=============================================================================
As filed with the Securities and Exchange Commission on September 29, 1995
Registration No. 33-62405
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SunAmerica Inc. Maryland 86-0176061
SunAmerica Capital Trust II Delaware 95-6994849
SunAmerica Capital Trust III Delaware 95-6994850
SunAmerica Capital Trust IV Delaware 95-6994851
(Exact name of (State or other (I.R.S. employer
registrant as jurisdiction of identification
specified in incorporation or number)
its charter) organization)
1 SunAmerica Center,
Los Angeles, California 90067-6022
(Address, including zip code, and telephone number, including
area code, of Registrant's 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, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
David W. Ferguson, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
Approximate date of commencement of proposed sale to the public: From
time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities being offered only in
connection with dividend or interest reinvestment plans, please check
the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ________
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to Offering Price Aggregate Registration
Securities to be Registered be Registered (1)(2) Per Unit(3) Offering Price Fee(4)
--------------------------- -------------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C>
Senior debt securities, subordinated debt
securities and junior subordinated debt
securities (collectively, "Debt Securities")
of SunAmerica Inc. ..................................
Warrants of SunAmerica to purchase debt securities.....
Warrants of SunAmerica to purchase preferred stock
or depository shares
Warrants of SunAmerica to purchase common stock........
Preferred Stock of SunAmerica Inc. ....................
Depositary Shares of SunAmerica Inc. ..................
Common Stock of SunAmerica Inc. .......................
Preferred Securities of SunAmerica Capital Trust II ... $1,000,000,000 100% $1,000,000,000 $344,827.59
Preferred Securities of SunAmerica Capital Trust III...
Preferred Securities of SunAmerica Capital Trust IV....
Guarantees of Preferred Securities of SunAmerica Capital
Trust II, SunAmerica Capital Trust III and SunAmerica
Captial Trust IV by SunAmerida Inc.(5)................
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</TABLE>
(footnotes on following page)
____________
(1) Such indeterminate number or amount of Debt Securities, Warrants,
Preferred Stock Depositary Shares and Common Stock of SunAmerica and
Preferred Securities of SunAmerica Capital Trust II, SunAmerica Capital
Trust III and SunAmerica Capital Trust IV as may from time to time be
issued at indeterminate prices. Junior Subordinated Debt Securities
may be issued and sold to SunAmerica Capital Trust II, SunAmerica
Capital Trust III and SunAmerica Capital Trust IV, in which event such
junior subordinated debt securities may later be distributed to the
holders of Preferred Securities upon a dissolution of SunAmerica
Capital Trust II, SunAmerica Capital Trust III and SunAmerica Capital
Trust IV and the distribution of the assets thereof.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign
currencies as shall result in an aggregate initial offering price for
all securities of $1,000,000,000. The Prospectuses herein cover
$1,000,000,000 of securities. In addition, this Registration Statement
includes such presently indeterminate number of Securities (as defined
herein) as may be issuable from time to time upon conversion or
exchange of the Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
and exclusive of accrued interest and dividends, if any.
(4) Previously paid.
(5) No separate consideration will be received for any Guarantee or any
other obligation. SunAmerica is also registering under this
registration statement all other obligations that it may have with
respect to Preferred Securities by SunAmerica Capital Trust II,
SunAmerica Capital Trust III or SunAmerica Capital Trust IV.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in accordance
with section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.
===========================================================================
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses to be
used in connection with offerings of the following securities:
(1) Debt Securities (both senior and subordinated), Preferred Stock (or
depositary shares representing Preferred Stock) and Common Stock of
SunAmerica Inc. and Warrants of SunAmerica Inc. to purchase any of the
foregoing.
(2) Preferred Securities of SunAmerica Capital Trust II, SunAmerica Capital
Trust III and SunAmerica Capital Trust IV, severally, Junior
Subordinated Debentures of SunAmerica Inc. and Guarantees by SunAmerica
Inc. of Preferred Securities issued by a SunAmerica Capital Trust.
Each offering of securities made under this Registration Statement will
be made pursuant to one of these Prospectuses, with the specific terms of the
securities offered thereby set forth in an accompanying Prospectus Supplement.
[LOGO]
PROSPECTUS
SUNAMERICA INC.
Debt Securities
Preferred Stock
Common Stock
Warrants
SunAmerica Inc. (the "Company") may offer and sell from time to time (i)
its unsecured debt securities ("Debt Securities"), (ii) shares of its
preferred stock, without par value (the "Preferred Stock"), which may be
represented by depositary shares as described herein, (iii) shares of its
common stock, par value $1.00 per share (the "Common Stock") or (iv)
warrants to purchase Debt Securities, Preferred Stock and Common Stock, the
"Warrants"). The Debt Securities, Preferred Stock, Common Stock and
Warrants are herein collectively referred to as the "Securities". The
Securities may be offered in one or more separate classes or series, in
amounts, at prices and on terms to be determined by market conditions at
the time of sale and to be set forth in a supplement or supplements to this
Prospectus (a "Prospectus Supplement"). Securities may be sold for U.S.
dollars, foreign denominated currency or currency units; amounts payable
with respect to any Securities may likewise be payable in U.S. dollars,
foreign denominated currency or currency units -- in each case, as the
Company specifically designates. By separate prospectus, the form of which
is included in the Registration Statement of which this Prospectus forms a
part, three Delaware statutory business trusts (the "Trusts") which are
wholly owned subsidiaries of the Company, may from time to time severally
offer Preferred Securities guaranteed by the Company to the extent set
forth therein and the Company may offer from time to time Junior
Subordinated Debt Securities either directly or to a Trust. The aggregate
initial public offering price of the securities to be offered by this
Prospectus and such other prospectus shall not exceed $1,000,000,000.
An accompanying Prospectus Supplement will set forth certain terms of
any Debt Securities in respect of which this Prospectus is being delivered,
including, where applicable, the ranking as senior or subordinated Debt
Securities, the specific designation, aggregate principal amount, purchase
price, maturity, interest rate (or manner of calculation thereof), time of
payment of interest (if any), listing (if any) on a securities exchange,
authorized denomination, any exchangeability, conversion, redemption,
prepayment or sinking fund provisions, the currency or currencies or currency
unit or units in which principal, premium, if any, or interest is payable and
any other specific terms of the Debt Securities. An accompanying Prospectus
Supplement will set forth certain terms of any Preferred Stock in respect of
which this Prospectus is being delivered, including the specific designation,
number of shares, purchase price and the rights, preferences and privileges
thereof and any qualifications or restrictions thereon (including dividends,
liquidation value, voting rights, terms for the redemption, conversion or
exchange thereof and any other specific terms of the Preferred Stock), listing
(if any) on a securities exchange and whether the Company has elected to offer
the Preferred Stock in the form of depositary shares. An accompanying
Prospectus Supplement will set forth certain terms of any Common Stock in
respect of which this Prospectus is being delivered, including the number of
shares offered, the initial offering price, market price and dividend
information. An accompanying Prospectus Supplement will set forth certain
terms of any Warrants in respect of which this Prospectus is being delivered,
including the specific designation, the number, purchase price and terms
thereof, any listing of the Warrants or the underlying Securities on a
securities exchange or any other terms in connection with the offering, sale
and exercise of the Warrants, as well as the terms on which and the Securities
for which such Warrants may be exercised.
--------------
The Company may sell the Securities directly, through agents designated
from time to time or through underwriters or dealers. See "Plan of
Distribution" below. If any agents of the Company or any underwriters or
dealers are involved in the sale of the Securities, the names of such agents,
underwriters or dealers and any applicable commissions and discounts will be
set forth in any related Prospectus Supplement. The managing underwriter or
underwriters with respect to each series sold to or through underwriters will
be named in the accompanying Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 29, 1995.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 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 filed by the Company with the
Commission can be inspected and copied at the Commission's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the public
reference facilities of the regional offices in Chicago and New York. The
addresses of these regional offices are as follows: 500 West Madison Street,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material also can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington D.C. 20549, upon payment of the fees prescribed by the rules and
regulations of the Commission. Reports, proxy statements, and other
information concerning the Company may also be inspected at the offices of the
New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005 and
at the offices of the Pacific Stock Exchange at 301 Pine Street, San
Francisco, California 94104. The Company's Common Stock is listed on both
exchanges.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered by this Prospectus. This Prospectus
does not contain all the information set forth in the Registration Statement
and exhibits thereto. In addition, certain documents filed by the Company
with the Commission have been incorporated in this Prospectus by reference.
See "Incorporation of Certain Documents by Reference." 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. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement, including the exhibits thereto, and the documents
incorporated herein by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the
following documents previously filed by the Company with the Commission
pursuant to the 1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended September 30,
1994.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31,
1994, March 31, 1995 and June 30, 1995.
3. Current Reports on Form 8-K filed on November 14, 1994, January
24, 1995, April 25, 1995, May 26, 1995, July 14, 1995, July 28,
1995 and September 6, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c) 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this 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 or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such document shall be directed to
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022,
Attention: Vice President, Investor Relations (telephone (310) 772-6000).
For North Carolina Investors: The Commissioner of Insurance of the
State of North Carolina has not approved or disapproved this offering nor has
such Commissioner passed upon the accuracy or adequacy of this Prospectus.
No dealer, salesman or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any underwriter, dealer or agent. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy,
any securities other than the registered securities to which it relates in any
jurisdiction where, or to any person to whom, it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that
there has not been any change in the facts set forth in this Prospectus or in
the affairs of the Company since the date hereof.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
THE COMPANY
The Company is a diversified financial services company specializing in
retirement savings products and services. At June 30, 1995, the Company held
$27 billion of assets throughout its businesses, including $16.20 billion of
assets on its balance sheet, $2.08 billion of assets managed in mutual funds
and private accounts and $8.76 billion under custody in retirement trust
accounts. Together, the Company's life insurance companies rank among the
largest U.S. issuers of annuities. Complementing these annuity operations are
the Company's asset management operations; its two broker-dealers, which the
Company 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, the Company specializes in the sale of
tax-deferred long-term savings products and investments to the expanding
preretirement savings market. The Company markets fixed annuities and
fee-generating variable annuities, mutual funds and trust services, as well as
guaranteed investment contracts. The Company's products are distributed
through a broad spectrum of financial services distribution channels,
including independent registered representatives of the Company's
broker-dealer subsidiaries and unaffiliated broker-dealers, independent
general insurance agents and financial institutions.
The principal executive offices of the Company are located at 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
RECENT DEVELOPMENTS
On September 20, 1995, the Company's wholly owned subsidiary, Anchor
National Life Insurance Company, signed a definitive agreement pursuant to
which it or an affiliate will acquire CalFarm Life Insurance Company
("CalFarm Life") from its parent, Zenith National Insurance Corp., for
approximately $120 million in cash. Completion of the acquisition,
expected by year-end 1995, is subject to receipt of normal regulatory
approvals and other customary terms and conditions. CalFarm Life is
headquartered in Sacramento, California and currently markets a range of
life and health insurance and annuity products, specializing in the
qualified 403(b) market for teachers and other non-profit organizations.
At June 30, 1995, CalFarm Life had approximately $739 million in annuity
and life reserves, and approximately $2.8 billion of life insurance in
force. Under terms of the agreement, Zenith National will retain the
company's health insurance business.
On September 11, 1995, the Company's Board of Directors approved for
submission to shareholder vote an amendment to the Articles of Incorporation
to increase the Company's authorized capital from (i) 50,000,000 to
175,000,000 shares of Common Stock and (ii) 15,000,000 to 25,000,000 shares of
Class B Stock. The Company has scheduled a special shareholders' meeting on
October 30, 1995 (for shareholders of record as of September 21, 1995) for
consideration of the proposed increase in authorized capital stock. On
September 11, 1995, the Board of Directors also approved a three-for-two stock
split, to be effected in the form of a stock dividend, of its outstanding
Common Stock and Class B Stock, contingent upon shareholder approval of the
proposed increase in authorized capital stock.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the
net proceeds from the sale of the Securities are expected to be used for
general corporate purposes, including repayment or redemption of outstanding
debt or preferred stock, the possible acquisition of financial services
businesses or assets thereof, investments in portfolio assets and working
capital needs. The Company routinely reviews opportunities to acquire
financial services businesses or assets thereof.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to
fixed charges and earnings
to combined fixed charges and preferred stock dividends for the Company for
the periods indicated:
<TABLE>
<CAPTION> Nine months ended
June 30,
Years ended September 30, (unaudited)
---------------------------------------------------- -------------------------
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- ------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(excluding interest incurred on
reserves and trust deposits)(1) 2.4x 2.7x 4.0x 6.1x 5.8x 5.9x 5.8x
Ratio of earnings to fixed charges
(including interest incurred on
reserves and trust deposits)(2) 1.1x 1.1x 1.2x 1.4x 1.5x 1.5x 1.5x
Ratio of earnings to combined
fixed charges and preferred stock
dividends (excluding interest
incurred on reserves and trust
deposits)(3) 2.0x 2.3x 2.7x 2.8x 2.8x 2.8x 3.3x
Ratio of earnings to combined
fixed charges and preferred stock
dividends (including interest
incurred on reserves and trust
deposits)(4) 1.1x 1.1x 1.2x 1.3x 1.4x 1.4x 1.4x
</TABLE>
___________
(1) In computing the ratio of earnings to fixed charges (excluding interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness and dividends
on the preferred securities of a subsidiary grantor trust. Earnings are
computed by adding interest incurred on senior and subordinated
indebtedness and dividends paid on the preferred securities of a
subsidiary grantor trust to pretax income.
(2) In computing the ratio of earnings to fixed charges (including interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness, fixed annuity
contracts, guaranteed investment contracts and trust deposits, and
dividends on the preferred securities of a subsidiary grantor trust.
Earnings are computed by adding interest incurred on senior and
subordinated indebtedness, fixed annuity contracts, guaranteed investment
contracts and trust deposits, and dividends paid on the preferred
securities of a subsidiary grantor trust to pretax income.
(3) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (excluding interest incurred on reserves and
trust deposits), combined fixed charges and preferred stock dividends
consist of interest expense on senior and subordinated indebtedness,
dividends on the preferred securities of a subsidiary grantor trust and
dividends on preferred stock of the Company on a tax equivalent basis.
Earnings are computed by adding interest incurred on senior and
subordinated indebtedness and dividends paid on the preferred securities
of a subsidiary grantor trust to pretax income.
(4) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (including interest incurred on reserves 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; dividends on the preferred securities of a subsidiary grantor
trust; and dividends on preferred stock of the Company 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 and dividends paid on
the preferred securities of a subsidiary grantor trust to pretax income.
DESCRIPTION OF DEBT SECURITIES
The Company's unsecured Debt Securities, consisting of notes, debentures
or other evidences of indebtedness, may constitute either senior Debt
Securities ("Senior Debt Securities") or subordinated Debt Securities
("Subordinated Debt Securities") of the Company and will be issued in the case
of Senior Debt Securities, under a Senior Indenture dated as of April 15, 1993
(the "Senior Debt Indenture") between the Company and The First National Bank
of Chicago, as Trustee, and in the case of Subordinated Debt Securities, under
a Subordinated Indenture dated as of April 15, 1993 (the "Subordinated Debt
Indenture") between the Company and The First National Bank of Chicago, as
Trustee. The Senior Debt Indenture and the Subordinated Debt Indenture are
sometimes hereinafter referred to individually as an "Indenture" and
collectively as the "Indentures". The First National Bank of Chicago, in its
capacity as trustee under either or both of the Indentures, is referred to
hereinafter as the "Trustee." The Indentures are included as exhibits to the
Registration Statement of which this Prospectus is a part. The following
description summarizes the material terms of the Indentures and the Debt
Securities and is qualified in its entirety by reference to the detailed
provisions of the applicable Indenture, which contains the full text of such
provisions, including the definition of certain terms used herein, and for
other information regarding the Debt Securities. Numerical references in
parentheses below are to sections in the applicable Indenture. Wherever
particular sections or defined terms of the applicable Indenture are referred
to, such sections or defined terms are incorporated herein by reference as
part of the statement made, and the statement is qualified in its entirety by
such reference. The indentures are substantially identical except for
provisions relating to subordination and the Company's negative pledge and
restrictions on certain dispositions. Any Debt Securities offered by this
Prospectus and the accompanying Prospectus Supplement are referred to herein
as the "Offered Debt Securities".
General
Neither of the Indentures limits the amount of additional indebtedness
the Company or any of its subsidiaries may incur. The Debt Securities will be
unsecured senior or subordinated obligations of the Company. Since the
Company is a holding company, the Company's rights and the rights of its
creditors, including the holders of Debt Securities, to participate in the
assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to the prior claims of the subsidiary's creditors, except to
the extent that the Company may itself be a creditor with recognized claims
against the subsidiary. Claims on the Company's subsidiaries by creditors
other than the Company include substantial claims for policy benefits and debt
obligations, as well as other liabilities incurred in the ordinary course of
business. In addition, since many of the Company'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 the Company without prior regulatory approval is limited by
applicable laws and regulations.
The Indentures do not limit the amount of Debt Securities that may be
issued and provide that Debt Securities may be issued from time to time in one
or more series and may be denominated and payable in foreign currencies or
units based on or related to foreign currencies, including European Currency
Units. Special United States federal income tax considerations applicable to
any Debt Securities so denominated are described in the relevant Prospectus
Supplement.
Reference is made to the applicable Prospectus Supplement for the
following terms of and information relating to the Offered Debt Securities
offered thereby (to the extent such terms are applicable to such Debt
Securities): (i) classification as senior or subordinated Debt Securities,
the specific designation, aggregate principal amount, purchase price and
denomination; (ii) currency or units based on or relating to currencies in
which the Offered Debt Securities are denominated and/or in which
principal, premium, if any, and/or any interest will or may be payable;
(iii) any date of maturity; (iv) interest rate or rates (or the method by
which such rate will be determined), if any; (v) the dates on which any
such interest will be payable; (vi) the place or places where the
principal of, premium, if any, and interest, if any, on the Offered Debt
Securities will be payable; (vii) any redemption, repayment or sinking
fund provisions; (viii) whether, in the case of Subordinated Debt
Securities, such Offered Debt Securities are convertible into Common Stock
of the Company; (ix) whether the Offered Debt Securities will be issuable
in registered form ("Registered Debt Securities") or bearer form ("Bearer
Debt Securities") or both and, if Bearer Debt Securities are issuable, any
restrictions applicable to the place of payment of any principal of,
premium, if any, and interest on such Bearer Debt Securities, to the
exchange of one form for another and to the offer, sale and delivery of
such Bearer Debt Securities (except that under current United States
federal income tax law, Registered Debt Securities will not be exchangeable
into Bearer Debt Securities); (x) any applicable United States federal
income tax consequences, including whether and under what circumstances the
Company will pay additional amounts on Offered Debt Securities held by a
person who is not a U.S. person (as hereinafter defined) in respect of any
tax, assessment or governmental charge withheld or deducted and, if so,
whether the Company will have the option to redeem such Debt Securities
rather than pay such additional amounts; (xi) the proposed listing, if
any, of the Offered Debt Securities on any securities exchange; and (xii)
any other specific terms of the Offered Debt Securities, including any
modifications of or additions to the events of default or covenants
provided for with respect to such Debt Securities, and any terms which may
be required by or advisable under applicable laws or regulations not
inconsistent with the applicable Indenture.
Debt Securities may be presented for exchange and Registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the applicable Indenture. Debt
Securities in bearer form and the coupons, if any, appertaining thereto will
be transferable by delivery.
Debt Securities will bear interest at a fixed rate or a floating rate.
Debt Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes are described in the
relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest
payable on any interest payment date, to be determined by reference to one or
more currency exchange rates, commodity prices, equity indices or other
factors. Holders of such Debt Securities may receive a principal amount on
any principal payment date, or a payment of interest on any interest payment
date, that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of the
applicable currency, commodity, equity index or other factor. Information as
to the methods for determining the amount of principal or interest payable on
any date, the currencies, commodities, equity indices or other factors to
which the amount payable on such date is linked and certain additional tax
considerations will be set forth in the applicable Prospectus Supplement.
Global Debt Securities
The registered Debt Securities of a series may be issued in the form of
one or more fully registered global Securities (a "Registered Global
Security") that will be deposited with a depositary (a "Depositary") or with a
nominee for a Depositary identified in the Prospectus Supplement relating to
such series and registered in the name of the Depositary or a nominee thereof.
In such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and
until it is exchanged in whole for Debt Securities in definitive registered
form, a Registered Global Security may not be transferred except as a whole by
the Depositary for such Registered Security to a nominee of such Depositary or
by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered
Global Security will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will
be limited to persons that have accounts with the Depositary for such
Registered Global Security ("participants") or persons that may hold interests
through participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer system, the participant's accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership
of beneficial interests in such Registered Global Security will be shown on,
and the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its
nominee, is the registered owner of such Registered Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Debt Securities represented by such Registered Global
Security for all purposes under the applicable Indenture. Except as set forth
below, owners of beneficial interests in a Registered Global Security will not
be entitled to have the Debt Securities represented by such Registered Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of such Debt Securities in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture.
Accordingly, each person owning a beneficial interest in a Registered Global
Security must rely on the procedures of the Depositary for such Registered
Global Security and, if such person is not a participant, on the procedures of
the participant through which such person owns its interest, to exercise any
rights of a holder under the applicable Indenture. The Company understands
that under existing industry practices, if the Company requests any action of
holders or if an owner of a beneficial interest in a Registered Global
Security desires to give or take any action which a holder is entitled to give
or take under the applicable Indenture, the Depositary for such Registered
Global Security would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners
holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owners of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities
represented by a Registered Global Security, upon receipt of any payment of
principal, premium or interest in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices,
as is now the case with the securities held for the accounts of customers
in bearer form or registered in "street name", and will be the
responsibility of such participants.
If the Depositary for any Debt Securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary
or ceases to be a clearing agency registered under the 1934 Act, and a
successor Depositary registered as a clearing agency under the 1934 Act is not
appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one
or more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euro-clear and CEDEL, or with a nominee for such
depositary identified in the Prospectus Supplement relating to such series.
The specific terms and procedures, including the specific terms of the
depositary arrangement and any specific procedures for the issuance of Debt
Securities in definitive form in exchange for a Bearer Global Security, with
respect to any portion of a series of Debt Securities to be represented by a
Bearer Global Security will be described in the Prospectus Supplement relating
to such series.
Senior Debt
Payment of the principal of, premium, if any, and interest on Debt
Securities issued under the Senior Debt Indenture will rank pari passu with
all other unsecured and unsubordinated debt of the Company.
Subordinated Debt
Subordination. Payment of the principal of, premium, if any, and
interest on Debt Securities issued under the Subordinated Debt Indenture
will be subordinate and junior in right of payment, to the extent and in the
manner set forth in the Subordinated Debt Indenture, to all "Senior
Indebtedness" of the Company. The Subordinated Debt Indenture defines "Senior
Indebtedness" as the principal of and premium, if any, and interest on (a) all
indebtedness of the Company, whether outstanding on the date of the
Subordinated Debt Indenture or thereafter created, (i) for money borrowed by
the Company, (ii) for money borrowed by, or obligations of, others and either
assumed or guaranteed, directly or indirectly, by the Company, (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 the Company at the
time of the acquisition of such property by the Company, for the payment of
which the Company 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 the Company. Notwithstanding anything to
the contrary in the Subordinated Debt Indenture or the Subordinated Debt
Securities, Senior Indebtedness shall not include, (i) any indebtedness of the
Company 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 Debt Securities or (ii) any indebtedness of the Company to a
subsidiary of the Company. (Subordinated Debt Indenture, Section 1.1). The
Subordinated Indenture does not contain any limitation on the amount of Senior
Indebtedness that can be incurred by the Company. Indebtedness issued or to
be issued pursuant to the Indenture dated March 15, 1995 between the Company
and The First National Bank of Chicago, as Trustee, providing for the issuance
of junior subordinated indebtedness of the Company is subordinate in right of
payment to the Subordinated Debt Securities. As of the date of this
Prospectus, approximately $54.3 million principal amount of 9.95% junior
subordinated debentures due 2044 are outstanding under such Indenture.
In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or its property, or (b) that Subordinated Debt
Securities of any series are declared and payable before their expressed
maturity because of the occurrence of an Event of Default pursuant to
Section 5.1 of the Subordinated Debt 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 or money's worth, before the holders of any of such
Subordinated Debt Securities or coupons appertaining thereto are entitled
to receive a payment on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by such Subordinated Debt Securities
or of such coupons appertaining thereto. 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 or interest on the Subordinated
Debt Securities or coupons shall be made. (Subordinated Debt Indenture,
Article 13) If this Prospectus is being delivered in connection with a
series of Subordinated Debt Securities, the accompanying Prospectus
Supplement will set forth the approximate amount of Senior Indebtedness
outstanding as of the end of the most recent fiscal quarter.
Conversion Rights. The terms and conditions, if any, on which
Subordinated Debt Securities are convertible into Common Stock of the Company
will be set forth in the prospectus supplement relating thereto. Such terms
will include the conversion price, the conversion period, provisions as to
whether conversion will be at the option of the holder or the Company, the
events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of the convertible
Subordinated Debt Securities; and such terms may include provisions under
which the number of shares of Common Stock to be received by the holders of
the Subordinated Debt Securities would be calculated according to the market
price of the Common Stock as of a time stated in the prospectus supplement.
Certain Covenants of the Company
Limitations on Liens. The Senior Debt Indenture provides that the
Company and its Restricted Subsidiaries (as defined below) may not issue,
assume, incur or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien or other encumbrance (except for certain liens
specifically permitted by the Senior Debt Indenture), directly or indirectly,
upon any shares of the Voting Stock (as defined in the Senior Debt Indenture)
of a Restricted Subsidiary which shares are owned by the Company or its
Restricted Subsidiaries without effectively providing that the Debt Securities
issued under the Senior Debt Indenture (and if the Company so elects, any
other indebtedness of the Company ranking on a parity with such Debt
Securities) shall be secured equally and ratably with, or prior to, any such
secured indebtedness so long as such indebtedness remains outstanding. The
foregoing restrictions, however, do not apply to liens upon any shares of
Voting Stock of any corporation existing at the time such corporation becomes
a Restricted Subsidiary and extensions, renewals or replacements thereof.
(Senior Debt Indenture, Section 3.9)
The term "Restricted Subsidiary" means (a) so long as they are
Subsidiaries of the Company, SunAmerica Life Insurance Company ("SunAmerica
Life") and Anchor National Life Insurance Company ("Anchor"); (b) any other
present or future Insurance Subsidiary the Consolidated Total Assets (as
defined in the Senior Debt Indenture) of which constitute 20% or more of the
Consolidated Total Assets of the Company; and (c) any Subsidiary which is a
successor, by merger or otherwise, to substantially all of the business or
properties of any Insurance Subsidiary referred to or described in the
foregoing clauses (a) or (b). The term "Subsidiary" means any corporation or
other entity more than 50% of the outstanding shares of Voting Stock of which
is at the time of determination owned or controlled, directly or indirectly,
by the Company. The term "Insurance Subsidiary" means a Subsidiary registered
in the state of its domicile under the insurance laws of such state and
qualified to sell insurance products. (Senior Debt Indenture, Section 1.1)
Consolidation, Merger and Sale of Assets. Each Indenture provides that
the Company shall not consolidate or merge with or into, or transfer or lease
its assets substantially as an entirety to any person unless the Company shall
be the continuing corporation, or the successor corporation or person to which
such assets are transferred or leased shall be organized under the laws of the
United States or any state thereof or the District of Columbia and shall
expressly assume the Company's obligations on the Debt Securities and under
such Indenture, and after giving effect to such transaction no Event of
Default (as defined in such Indenture) shall have occurred and be continuing,
and certain other conditions are met. (Senior and Subordinated Debt
Indentures, Section 9.1)
This covenant would not apply to any recapitalization transaction, a
change of control of the Company or a highly leveraged transaction unless such
transactions or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. Except as may be described in a Prospectus Supplement applicable to
a particular series of Debt Securities, there are no covenants or other
provisions in the Indentures providing for a put or increased interest or that
would otherwise afford holders of Debt Securities additional protection in the
event of a recapitalization transaction, a change of control of the Company or
a highly leveraged transaction.
Restrictions on Certain Dispositions. The Senior Debt Indenture
provides that as long as any of the Senior Debt Securities remain outstanding,
the Company will not, and will not permit any Restricted Subsidiary to, issue,
sell, assign, transfer or otherwise dispose of, directly or indirectly, any of
the Voting Stock of any Restricted Subsidiary, unless (a) the issuance, sale,
assignment, transfer or other disposition is required to comply with the order
of a court or regulatory authority of competent jurisdiction, other than an
order issued at the request of the Company or of one of its Restricted
Subsidiaries; (b) the shares of Voting Stock issued, sold, assigned,
transferred or otherwise disposed of constitute directors' qualifying shares;
(c) all of the Voting Stock of a Restricted Subsidiary then owned by the
Company or by its Restricted Subsidiaries is disposed of, in a single
transaction or in a series of related transactions, for a consideration
consisting of cash or other property the fair market value of which (as
determined in good faith by the Board of Directors) is at least equal to the
Fair Value (as defined below) of such Voting Stock; or (d) after giving effect
to the issuance, sale, assignment, transfer or other disposition, the Company
and its Restricted Subsidiaries would own directly or indirectly at least 80%
of the issued and outstanding Voting Stock of such Restricted Subsidiary and
such issuance, sale, assignment, transfer or other disposition is made for a
consideration consisting of cash or other property which is at least equal to
the Fair Value of such Voting Stock. (Senior Debt Indenture, Section 9.3)
The term "Fair Value" when used with respect to any Voting Stock means the
fair value as determined in good faith by the Board of Directors of the
Company. (Senior Debt Indenture, Section 1.1) The Senior Debt Indenture
does not restrict the transfer of assets from a Restricted Subsidiary to any
other person, including the Company or another subsidiary of the Company.
Events of Default
An Event of Default is defined under each Indenture with respect to
Debt Securities of any series issued under such Indenture as being: (a)
default in payment of all or any part of the principal of the Debt
Securities of such series when due, either at maturity (or upon any
redemption), by declaration or otherwise; (b) default for 30 days in
payment of any interest on any Debt Securities of such series; (c) default
in payment of any sinking fund installment when due; (d) default for 60
days after written notice as provided in such Indenture in the observance
or performance of any other covenant or agreement in the Debt Securities of
such series or such Indenture other than a covenant included in such
Indenture solely for the benefit of a series of Debt Securities other than
such series; (e) certain events of bankruptcy, insolvency or
reorganization; or (f) an event of default with respect to any other
indebtedness for borrowed money (other than non-recourse obligations) of
the Company or any of its Restricted Subsidiaries, in an aggregate
principal amount exceeding $10,000,000, if such event of default shall
result in the acceleration of such other indebtedness under the terms of
the instrument under which such indebtedness is issued or secured, so long
as such acceleration is not cured, waived, rescinded or annulled, or such
indebtedness is not discharged, within 10 days after written notice thereof
as provided in such Indenture; provided that if any such acceleration shall
cease or be cured, waived, rescinded or annulled, then the Event of Default
by reason thereof shall be deemed likewise to have been thereupon cured.
(Senior and Subordinated Debt Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the
default in payment of principal of, premium, if any, or interest on, any
series of Debt Securities issued under such Indenture or due to the default in
the performance or breach of any other covenant or agreement of the Company
applicable to the Debt Securities of such series but not applicable to all
outstanding Debt Securities issued under such Indenture shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of each affected series (treated as
one class) issued under such Indenture and then outstanding may then declare
the principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately; and (b) if any Event of
Default due to a default in the performance of any other of the covenant or
agreements in such Indenture applicable to all outstanding Debt Securities
issued thereunder and then outstanding or due to certain events of bankruptcy,
insolvency and reorganization of the Company shall have occurred and be
continuing, either the trustee or the holders of not less than 25% in
principal amount of all Debt Securities issued under such Indenture and then
outstanding (treated as one class) may declare the principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal of (or
premium, if any) or interest on such Debt Securities) by the holders of a
majority in principal amount of the Debt Securities of all such affected
series then outstanding. (Senior and Subordinated Debt Indentures, Sections
5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities issued under such
Indenture requesting the Trustee to exercise any right or power under such
Indenture before proceeding to exercise any such right or power at the request
of such holders. (Senior and Subordinated Debt Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities of each affected series (treated as
one class) issued under such Indenture may direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee. (Senior and
Subordinated Debt Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under
such Indenture may institute any action against the Company under such
Indenture (except actions for payment of overdue principal, premium, if any,
or interest) unless such holder previously shall have given to the Trustee
written notice of default and continuance thereof and unless the holders of
not less than 25% in principal amount of the Debt Securities of each affected
series (treated as one class) issued under such Indenture and then outstanding
shall have requested the Trustee to institute such action and shall have
offered the Trustee reasonable indemnity, the Trustee shall not have
instituted such action within 60 days of such request and the Trustee shall
not have received direction inconsistent with such written request by the
holders of a majority in principal amount of the Debt Securities of each
affected series (treated as one class) issued under such Indenture and then
outstanding. (Senior and Subordinated Debt Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that the Company will file annually
with the Trustee a certificate of no default or a certificate specifying any
default that exists. (Senior and Subordinated Debt Indentures, Section 3.5)
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under each
Indenture as set forth below. (Senior and Subordinated Debt Indentures,
Section 10.1)
Under terms satisfactory to the Trustee, the Company may discharge
certain obligations to holders of any series of Debt Securities issued under
such Indentures which have not already been delivered to the Trustee for
cancellation and which have either become due and payable or are by their
terms due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee cash or, in the case of Debt
Securities payable only in U.S. dollars, U.S. Government Obligations (as
defined in such Indenture), as trust funds in an amount certified to be
sufficient to pay when due, whether at maturity, upon redemption or otherwise,
the principal of, premium, if any, and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders
of any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid its duty to register the transfer or
exchange of such series of Debt Securities, to replace any temporary,
mutilated, destroyed, lost or stolen series of Debt Securities or to maintain
an office or agency in respect of such series of Debt Securities. Under terms
satisfactory to the Trustee, the Company may instead be released with respect
to any outstanding series of Debt Securities issued under the relevant
Indenture from the obligations imposed by certain provisions of such Indenture
including Sections 3.9, 9.1 and 9.3, in the case of the Senior Debt Indenture,
and Section 9.1, in the case of the Subordinated Debt Indenture (which contain
the covenants described above limiting liens, consolidations, mergers,
transfers and leases and certain dispositions) and omit to comply with such
Sections without creating an Event of Default ("covenant defeasance").
Defeasance or covenant defeasance may be effected only if, among other things:
(i) the Company irrevocably deposits with the Trustee cash or, in the case of
Debt Securities payable only in U.S. dollars, 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 Debt Securities of such series issued under such Indenture; (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities (in the case of a defeasance, 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) in the case of the
Subordinated Debt Indenture no event or condition shall exist that, pursuant
to certain provisions described under "Subordinated Debt" above, would prevent
the Company from making payments of principal of, premium, if any, and
interest on the Subordinated Debt Securities at the date of the irrevocable
deposit referred to above.
Modification of the Indentures
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a
successor corporation of the obligations of the Company, (c) add covenants for
the protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in such Indenture, provided that such cure or
correction does not adversely affect the holders of such Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee. (Senior and
Subordinated Debt Indentures, Section 8.1)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series issued under such
Indenture then outstanding and affected (voting as one class), to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the Debt
Securities of each series so affected; provided that the Company and the
Trustee may not, without the consent of the holder of each outstanding Debt
Security affected thereby, (a) extend the stated maturity of the principal of
any Debt Security, or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or change the currency in which the principal
thereof (including any amount in respect of original issue discount), premium,
if any, or interest thereon is payable or reduce the amount of any original
issue Debt Security that is payable upon acceleration or provable in
bankruptcy or alter certain provisions of such Indenture relating to the Debt
Securities issued thereunder not denominated in U.S. dollars or impair the
right to institute suit for the enforcement of any payment on any Debt
Security when due or (b) reduce the aforesaid percentage in principal amount of
Debt Securities of any series issued under such Indenture, the consent of the
holders of which is required for any such modification. (Senior and
Subordinated Debt Indentures, Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
Concerning the Trustee
The First National Bank of Chicago is one of a number of banks with
which the Company and its subsidiaries maintain ordinary banking and trust
relationships.
DESCRIPTION OF CAPITAL STOCK
Under the Articles of Incorporation of the Company, as amended and
restated and including any Articles Supplementary (the "Articles of
Incorporation"), the Company has authority to issue 50,000,000 shares of Common
Stock, par value $1.00 per share ("Common Stock"), 15,000,000 shares of
Nontransferable Class B Stock, par value $1.00 per share (the "Nontransferable
Class B Stock"), 15,000,000 shares of Transferable Class B Stock, par value
$1.00 per share (the "Transferable Class B Stock," and, together with the
Nontransferable Class B Stock, the "Class B Stock") and 20,000,000 shares of
Preferred Stock, without par value ("Preferred Stock"). Preferred Stock may
be issued from time to time in one or more classes with such full, specific,
limited or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications and
limitations or restrictions thereof, as shall be stated and expressed in the
Articles of Incorporation or any amendment thereof or in the resolution or
resolutions of the Board of Directors of the Company establishing any class of
Preferred Stock. The dividend, voting, conversion, exchange, repurchase and
redemption rights, if applicable, the liquidation preference, and other
specific terms of each series of the Preferred Stock will be set forth in the
applicable Prospectus Supplement. At July 31, 1995, there were outstanding
(i) 29,438,110 shares of Common Stock (and 13,641,701 shares of Common Stock
reserved for issuance upon conversion of the outstanding Series D Preferred
Shares (as defined below) and the Nontransferable Class B Stock and in
connection with outstanding employee stock options and 150,000 shares of
Common Stock deferred under the Long-Term Performance-Based Incentive Plan for
the Chief Executive Officer); (ii) 6,826,439 shares of Nontransferable Class B
Stock; (iii) 3,514,765 shares of a series of Preferred Stock designated the 9
1/4% Preferred Stock, Series B ("Series B Preferred Shares"); (iv) 486,800
shares of a series of Preferred Stock designated the Adjustable Rate
Cumulative Preferred Stock, Series C ("Series C Preferred Shares"); and (v)
100,050 shares of a series of Preferred Stock designated the Series D
Mandatory Conversion Premium Dividend Preferred Stock ("Series D Preferred
Shares"), represented by 5,002,500 Depositary Shares ("Series D Depositary
Shares") (each representing one-fiftieth of a Series D Preferred Share).
There are no shares of Transferable Class B Stock outstanding. The Series B
Preferred Shares, Series C Preferred Shares and the Series D Preferred Shares
rank pari passu with each other and senior to the Common Stock and Class B
Stock. For further information regarding the Common Stock and Class B Stock,
including a description of the rights attached thereto, see "Common Stock and
Class B Stock" below. For a description of the series of Preferred Stock of
the Company currently outstanding, see "Series B Preferred Shares", "Series C
Preferred Shares" and "Series D Preferred Shares" below.
For a discussion of certain recent proposed amendments to the
Articles of Incorporation and other proposed actions which would (i)
increase the number of authorized shares of the Company's Common Stock and
Nontransferable Class B Stock and (ii) effect a three-for-two stock split
of outstanding shares of Common Stock and Class B Stock, see "The Company--
Recent Developments".
The Prospectus Supplement relating to an offering of Common Stock will
describe terms relevant thereto, including the number of shares offered, the
initial offering price, market price and dividend information.
The applicable Prospectus Supplement will describe the following terms
of any Preferred Stock in respect of which this Prospectus is being delivered
(to the extent applicable to such Preferred Stock): (i) the specific
designation, number of shares, seniority and purchase price; (ii) any
liquidation preference per share; (iii) any date of maturity; (iv) any
redemption, repayment or sinking fund provisions; (v) any dividend rate or
rates and the dates on which any such dividends will be payable (or the method
by which such rates or dates will be determined); (vi) any voting rights;
(vii) if other than the currency of the United States of America, the currency
or currencies including composite currencies in which such Preferred Stock is
denominated and/or in which payments will or may be payable; (viii) the method
by which amounts in respect of such Preferred Stock may be calculated and any
commodities, currencies or indices, or value, rate or price, relevant to such
calculation; (ix) whether the Preferred Stock is convertible or exchangeable
and, if so, the securities or rights into which such Preferred Stock is
convertible or exchangeable (which may include other Preferred Stock, Debt
Securities, Common Stock or other securities or rights of the Company
(including rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies or indices) or
securities of other issuers or a combination of the foregoing), and the terms
and conditions upon which such conversions or exchanges will be effected
including the initial conversion or exchange prices or rates, the conversion
or exchange period and any other related provisions; (x) the place or places
where dividends and other payments on the Preferred Stock will be payable; and
(xi) any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares", the Company may,
at its option, elect to offer depositary shares ("Depositary Shares")
evidenced by depositary receipts ("Depositary Receipts"), each representing an
interest (to be specified in the Prospectus Supplement relating to the
particular series of the Preferred Stock) in a share of the particular series
of the Preferred Stock issued and deposited with a Preferred Stock Depositary
(as defined herein).
All shares of Preferred Stock offered hereby, or issuable upon
conversion, exchange or exercise of Securities, will, when issued, be fully
paid and non-assessable.
Common Stock and Class B Stock
Dividends. Except as provided below, holders of Common Stock and Class
B Stock are entitled to receive dividends and other distributions in cash,
stock or property of the Company, when, as and if declared by the Board of
Directors out of assets or funds of the Company legally available therefor and
shall share equally on a per share basis in all such dividends and other
distributions (subject to the rights of holders of Preferred Stock). If a
cash dividend is paid on any of the Common Stock, the Nontransferable Class B
Stock or the Transferable Class B Stock, a cash dividend also will be paid on
the Common Stock, the Nontransferable Class B Stock and the Transferable Class
B Stock, as the case may be. The amount of the cash dividend paid on each
share of Class B Stock will be equal to 90% of the amount of the cash dividend
paid on each share of Common Stock. In addition if holders of Common Stock
receive shares of Common Stock in connection with stock dividends or stock
splits, holders of Transferable Class B Stock will receive a proportionate
number of shares of Transferable Class B Stock and holders of Nontransferable
Class B Stock will receive a proportionate number of shares of Nontransferable
Class B Stock.
Voting Rights. At every meeting of shareholders, every holder of Common
Stock is entitled to one vote per share and every holder of Class B is
entitled to 10 votes per share. All actions submitted to a vote of
shareholders are voted upon by holders of Common Stock and Class B Stock
voting together as a single class (subject to any voting rights which may be
granted to holders of Preferred Stock) and a majority of the votes cast by
such holders is required to approve any such action, except where other
provision is made by law.
In addition to any vote required by law, the holders of Common Stock and
Class B Stock each vote separately as a class (i) on any merger or
consolidation of the Company with or into any other corporation, or any sale,
lease, exchange or other disposition of all or substantially all of the
Company's assets to or with any other person or any dissolution of the Company
(unless the other party to such merger or other transaction is a
majority-owned subsidiary of the Company) and (ii) on any additional issuances
of Class B Stock other than in connection with stock splits and stock
dividends and exchanges of Nontransferable Class B Stock for Transferable
Class B Stock. A majority of votes cast by the Common Stock and Class B
Stock, each voting separately as a class, is required to approve any matters
described above as to which holders of such shares have a separate class vote,
unless, in the case of the events described in clause (i) above, a greater
vote is required by law. In addition, to any vote required by law, the
affirmative vote of the holders of a majority of the shares of the Common
Stock and the Nontransferable Class B Stock, each voting separately as a
class, is required to approve any amendments to the Articles of Incorporation.
Liquidation Rights. In the event of any Liquidation, the holders of
Common Stock and Class B Stock are entitled to share equally in the assets
available for distribution after payment of all liabilities and provision for
the liquidation preference of any shares of Preferred Stock then outstanding.
Class B Stock Conversion Rights. Each share of Class B Stock is
convertible into one share of Common Stock at any time at the option of the
holder. In addition, any transfer of shares of Nontransferable Class B Stock
not permitted under the Articles of Incorporation will result in the
conversion of such shares into shares of Common Stock.
Exchange of Nontransferable Class B Stock. The Nontransferable Class B
Stock is exchangeable in whole at the option of the Company at any time for
Transferable Class B Stock. Holders of Nontransferable Class B Stock will
receive one share of Transferable Class B Stock for each share of
Nontransferable Class B Stock held by them at the time of the exchange.
Miscellaneous. The holders of Common Stock and Class B Stock have no
preemptive rights, cumulative voting rights or subscriptions rights. Except
as described above, the Common Stock and Class B Stock have no conversion
rights and are not subject to redemption.
The transfer agent and registrar with respect to the Common Stock is The
Bank of New York.
All shares of Common Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will, when issued, be fully paid and
non-assessable.
Mr. Eli Broad, Chairman, President and Chief Executive Officer of the
Company, beneficially owns, as of July 31, 1995, 1,162,041 shares of Common
Stock and 5,276,762 shares of Nontransferable Class B Stock, representing an
aggregate of 55.2% of the voting power of the Company's outstanding stock.
Series B Preferred Shares
Dividends. Subject to the rights of holders of other classes of stock
ranking on a parity with or senior to the Series B Preferred Shares which may
from time to time be issued by the Company, the holders of Series B Preferred
Shares are entitled to receive, when, as and if the Board of Directors
declares a dividend on the Series B Preferred Shares, out of assets legally
available for dividends, cumulative preferential cash dividends from the issue
date of the Series B Preferred Shares (June 29, 1992), accruing at the rate
per Series B Preferred Share of $2.3125 per annum or $.5781 per quarter,
payable quarterly in arrears on the 15th day of each March, June, September
and December or, if any such date is not a business day, on the next
succeeding business day.
Dividends on the Series B Preferred Shares accrue whether or not the
Company has earnings, whether or not there are funds legally available for the
payment of such dividends and whether nor not such dividends are declared and
will accumulate to the extent they are not paid on the dividend payment date
for the quarter for which they accrue. Accumulated unpaid dividends do not
bear interest.
Liquidation Rights. Subject to the rights of holders of other classes
of stock ranking on a parity with or senior to Series B Preferred Shares, in
the event of any liquidation, dissolution or winding-up of the business of the
Company, whether voluntary or involuntary (any such event, a "Liquidation"),
the holders of the Series B Preferred Shares, after payment or provision for
payment of the debts and other liabilities of the Company, will be entitled to
receive for each Series B Preferred Share, an amount equal to the sum of $25
and all accrued and unpaid dividends thereon, and no more. If, upon any
Liquidation, there are insufficient assets to permit full payment of holders
of Series B Preferred Shares and shares of any other class of outstanding
Preferred Stock, the holders of Series B Preferred Shares and such other
shares shall be paid ratably in proportion to the full distributable amounts
to which holders of Series B Preferred Shares and such other shares are
respectively entitled upon Liquidation.
Redemption. The Series B Preferred Shares are not redeemable prior to
June 15, 1997. On and after such date, the Series B Preferred Shares are
redeemable in cash at the option of the Company, in whole or in part, from
time to time, at a redemption price of $25.00 per share plus accrued and
unpaid dividends to the date fixed for redemption.
The Series B Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. The Series B Preferred Shares do not entitle holders
thereof to voting rights, except (i) the Company may not alter any of the
provisions of the Articles of Incorporation or the Articles Supplementary
relating to the Series B Preferred Shares which would materially and adversely
affect any right, preference or privilege of the Series B Preferred Shares
without the affirmative vote of the holders of at least two thirds of the
Series B Preferred Shares outstanding at the time (voting separately as a
class); provided, however, that any such alteration that would authorize,
create or issue additional shares of Preferred Stock or any other shares of
stock (whether or not already authorized) ranking senior to, on a parity with
or junior to the Series B Preferred Shares as to dividends or on the
distribution of assets upon Liquidation shall be deemed not to materially and
adversely affect such rights, preferences or privileges, (ii) in the event
dividends payable on the Series B Preferred Shares shall be in arrears in an
aggregate amount equivalent to six full quarterly dividends (a "Series B
Preferred Share Dividend Default"), or (iii) as required by law. In the event
of a Series B Preferred Share Dividend Default, the holders of the outstanding
Series B Preferred Shares will be entitled to elect together with holders of
all other outstanding classes of Preferred Stock ranking on a parity with the
Series B Preferred Shares and entitled to participate in such election, voting
as a single class, two directors at a special meeting called by the Board of
Directors for such purpose. Such two directors shall serve until the full
dividends accumulated on all outstanding Series B Preferred Shares and all
other outstanding classes of Preferred Stock ranking on a parity with the
Series B Preferred Shares are paid.
Series C Preferred Shares
Dividends. Subject to the rights of holders of other classes of stock
ranking on a parity with or senior to the Series C Preferred which may from
time to time be issued by the Company, the holders of the Series C Preferred
Shares are entitled to receive, when, as and if the Board of Directors
declares a dividend on the Series C Preferred Shares, out of assets legally
available for dividends, cumulative preferential cash dividends accruing at an
adjustable rate, payable quarterly in arrears on the 1st day of March, June,
September or December of each year or, if such day is not a business day, on
the next preceding business day, equal for each quarterly dividend period to
.50% less than the highest of the "Three-Month Treasury Bill Rate," the "Ten
Year Constant Maturity Rate" or the "Twenty Year Constant Maturity Rate"
determined in advance of such dividend period. However, the rate may not be
less than 7.00% per annum nor greater than 13.50% per annum. The current rate
is 7.00%.
Dividends on the Series C Preferred Shares accrue whether or not the
Company has earnings, whether or not there are funds legally available for the
payment of such dividends and whether or not such dividends are declared and
will accumulate to the extent they are not paid on the dividend payment date
for the quarter for which they accrue. Accumulated unpaid dividends do not
bear interest.
Liquidation Rights. Subject to the rights of holders of other classes
of stock ranking on a parity with or senior to Series C Preferred Shares, in
the event of any Liquidation, the holders of the Series C Preferred Shares,
after payment or provision for payment of the debts and other liabilities of
the Company, will be entitled to receive for each Series C Preferred Share, an
amount equal to the sum of $100 and all accrued and unpaid dividends thereon,
and no more. If, upon any Liquidation, there are insufficient assets to
permit full payment of holders of Series C Preferred Shares and shares of any
other class of outstanding Preferred Stock, the holders of Series C Preferred
Shares and such other shares shall be paid ratably in proportion to the full
distributable amounts to which holders of Series C Preferred Shares and such
other shares are respectively entitled upon Liquidation.
Redemption. The Series C Preferred Shares are redeemable at any time at
the option of the Company, in whole or in part, at $103 per share prior to
March 1, 1996 and, thereafter, at $100 per share, plus in each case accrued
and unpaid dividends to the redemption date.
The Series C Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. Each Series C Preferred Share is entitled to one-tenth
of one vote per share on all matters submitted to a vote of the holders of the
Company's Common Stock, voting as a single class with holders of Common Stock
and with holders of any other class or series having the right to vote with
the holders of Common Stock. In addition, if, on the date used to determine
shareholders of record for any meeting of shareholders at which directors are
to be elected, dividends on the Series C Preferred Shares or any other series
of preferred stock ranking on a parity with the Series C Preferred Shares as
to dividends are in arrears in an amount equal to at least six quarterly
dividends (whether or not consecutive), holders of Series C Preferred Shares
(separately as a class with other holders of affected Preferred Stock) are
entitled to vote for and elect two directors of the Company. Each holder of
Series C Preferred Shares has one vote for each share held in such
circumstance.
Without the consent or affirmative vote of the holders of at least
two-thirds of the outstanding Series C Preferred Shares, voting separately as
a class with all other affected series of Preferred Stock ranking on a parity
either as to dividends or upon liquidation with the Series C Preferred Shares,
the Company shall not authorize, create or issue, or increase the authorized
amount of, any class or series of stock ranking prior to the Series C
Preferred Shares as to dividends or upon liquidation (or any securities
convertible into any such stock). The affirmative vote or consent of the
holders of a least two-thirds of the outstanding Series C Preferred Shares,
voting separately as a class with all other affected series of Preferred
Stock, will be required for any amendment, alteration or repeal, whether by
merger or consolidation or otherwise, of the Company's Articles or any
articles supplemental thereto if the amendment, alteration or repeal adversely
affects the preferences, rights, powers or privileges of the Series C
Preferred Shares and any other Preferred Stock; provided, however, that in any
case in which one or more, but not all, series of such class would be
adversely affected as to the preferences, rights, powers or privileges
thereof, the affirmative vote or consent of the holders of a least two-thirds
of the votes entitled to be cast by the holders of shares of any series that
would be adversely affected, voting as a class, shall be required in lieu
thereof; excluding, however, an increase or decrease (but not to less than the
then outstanding Series C Preferred Shares) in the aggregate number of
authorized Series C Preferred Shares.
Series D Preferred Shares
Dividends. Subject to the rights of holders of other classes of stock
ranking on a parity with or senior to the Series D Preferred Shares which may
from time to time be issued by the Company, the holders of Series D Preferred
Shares are entitled to receive, when, as and if the Board of Directors
declares a dividend on the Series D Preferred Shares, out of assets legally
available for dividends, cumulative preferential cash dividends from the date
of issue of the Series D Preferred Shares (March 3, 1993), accruing at the
rate per Series D Preferred Share of $139 per annum or $34.75 per quarter
(equivalent to $2.78 per annum or $.695 per quarter for each Series D
Depositary Share), payable quarterly in arrears.
Dividends on the Series D Preferred Shares accrue whether or not the
Company has earnings, whether or not there are funds legally available for the
payment of such dividends and whether or not such dividends are declared and
will accumulate to the extent they are not paid on the dividend payment date
for the quarter for which they accrue. Accumulated unpaid dividends will not
bear interest.
Mandatory Conversion of Series D Preferred Shares. On March 1, 1996
(the "Series D Mandatory Conversion Date"), each outstanding Series D
Preferred Share will convert automatically into shares of Common Stock at the
Series D Common Stock Equivalent Rate (as described below) in effect on the
Series D Mandatory Conversion Date and the right to receive an amount in cash
equal to all accrued and unpaid dividends on such Series D Preferred Share to
and including the Series D Mandatory Conversion Date (the "Series D Mandatory
Conversion"), subject to the rights of the Company to call Series D Preferred
Shares prior to Series D Mandatory Conversion. The Series D Common Equivalent
Rate is currently fifty shares of Common Stock for each Series D Preferred
Share (equivalent to one share of Common Stock for each Series D Depositary
Share), subject to adjustment in the event of stock dividends, distribution of
assets or certain other events.
Immediately prior to the effectiveness of a Merger or Consolidation,
each outstanding Series D Preferred Share will convert automatically into (i)
shares of Common Stock at the Series D Common Equivalent Rate in effect on the
effective date of the Merger or Consolidation, plus (ii) the right to receive
an amount in cash equal to the accrued and unpaid dividends on such Series D
Preferred Share to and including the effective date, plus (iii) the right to
receive an amount in cash initially equal to $375 (equivalent to $7.50 for
each Series D Depositary Share), declining by $.350150 (equivalent to $.007003
for each Series D Depositary Share) on each day following the date of issue of
the Series D Preferred Shares (March 3, 1993) to $21 (equivalent to $.42 for
each Series D Depositary Share) on January 1, 1996, and equal to zero
thereafter, determined with reference to the effective date, unless sooner
redeemed. At the option of the Company, it may deliver on the effective date,
in lieu of some or all of the cash consideration described in clauses (ii) and
(iii) of the preceding sentence, shares of Common Stock.
Series D Preferred Shares are not convertible into Common Stock at the
option of the holders thereof.
Right to Call Series D Preferred Shares. Except as provided below, at
any time or from time to time prior to the Series D Mandatory Conversation
Date, the Company has the right to call the outstanding Series D Preferred
Shares for redemption, in whole or in part, and to deliver to the holders
thereof in exchange for each such Series D Preferred Share a number of shares
of Common Stock equal to the Series D Call Price (as described below) on the
redemption date divided by the current market price (as defined) of the Common
Stock on the second trading day preceding the earlier of the commencement of
the mailing of notice of such redemption to holders of the Series D Preferred
Shares or the date such notice is published in accordance with the terms of
the Series D Preferred Shares (the "Series D Notice Date") plus an amount in
cash equal to accrued and unpaid dividends to and including the date of
redemption. The Series D Call Price of each Series D Preferred Share declines
by $.350150 (equivalent to $7.50 for each Series D Depositary Share) on each
day following the date of original issue of the Series D Preferred Shares
(March 3, 1993) from $2,872.50 (equivalent to $57.45 for each Series D
Depositary Share) to $2,518.50 (equivalent to $50.37 for each Series D
Depositary Share) on January 1, 1996, and will be $2,497.50 (equivalent to
$49.95 for each Series D Depositary Share) thereafter.
Liquidation Rights. Subject to the rights of holders of other classes
of stock ranking on a parity with or senior to the Series D Preferred Shares,
in the event of any Liquidation, the holders of Series D Preferred Shares,
after payment or provisions for payment of the debts and other liabilities of
the Company, will be entitled to receive, for each Series D Preferred Share,
an amount equal to the sum of (i) $1,850 (equivalent to $37.00 for each Series
D Depositary Share) and (ii) all accrued and unpaid dividends thereon, and no
more. If, upon any such liquidation, there are insufficient assets to permit
full payment to holders of Series D Preferred Shares and shares of any class
of outstanding Preferred Stock, the holders of Series D Preferred Shares and
such other shares shall be paid ratably in proportion to the full
distributable amounts to which holders of Series D Preferred Shares and such
other shares are respectively entitled.
The Series D Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. The Series D Preferred Shares do not entitle holders
thereof to voting rights, except (i) the Company may not alter any of the
provisions of the Articles of Incorporation or the Articles Supplementary
relating to the Series D Preferred Shares which would materially and adversely
affect any right, preference or privilege of the Series D Preferred Shares
without the affirmative vote of the holders of at least two-thirds of the
shares of Series D Preferred Shares outstanding at the time (voting separately
as a class); provided, however, that any such alteration that would
authorize, create or issue any additional shares of Preferred Stock or any
other shares of stock (whether or not already authorized) ranking senior to,
on a parity with or junior to the Series D Preferred Shares as to dividends or
on the distribution of assets upon Liquidation shall be deemed not to
materially and adversely affect such rights, preferences or privileges, (ii)
in the event dividends payable on the Series D Preferred Shares shall be in
arrears in an aggregate amount equivalent to six full quarterly dividends (a
"Series D Preferred Share Dividend Default"), or (iii) as required by law. In
the event of a Series D Preferred Share Dividend Default, the holders of all
other outstanding classes of Preferred Stock ranking on a parity with Series
D Preferred Shares and entitled to participate in such election, voting as a
single class, two directors at a special meeting called by the Board of
Directors for such purpose. Such two directors shall serve until the full
dividends accumulated on all outstanding Series D Preferred Shares and all
other outstanding classes of Preferred Stock ranking on a parity with the
Series D Preferred Shares are paid.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of
certain provisions of the Deposit Agreement (as defined below) and of the
Depositary Shares and Depositary Receipts summarizes the material terms of
the Deposit Agreement and of the Depositary Shares and Depositary Receipts,
and is qualified in its entirety by reference to, the form of Deposit
Agreement and form of Depositary Receipts relating to each series of the
Preferred Stock.
General
The Company may, at its option, elect to have shares of Preferred Stock
be represented by Depositary Shares. The shares of any series of the
Preferred Stock underlying the Depositary Shares will be deposited under a
separate deposit agreement (the "Deposit Agreement") between the Company and
a bank or trust company selected by the Company (the "Preferred Stock
Depositary"). The Prospectus Supplement relating to a series of Depositary
Shares will set forth the name and address of the Preferred Stock Depositary.
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share will be entitled, proportionately, to all the rights, preferences and
privileges of the Preferred Stock represented thereby (including dividend,
voting, redemption, conversion, exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
A holder of Depositary Shares is not entitled to receive the shares
of Preferred Stock (but only in whole shares of Preferred Stock) underlying
such Depositary Shares. If the Depositary Receipts delivered by the holder
evidence a number of Depositary Shares in excess of the whole number of
shares of Preferred Stock to be withdrawn, the Depositary will deliver to
such holder a the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares.
Dividends and Other Distributions
The Preferred Stock Depositary will distribute all cash dividends or
other cash distributions in respect of the Preferred Stock to the record
holders of Depositary Receipts in proportion, insofar as possible, to the
number of Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to
make such distribution, in which case the Preferred Stock Depositary may, with
the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including sale (at
public or private sale) of such property and distribution of the net proceeds
from such sale to such holders.
The amount so distributed in any of the foregoing cases will be reduced
by any amount required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes.
Conversion and Exchange
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the
Prospectus Supplement relating thereto, each record holder of Depositary
Shares will have the right or obligation to convert or exchange such
Depositary Shares pursuant to the terms thereof.
Redemption of Depositary Shares
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds
received by the Preferred Stock Depositary resulting from the redemption,
in whole or in part, of the Preferred Stock held by the Preferred Stock
Depositary. The redemption price per Depositary Share will be equal to the
aggregate redemption price payable with respect to the number of shares of
Preferred Stock underlying the Depositary Shares. Whenever the Company
redeems Preferred Stock from the Preferred Stock Depositary, the Preferred
Stock Depositary will redeem as of the same redemption date a proportionate
number of Depositary Shares representing the shares of Preferred Stock that
were redeemed. If less than all the Depositary Shares are to be redeemed,
the Depositary Shares to be redeemed will be selected by lot or pro rata as
may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be deemed to be outstanding and all rights of
the holders of the Depositary Shares will cease, except the right to
receive the redemption price upon such redemption. Any funds deposited by
the Company with the Preferred Stock Depositary for any Depositary Shares
which the holders thereof fail to redeem shall be returned to the Company
after a period of two years from the date such funds are so deposited.
Voting
Upon receipt of notice of any meeting at which the holders of any shares
of Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice
to the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depositary as to the exercise of the voting rights pertaining
to the number of shares of Preferred Stock underlying such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable,
to vote the number of shares of Preferred Stock underlying such Depositary
Shares in accordance with such instructions, and the Company will agree to
take all reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the Preferred Stock to the
extent it does not receive specific written instructions from holders of
Depositary Receipts representing such Preferred Stock.
Record Date
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred
Stock, or (ii) the Preferred Stock Depositary shall receive notice of any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice, or of the mandatory
conversion of or any election on the part of the Company to call for the
redemption of any Preferred Stock, the Preferred Stock Depositary shall in
each such instance fix a record date (which shall be the same as the record
date for the Preferred Stock) for the determination of the holders of
Depositary Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the
sale thereof or (y) who shall be entitled to give instructions for the
exercise of voting rights at any such meeting or to receive notice of such
meeting or of such redemption or conversion, subject to the provisions of the
Deposit Agreement.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt and any provision of the Deposit
Agreement may at any time be amended by agreement between the Company and the
Preferred Stock Depositary. However, any amendment which imposes or increases
any fees, taxes or other charges payable by the holders of Depositary Receipts
(other than taxes and other governmental charges, fees and other expenses
payable by such holders as stated under "Charges of Preferred Stock
Depositary"), or which otherwise prejudices any substantial existing right of
holders of Depositary Receipts, will not take effect as to outstanding
Depositary Receipts until the expiration of 90 days after notice of such
amendment has been mailed to the record holders of outstanding Depositary
Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time
45 days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of it election to resign and a
successor depositary shall not have been appointed and accepted its
appointment. If any Depositary Receipts remain outstanding after the date of
termination, the Preferred Stock Depositary thereafter will discontinue the
transfer of Depositary Receipts, will suspend the distribution of dividends
to the holders thereof, and will not give any further notices (other than
notice of such termination) or perform any further acts under the Deposit
Agreement except as provided below and except that the Preferred Stock
Depositary will continue (i) to collect dividends on the Preferred Stock and
any other distributions with respect thereto and (ii) to deliver the Preferred
Stock together with such dividends and distributions and the net proceeds of
any sales of rights, preferences, privileges or other property, without
liability for interest thereon, in exchange for Depositary Receipts
surrendered. At any time after the expiration of two years from the date of
termination, the Preferred Stock Depositary may sell the Preferred Stock then
held by it at public or private sales, at such place or places and upon such
terms as it deems proper and may thereafter hold the net proceeds of any such
sale, together with any money and other property then held by it, without
liability for interest thereon, for the pro rata benefit of the holders of
Depositary Receipts which have not been surrendered.
Charges of Preferred Stock Depositary
The Company will pay all charges of the Preferred Stock Depositary
including charges in connection with the initial deposit of the Preferred
Stock, the initial issuance of the Depositary Receipts, the distribution of
information to the holders of Depositary Receipts with respect to matters on
which Preferred Stock is entitled to vote, withdrawals of the Preferred Stock
by the holders of Depositary Receipts or redemption or conversion of the
Preferred Stock, except for taxes (including transfer taxes, if any) and other
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts or
persons depositing Preferred Stock.
Miscellaneous
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts at its Corporate Office and its New York
Office, all reports and communications from the Company which are delivered to
the Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if
it is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of
the Preferred Stock Depositary under the Deposit Agreement are limited to
performing its duties thereunder without negligence or bad faith. The
obligations of the Company under the Deposit Agreement are limited to
performing its duties thereunder in good faith. Neither the Company nor the
Preferred Stock Depositary is obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on documents
believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by
the Company, effective upon the acceptance by its successor of its
appointment; provided, that if a successor Preferred Stock Depositary has not
been appointed or accepted such appointment within 45 days after the Preferred
Stock Depositary has delivered a notice of election to resign to the Company,
the Preferred Stock Depositary may terminate the Deposit Agreement. See
"Amendment and Termination of Deposit Agreement" above.
DESCRIPTION OF WARRANTS
General
The Company may issue Warrants to purchase Securities, and such Warrants
may be issued independently or together with any Securities and may be
attached to or separate from such Securities. Each series of Warrants will be
issued under a separate warrant agreement (each a "Warrant Agreement") to be
entered into between the Company and a warrant agent ("Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with
the Warrants of such series and will not assume any obligation or relationship
of agency for or with holders or beneficial owners of Warrants. The following
sets forth certain general terms and provisions of the Warrants offered
hereby. Further terms of the Warrants and the applicable Warrant Agreement are
set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued;
(iv) the currency or currencies, including composite currencies, in which the
price of such Warrants may be payable; (v) the designation and terms of the
Securities purchasable upon exercise of such Warrants; (vi) the price at which
and the currency or currencies, including composite currencies, in which the
Securities purchasable upon exercise of such Warrants may be purchased; (vii)
the date on which the right to exercise such Warrants shall commence and the
date on which such right shall expire; (viii) whether such Warrants will be
issued in registered form or bearer form; (ix) if applicable, the minimum or
maximum amount of such Warrants which may be exercised at any one time; (x) if
applicable, the designation and terms of the Securities with which such
Warrants are issued and the number of such Warrants issued with each such
Security; (xi) if applicable, the date on and after which such Warrants and
the related Securities will be separately transferable; (xii) information with
respect to book-entry procedures, if any; (xiii) if applicable, a discussion
of certain United States Federal income tax considerations; and (xiv) any
other terms of such Warrants, including terms, procedures and limitations
relating to the exchange and exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby directly or
through agents, underwriters or dealers.
Offers to purchase Securities may be solicited by agents designated by
the Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the
offer or sale of the Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent set forth, in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment. The Company may also sell Securities
to an agent as principal. Agents may be entitled to, under agreements which
may be entered into with the Company, indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If any underwriters are utilized in the sale of Securities in respect of
which this Prospectus is delivered, the Company will enter into an
underwriting agreement with such underwriters and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Securities in respect of which this Prospectus is delivered to the
public. Underwriters may offer and sell the Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The underwriters may be entitled, under the relevant
underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for the Company
in the ordinary course of business.
If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company will sell such Securities to
the dealer, as principal. The dealer may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("marketing firms"), acting as principals for
their own accounts or as agents for the Company. Any remarketing firm will be
identified and the terms of its agreement, if any, with the Company and its
compensation will be described in the Prospectus Supplement. Remarketing
firms may be deemed to be underwriters in connection with the Securities
remarketing thereby. Remarketing firms may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will
be subject to only those conditions set forth in the Prospectus Supplement,
and the Prospectus Supplement will set forth the commission payable for
solicitation of such offers.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Securities will be passed upon for the Company by Susan L.
Harris, Vice President and General Counsel -- Corporate Affairs of the
Company, and by Davis Polk & Wardwell, New York, New York. Ms. Harris and
Davis Polk & Wardwell will rely as to matters of Maryland law on Piper &
Marbury LLP, Baltimore, Maryland. Ms. Harris holds stock, restricted stock
and options to purchase stock granted under the Company's employee stock
plans, which in the aggregate represent less than 1% of the Company's Common
Stock. David W. Ferguson, a partner of Davis Polk & Wardwell, is a director of
First SunAmerica Life Insurance Company, a subsidiary of the Company.
EXPERTS
The consolidated financial statements incorporated in this 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
The Company and certain affiliates of the Company, including Anchor and
SunAmerica Life, 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 Internal
Revenue Code of 1986, as amended (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 are acquired by a pension or
other employee benefit plan with respect to which the Company 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 should consult with its legal counsel.
PROSPECTUS [LOGO]
SUNAMERICA INC.
Junior Subordinated Debt Securities
SunAmerica Capital Trust II
SunAmerica Capital Trust III
SunAmerica Capital Trust IV
Preferred Securities guaranteed to the extent set forth herein by
SunAmerica Inc.
__________________
SunAmerica Inc. (the "Company") may offer and sell from time to time
unsecured junior subordinated debt securities (the "Junior Subordinated
Debt Securities") consisting of debentures, notes or other evidences of
indebtedness in one or more series and in amounts, at prices and on terms
to be determined at or prior to the time of any such offering. The Junior
Subordinated Debt Securities when issued will be unsecured obligations of
the Company. The Company's obligations under the Junior Subordinated Debt
Securities will be subordinate and junior in right of payment to all Senior
Indebtedness (as defined herein) of the Company.
SunAmerica Capital Trust II, SunAmerica Capital Trust III and SunAmerica
Capital Trust IV (each, a "SunAmerica Trust"), each a statutory business trust
formed under the laws of the State of Delaware, may offer and sell, from time
to time, preferred securities representing undivided beneficial interests in
the assets of the respective SunAmerica Trust ("Preferred Securities"). The
payment of periodic cash distributions ("distributions") with respect to
Preferred Securities of each of the SunAmerica Trusts out of moneys held by
the Property Trustee (as defined herein) of each of the SunAmerica Trusts, and
payments on liquidation of each SunAmerica Trust and on redemption of
Preferred Securities of such SunAmerica Trust, will be guaranteed by the
Company as and to the extent described herein (each, a "Preferred Securities
Guarantee"). See "Description of the Preferred Securities Guarantees". The
Company's obligation under each Preferred Securities Guarantee is an unsecured
obligation of the Company and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Company, including the Junior
Subordinated Debt Securities, except those made pari passu or subordinate by
their terms, and (ii) senior to all capital stock now or hereafter issued by
the Company and to any guarantee now or hereafter entered into by the Company
in respect of any of its capital stock. Junior Subordinated Debt Securities
may be issued and sold from time to time in one or more series by the Company
to a SunAmerica Trust, or a trustee of such trust, in connection with the
investment of the proceeds from the offering of Preferred Securities and
Common Securities (as defined herein) of such SunAmerica Trust. The Junior
Subordinated Debt Securities purchased by a SunAmerica Trust may be
subsequently distributed pro rata to holders of Preferred Securities and
Common Securities in connection with the dissolution of such SunAmerica Trust,
upon the occurrence of certain events as may be described in an accompanying
Prospectus Supplement.
Specific terms of the Junior Subordinated Debt Securities of any series
or the Preferred Securities of any SunAmerica Trust in respect of which this
Prospectus is being delivered (the "Offered Securities") will be set forth in
a Prospectus Supplement with respect to such Offered Securities, which will
describe, without limitation and where applicable, the following: (i) in the
case of Junior Subordinated Debt Securities, the specific designation,
aggregate principal amount, authorized denomination, maturity, premium, if
any, redemption or sinking fund provisions, if any, interest rate (which may
be fixed or variable), if any, the time and method of calculating interest
payments, if any, dates on which premium, if any, and interest, if any, will
be payable, the right of the Company, if any, to defer payments of interest on
the Junior Subordinated Debt Securities and the maximum length of such
deferral period, the initial public offering price, and any listing on a
securities exchange and other specific terms of the offering; and (ii) in the
case of Preferred Securities, the specific designation, number of securities,
liquidation amount per security, initial public offering price, and any
listing on a securities exchange, distribution rate (or method of calculation
thereof), dates on which distributions shall be payable and dates from which
distributions shall accrue, voting rights (if any), terms for any conversion
or exchange into other securities, any redemption or sinking fund provisions,
any other rights, preferences, privileges, limitations or restrictions
relating to the Preferred Securities and the terms upon which the proceeds of
the sale of the Preferred Securities shall be used to purchase a specific
series of Junior Subordinated Debt Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering. Any Prospectus Supplement relating
to any series of Offered Securities will contain information concerning
certain United States federal income tax considerations, if applicable, to the
Offered Securities. By separate prospectus, the form of which is included in
the Registration Statement of which this Prospectus is a part, the Company may
offer from time to time debt securities (both senior and subordinated),
Preferred Stock (or depositary shares representing Preferred Stock), Common
Stock or Warrants to purchase any of the foregoing. The aggregate initial
public offering price of the securities to be offered by this Prospectus and
such other prospectus shall not exceed $1,000,000,000.
__________________
The Company and/or each of the SunAmerica Trusts may sell the Offered
Securities directly, through agents designated from time to time or through
underwriters or dealers. See "Plan of Distribution" below. If any agents of
the Company and/or any SunAmerica Trust or any underwriters or dealers are
involved in the sale of the Offered Securities, the names of such agents,
underwriters or dealers and any applicable commissions and discounts will be
set forth in any related Prospectus Supplement. The managing underwriter or
underwriters with respect to each series sold to or through underwriters will
be named in the accompanying Prospectus Supplement. See "Plan of
Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________
The date of this Prospectus is September 29, 1995.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 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 filed by the Company with the
Commission can be inspected and copied at the Commission's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the public
reference facilities of the regional offices in Chicago and New York. The
addresses of these regional offices are as follows: 500 West Madison Street,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material also can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington D.C. 20549, upon payment of the fees prescribed by the rules and
regulations of the Commission. Reports, proxy statements, and other
information concerning the Company may also be inspected at the offices of the
New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005 and
at the offices of the Pacific Stock Exchange at 301 Pine Street, San
Francisco, California 94104. The Company's Common Stock is listed on both
exchanges.
The Company and the SunAmerica Trusts have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth
in the Registration Statement and exhibits thereto. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference." 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. For
further information with respect to the Company, the SunAmerica Trusts and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and the documents incorporated herein by
reference.
No separate financial statements of any of the SunAmerica Trusts have
been included or incorporated by reference herein. The Company and the
SunAmerica Trusts do not consider that such financial statements would be
material to holders of the Preferred Securities because (i) all of the voting
securities of each SunAmerica Trust will be owned, directly or indirectly by,
the Company, a reporting company under the 1934 Act, (ii) each of the
SunAmerica Trusts 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 issuing Trust Securities (as
defined herein) representing undivided beneficial interests in the assets of
such SunAmerica Trust and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by the Company and (iii) the obligations
of each of the SunAmerica Trusts under the Preferred Securities of that
SunAmerica Trust are fully and unconditionally guaranteed by the Company as
and to the extent described herein. See "The SunAmerica Trusts",
"Description of the Preferred Securities," "Description of the Preferred
Securities Guarantees" and "Description of the Junior Subordinated Debt
Securities." The SunAmerica Trusts are statutory business trusts formed under
the laws of the State of Delaware. The Company, as of the date of this
Prospectus, beneficially owns all of the beneficial interests in each
SunAmerica Trust. Each holder of Preferred Securities of a SunAmerica Trust
will be furnished annually with unaudited financial statements of such Trust
as soon as available after the end of the Trust's fiscal year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the
following documents previously filed by the Company with the Commission
pursuant to the 1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended September 30,
1994.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31,
1994, March 31, 1995 and June 30, 1995.
3. Current Reports on Form 8-K filed on November 14, 1994, January
24, 1995, April 25, 1995, May 26, 1995, July 14, 1995, July 28,
1995 and September 6, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c) 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this 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 or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such document shall be directed to
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022,
Attention: Vice President, Investor Relations (telephone (310) 772-6000).
For North Carolina Investors: The Commissioner of Insurance of the
State of North Carolina has not approved or disapproved this offering nor has
such Commissioner passed upon the accuracy or adequacy of this Prospectus.
No dealer, salesman or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made,
such information or representations must not be relied upon as having been
authorized by the Company, any SunAmerica Trust or any underwriter, dealer or
agent. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities other than the registered
securities to which it relates in any jurisdiction where, or to any person to
whom, it is unlawful to make such offer or solicitation. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has not been any change in the facts set
forth in this Prospectus or in the affairs of the Company or any SunAmerica
Trust since the date hereof.
__________________
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
THE COMPANY
The Company is a diversified financial services company specializing in
retirement savings products and services. At June 30, 1995, the Company held
$27 billion of assets throughout its businesses, including $16.20 billion of
assets on its balance sheet, $2.08 billion of assets managed in mutual funds
and private accounts and $8.76 billion under custody in retirement trust
accounts. Together, the Company's life insurance companies rank among the
largest U.S. issuers of annuities. Complementing these annuity operations are
the Company's asset management operations; its two broker-dealers, which the
Company 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, the Company specializes in the sale of
tax-deferred long-term savings products and investments to the expanding
preretirement savings market. The Company markets fixed annuities and
fee-generating variable annuities, mutual funds and trust services, as well as
guaranteed investment contracts. The Company's products are distributed
through a broad spectrum of financial services distribution channels,
including independent registered representatives of the Company's
broker-dealer subsidiaries and unaffiliated broker-dealers, independent
general insurance agents and financial institutions.
The principal executive offices of the Company are located at 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
RECENT DEVELOPMENTS
On September 20, 1995, the Company's wholly owned subsidiary, Anchor
National Life Insurance Company, signed a definitive agreement pursuant to
which it or an affiliate will acquire CalFarm Life Insurance Company
("CalFarm Life") from its parent, Zenith National Insurance Corp., for
approximately $120 million in cash. Completion of the acquisition,
expected by year-end 1995, is subject to receipt of normal regulatory
approvals and other customary terms and conditions. CalFarm Life is
headquartered in Sacramento, California and currently markets a range of
life and health insurance and annuity products, specializing in the
qualified 403(b) market for teachers and other non-profit organizations.
At June 30, 1995, CalFarm Life had approximately $739 million in annuity
and life reserves, and approximately $2.8 billion of life insurance in
force. Under terms of the agreement, Zenith National will retain the
company's health insurance business.
On September 11, 1995, the Company's Board of Directors approved for
submission to shareholder vote an amendment to the Articles of Incorporation
to increase the Company's authorized capital from (i) 50,000,000 to
175,000,000 shares of Common Stock and (ii) 15,000,000 to 25,000,000 shares of
Class B Stock. The Company has scheduled a special shareholders' meeting on
October 30, 1995 (for shareholders of record as of September 21, 1995) for
consideration of the proposed increase in authorized capital stock. On
September 11, 1995, the Board of Directors also approved a three-for-two stock
split, to be effected in the form of a stock dividend, of its outstanding
Common Stock and Class B Stock, contingent upon shareholder approval of the
proposed increase in authorized capital stock.
THE SUNAMERICA TRUSTS
Each of SunAmerica Capital Trust II, SunAmerica Capital Trust III and
SunAmerica Capital Trust IV is a statutory business trust formed on September
6, 1995 under the Delaware Business Trust Act (the "Business Trust Act")
pursuant to a separate declaration of trust among the Trustees (as defined
herein) of such SunAmerica Trust and the Company and the filing of a
certificate of trust with the Secretary of State of the State of Delaware.
Such declaration will be amended and restated in its entirety (as so amended
and restated, the "Declaration") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part, as of the
date the Preferred Securities of such SunAmerica Trust are initially issued.
Each Declaration is qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Upon issuance of any Preferred
Securities by a SunAmerica Trust, the holders thereof will own all of the
issued and outstanding Preferred Securities of such SunAmerica Trust. The
Company will acquire securities representing common undivided beneficial
interests in the assets of each SunAmerica Trust (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities") in an amount
equal to at least 3% of the total capital of such SunAmerica Trust and will
own, directly or indirectly, all of the issued and outstanding Common
Securities of each SunAmerica Trust. The Preferred Securities and the Common
Securities will rank pari passu with each other and will have equivalent
terms; provided that (i) if a Declaration Event of Default (as defined
herein) under the Declaration of a SunAmerica Trust occurs and is continuing,
the holders of Preferred Securities of such SunAmerica Trust will have a
priority over holders of the Common Securities of such SunAmerica Trust 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 the Trustees and to increase or decrease the number of Trustees,
subject to the right of holders of Preferred Securities to appoint one
additional Regular Trustee (as defined below) of such SunAmerica Capital Trust
(a "Special Regular Trustee") in certain limited circumstances set forth in
the Prospectus Supplement. Each SunAmerica Trust exists for the purpose of
(a) issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the gross proceeds from the sale of the Trust
Securities in Junior Subordinated Debt Securities of the Company and (d)
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 applicable
Declaration, the Business Trust Act and the Trust Indenture Act.
The number of trustees (the "Trustees") of each SunAmerica Trust shall
initially be five. Three of such Trustees (the "Regular Trustees") are
individuals who are employees or officers of the Company. The fourth such
trustee will be The Bank of New York, which is unaffiliated with the Company
and which will serve as the property trustee (the "Property Trustee") and act
as the indenture trustee for purposes of the Trust Indenture Act. The fifth
such 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"). Pursuant
to each Declaration, legal title to the Junior Subordinated Debt Securities
purchased by a SunAmerica Trust will be held by the Property Trustee for the
benefit of the holders of the Trust Securities of such SunAmerica Trust and
the Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture (as defined under "Description of the Junior
Subordinated Debt Securities") with respect to the Junior Subordinated Debt
Securities. In addition, the Property Trustee will maintain exclusive control
of a segregated non-interest bearing bank account (the "Property Account") to
hold all payments in respect of the Junior Subordinated Debt Securities
purchased by a SunAmerica Trust for the benefit of the holders of Trust
Securities. The Property Trustee will promptly make distributions to the
holders of the Trust Securities out of funds from the Property Account. The
Preferred Securities Guarantees are separately qualified under the Trust
Indenture Act and will be held by The Bank of New York, acting in its capacity
as indenture trustee with respect thereto, for the benefit of the holders of
the applicable Preferred Securities. As used in this Prospectus and any
accompanying Prospectus Supplement, the term "Property Trustee" with respect
to a SunAmerica Trust refers to The Bank of New York acting either in its
capacity as a Trustee under the Declaration and the holder of legal title to
the Junior Subordinated Debt Securities purchased by that Trust or in its
capacity as indenture trustee under, and the holder of, the applicable
Preferred Securities Guarantee, as the context may require. Subject to the
right of holders of Preferred Securities to appoint a Special Regular Trustee
as described above, the Company as the direct or indirect owner of all of the
Common Securities of each SunAmerica Trust, will have the exclusive right
(subject to the terms of the related Declaration) to appoint, remove or
replace Trustees and to increase or decrease the number of Trustees, provided
that the number of Trustees shall be at least three, a majority of which shall
be Regular Trustees. A Special Regular Trustee need not be an employee or
officer of, or otherwise affiliated with, the Company. The term of a
SunAmerica Trust will be set forth in the Prospectus Supplement, but may
terminate earlier as provided in such Declaration.
The duties and obligations of the Trustees of a SunAmerica Trust shall
be governed by the Declaration of such SunAmerica Trust. Under its
Declaration, each SunAmerica Trust shall not, and the Trustees shall cause
such SunAmerica Trust not to, engage in any activity other than in connection
with the purposes of such SunAmerica Trust or other than as required or
authorized by the related Declaration. In particular, each SunAmerica Trust
shall not and the Trustees shall not (a) invest any proceeds received by such
SunAmerica Trust from holding the Junior Subordinated Debt Securities
purchased by such SunAmerica Trust but shall promptly distribute from the
Property Account all such proceeds to holders of Trust Securities pursuant to
the terms of the related Declaration and of the Trust Securities; (b) acquire
any assets other than as expressly provided in the related Declaration; (c)
possess Trust property for other than a Trust purpose; (d) make any loans,
other than loans represented by the Junior Subordinated Debt Securities; (e)
possess any power or otherwise act in such a way as to vary the assets of such
SunAmerica Trust or the terms of its Trust Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interests in, such SunAmerica Trust other than its Trust
Securities; (g) incur any indebtedness for borrowed money or (h)(i) direct
the time, method and place of exercising any trust or power conferred upon the
Indenture Trustee (as defined under "Description of the Junior Subordinated
Debt Securities") with respect to the Junior Subordinated Debt Securities
deposited in that SunAmerica Trust as trust assets or upon the Property
Trustee of that SunAmerica Trust with respect to its Preferred Securities,
(ii) waive any past default that is waivable under the Indenture or the
Declaration, (iii) exercise any right to rescind or annul any declaration that
the principal of all of the Junior Subordinated Debt Securities deposited in
that SunAmerica Trust as trust assets shall be due and payable or (iv) consent
to any amendment, modification or termination of the Indenture or such Junior
Subordinated Debt Securities or the Declaration, in each case where such
consent shall be required, unless in the case of this clause (h) the Property
Trustee 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 such SunAmerica Trust to be classified for
United States federal income tax purposes as an association taxable as a
corporation or a partnership and that such SunAmerica Trust will continue to
be classified as a grantor trust for United States federal income tax
purposes.
The books and records of each SunAmerica Trust will be maintained at the
principal office of such SunAmerica Trust and will be open for inspection by a
holder of Preferred Securities of such SunAmerica Trust or his representative
for any purpose reasonably related to its interest in such SunAmerica Trust
during normal business hours. Each holder of Preferred Securities will be
furnished annually with unaudited financial statements of the applicable
SunAmerica Trust as soon as available after the end of such SunAmerica Trust's
fiscal year.
Except as provided below or under the Business Trust Act and the Trust
Indenture Act, holders of Preferred Securities will have no voting rights. In
certain circumstances set forth in a Prospectus Supplement, holders of
Preferred Securities of a SunAmerica Trust shall have the right to vote, as a
single class, for the appointment of a Special Regular Trustee who need not be
an employee or officer of or otherwise affiliated with the Company. The
Special Regular Trustee shall have the same rights, powers and privileges
under the Declaration as the Regular Trustees.
The Property Trustee, for the benefit of the holders of the Trust
Securities of a SunAmerica Trust, is authorized under each Declaration to
exercise all rights under the Indenture with respect to the Junior
Subordinated Debt Securities deposited in such SunAmerica Trust as trust
assets, including its rights as the holder of such Junior Subordinated Debt
Securities to enforce the Company's obligations under such Junior Subordinated
Debt Securities upon the occurrence of an Indenture Event of Default. The
Property Trustee shall also be authorized to enforce the rights of holders of
Preferred Securities of a SunAmerica Trust under the Preferred Securities
Guarantee. If any SunAmerica Trust's failure to make distributions on the
Preferred Securities of a SunAmerica Trust is a consequence of the Company's
exercise of any right under the terms of the Junior Subordinated Debt
Securities deposited in such SunAmerica Trust as trust assets to extend the
interest payment period for such Junior Subordinated Debt Securities, the
Property Trustee will have no right to enforce the payment of distributions on
such Preferred Securities until a Declaration Event of Default shall have
occurred. Holders of a least a majority in liquidation amount of the
Preferred Securities held by a SunAmerica Trust will have the right to direct
the Property Trustee for that SunAmerica Trust with respect to certain matters
under the Declaration for that SunAmerica Trust and the related Preferred
Securities Guarantee. If the Property Trustee fails to enforce its rights
under the Indenture or fails to enforce the Preferred Securities Guarantee,
any holder of Preferred Securities may, after a period of 30 days has elapsed
from such holder's written request to the Property Trustee to enforce such
rights or the Preferred Securities Guarantee may institute a legal proceeding
against the Company to enforce such rights or the Preferred Securities
Guarantee, as the case may be.
Pursuant to each Declaration, distributions on the Preferred
Securities of a SunAmerica Trust must be paid on the dates payable to the
extent that the Property Trustee for that SunAmerica Trust has cash on hand
in the applicable Property Account to permit such payment. The funds
available for distribution to the holders of the Preferred Securities of a
SunAmerica Trust will be limited to payments received by the Property
Trustee in respect of the Junior Subordinated Debt Securities that are
deposited in the SunAmerica Trust as trust assets. If the Company does not
make interest payments on the Junior Subordinated Debt Securities deposited
in a SunAmerica Trust as trust assets, the Property Trustee will not make
distributions on the Preferred Securities of such SunAmerica Trust. Under
the Declaration, if and to the extent the Company does make interest
payments on the Junior Subordinated Debt Securities deposited in a
SunAmerica Trust as trust assets, the Property Trustee is obligated to make
distributions on the Trust Securities of such SunAmerica Trust on a Pro
Rata Basis (as defined below). The payment of distributions on the
Preferred Securities of a SunAmerica Trust is guaranteed by SunAmerica on a
subordinated basis as and to the extent set forth under "Description of the
Preferred Securities Guarantee". A Preferred Securities Guarantee is a
full and unconditional guarantee from the time of issuance of the
applicable Preferred Securities but the Preferred Securities Guarantee
covers distributions and other payments on the applicable Preferred
Securities only if and to the extent that the Company has made a payment to
the Property Trustee of interest or principal on the Junior Subordinated
Debt Securities deposited in the SunAmerica Trust as trust assets. As used
in this Prospectus, the term "Pro Rata Basis" shall mean pro rata to each
holder of Trust Securities of a SunAmerica Trust according to the aggregate
liquidation amount of the Trust Securities of such SunAmerica Trust held by
the relevant holder in relation to the aggregate liquidation amount of all
Trust Securities of such SunAmerica Trust outstanding unless, in relation
to a payment, a Declaration Event of Default under the Declaration has
occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each holder of the Preferred Securities of
such SunAmerica Trust pro rata according to the aggregate liquidation
amount of the Preferred Securities held by the relevant holder in relation
to the aggregate liquidation amount of all the Preferred Securities of such
SunAmerica Trust outstanding, and only after satisfaction of all amounts
owed to the holders of such Preferred Securities, to each holder of Common
Securities of such SunAmerica Trust pro rata according to the aggregate
liquidation amount of such Common Securities held by the relevant holder in
relation to the aggregate liquidation amount of all Common Securities of
such SunAmerica Trust outstanding.
If an Indenture Event of Default occurs and is continuing with
respect to Junior Subordinated Debt Securities deposited in a SunAmerica
Trust as trust assets, an Event of Default under the Declaration (a
"Declaration Event of Default") of such SunAmerica Trust will occur and be
continuing with respect to any outstanding Trust Securities of such
SunAmerica Trust. In such event, each Declaration provides that the
holders of Common Securities of such SunAmerica Trust will be deemed to
have waived any such Declaration Event of Default with respect to the
Common Securities until all Declaration Events of Default with respect to
the Preferred Securities of such SunAmerica Trust have been cured or
waived. Until all such Declaration Events of Default with respect to the
Preferred Securities of such SunAmerica Trust have been so cured or waived,
the Property Trustee will be deemed to be acting solely on behalf of the
holders of the Preferred Securities of such SunAmerica Trust and only the
holders of such Preferred Securities will have the right to direct the
Property Trustee with respect to certain matters under such Declaration and
consequently under the Indenture. In the event that any Declaration Event
of Default with respect to the Preferred Securities of such SunAmerica
Trust is waived by the holders of the Preferred Securities of such
SunAmerica Trust as provided in the Declaration, the holders of Common
Securities pursuant to such Declaration have agreed that such waiver also
constitutes a waiver of such Declaration Event of Default with respect to
the Common Securities for all purposes under the Declaration without any
further act, vote or consent of the holders of the Common Securities.
Each Declaration provides that the Trustees of such SunAmerica Trust
may treat the person in whose name a Certificate representing its Preferred
Securities is registered on the books and records of such SunAmerica 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 such
SunAmerica Trust shall have actual or other notice thereof. Preferred
Securities will be issued in fully registered form. Unless otherwise
specified in a Prospectus Supplement, Preferred Securities will be
represented by a global certificate registered on the books and records of
such SunAmerica Trust in the name of a depositary (the "Depositary") named
in an accompanying Prospectus Supplement or its nominee. Under each
Declaration:
(i) such SunAmerica Trust and the Trustees thereof shall be
entitled to deal with the Depositary (or any successor depositary)
for all purposes, including the payment of distributions and
receiving approvals, votes or consents under the related Declaration,
and except as set forth in the related Declaration with respect to
the Property Trustee, shall have no obligation to persons owning a
beneficial interest in Preferred Securities ("Preferred Security
Beneficial Owners") registered in the name of and held by the
Depositary or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary (or any successor depositary) and
shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Depositary and/or its
participants. With respect to Preferred Securities registered in the
name of and held by the Depositary or its nominee, all notices and other
communications required under each Declaration shall be given to, and
all distributions on such Preferred Securities shall be given or made
to, the Depositary (or its successor).
The specific terms of the depositary arrangement with respect to the Preferred
Securities will be disclosed in the applicable Prospectus Supplement.
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the applicable SunAmerica Trust, including the fees and
expenses of its Trustees and any taxes and all costs and expenses with respect
thereto, to which such SunAmerica Trust may become subject, except for United
States withholding taxes. The foregoing obligations of the Company under each
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 thereof. Any
such Creditor may enforce such obligations of the Company directly against the
Company and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against any SunAmerica Trust or any
other person before proceeding against the Company. The Company has agreed in
each Declaration to execute such additional agreements as may be necessary or
desirable in order to give full effect to the foregoing.
The foregoing description summarizes the material terms of the
Declarations and is qualified in its entirety by reference to the form of
Declaration which has been filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
The business address of each SunAmerica Trust is c/o SunAmerica Inc., 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
USE OF PROCEEDS
Each SunAmerica Trust will use all proceeds received from the sale of
its Trust Securities to purchase Junior Subordinated Debt Securities from the
Company.
Unless otherwise set forth in the applicable Prospectus Supplement, the
net proceeds from the sale of the Junior Subordinated Debt Securities are
expected to be used by the Company for general corporate purposes, including
repayment or redemption of outstanding debt or preferred stock, the possible
acquisition of financial services businesses or assets thereof, investments in
portfolio assets and working capital needs. The Company routinely reviews
opportunities to acquire financial services businesses or assets thereof.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to
fixed charges and earnings to combined fixed charges and preferred stock
dividends for the Company for the periods indicated:
<TABLE>
<CAPTION> Nine months ended
June 30,
Years ended September 30, (unaudited)
________________________________________________ ___________________
1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(excluding interest incurred on
reserves and trust deposits)(1) 2.4x 2.7x 4.0x 6.1x 5.8x 5.9x 5.8x
Ratio of earnings to fixed charges
(including interest incurred on
reserves and trust deposits)(2) 1.1x 1.1x 1.2x 1.4x 1.5x 1.5x 1.5x
Ratio of earnings to combined
fixed charges and preferred stock
dividends (excluding interest
incurred on reserves and trust
deposits)(3) 2.0x 2.3x 2.7x 2.8x 2.8x 2.8x 3.3x
Ratio of earnings to combined
fixed charges and preferred stock
dividends (including interest
incurred on reserves and trust
deposits)(4) 1.1x 1.1x 1.2x 1.3x 1.4x 1.4x 1.4x
<FN>
__________
(1) In computing the ratio of earnings to fixed charges (excluding interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness and dividends
on the preferred securities of a subsidiary grantor trust. Earnings are
computed by adding interest incurred on senior and subordinated
indebtedness and dividends paid on the preferred securities of a
subsidiary grantor trust to pretax income.
(2) In computing the ratio of earnings to fixed charges (including
interest incurred on reserves and trust deposits), fixed charges
consist of interest expense on senior and subordinated indebtedness,
fixed annuity contracts, guaranteed investment contracts and trust
deposits, and dividends on the preferred securities of a subsidiary
grantor trust. Earnings are computed by adding interest incurred on
senior and subordinated indebtedness, fixed annuity contracts,
guaranteed investment contracts and trust deposits, and dividends
paid on the preferred securities of a subsidiary grantor trust to
pretax income.
(3) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (excluding interest incurred on reserves and
trust deposits), combined fixed charges and preferred stock dividends
consist of interest expense on senior and subordinated indebtedness,
dividends on the preferred securities of a subsidiary grantor trust and
dividends on preferred stock of the Company on a tax equivalent basis.
Earnings are computed by adding interest incurred on senior and
subordinated indebtedness and dividends paid on the preferred securities
of a subsidiary grantor trust to pretax income.
(4) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (including interest incurred on reserves 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; dividends on the preferred securities of a subsidiary grantor
trust; and dividends on preferred stock of the Company 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 and dividends paid on
the preferred securities of a subsidiary grantor trust to pretax income.
</TABLE>
DESCRIPTION OF THE PREFERRED SECURITIES
Each SunAmerica Trust may issue, from time to time, only one series
of Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each SunAmerica Trust authorizes the
Regular Trustees of such SunAmerica Trust to issue on behalf of such
SunAmerica Trust one series of Preferred Securities. Each Declaration will
be qualified as an indenture under the Trust Indenture Act. The Preferred
Securities will have such terms, including distributions, redemption,
voting, liquidation rights and such other preferred, deferred or other
special rights or such restrictions as shall be set forth in the related
Declaration or made part of such Declaration by the Trust Indenture Act.
Reference is made to any Prospectus Supplement relating to the Preferred
Securities of a SunAmerica Trust for specific terms, including (i) the
specific designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such SunAmerica Trust, (iii) the annual
distribution rate (or method of calculation thereof) for Preferred
Securities issued by such SunAmerica Trust, the date or dates upon which
such distributions shall be payable and the record date or dates for the
payment of such distributions, (iv) whether distributions on Preferred
Securities issued by such SunAmerica Trust shall be cumulative, and, in the
case of Preferred Securities having such cumulative distribution rights,
the date or dates or method of determining the date or dates from which
distributions on Preferred Securities issued by such SunAmerica Trust shall
be cumulative, (v) the amount or amounts which shall be paid out of the
assets of such SunAmerica Trust to the holders of Preferred Securities of
such SunAmerica Trust upon voluntary or involuntary dissolution, winding-up
or termination of such SunAmerica Trust, (vi) the obligation or right, if
any, of such SunAmerica Trust to purchase or redeem Preferred Securities
issued by such SunAmerica Trust and the price or prices at which, the
period or periods within which and the terms and conditions upon which
Preferred Securities issued by such SunAmerica Trust shall or may be
purchased or redeemed, in whole or in part, pursuant to such obligation or
right, (vii) the voting rights, if any, of Preferred Securities issued by
such SunAmerica Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval
by the holders of Preferred Securities, or of Preferred Securities issued
by one or more SunAmerica Trusts, or of both, as a condition to specified
actions or amendments to the Declaration of such SunAmerica Trust, (viii)
terms for any conversion or exchange into other securities and (ix) any
other relevant rights, preferences, privileges, limitations or restrictions
of Preferred Securities issued by such SunAmerica Trust consistent with the
Declaration of such SunAmerica Trust or with applicable law. All Preferred
Securities offered hereby will be guaranteed by the Company as and to the
extent set forth below under "Description of the Preferred Securities
Guarantees." Certain United States federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each SunAmerica
Trust will issue one series of Common Securities. The Declaration of each
SunAmerica Trust authorizes the Regular Trustees of such trust to issue on
behalf of such SunAmerica Trust one series of Common Securities having such
terms including distributions, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. The terms of the Common
Securities issued by a SunAmerica Trust will be substantially identical to the
terms of the Preferred Securities issued by such SunAmerica Trust and the
Common Securities will rank pari passu, and payments will be made thereon on a
Pro Rata Basis with the Preferred Securities except that if a Declaration
Event of Default occurs and is continuing, the rights of the holders of such
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and maturity will be subordinated to the rights of the
holders of such Preferred Securities. Except in certain limited
circumstances, the Common Securities issued by a SunAmerica Trust will also
carry the right to vote and to appoint, remove or replace any of the Trustees
of that SunAmerica Trust. All of the Common Securities of a SunAmerica Trust
will be directly or indirectly owned by the Company.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company
for the benefit of the holders from time to time of Preferred Securities.
Each Preferred Security Guarantee will be separately qualified under the
Trust Indenture Act and will be held by the Bank of New York, acting in its
capacity as indenture trustee with respect thereto, for the benefit of
holders of the Preferred Securities of the applicable SunAmerica Trust.
The terms of each Preferred Securities Guarantee will be those set forth in
such Preferred Securities Guarantee and those made part of such Guarantee
by the Trust Indenture Act. This description summarizes the material terms
of the Preferred Securities Guarantees and is qualified in its entirety by
reference to, the form of Preferred Securities Guarantee, which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a
part, and the Trust Indenture Act.
General
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a SunAmerica
Trust, the Guarantee Payments (as defined herein) (without duplication of
amounts theretofore paid by such SunAmerica Trust), to the extent not paid by
such SunAmerica Trust, regardless of any defense, right of set-off or
counterclaim that such SunAmerica Trust may have or assert. The following
payments or distributions with respect to Preferred Securities issued by a
SunAmerica Trust to the extent not paid or made by such SunAmerica Trust (the
"Guarantee Payments"), will be subject to the Preferred Securities Guarantee
(without duplication): (i) any accrued and unpaid distributions on such
Preferred Securities, and the redemption price, including all accrued and
unpaid distributions to the date of redemption, with respect to any Preferred
Securities called for redemption by such SunAmerica Trust but if and only to
the extent that in each case the Company has made a payment to the related
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in such SunAmerica Trust as trust assets and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of such
SunAmerica Trust (other than in connection with the distribution of such
Junior Subordinated Debt Securities to the holders of Preferred Securities or
the redemption of all of the Preferred Securities upon the maturity or
redemption of such Junior Subordinated Debt Securities) the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions
on such Preferred Securities to the date of payment, to the extent such
SunAmerica Trust has funds available therefor or (b) the amount of assets of
such SunAmerica Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of such SunAmerica Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Company to the holders of Preferred Securities or
by causing the applicable SunAmerica Trust to pay such amounts to such
holders.
The Preferred Securities Guarantee is a full and unconditional guarantee
from the time of issuance of the applicable Preferred Securities but the
Preferred Securities Guarantee covers distributions and other payments on such
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the applicable SunAmerica Trust as
trust assets. If the Company does not make interest or principal payments on
the Junior Subordinated Debt Securities deposited in the applicable SunAmerica
Trust as trust assets, the Property Trust will not make distributions of the
Preferred Securities of such SunAmerica Trust and the SunAmerica Trust will
not have funds available therefor.
The Company's obligations under the Declaration for each Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by that Trust, the Junior Subordinated Debt Securities purchased by
that Trust and the related Indenture (as defined below) in the aggregate
will provide a full and unconditional guarantee on a subordinated basis by
the Company of payments due on the Preferred Securities issued by that
Trust.
Certain Covenants of the Company
In each Preferred Securities Guarantee, the Company will covenant that,
so long as any Preferred Securities issued by the applicable SunAmerica Trust
remain outstanding, the Company will not (A) declare or pay any dividends on,
or redeem, 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 or (B) make any payment of interest,
premium (if any) or principal on any debt securities issued by the Company
which rank pari passu with or junior to the Junior Subordinated Debt
Securities, if at such time (i) the Company shall be in default with respect
to its Guarantee Payments or other payment obligations under the Preferred
Securities Guarantee, (ii) there shall have occurred any Declaration Event of
Default under the related Declaration or (iii) in the event that Junior
Subordinated Debt Securities are issued to a SunAmerica Trust in connection
with the issuance of Trust Securities by such SunAmerica Trust, the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period
as provided in the terms of the Junior Subordinated Debt Securities and such
period, or any extension thereof, is continuing; provided that (a) the Company
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") or upon the
conversion of any other Preferred Stock of the Company as may be outstanding
from time to time, in each case in accordance with the terms of such stock.
In addition, so long as any Preferred Securities remain outstanding, the
Company has agreed (i) to remain the sole direct or indirect owner of all of
the outstanding Common Securities issued by the applicable SunAmerica Trust
and shall not cause or permit the Common Securities to be transferred except
to the extent permitted by the related Declaration; provided that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities issued by the applicable
SunAmerica Trust and (ii) to use reasonable efforts to cause such SunAmerica
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 Debt Securities.
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), each 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 issued by the applicable
SunAmerica Trust. The manner of obtaining any such approval of holders of
such Preferred Securities will be set forth in an accompanying Prospectus
Supplement. All guarantees and agreements contained in a Preferred
Securities Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of the Company and shall inure to the benefit
of the holders of the Preferred Securities of the applicable SunAmerica
Trust then outstanding. Except in connection with a consolidation, merger
or sale involving the Company that is permitted under the Indenture, the
Company may not assign its obligations under any Preferred Securities
Guarantee.
Termination of the Preferred Securities Guarantees
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable
SunAmerica Trust upon full payment of the redemption price of all Preferred
Securities of such SunAmerica Trust, or upon distribution of the Junior
Subordinated Debt Securities to the holders of the Preferred Securities of
such SunAmerica Trust in exchange for all of the Preferred Securities issued
by such SunAmerica Trust, or upon full payment of the amounts payable upon
liquidation of such SunAmerica Trust. Notwithstanding the foregoing, each
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 issued by the applicable SunAmerica Trust must restore payment of
any sums paid under such Preferred Securities or such Guarantee.
Status of the Preferred Securities Guarantees
The Company's obligations under each Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, including the Junior Subordinated Debt
Securities, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Company and to
any guarantee now or hereafter entered into by the Company in respect of any
of its capital stock. The Company's obligations under each Preferred
Securities Guarantee will rank pari passu with respect to any other Preferred
Securities Guarantee. Because the Company is a holding company, the Company's
obligations under each Preferred Securities Guarantee are also effectively
subordinated to all existing and future liabilities, including trade payables,
of the Company's subsidiaries, except to the extent that the Company is a
creditor of the subsidiaries recognized as such. Each Declaration provides
that each holder of Preferred Securities issued by the applicable SunAmerica
Trust by acceptance thereof agrees to the subordination provisions and other
terms of the related Preferred Securities Guarantee.
Each 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). Each Preferred Securities Guarantee will be
deposited with The Bank of New York, as indenture trustee, to be held for
the benefit of the holders of the Preferred Securities issued by the
applicable SunAmerica Trust. The Bank of New York shall enforce the
Preferred Securities Guarantee on behalf of the holders of the Preferred
Securities issued by the applicable SunAmerica Trust. The holders of not
less than a majority in aggregate liquidation amount of the Preferred
Securities issued by the applicable SunAmerica Trust have the right to
direct the time, method and place of conducting any proceeding for any
remedy available in respect of the related Preferred Securities Guarantee,
including the giving of directions to The Bank of New York. If The Bank of
New York fails to enforce such Preferred Securities Guarantee as above
provided, any holder of Preferred Securities issued by the applicable
SunAmerica Trust may, after a period of 30 days has elapsed from such
holder's written request to The Bank of New York to enforce such Preferred
Securities Guarantee, institute a legal proceeding directly against the
Company to enforce its rights under such Preferred Securities Guarantee,
without first instituting a legal proceeding against the applicable
SunAmerica Trust or any other person or entity.
Miscellaneous
The Company will be required to provide annually to The Bank of New York
a statement as to the performance by the Company of certain of its obligations
under the Preferred Securities Guarantees and as to any default in such
performance. The Company is required to file annually with The Bank of New
York an officer's certificate as to the Company's compliance with all
conditions under Preferred Securities Guarantees.
The Bank of New York, prior to the occurrence of a default, undertakes
to perform only such duties as are specifically set forth in the applicable
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject
to such provision, The Bank of New York is under no obligation to exercise any
of the powers vested in it by a Preferred Securities Guarantee at the request
of any holder of Preferred Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
Governing Law
The Guarantees will be governed by, and construed in accordance with,
the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Junior Subordinated Debt Securities may be issued from time to time
in one or more series under an Indenture dated March 15, 1995 (the
"Indenture") between the Company and The First National Bank of Chicago, as
trustee (the "Indenture Trustee"). The Indenture has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a
part. The following description summarizes the material terms of the
Indenture, 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.
General
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Indenture does not limit the
amount of additional indebtedness the Company or any of its subsidiaries
may incur. Since the Company is a holding company, the Company's rights
and the rights of its creditors, including the holders of Junior
Subordinated Debt Securities, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be
subject to the prior claims of the subsidiary's creditors, except to the
extent that the Company may itself be a creditor with recognized claims
against the subsidiary. Claims on the Company's subsidiaries by creditors
other than the Company include substantial claims for policy benefits and
debt obligations, as well as other liabilities incurred in the ordinary
course of business. In addition, since many of the Company'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 the Company without prior regulatory approval is
limited by applicable laws and regulations.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that Junior
Subordinated Debt Securities may be issued thereunder from time to time in one
or more series. The Junior Subordinated Debt Securities are issuable in one
or more series pursuant to an indenture supplemental to the Indenture.
In the event Junior Subordinated Debt Securities are issued to a
SunAmerica Trust or a Trustee of such trust in connection with the issuance of
Trust Securities by such SunAmerica Trust, such Junior Subordinated Debt
Securities subsequently may be distributed pro rata to the holders of such
Trust Securities in connection with the dissolution of such SunAmerica Trust
upon the occurrence of certain events described in the Prospectus Supplement
relating to such Trust Securities. Only one series of Junior Subordinated
Debt Securities will be issued to a SunAmerica Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such SunAmerica
Trust.
Reference is made to the Prospectus Supplement which will accompany
this Prospectus for the following terms of the series of Junior
Subordinated Debt Securities being offered thereby (to the extent such
terms are applicable to the Junior Subordinated Debt Securities): (i) the
specific designation of such Junior Subordinated Debt Securities, aggregate
principal amount and purchase price; (ii) any limit on the aggregate
principal amount of such Junior Subordinated Debt Securities; (iii) the
date or dates on which the principal of such Junior Subordinated Debt
Securities is payable and the right, if any, to extend such date or dates;
(iv) the rate or rates at which such Junior Subordinated Debt Securities
will bear interest or the method of calculating such rate or rates; (v)
the date or dates from which such interest shall accrue, the interest
payment dates on which such interest will be payable or the manner of
determination of such interest payment dates and the record dates for the
determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, to extend the interest payment
periods and the duration of such extension; (vii) the period or periods
within which, the price or prices at which, and the terms and conditions
upon which, such Junior Subordinated Debt Securities may be redeemed, in
whole or in part, at the option of the Company; (viii) the right and/or
obligation, if any of the Company to redeem or purchase such Junior
Subordinated Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or periods
for which, the price or prices at which, and the terms and conditions upon
which, such Junior Subordinated Debt Securities shall be redeemed or
purchased, in whole or part, pursuant to such right and/or obligation;
(ix) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay
additional amounts on the Junior Subordinated Debt Securities held by a
person who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company
will have the option to redeem such Junior Subordinated Debt Securities
rather than pay such additional amounts; (x) the form of such Junior
Subordinated Debt Securities; (xi) if other than denominations of $25 or
any integral multiple thereof, the denominations in which such Junior
Subordinated Debt Securities shall be issuable; (xii) any and all other
terms with respect to such series, including any modification of or
additions to the events of default or covenants provided for with respect
to the Junior Subordinated Debt Securities, and any terms which may be
required by or advisable under applicable laws or regulations not
inconsistent with the Indenture; and (xiii) whether such Junior
Subordinated Debt Securities are issuable as a global security, and in such
case, the identity of the depositary.
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Junior Subordinated Debentures will be issued in United States
dollars in fully registered form without coupons in denominations of $25 or
integral multiples thereof. Junior Subordinated Debt Securities may be
presented for exchange and Junior Subordinated Debt Securities in registered
form may be presented for transfer in the manner, at the places and subject to
the restrictions set forth in the Junior Subordinated Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the Indenture. Junior Subordinated
Debt Securities in bearer form and the coupons, if any, appertaining thereto
will be transferable by delivery.
Junior Subordinated Debt Securities may bear interest at a fixed rate or
a floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States federal income tax considerations applicable to any such
discounted Junior Subordinated Debt Securities or to certain Junior
Subordinated Debt Securities issued at par which are treated as having been
issued at a discount for United States federal income tax purposes are
described in the relevant Prospectus Supplement.
Certain Covenants of the Company Applicable to the Junior Subordinated Debt
Securities
If Junior Subordinated Debt Securities are issued to a SunAmerica
Trust in connection with the issuance of Trust Securities by such
SunAmerica Trust, the Company will covenant in the Indenture that, so long
as the Preferred Securities issued by the applicable SunAmerica Trust
remain outstanding, the Company will not (a) declare or pay any dividends
on, or redeem, 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) the Company
shall be in default with respect to its Guarantee Payments or other payment
obligations under the related Preferred Securities Guarantee, (ii) there
shall have occurred any Indenture Event of Default with respect to the
Junior Subordinated Debt Securities or (iii) in the event that Junior
Subordinated Debt Securities are issued to a SunAmerica Trust in connection
with the issuance of Trust Securities by such SunAmerica Trust, the Company
shall have given notice of its election to defer payments of interest on
such Junior Subordinated Debt Securities by extending the interest payment
period as provided in the terms of such Junior Subordinated Debt Securities
and such period, or any extension thereof, is continuing; provided that (x)
the Company 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 or upon the conversion of any other Preferred Stock of the Company as
may be outstanding from time to time, in each case in accordance with the
terms of such stock and (y) the foregoing will not apply to any stock
dividends paid by the Company. In addition, if Junior Subordinated Debt
Securities are issued to a SunAmerica Trust in connection with the issuance
of Trust Securities by such SunAmerica Trust, for so long as the Preferred
Securities issued by the applicable SunAmerica Trust remain outstanding,
the Company has agreed (i) to remain the sole direct or indirect owner of
all of the outstanding Common Securities issued by the applicable
SunAmerica Trust and shall not cause or permit the Common Securities to be
transferred except to the extent permitted by the related Declaration;
provided that any permitted successor of the Company under the Indenture
may succeed to the Company's ownership of the Common Securities issued by
the applicable SunAmerica Trust, (ii) to comply fully with all of its
obligations and agreements contained in the related Declaration and (iii)
not to take any action which would cause the applicable SunAmerica Trust to
cease to be treated as a grantor trust for United States federal income tax
purposes except in connection with a distribution of Junior Subordinated
Debt Securities.
Subordination
The Indenture provides that the Junior Subordinated Debt Securities
are subordinate and junior in right of payment to all Senior Indebtedness
of the Company. In the event (a) of any insolvency or bankruptcy
proceedings, or any receivership, liquidation, reorganization or other
similar proceedings in respect of the Company or its property or any
proceeding for voluntary liquidation, dissolution or other winding up of
the Company, or (b) that Junior Subordinated Debt Securities of any series
are declared due and payable before their expressed maturity because of the
occurrence of an Indenture 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 Junior Subordinated Debt Securities are entitled to
receive payment on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by such Junior Subordinated Debt
Securities. 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 or, premium, if any, or interest on the Junior Subordinated Debt
Securities shall be made. (Section 14.02 and 14.03). If this Prospectus
is being delivered in connection with a series of Junior Subordinated Debt
Securities, the accompanying Prospectus Supplement will set forth the
approximate amount of Senior Indebtedness outstanding as of the end of the
most recent fiscal quarter.
The term "Senior Indebtedness" shall mean the principal of and premium,
if any, and interest on (a) all indebtedness of the Company, whether
outstanding on the date of the Indenture or thereafter created, (i) for money
borrowed by the Company (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 the Company, (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 the Company at the time of the acquisition of
such property by the Company for the payment of which the Company 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 the Company.
Notwithstanding anything to the contrary in the Indenture or the Junior
Subordinated Debt Securities, Senior Indebtedness shall not include (i) any
indebtedness of the Company 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 Junior Subordinated Debt Securities, as the case may be, and in
particular, the Junior Subordinated Debt Securities shall rank pari passu with
respect to all other debt securities and guarantees in respect thereof issued
to any other trusts, partnerships or other entity affiliated with the Company
which is a financing vehicle of the Company in connection with the issuance of
preferred securities by such financing vehicle, or (ii) any indebtedness of
the Company to a subsidiary of the Company. (Section 1.01). The Subordinated
Indenture does not contain any limitation on the amount of Senior Indebtedness
that can be incurred by the Company.
Indenture Events of Default
The Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an
"Indenture Event of Default" with respect to each series of Junior
Subordinated Debt Securities:
(a) failure for 30 days to pay interest on the Junior Subordinated
Debt Securities of such series when due; provided that a valid extension
of the interest payment period by the Company 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 Junior
Subordinated Debt Securities 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 the Company from the Indenture Trustee or the
holders of at least 25% in principal amount of the outstanding Junior
Subordinated Debt Securities of such series; or
(d) certain events in bankruptcy, insolvency or reorganization of
the Company.
In each and every such case, unless the principal of all the Junior
Subordinated Debt Securities 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 Junior Subordinated Debt Securities of that
series then outstanding, by notice in writing to the Company (and to the
Indenture Trustee if given by such holders), may declare the principal of all
the Junior Subordinated Debt Securities 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 Junior Subordinated Debt Securities 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 Junior Subordinated Debt Securities of that series may declare the
principal due and payable immediately upon an Indenture Event of Default with
respect to such series, but the holders of a majority in aggregate outstanding
principal amount of Junior Subordinated Debt Securities 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 Junior Subordinated Debt Securities of that series may, on behalf of the
holders of all the Junior Subordinated Debt Securities 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 Debt Securities. (Section 6.06).
The Company is required to file annually with the Indenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants under the Indenture.
If Junior Subordinated Debt Securities are issued to a SunAmerica
Trust in connection with the issuance of Trust Securities of such
SunAmerica Trust, then under the applicable Declaration an Indenture Event
of Default with respect to such series of Junior Subordinated Debt
Securities will constitute a Declaration Event of Default.
Modification of the Indenture
The Indenture contains provisions permitting the Company and the
Indenture Trustee, with the consent of the holders of not less than a
majority in principal amount of the outstanding Junior Subordinated Debt
Securities of each series affected, to modify the Indenture or any
supplemental indenture affecting the rights of the holders of such Junior
Subordinated Debt Securities; provided that no such modification may,
without the consent of the holder of each outstanding Junior Subordinated
Debt Security affected thereby, (i) extend the fixed maturity of any Junior
Subordinated Debt Securities 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 Junior Subordinated Debt Security so
affected or (ii) reduce the percentage of Junior Subordinated Debt
Securities, the holders of which are required to consent to any such
modification, without the consent of the holders of each Junior
Subordinated Debt Security then outstanding and affected thereby. (Section
9.02).
Book-Entry and Settlement
If any Junior Subordinated Debt Securities of a series are represented
by one or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of and any premium and interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented
by a Global Security will be described in the applicable Prospectus
Supplement.
Consolidation, Merger and Sale
The Indenture will provide that the Company 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 the Company unless (i) either the Company 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 the Company'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, the Company will be discharged from
any and all obligations in respect of the Junior Subordinated Debt Securities
of a series (except in each case for certain obligations to register the
transfer or exchange of such Junior Subordinated Debt Securities, replace
stolen, lost or mutilated Junior Subordinated Debt Securities of that series,
maintain paying agencies and hold moneys for payment in trust) if (i) the
Company 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 Debt Securities of such
series; (ii) the Company delivers to the Indenture Trustee an opinion of
counsel to the effect that the holders of the Junior Subordinated Debt
Securities of such series 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 holders' United States federal income tax
treatment of principal, premium and interest payments on such Junior
Subordinated Debt Securities of such series (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 the subordination provisions applicable to such
series, would prevent the Company from making payments of principal of,
premium, if any, and interest on the Junior Subordinated Debt Securities of
such series at the date of the irrevocable deposit referred to above.
(Section 11.01).
Governing Law
The Indenture and the Junior Subordinated Debt Securities 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 Debt Securities, 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 the Company and its
subsidiaries maintain ordinary banking and trust relationships.
Miscellaneous
The Company 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 the Company; provided that, in the event of any such assignment,
the Company 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 the Company to a successor or purchaser pursuant to a
consolidation, merger or sale permitted by the Indenture. (Section 13.11).
PLAN OF DISTRIBUTION
The Company may sell any series of Junior Subordinated Debt Securities
and the SunAmerica Trusts may sell the Preferred Securities being offered
hereby directly or through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents
designated by the Company from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act,
involved in the offer or sale of the Offered Securities in respect of which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment. The Company
may also sell Offered Securities to an agent as principal. Agents may be
entitled under agreements which may be entered into the Company to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
If any underwriters are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, the Company will enter into an
underwriting agreement with such underwriters and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Offered Securities in respect of which this Prospectus is delivered to
the public. Underwriters may offer and sell the Offered Securities at a fixed
price or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The underwriters may be entitled, under the
relevant underwriting agreement, to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If a dealer is utilized in the sale of the Offered Securities in
respect of which this Prospectus is delivered, the Company will sell such
Offered Securities to the dealer, as principal. The dealer may then resell
such Offered Securities to the public at varying prices to be determined by
such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary
course of business.
Offered Securities may also be offered and sold, if so indicated in
the Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their
terms, or otherwise, by one or more firms ("marketing firms"), acting as
principals for their own accounts or as agents for the Company. Any
remarketing firm will be identified and the terms of its agreement, if any,
with the Company and its compensation will be described in the Prospectus
Supplement. Remarketing firms may be deemed to be underwriters in
connection with the Offered Securities remarketed thereby. Remarketing
firms may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and may be customers of,
engage in transactions with or perform services for the Company in the
ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to only those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission
payable for solicitation of such offers.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement,
certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon for the SunAmerica Trusts by Richards, Layton &
Finger, Wilmington, Delaware, special Delaware counsel to the SunAmerica
Trusts. The validity of the Preferred Securities Guarantees and the Junior
Subordinated Debt Securities will be passed upon for the SunAmerica Trusts and
the Company by Davis Polk & Wardwell, New York, New York, special counsel to
the Company and the SunAmerica Trusts. Certain legal matters in connection
with the Preferred Securities, the Preferred Securities Guarantees and the
Junior Subordinated Debt Securities will be passed upon for the SunAmerica
Trusts and the Company by Susan L. Harris, Vice President and General
Counsel--Corporate Affairs of the Company. Ms. Harris and Davis Polk &
Wardwell will rely as to matters of Maryland law on Piper & Marbury LLP,
Baltimore, Maryland. Ms. Harris holds stock, restricted stock and options to
purchase stock granted under the Company's employee stock plan, which in the
aggregate represents less than 1% of the Company's common stock. David W.
Ferguson, a partner of Davis Polk & Wardwell, is a director of First
SunAmerica Life Insurance Company, a subsidiary of the Company.
EXPERTS
The consolidated financial statements incorporated in this 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
The Company and certain affiliates of the Company, including Anchor
National Life Insurance Company and SunAmerica Life Insurance Company, 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 Internal Revenue Code of 1986,
as amended (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 Offered Securities are acquired by a pension or other employee
benefit plan with respect to which the Company or any of its affiliates is a
service provider, unless such Offered 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 Offered
Securities should consult with its legal counsel.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimates, except the SEC registration fee.
SEC registration fee.......................... $344,828
Printing and engraving........................ 100,000
Legal fees and expenses....................... 150,000
Fees of accountants........................... 80,000
Fees of trustee............................... 50,000
Blue sky fees and expenses.................... 60,000
Rating agency fees............................ 10,000
Miscellaneous................................. 55,172
---------
Total................................... $850,000
_______
Item 15. 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 the Company's Restated Articles of
Incorporation, as amended and restated (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 the Company, 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
of the Articles of Incorporation, as amended and restated, 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, the
Company's officers and directors are covered by certain directors' and
officers' liability insurance policies maintained by the Company. 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.
Each Amended and Restated Declaration of Trust (a "Declaration") of a
SunAmerica Trust provides that no Trustee, affiliate of any Trustee or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of such
SunAmerica Trust or its affiliates (each, an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any employee or
agent of such SunAmerica Trust or its affiliates, or any officers, directors,
shareholders, employees, representatives or agents of the Company or its
affiliates or to any holders of Trust Securities of such SunAmerica 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 such
SunAmerica 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 of such SunAmerica Trust 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, in the case of
the Property Trustee of such SunAmerica Trust, negligence) or willful
misconduct with respect to such acts or omissions. Each Declaration also
provides that, to the fullest extent permitted by applicable law, the Company
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 such SunAmerica Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such 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, in the
case of the Property Trustee of such SunAmerica Trust, negligence) or willful
misconduct with respect to such acts or omissions. Each 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 the final disposition of such claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Company prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Company 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 such
Declaration.
Item 16. List of Exhibits.
Exhibit
- -------
1.1* Form of Underwriting Agreement (Debt)
1.2* Form of Underwriting Agreement (Equity)
1.3* Form of Underwriting Agreement (Preferred Securities)
3.1 Restated Charter of the Company, dated October 2, 1991
(incorporated herein be reference to Exhibit 3(a) to the
Company's Form 8, dated and filed October 4, 1991, amending the
Company's Annual Report on Form 10-K for the year ended September
30, 1990)
3.2 Articles Supplementary, dated June 24, 1992 (incorporated herein
by reference to Exhibit 3(c) to the Company's 1992 Annual Report
on Form 10-K, filed November 30, 1992)
3.3 Amendment to the Company's Restated Articles of Incorporation,
dated February 1, 1993 (incorporated herein by reference to
Exhibit 1 to the Company's Form 8-K, filed February 3, 1993)
3.4 Articles Supplementary, dated March 9, 1993 (incorporated herein
by reference to Exhibit 3(e) to the Company's Registration
Statement No. 33-66048 on Form S-4, filed July 22, 1993)
3.5 Articles Supplementary, dated August 31, 1993 (incorporated
herein by reference to Exhibit 3(f) to the Company's 1993 Annual
Report on Form 10-K, filed December 16, 1993)
3.6 Articles of Merger, dated July 30, 1993, between the Company and
SunAmerica Corporation (incorporated herein by reference to
Exhibit 3(g) to the Company's 1993 Annual Report on Form 10-K,
filed December 16, 1993)
3.7 Bylaws of the Company as revised on October 23, 1987
(incorporated herein by reference to Exhibit 3(b) to the
Company's 1987 Annual Report on Form 10-K, filed February 26,
1988)
4.1 Senior Indenture dated as of April 15, 1993, between the Company
and The First National Bank of Chicago (incorporated by reference
to Exhibit 4(h) to the Company's Annual Report on Form 10-K,
filed December 16, 1993)
4.2* Form of Subordinated Indenture dated as of April 15, 1993 between
the Company and The First National Bank of Chicago
4.3* Junior Subordinated Indenture dated as of March 15, 1995, as
supplemented by a First Supplemental Indenture dated as of March
15, 1995, between the Company and The First National Bank of
Chicago.
4.4* Declaration of Trust of SunAmerica Capital Trust II
4.5* Certificate of Trust of SunAmerica Capital Trust II
4.6* Declaration of Trust of SunAmerica Capital Trust III
4.7* Certificate of Trust of SunAmerica Capital Trust III
4.8* Declaration of Trust of SunAmerica Capital Trust IV
4.9* Certificate of Trust of SunAmerica Capital Trust IV
4.10* Form of Amended and Restated Declaration of Trust for each of
SunAmerica Capital Trust II, SunAmerica Capital Trust III and
SunAmerica Capital Trust IV
4.11* Form of Preferred Security (included in Exhibit 4.10)
4.12* Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Securities and Preferred
Securities
4.13* Form of Junior Subordinated Debt Security (included in Exhibit 4.12)
4.14* Form of Preferred Securities Guarantee with respect to
Preferred Securities
4.15* Form of Deposit Agreement
4.16* Form of SunAmerica Common Stock Share Certificate
5.1* Opinion of Davis Polk & Wardwell
5.2 Opinion of Piper & Marbury LLP
5.3* Opinion of Richards, Layton & Finger
12.1* Statement re: Computation of ratio of earnings to fixed charges
12.2* Statement re: Computation of ratio of earnings to combined fixed
charges and preferred stock dividends
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Susan L. Harris
23.3* Consent of DaviS Polk & Wardwell (included in Exhibit 5.1)
23.4* Consent of Piper & Marbury LLP (included in Exhibit 5.2)
23.5 Consent of Richards, Layton & Finger (included in Exhibit 5.3)
24.1* Powers of Attorney for the Company
24.2* Powers of Attorney for SunAmerica, as sponsor, to sign the
Registration Statement on behalf of SunAmerica Capital Trust II,
SunAmerica Capital Trust III and SunAmerica Capital Trust IV
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 Senior Indenture
25.2* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Subordinated Indenture
25.3* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Junior Subordinated Indenture
25.4* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust II
25.5* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust III
25.6* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust IV
25.7* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to the
Preferred Securities of SunAmerica Capital Trust II
25.8* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to the
Preferred Securities of SunAmerica Capital Trust III
25.9* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to the
Preferred Securities of SunAmerica Capital Trust IV
[FN]
_____________
*Previously filed
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company'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 this registration statement shall be deemed to be
a new registration statement relating to the securities offered thereby, and
for the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) 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 provisions referred to in Item 15
of this registration statement, 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 Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
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 its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Los Angeles, State
of California, on September 29, 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 below by the
following persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
* Chairman, President and September 29, 1995
- ------------------------ Chief Executive Officer
Eli Broad (Principal Executive Officer)
* Senior Vice President and September 29, 1995
- ------------------------ Treasurer (Principal
James R. Belardi Financial Officer)
* Senior Vice President and September 29, 1995
- ------------------------ Controller (Principal
Scott L. Robinson Accounting Officer)
* Director September 29, 1995
- ------------------------
Ronald J. Arnault
* Director September 29, 1995
- ------------------------
Karen Hastie-Williams
* Director September 29, 1995
- ------------------------
David O. Maxwell
* Director September 29, 1995
- ------------------------
Barry Munitz
* Director September 29, 1995
- ------------------------
Lester Pollack
* Director September 29, 1995
- ------------------------
Carl E. Reichardt
* Director September 29, 1995
- ------------------------
Richard D. Rohr
* Director September 29, 1995
- ------------------------
Sanford C. Sigoloff
* Director September 29, 1995
- ------------------------
Harold M. Williams
* By: /s/ Susan Harris
_____________________________
Susan Harris
Attorney in Fact
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SunAmerica
Capital Trust II, SunAmerica Capital Trust III and SunAmerica Capital Trust IV
each certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No.
2 to the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of California, on
September 29, 1995.
SUNAMERICA CAPITAL TRUST II
By: SunAmerica Inc., as Sponsor
By: /s/ James R. Belardi
___________________________
Name: James R. Belardi
Title: Senior Vice President and
Treasurer
SUNAMERICA CAPITAL TRUST III
By: SunAmerica Inc., as Sponsor
By: /s/ James R. Belardi
___________________________
Name: James R. Belardi
Title: Senior Vice President and
Treasurer
SUNAMERICA CAPITAL TRUST IV
By: SunAmerica Inc., as Sponsor
By: /s/ James R. Belardi
___________________________
Name: James R. Belardi
Title: Senior Vice President and
Treasurer
EXHIBIT INDEX
Exhibit
-------
1.1* Form of Underwriting Agreement (Debt)
1.2* Form of Underwriting Agreement (Equity)
1.3* Form of Underwriting Agreement (Preferred Securities)
3.1 Restated Charter of the Company, dated October 2, 1991
(incorporated herein by reference to Exhibit 3(a) to the
Company's Form 8, dated and filed October 4, 1991, amending
the Company's Annual Report on Form 10-K for the year ended
September 30, 1990)
3.2 Articles Supplementary, dated June 24, 1992 (incorporated herein
by reference to Exhibit 3(c) to the Company's 1992 Annual Report
on Form 10-K, filed November 30, 1992)
3.3 Amendment to the Company's Restated Articles of Incorporation,
dated February 1, 1993 (incorporated herein by reference to
Exhibit 1 to the Company's Form 8-K, filed February 3, 1993)
3.4 Articles Supplementary, dated March 9, 1993 (incorporated herein
by reference to Exhibit 3(e) to the Company's Registration
Statement No. 33-66048 on Form S-4, filed July 22, 1993)
3.5 Articles Supplementary, dated August 31, 1993 (incorporated
herein by reference to Exhibit 3(f) to the Company's 1993 Annual
Report on Form 10-K, filed December 16, 1993)
3.6 Articles of Merger, dated July 30, 1993, between the Company and
SunAmerica Corporation (incorporated herein by reference to
Exhibit 3(g) to the Company's 1993 Annual Report on Form 10-K,
filed December 16, 1993)
3.7 Bylaws of the Company as revised on October 23, 1987
(incorporated herein by reference to Exhibit 3(b) to the
Company's 1987 Annual Report on Form 10-K, filed February 26,
1988)
4.1* Senior Indenture dated as of April 15, 1993, between the Company
and The First National Bank of Chicago (incorporated by
reference to Exhibit 4(h) to the Company's Annual Report on Form
10-K, filed December 16, 1993)
4.2* Form of Subordinated Indenture dated as of April 15, 1993
between the Company and The First National Bank of Chicago
4.3* Junior Subordinated Indenture dated as of March 15, 1995, as
supplemented by a First Supplemental Indenture dated as of March
15, 1995, between the Company and The First National Bank of
Chicago.
4.4* Declaration of Trust of SunAmerica Capital Trust II
4.5* Certificate of Trust of SunAmerica Capital Trust II
4.6* Declaration of Trust of SunAmerica Capital Trust III
4.7* Certificate of Trust of SunAmerica Capital Trust III
4.8* Declaration of Trust of SunAmerica Capital Trust IV
4.9* Certificate of Trust of SunAmerica Capital Trust IV
4.10* Form of Amended and Restated Declaration of Trust for each of
SunAmerica Capital Trust II, SunAmerica Capital Trust III and
SunAmerica Capital Trust IV
4.11* Form of Preferred Security (included in Exhibit 4.10)
4.12* Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Securities and Preferred
Securities
4.13* Form of Junior Subordinated Debt Security (included in Exhibit
4.12)
4.14* Form of Preferred Securities Guarantee with respect to
Preferred Securities
4.15* Form of Deposit Agreement
4.16* Form of SunAmerica Common Stock Share Certificate
5.1* Opinion of Davis Polk & Wardwell
5.2 Opinion of Piper & Marbury LLP
5.3* Opinion of Richards, Layton & Finger
12.1* Statement re: Computation of ratio of earnings to fixed charges
12.2* Statement re: Computation of ratio of earnings to combined
fixed charges and preferred stock dividends
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Susan L. Harris
23.3* Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4* Consent of Piper & Marbury LLP (included in Exhibit 5.2)
23.5* Consent of Richards, Layton & Finger (included in Exhibit 5.3)
24.1* Powers of Attorney for the Company
24.2* Powers of Attorney for SunAmerica, as sponsor, to sign the
Registration Statement on behalf of SunAmerica Capital Trust II,
SunAmerica Capital Trust III and SunAmerica Capital Trust IV
(included in Exhibits 4.4, 4.6 and 4.8, respectively)
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 Senior Indenture
25.2* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Subordinated Indenture
25.3* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The First National Bank of Chicago, as Trustee,
under the Junior Subordinated Indenture
25.4* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust II
25.5* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust III
25.6* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, with respect to
the Amended and Restated Declaration of Trust of SunAmerica
Capital Trust IV
25.7* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to
the Preferred Securities of SunAmerica Capital Trust II
25.8* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to
the Preferred Securities of SunAmerica Capital Trust III
25.9* Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of The Bank of New York, as Trustee, under the
Preferred Securities Guarantee of the Company with respect to
the Preferred Securities of SunAmerica Capital Trust IV
[FN]
__________
* Previously filed.
EXHIBIT 5.2
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH WASHINGTON
36 SOUTH CHARLES STREET NEW YORK
BALTIMORE, MARYLAND 21201-3018 PHILADELPHIA
410-539-2530 EASTON
FAX: 410-539-0489 LONDON
September 28, 1995
SunAmerica Inc.
One SunAmerica Center
Century City, California 90067-6022
Ladies and Gentlemen:
We have acted as counsel to SunAmerica Inc., a Maryland
corporation (the "Company"), in connection with the
preparation of Registration Statement on Form S-3 (the
"Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act"), with.
respect to the contemplated issuance by the Company from
time to time of up to $1,000,000,000 aggregate public
offering price or the equivalent thereof in one or more
foreign currencies or composite currencies of (i) unsecured
debt securities (the "Debt Securities"), which may be
issued pursuant to a Senior Indenture dated as of April 15,
1993 between the Company and First National Bank of
Chicago, as Trustee (as amended or supplemented, the
"Senior Indenture"), or a Subordinated Indenture dated as
of April -, 1993 to be entered into between the Company and
First National Bank of Chicago, as Trustee (as amended or
supplemented, the "Subordinated Indenture"), or an
Indenture dated as of March 15, 1995 between the Company
and First National Bank of Chicago, as Trustee (as amended or
supplemented, the "Junior Subordinated Indenture" and,
together with the Senior Indenture and the Subordinated
Indenture, the "Indentures"); (ii) shares of preferred
stock, without par value (the "Preferred Stock"), which may
be represented by depositary shares (the "Depositary
Shares") evidenced by depositary receipts (the "Receipts");
(iii) shares of common stock of the Company, $1.00 par
value per share (the "Common Stock"); (iv) warrants to
purchase Debt Securities, Preferred Stock, Common Stock or
other securities or rights (the "Warrants"); and (v)
guarantees of the Company of Preferred Securities of
SunAmerica Capital Trust III and SunAmerica Capital Trust IV
which may be issued pursuant to Guarantee Agreements (the
"Guarantee Agreements") to be executed by the Company.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purpose of rendering this opinion. In addition, this
opinion is based upon the assumption that the Registration Statement and
any required post-effective amendments thereto have become effective under
the Securities Act.
On the basis of the foregoing we are of the opinion that:
1. When (i) the Subordinated Indenture has been duly
executed and delivered; (ii) the terms of the Debt
Securities and of their issuance and sale have been duly
established in conformity with the Indentures relating to
the Debt Securities so as not to violate any applicable law
or result in a default under or breach of any agreement or
instrument binding upon the Company and so as to comply
with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over
the Company; and (iii) the Debt Securities have been duly
executed and authenticated in accordance with the
Indentures relating to the Debt Securities, and duly issued
and sold as contemplated by the Registration Statement and
any prospectus supplement relating thereto, the Debt
Securities (including any Debt Securities duly issued (x)
upon the exchange of any shares of Preferred Stock that are
exchangeable into Debt Securities or (y) upon exercise of
any Warrants exercisable for Debt Securities) will constitute
valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to (a)
bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors
rights generally, and (b) general principles of equity
(regardless of whether considered in a proceeding at law or
in equity).
2. When (i) the Deposit Agreement relating to the
Depositary Shares has been duly executed and delivered;
(ii) the terms of the Depositary Shares and of their
issuance and sale have been duly established in conformity
with the Deposit Agreement relating to such Depositary
Shares so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the
Company; (iii) the terms of the Preferred Stock have been
duly and properly authorized for issuance and Articles
Supplementary to the Charter of the Company classifying the
Preferred Stock and setting forth the terms thereof have
been filed; (iv) such shares of Preferred Stock have been
duly issued and paid for in the manner contemplated in the
Registration Statement and any prospectus supplement
relating thereto; and (v) the Receipts evidencing the
Depositary Shares are duly issued against the deposit of
the Preferred Stock in accordance with the Deposit
Agreement, such Receipts will be validly issued and will
entitle the holders thereof to the rights specified
therein and in the Deposit Agreement.
3. When (i) the Warrant Agreement relating to the Warrants
(the "Warrant Agreement") has been duly executed and delivered; (ii) the
terms of the Warrants and of their issuance and sale have been duly
established in conformity with the Warrant Agreement relating to such
Warrants so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and
so as to comply with any requirement or restriction imposed by any court
or governmental or regulatory body having jurisdiction over the Company; and
(iii) the Warrants have been duly executed and countersigned in accordance
with the Warrant Agreement relating to such Warrants, and issued and sold
in the form and in the manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, such Warrants will
constitute valid and legally binding obligations of the Company enforceable
in accordance with their terms, subject to (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
and (b) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
4. When (i) the terms of the Preferred Stock have been duly
and properly authorized for issuance and Articles Supplementary to the
Charter of the Company classifying the Preferred Stock and setting forth
the terms thereof have been filed; and (ii) such shares of Preferred Stock
have been duly issued and paid for in the manner contemplated in the
Registration Statement and any prospectus supplement relating thereto, such
shares of Preferred Stock will be validly issued, fully paid and
nonassessable.
5. When (i) the shares of Common Stock have been duly and
properly authorized for issuance; and (ii) the shares of Common Stock have
been duly issued, sold and delivered as contemplated in the Registration
Statement and any prospectus supplement relating thereto, the shares of
Common Stock (including any Common Stock duly issued (x) upon the exchange
of any shares of Preferred Stock that are exchangeable into Common Stock,
(y) upon the exercise of any Warrants exercisable for Common Stock or (z)
upon the conversion of any Debt Securities that are convertible or
exchangeable into Common Stock), will be validly issued, fully paid and
nonassessable.
6. When the Guarantee Agreements relating to the Preferred Security
Guarantees have been duly executed and delivered, such Guarantee Agreements
will constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other
similar laws now or hemmer in effect relating to or affecting creditors'
rights generally, and (b) general principles of equity (regardless of
whether considered in a proceeding at law or in equity).
The foregoing opinion is limited to the laws of the States of Maryland
and the federal laws of the United States of America.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our name under the heading
"Legal Matters." In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of
the Securities Act.
Very truly yours,
PIPER & MARBURY LLP
