies while
preserving SunAmerica's flexibility with respect to future financings.
The Offering Circular/Prospectus and Letter of Transmittal contain
important information which should be read before any action is taken by
holders of Series B Preferred. Tenders may be made only by a properly
completed and executed Letter of Transmittal and in conformance with the terms
thereof and of the Offering Circular/Prospectus.
The information required to be disclosed by paragraph (d)(1) of Rule
13e-4 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, is contained in the Offering Circular/Prospectus and is
incorporated herein by reference.
The Offering Circular/Prospectus and the related Letter of
Transmittal are first being sent to holders of Series B Preferred on ________,
1995 and are being furnished to brokers, dealers, banks and similar persons
whose names, or names of whose nominees, appear on the lists of holders of the
Series B Preferred or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Series B Preferred.
Requests for copies of the Offering Circular/Prospectus or of the
Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to
Georgeson & Company, Inc., the Information Agent, at (800) 223-2064, and
copies will be forwarded promptly at SunAmerica's expense.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
------------------------
Wall Street Plaza
New York, New York 10005
Call Toll Free:
(800) 223-2064
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
(212) 449-4906
_________, 1995
[SUNAMERICA INC. LETTERHEAD]
, 1995
To Holders of 9 1/4%
Preferred Stock, Series B:
SunAmerica Capital Trust I, a newly organized special purpose
Delaware statutory business trust (the "Trust"), all of whose common
beneficial interests are owned by SunAmerica Inc. ("SunAmerica"), is proposing
an exchange offer for up to 5,500,000 shares of outstanding 9 1/4% Preferred
Stock, Series B (the "Series B Preferred") of SunAmerica. The Trust is
offering (the "Offer") to exchange its ___% Trust Originated Preferred
Securities ("TOPrS") (the "Preferred Securities") for shares of Series B
Preferred on the basis of one Preferred Security for each share of Series B
Preferred validly tendered and not withdrawn pursuant to the Offer. Shares of
Series B Preferred not accepted for exchange because of proration or otherwise
will be returned. In connection with the Offer, SunAmerica will deposit in the
Trust as trust assets its ___% Junior Subordinated Debentures, Series A, due
2044.
The Offer is explained in detail in the enclosed Offering
Circular/Prospectus and Letter of Transmittal. If you want to tender your
shares and to participate in the Offer, the instructions for tendering are
also set forth in detail in the enclosed materials. I encourage you to read
these materials carefully before making any decision with respect to the
Offer. Neither SunAmerica nor its Board of Directors makes any recommendation
to any stockholder whether to tender or to refrain from tendering in the Offer.
Very truly yours,
