SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
SUNAMERICA INC.
(Name of the Issuer)
SUNAMERICA CAPITAL TRUST I
(Name of Person(s) Filing Statement)
9 1/4% PREFERRED STOCK, SERIES B
(Title of Class of Securities)
866930506
(CUSIP Number of Class of Securities)
SUSAN L. HARRIS, Esq.
Vice President and General Counsel - Corporate Affairs
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
(310) 772-6000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person Filing Statement)
Please address a copy of all communications to:
DAVID W. FERGUSON, Esq. GREGG A. NOEL, Esq.
Davis Polk & Wardwell Skadden, Arps, Slate, Meagher & Flom
450 Lexington Avenue 300 South Grand Avenue, Suite 3400
New York, New York 10017 Los Angeles, California 90071
(212) 450-4000 (213) 687-5000
April 28, 1995
(Date Tender Offer First Published, Sent or Given to Security Holders)
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
- --------------------------------------- ----------------------
$144,031,250 $28,807
* For purposes of calculating the filing fee pursuant to Rule 0-11 of the
Securities Exchange Act of 1934, as amended, the market value of the
91/4% Preferred Stock, Series B (the "Series B Preferred Stock") proposed to
be acquired was determined by multiplying $26 3/16 (the average of the high
and low reported prices of the Series B Preferred Stock on the New York Stock
Exchange on April 25, 1995 by 5,500,000 (the number of shares of Series B
Preferred Stock which SunAmerica Capital Trust I has offered to acquire).
(X) Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: $46,703
Form or Registration No.: S-4 (Registration No. 33-56961-01 and 33-56961-02)
Filing Party: SunAmerica Inc. and SunAmerica Capital Trust I.
Date Filed: December 20, 1994
This Issuer Tender Offer Statement (the "Statement") is being filed
with the Securities and Exchange Commission (the "Commission") by SunAmerica
Capital Trust I in connection with the filing under the Securities Act of
1933, as amended, of a registration statement on Form S-4 (the "Registration
Statement") regarding an exchange offer (the "Offer") to holders of 9 1/4%
Preferred Stock, Series B (the "Preferred Stock") of SunAmerica Inc.
("SunAmerica"). A copy of the Offering Circular/Prospectus dated April 27,
1995 (the "Offering Circular/Prospectus") contained in the Registration
Statement (Registration Nos. 33-56961-01 and 33-56961-02) declared effective
by the Commission on April 26, 1995 is attached hereto as Exhibit A. Pursuant
to General Instruction B to Schedule 13E-4, certain information contained in
the Offering Circular/Prospectus is hereby incorporated by reference in answer
to items of this Statement.
References to the Offering Circular/Prospectus are identified by the
captions set forth in the Offering Circular/Prospectus. Where substantially
identical information required by Schedule 13E-4 is included under more than
one caption, reference is made to only one caption of the Offering
Circular/Prospectus.
ITEM 1. Security and Issuer.
(a) The name of the issuer is SunAmerica Inc., a Maryland
corporation. The address of its principal executive office is
1 SunAmerica Center, Los Angeles, California 90067-6022.
(b) The exact title of the class of securities being sought is 9
1/4% Preferred Stock, Series B, of SunAmerica Inc. Reference
is made to "Offering Circular/Prospectus Summary" and "The
Offer -- Terms of the Offer" in the Offering
Circular/Prospectus, which are incorporated herein by
reference. No shares of Preferred Stock, Series B, are to be
acquired from any officer, director or affiliate of SunAmerica
Inc.
(c) Reference is made to "Price Range of Series B Preferred" in the
Offering Circular/Prospectus, which is incorporated herein by
reference.
(d) The name of the person filing this statement is SunAmerica
Capital Trust I (the "Trust"), a newly organized statutory
business trust organized under the laws of the State of
Delaware. The address of its principal office is c/o
SunAmerica Inc, 1 SunAmerica Center, Los Angeles, California
90067-6022. The Trust has been organized by SunAmerica for the
purpose of effecting the exchange offer. Reference is made to
"Offering Circular/Prospectus Summary", "SunAmerica Capital
Trust I" and "The Offer -- Terms of the Offer" in the Offering
Circular/Prospectus, which are incorporated herein by reference.
<PAGE>
ITEM 2. Source and Amount of Funds or Other Consideration.
(a) Reference is made to "The Offer -- Terms of the Offer",
"Description of the Preferred Securities", "Description of the
Preferred Securities Guarantee" and "Description of the Junior
Subordinated Debentures" in the Offering/Circular Prospectus,
which are incorporated herein by reference.
(b) Reference is made to "The Offer -- Terms of the Offer",
"Description of the Preferred Securities", "Description of the
Preferred Securities Guarantee" and "Description of the Junior
Subordinated Debentures" in the Offering Circular/Prospectus,
which are incorporated herein by reference.
ITEM 3. Purpose of the Tender Offer and Plans or Proposals of the
Issuer or Affiliate.
Reference is made to "The Offer -- Purpose of the Offer" and "--
Terms of the Offer" in the Offering Circular/Prospectus, which are
incorporated herein by reference. Series B Preferred acquired pursuant to the
Offer will be delivered to SunAmerica and will be retired. See "Description
of the Series B Preferred - Reissuances" in the Offering Circular/Prospectus,
which is incorporated herein by reference.
(a) SunAmerica may acquire various SunAmerica securities from time
to time in the future to satisfy various sinking fund or other
redemption requirements or for other purposes. From time to
time, SunAmerica expects to sell various SunAmerica securities
to raise funds for general or special corporate purposes.
(b)-(d) None.
(e) Reference is made to "Capitalization" in the Offering
Circular/Prospectus, which is incorporated herein by reference.
(f)-(j) None.
ITEM 4. Interest in Securities of the Issuer.
None.
ITEM 5. Contracts, Arrangements, Understandings or Relationships with
Respect to the Issuer's Securities.
None.
ITEM 6. Persons Retained, Employed or to be Compensated.
Reference is made to "The Offer -- Exchange Agent and Information
Agent", "-- Dealer Manager; Soliciting Dealers" and "Fees and Expenses;
Transfer Taxes" in the Offering Circular/Prospectus, which are incorporated
herein by reference.
ITEM 7. Financial Information.
(a) Reference is made to "Ratios of Earnings to Fixed Charges",
<PAGE>
"Selected Consolidated Financial Data", "Capitalization" and
"Incorporation of Certain Documents by Reference" in the
Offering Circular/Prospectus, which are incorporated herein by
reference.
(b) Inapplicable.
ITEM 8. Additional Information.
(a) None.
(b) There are no applicable regulatory requirements which must be
complied with or approvals which must be obtained in connection
with the Offer other than compliance with the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder, the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder including,
without limitation, Rule 13e-4 promulgated thereunder, the
Trust Indenture Act of 1939, as amended, and the requirements
of state securities or "blue sky" laws.
(c) Inapplicable.
(d) None.
(e) None.
ITEM 9. Material to be Filed as Exhibits.
(a) Offering Circular/Prospectus dated April 27, 1995 (Exhibit A);
Press Release issued by the Company on December 21, 1994
(Exhibit B); Tombstone advertisement published on April
28, 1995 (Exhibit C); Form of Letter of Transmittal (Exhibit
D); Form of Letter to Clients (Exhibit E); Form of Letter to
Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees (Exhibit F); Notice of Guaranteed Delivery (Exhibit
G); Form of SunAmerica Letter to Holders of 91/4% Preferred
Stock, Series B (Exhibit H); Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 (Exhibit
I); and Summary of Conditions for Payment to Soliciting Dealers
(Exhibit J).
(b) Junior Subordinated Indenture dated as of March 15, 1995
between the Company and The First National Bank of Chicago, as
Trustee (Exhibit K), First Supplemental Indenture dated as of
March 15, 1995 (Exhibit L) and Guarantee Agreement of
SunAmerica (Exhibit M).
(c) None.
(d) Tax opinion of Davis Polk & Wardwell (Exhibit N).
(e) The Offering Circular/Prospectus is included in (a) above.
(f) None.
SIGNATURE
<PAGE>
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 28, 1995 SUNAMERICA CAPITAL TRUST I
By: SunAmerica Inc.,
as Sponsor
--------------------------------
By /s/ James R. Belardi
Name: James R. Belardi
Title: Senior Vice President
and Treasurer
INDEX TO EXHIBITS
Exhibit Description
A Offering Circular/Prospectus dated April 27, 1995
B Press Release issued by the Company on December 21, 1994
C Tombstone Advertisement published on April 28, 1995
D Letter of Transmittal
E Letter to Clients
F Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
G Notice of Guaranteed Delivery
H Letter of SunAmerica to Holders of 91/4% Preferred Stock,
Series B
I Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9
J Summary of Conditions for Payment to Soliciting Dealers
K Indenture dated as of March 15, 1995 between the Company and
The First National Bank of Chicago, as Trustee
L First Supplemental Indenture dated as of March 15, 1995 between
the Company and The First National Bank of Chicago, as Trustee
M Guarantee Agreement dated as of May __, 1995 of the Company
N Tax Opinion of Davis Polk & Wardwell
EXHIBIT A
OFFERING CIRCULAR/PROSPECTUS
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.95% TRUST ORIGINATED PREFERRED SECURITIESSM ("TOPrSSM")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth herein
by SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
THE OFFER, THE PRORATION PERIOD
AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MAY 25, 1995,
UNLESS THE OFFER IS EXTENDED.
SunAmerica Capital Trust I, a Delaware statutory business trust (the
"Trust"), hereby offers, upon the terms and subject to the conditions set
forth in this Offering Circular/Prospectus and the accompanying Letter of
Transmittal (the "Letter of Transmittal" which, together with this Offering
Circular/Prospectus, constitute the "Offer"), to exchange its 9.95% Trust
Originated Preferred Securities ("TOPrS"), representing preferred undivided
beneficial interests in the assets of the Trust (the "Preferred Securities"),
for up to 5,500,000 shares of outstanding 9 1/4% Preferred Stock, Series B
(the "Series B Preferred") of SunAmerica Inc., a Maryland corporation
("SunAmerica"). Exchanges will be made on the basis of one Preferred Security
for each share of Series B Preferred validly tendered and accepted for exchange
in the Offer. Shares of Series B Preferred not accepted for exchange because
of proration will be returned. Concurrently with the issuance of Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer,
SunAmerica will deposit in the Trust as trust assets its 9.95% Junior
Subordinated Debentures, Series A, due 2044 (the "Junior Subordinated
Debentures") having an aggregate principal amount equal to the aggregate
stated liquidation amount of the Preferred Securities to be issued by the
Trust.
Holders of Series B Preferred may participate in the Offer by
properly completing and signing the Letter of Transmittal and tendering their
shares of Series B Preferred as described in "The Offer -- Procedures for
Tendering" in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date (as defined herein). In
order to participate in the Offer, holders of Series B Preferred must submit a
Letter of Transmittal and comply with the other procedures for tendering in
accordance with the instructions contained herein and in the Letter of
Transmittal prior to the Expiration Date.
For a description of the other terms of the Offer, see "The Offer --
Terms of the Offer"; "-- Expiration Date; Extensions; Amendments;
Termination"; "-- Withdrawal of Tenders" and "-- Acceptance of Shares and
Proration". Except as set forth below, the Trust expressly reserves the right
to extend, amend or modify the terms of the Offer, and not accept for exchange
any Series B Preferred, at any time prior to the Expiration Date for any
reason, including (without limitation) if fewer than 2,810,000 shares of
Series B Preferred are tendered (which condition may be waived). The
Preferred Securities have been approved for listing on the New York Stock
Exchange (the "NYSE"), subject to notice of issuance. In order to satisfy the
NYSE listing requirements, acceptance of Series B Preferred validly tendered
in the Offer is subject to the condition that as of the Expiration Date there
be at least 400 record or beneficial holders of Preferred Securities to be
issued in exchange for such Series B Preferred, which condition may not be
waived. See "The Offer -- Expiration Date; Extensions; Amendments;
Termination".
SunAmerica will own directly or indirectly all of the securities
representing common undivided beneficial interests in the assets of the Trust
(the "Common Securities" and, together with the Preferred Securities, the
"Trust Securities"). The Trust exists for the purpose of (a) issuing (i) its
Preferred Securities in exchange for Series B Preferred validly tendered in
the Offer and delivering such Series B Preferred to SunAmerica in
consideration for the deposit by SunAmerica of Junior Subordinated Debentures
in the Trust as trust assets and (ii) its Common Securities to SunAmerica in
exchange for cash and investing the proceeds thereof in an equivalent amount
of Junior Subordinated Debentures and (b) engaging in such other activities as
are necessary and incidental thereto. The Preferred Securities and the Common
Securities will rank pari passu with each other and will have equivalent
terms; provided that (i) if an Event of Default (as defined herein) under the
Declaration occurs and is continuing, the holders of Preferred Securities will
have a priority over holders of the Common Securities with respect to payments
in respect of distributions and payments upon liquidation, redemption or
otherwise and (ii) holders of Common Securities have the exclusive right
(subject to the terms of the Declaration) to appoint, replace or remove
Trustees and to increase or decrease the number of Trustees, subject to the
right of holders of Preferred Securities to appoint a Trustee (the "Special
Regular Trustee") upon the occurrence of certain events described herein.
Cash distributions on the Preferred Securities will be cumulative
from the first day following the Expiration Date (the "Accrual Date") at an
annual rate of 9.95% of the liquidation amount of $25 per Preferred Security,
and will be payable quarterly in arrears on the 30th day of March, June,
September and December of each year, commencing on June 30, 1995
("distributions"). Cash distributions in arrears for more than one quarter
will bear interest thereon at the rate per annum of 9.95% of the stated
liquidation amount of $25 per Preferred Security (to the extent permitted by
applicable law), compounded quarterly. The term "distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. In addition, holders of the Preferred Securities will be
entitled to an additional cash distribution at the rate of 9 1/4% per annum of
the liquidation amount thereof from March 15, 1995 through the Expiration Date
in lieu of dividends accumulating after March 15, 1995 on their Series B
Preferred accepted for exchange, such additional distribution to be made at the
time the first distribution on the Preferred Securities is made. The
distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and the interest and
other payment dates on the Junior Subordinated Debentures deposited in the
Trust as trust assets. As a result, if principal or interest is not paid on
the Junior Subordinated Debentures, including as a result of SunAmerica's
election to extend the interest payment period on the Junior Subordinated
Debentures as described below, the Trust will not make payments on the Trust
Securities. The Junior Subordinated Debentures provide that, so long as
SunAmerica shall not be in default in the payment of interest on the Junior
Subordinated Debentures, SunAmerica shall have the right to defer payments of
interest on the Junior Subordinated Debentures by extending the interest
payment period from time to time for a period not exceeding 20 consecutive
quarterly interest periods (each, an "Extension Period"). No interest shall be
due and payable during an Extension Period and, as a consequence,
distributions on the Trust Securities will also be deferred, but at the end of
such Extension Period SunAmerica shall pay all interest then accrued and
unpaid on the Junior Subordinated Debentures, together with interest thereon
at the rate specified for the Junior Subordinated Debentures to the extent
permitted by applicable law, compounded quarterly ("Compounded Interest").
All references herein to interest shall include Compounded Interest unless
otherwise stated. There could be multiple Extension Periods of varying
lengths (up to nine Extension Periods of 20 consecutive quarterly interest
periods each or more numerous shorter Extension Periods) throughout the term
of the Junior Subordinated Debentures. During any such Extension Period,
SunAmerica may not declare or pay dividends on, or redeem, purchase, acquire or
make a distribution or liquidation payment with respect to, any of its common
stock or preferred stock; provided that SunAmerica will be permitted to pay
accrued dividends (and cash in lieu of fractional shares) upon the conversion
of any of its Series D Mandatory Conversion Premium Dividend Preferred Stock
(the "Series D Preferred Stock") in accordance with the terms of such stock.
See "Risk Factors"; "Description of the Junior Subordinated Debentures --
Interest" and "-- Option to Extend Interest Payment Period".
The payment of distributions out of moneys held by the Property
Trustee (as defined herein) and payments on liquidation of the Trust and the
redemption of Preferred Securities, as set forth below, are guaranteed by
SunAmerica on a subordinated basis as and to the extent described herein (the
"Preferred Securities Guarantee"). See "Description of the Preferred
Securities Guarantee". The Preferred Securities Guarantee is a full and
unconditional guarantee from the time of issuance of the Preferred Securities,
but the Preferred Securities Guarantee covers distributions and other payments
on the Preferred Securities only if and to the extent that SunAmerica has made
a payment to the Property Trustee of interest or principal on the Junior
Subordinated Debentures deposited in the Trust as trust assets. For a
description of redemption rights with respect to the Preferred Securities, the
possible dissolution of the Trust and distribution of Junior Subordinated
Debentures held by the Trust to holders of the Trust Securities and the
liquidation amount on the Preferred Securities, see "Risk Factors";
"Description of the Preferred Securities -- Special Event Redemption or
Distribution"; "-- Liquidation Distribution Upon Dissolution" and "Description
of the Junior Subordinated Debentures".
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO
THE PREFERRED SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE JUNIOR
SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES MAY BE DEFERRED AND THE
RELATED FEDERAL INCOME TAX CONSEQUENCES.
The Series B Preferred is listed and principally traded on the NYSE.
On December 19, 1994, the last full day of trading prior to the first public
announcement of the Offer, the closing sales price of the Series B Preferred
on the NYSE as reported on the Composite Tape was $25 3/8 per share. The
closing sales price of the Series B Preferred on the NYSE on April 26, 1995
was $26 5/8. Stockholders are urged to obtain current market quotations for
the Series B Preferred. To the extent that Series B Preferred is tendered and
accepted in the Offer, the terms on which untendered Series B Preferred could
subsequently be sold could be adversely affected. See "Listing and Trading of
Preferred Securities and Series B Preferred".
SunAmerica will pay to Soliciting Dealers (as defined herein)
designated by the record or beneficial owner, as appropriate, of Series B
Preferred a solicitation fee of $0.50 per share of Series B Preferred
validly tendered and accepted for exchange pursuant to the Offer, subject
to certain conditions. Soliciting Dealers are not entitled to a
solicitation fee for shares of Series B Preferred beneficially owned by
such Soliciting Dealer. See "The Offer -- Dealer Manager; Soliciting
Dealers".
Neither the board of directors of SunAmerica nor SunAmerica nor the
Trustees nor the Trust makes any recommendation to holders of Series B
Preferred as to whether to tender or refrain from tendering in the Offer.
Holders of Series B Preferred are urged to consult their financial and tax
advisors in making their decisions on what action to take in light of their
own particular circumstances.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS OFFERING CIRCULAR/PROSPECTUS,
AND ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THE OFFER NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR/PROSPECTUS.
Merrill Lynch & Co. has been retained as Dealer Manager to solicit
exchanges of Series B Preferred for Preferred Securities. See "The Offer --
Dealer Manager". Georgeson & Company Inc. has been retained to act as
Information Agent to assist in connection with the Offer.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
The date of this Offering Circular/Prospectus is April 27, 1995.
SM"Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
DIAGRAM OF OFFERS
[GRAPHIC A]
(SEE APPENDIX A FOR DESCRIPTION OF GRAPHIC MATERIAL)
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN
THIS OFFERING CIRCULAR/PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
SUNAMERICA, THE TRUST, THE TRUSTEES OR THE DEALER MANAGER. NEITHER THE
DELIVERY OF THIS OFFERING CIRCULAR/PROSPECTUS NOR ANY EXCHANGE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF SUNAMERICA OR THE TRUST SINCE THE RESPECTIVE DATES AS
OF WHICH INFORMATION IS GIVEN HEREIN. THE OFFER IS NOT BEING MADE TO (NOR
WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS OF SERIES B PREFERRED
IN ANY JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF
WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER,
SUNAMERICA AND THE TRUST MAY, AT THEIR DISCRETION, TAKE SUCH ACTION AS THEY MAY
DEEM NECESSARY TO MAKE THE OFFER IN ANY SUCH JURISDICTION AND EXTEND THE OFFER
TO HOLDERS OF SERIES B PREFERRED IN SUCH JURISDICTION. IN ANY JURISDICTION
THE SECURITIES LAWS OR BLUE SKY LAWS OF WHICH REQUIRE THE OFFER TO BE MADE BY
A LICENSED BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF THE TRUST BY
THE DEALER MANAGER OR ONE OR MORE REGISTERED BROKERS OR DEALERS WHICH ARE
LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
AVAILABLE INFORMATION
SunAmerica is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information concerning SunAmerica can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, Room 1024;
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material can also be inspected and copied at the
offices of the NYSE, 20 Broad Street, New York, N.Y. 10005.
This Offering Circular/Prospectus constitutes a part of a
registration statement on Form S-4 (together with all amendments and exhibits,
the "Registration Statement") filed by SunAmerica and the Trust with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Offering Circular/Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Statements contained herein concerning the provisions of any document do not
purport to be complete and, in each instance, are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
subject to and qualified in its entirety by such reference. Reference is made
to such Registration Statement and to the exhibits relating thereto for
further information with respect to SunAmerica, the Trust and the securities
offered hereby.
No separate financial statements of the Trust have been included or
incorporated by reference herein. SunAmerica and the Trust do not consider
that such financial statements would be material to holders of Preferred
Securities because the Trust is a newly-formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and
does not propose to engage in, any activity other than its holding as trust
assets the Junior Subordinated Debentures of SunAmerica and its issuance of
Trust Securities. See "SunAmerica Capital Trust I", "Description of the
Preferred Securities", "Description of the Preferred Securities Guarantee" and
"Description of the Junior Subordinated Debentures". The Trust is a statutory
business trust formed under the laws of the State of Delaware. SunAmerica, as
of the date hereof, beneficially owns all of the beneficial interests in the
Trust. Each holder of Preferred Securities will be furnished annually with
unaudited financial statements of the Trust as soon as available after the end
of the Trust's fiscal year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
SunAmerica's Annual Report on Form 10-K for the year ended September
30, 1994, its Quarterly Report on Form 10-Q for the quarter ended December 31,
1994 and its Current Reports on Form 8-K dated January 24, 1995 and April 24,
1995, have been filed with the Commission and are incorporated herein by
reference.
All documents filed by SunAmerica pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Offering
Circular/Prospectus and prior to the Expiration Date shall be deemed to be
incorporated by reference in this Offering Circular/Prospectus and to be a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
Offering Circular/Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified and superseded, to constitute a part of this Offering
Circular/Prospectus.
This Offering Circular/Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. SunAmerica will provide
without charge to each person, including any beneficial owner of the Series B
Preferred, to whom this Offering Circular/Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such documents should be directed to Shareholder
Communications of SunAmerica at 1 SunAmerica Center, Los Angeles, California
90067-6022 (Telephone (310) 772-6000). In order to ensure timely delivery of
the documents, any request should be made not later than five business days
prior to the Expiration Date.
TABLE OF CONTENTS
Page
----
Offering Circular/Prospectus Summary..................................... 4
Risk Factors. . . .......................................................15
Comparison of Preferred Securities
and Series B Preferred.................................................19
SunAmerica...............................................................23
SunAmerica Capital Trust I...............................................24
Ratio of Earnings to Fixed Charges.......................................28
Selected Consolidated Financial Data.....................................29
Capitalization...........................................................31
The Offer................................................................32
Listing and Trading of Preferred
Securities and Series B Preferred......................................40
Transactions and Arrangements Concerning
the Offer..............................................................40
Fees and Expenses; Transfer Taxes........................................40
Price Range of Series B Preferred........................................41
Description of the Preferred Securities..................................42
Description of the Preferred Securities Guarantee........................55
Description of the Junior Subordinated
Debentures.............................................................58
Description of the Series B Preferred....................................66
Relationship Between the Preferred
Securities, the Junior Subordinated
Debentures and the Preferred Securities Guarantee......................68
Taxation.................................................................70
Legal Matters............................................................73
Experts..................................................................74
ERISA Matters............................................................74
OFFERING CIRCULAR/PROSPECTUS SUMMARY
The following summary does not purport to be complete and is
qualified in its entirety by the detailed information contained elsewhere in,
or incorporated by reference in, this Offering Circular/Prospectus.
SunAmerica
SunAmerica is a diversified financial services company with more than
$24 billion of assets owned or under management. At December 31, 1994, these
assets consisted of $14.78 billion of assets owned by SunAmerica, $2.04
billion of assets managed in mutual funds and private accounts and $7.63
billion under custody in retirement trust accounts. Together, the SunAmerica
life insurance companies rank among the largest U.S. issuers of annuities.
Complementing these annuity operations are SunAmerica's asset management
operations; its two broker-dealers, which SunAmerica believes, based on
industry data, represent the largest network of independent registered
representatives in the nation; and its trust company which provides
administrative and custodial services to qualified retirement plans. Through
these subsidiaries, SunAmerica specializes in the sale of tax-deferred
long-term savings products and investments to the expanding preretirement
savings market. SunAmerica markets fixed annuities and fee-generating
variable annuities, mutual funds and trust services, as well as guaranteed
investment contracts. SunAmerica's products are distributed through a broad
spectrum of financial services distribution channels, including independent
registered representatives of SunAmerica's broker-dealer subsidiaries and
unaffiliated broker-dealers, independent general insurance agents and
financial institutions.
SunAmerica Capital Trust I
SunAmerica Capital Trust I is a statutory business trust that was
formed under the Delaware Business Trust Act (the "Business Trust Act") on
March 22, 1995. The Trust's original declaration of trust will be amended and
restated in its entirety as of the date the Trust accepts Series B Preferred
in the Offer (as so amended and restated, the "Declaration") substantially in
the form filed as an exhibit to the Registration Statement of which this
Offering Circular/Prospectus forms a part. See "The Offer -- Terms of the
Offer" and "-- Acceptance of Shares and Proration" for information regarding
the Trust's acceptance of Series B Preferred in the Offer. The Declaration is
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). Upon issuance of the Preferred Securities, the holders
thereof will own all of the issued and outstanding Preferred Securities.
SunAmerica has agreed to acquire Common Securities in an amount equal to at
least 3% of the total capital of the Trust and will own, directly or
indirectly, all of the issued and outstanding Common Securities. The
Preferred Securities and the Common Securities will rank pari passu with each
other and will have equivalent terms; provided that (i) if an Event of Default
(as defined herein) under the Declaration occurs and is continuing, the
holders of Preferred Securities will have a priority over the holders of the
Common Securities with respect to payments in respect of distributions and
payments upon liquidation, redemption and maturity and (ii) holders of Common
Securities have the exclusive right (subject to the terms of the Declaration)
to appoint, replace or remove Trustees and to increase or decrease the number
of Trustees, subject to the right of holders of Preferred Securities to
appoint one additional Trustee of the Trust (the "Special Regular Trustee")
upon the occurrence of certain events described herein.
The number of trustees (the "Trustees") of the Trust shall initially
be five. Three of the Trustees (the "Regular Trustees") are individuals who
are employees or officers of SunAmerica. The fourth trustee is The Bank of
New York, which is unaffiliated with SunAmerica and which will serve as
property trustee (the "Property Trustee") and act as the indenture trustee for
purposes of the Trust Indenture Act. The fifth trustee is an affiliate of The
Bank of New York that has its principal place of business in the State of
Delaware (the "Delaware Trustee"). Pursuant to the Declaration, legal title
to the Junior Subordinated Debentures will be held by the Property Trustee for
the benefit of the holders of the Trust Securities, and the Property Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture (as hereinafter defined) pursuant to which the Junior Subordinated
Debentures will be issued. 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
Debentures 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 in the Property Account. The Preferred Securities
Guarantee which will be separately qualified under the Trust Indenture Act
will be held by The Bank of New York, acting in its separate capacity as
indenture trustee with respect to the Preferred Securities Guarantee, for the
benefit of the holders of the Preferred Securities. As used in this Offering
Circular/Prospectus, the term "Property Trustee" 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 Debentures or in its capacity
as indenture trustee under, and the holder of, the Preferred Securities
Guarantee, as the context may require. Subject to the right of holders of
Preferred Securities to appoint a Special Regular Trustee upon the occurrence
of certain events described herein, SunAmerica, as direct or indirect owner of
all of the Common Securities, has the exclusive right (subject to the
provisions of the Declaration) to appoint, remove or replace Trustees and to
increase or decrease the number of Trustees, provided that the number of
Trustees shall at least be three, a majority of which shall be Regular
Trustees.
The Trust exists for the purpose of (a) issuing (i) its Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer
and delivering such Series B Preferred to SunAmerica in consideration for the
deposit by SunAmerica of Junior Subordinated Debentures in the Trust as trust
assets, and (ii) its Common Securities to SunAmerica in exchange for cash and
investing the proceeds thereof in an equivalent amount of Junior Subordinated
Debentures and (b) engaging in such other activities as are necessary and
incidental thereto. The rights of the holders of the Trust Securities,
including economic rights, rights to information and voting rights, are as set
forth in the Declaration, the Business Trust Act and the Trust Indenture Act.
See "SunAmerica Capital Trust I" and "Description of the Preferred
Securities". The Declaration does not permit the incurrence by the Trust of
any indebtedness for borrowed money or the making of any investment other than
in the Junior Subordinated Debentures. In the Declaration, SunAmerica has
agreed to pay for all debts and obligations (other than with respect to the
Trust Securities) and all costs and expenses of the Trust, including the fees
and expenses of the Trustees and any income taxes, duties and other
governmental charges, and all costs and expenses with respect thereto, to
which the Trust may become subject, except for United States withholding
taxes. See "Risk Factors", "SunAmerica Capital Trust I" and "Description of
the Preferred Securities".
Certain Potential Benefits and Risks to Investors
Prospective investors should carefully review the information
contained elsewhere in this Offering Circular/Prospectus prior to making a
decision regarding the Offer and should particularly consider the following
matters:
Potential Benefits to Exchanging Holders
bullet The cash distributions rate on the Preferred Securities will
be 70 basis points greater than the dividend rate on the Series B Preferred.
See "Comparison of Preferred Securities and Series B Preferred".
bullet So long as payments of interest and other payments are made
when due on the Junior Subordinated Debentures, such payments will be
sufficient to cover cash distributions and other payments made on the
Preferred Securities (and the Common Securities) because (i) the aggregate
principal amount of Junior Subordinated Debentures deposited as trust assets
will be equal to the sum of (x) the aggregate stated liquidation amount of
the Preferred Securities issued by the Trust in exchange for the Series B
Preferred accepted in the Offer and (y) the amount of proceeds received by the
Trust from the issuance of the Common Securities to SunAmerica, which proceeds
will be used by the Trust to purchase an equal principal amount of Junior
Subordinated Debentures, (ii) the interest rate and interest and other payment
dates on the Junior Subordinated Debentures will match the distribution rate
and distribution and other payment dates for the Preferred Securities, (iii)
the Declaration provides that SunAmerica shall pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust, and (iv) the Declaration further provides that the
Trustees shall not permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust. See "Offering
Circular/Prospectus Summary -- The Offer -- Description of Preferred
Securities and Junior Subordinated Debentures" and "SunAmerica Capital Trust
I".
bullet The Trust will have no independent operations and will exist
for the sole purpose of effecting the Offer and issuing the Trust Securities
as described herein and owning and holding through the Property Trustee the
Junior Subordinated Debentures. See "SunAmerica Capital Trust I".
bullet If (i) the Trust fails to pay distributions in full on the
Preferred Securities for 6 consecutive quarterly distribution periods, or (ii)
an Event of Default under the Declaration occurs and is continuing (each, an
"Appointment Event"), then the Declaration provides that the holders of the
Preferred Securities may appoint a Special Regular Trustee of the Trust who
need not be an officer or employee of or otherwise affiliated with SunAmerica.
Under the Declaration, any such Special Regular Trustee shall have the same
rights, powers and privileges as the Regular Trustees. See "Description of
the Preferred Securities -- Voting Rights".
bullet The Property Trustee will have the power to exercise all
rights, powers and privileges under the Indenture with respect to the Junior
Subordinated Debentures, including its rights as the holder of the Junior
Subordinated Debentures to enforce SunAmerica's obligations under the Junior
Subordinated Debentures upon the occurrence of an Indenture Event of Default,
and will also have the right to enforce the Preferred Securities Guarantee on
behalf of the holders of the Preferred Securities. In addition, the holders
of at least a majority in liquidation amount of the Preferred Securities will
have the right to direct the Property Trustee with respect to certain matters
under the Declaration and the 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, institute a legal proceeding against SunAmerica to enforce such
rights or the Preferred Securities Guarantee, as the case may be. See
"Description of the Preferred Securities" and "Description of the Preferred
Securities Guarantee".
bullet The Offer will allow SunAmerica to achieve certain tax
efficiencies while preserving its flexibility with respect to future
financings because, in contrast to dividend payments on the Series B Preferred
which are not deductible by SunAmerica, SunAmerica will be able to deduct
interest payments on the Junior Subordinated Debentures for United States
federal income tax purposes. See "The Offer -- Purpose of the Offer".
Potential Risks to Exchanging Holders
bullet Participation in the Offer will be a taxable event for holders
of Series B Preferred. See "Risk Factors -- Tax Consequences of the Offer".
bullet The obligations of SunAmerica under (i) the Junior Subordinated
Debentures are subordinate in right of payment to Senior Indebtedness (as
defined herein) of SunAmerica, (ii) SunAmerica's payment obligations under
the Preferred Securities Guarantee are subordinate in right of payment to
all liabilities of SunAmerica, including the Junior Subordinated
Debentures, except those made pari passu or subordinate by their terms, and
(iii) the Junior Subordinated Debentures and the Preferred Securities
Guarantee are effectively subordinated to all liabilities of subsidiaries
of SunAmerica. See "Risk Factors -- Subordination of Preferred Securities
Guarantee and Junior Subordinated Debentures; Dependence on SunAmerica".
bullet The Trust's ability to make distributions on the Preferred
Securities is entirely dependent upon SunAmerica making interest payments on
the Junior Subordinated Debentures when and as required, and the interest
payment period on the Junior Subordinated Debentures may be extended under
certain circumstances by SunAmerica in its sole discretion for up to 20
consecutive quarterly interest periods during which no interest would be
payable thereon. See "Risk Factors -- Subordination of Preferred Securities
Guarantee and Junior Subordinated Debentures; Dependence on SunAmerica; "--
Option to Extend Interest Payment Period; Tax Impact of Extension" and "--
Potential Market Volatility During Extension Period".
bullet Should SunAmerica not make interest or other payments on the
Junior Subordinated Debentures for any reason, including as a result of
SunAmerica's election to defer payments of interest on the Junior Subordinated
Debentures by extending the interest payment period on the Junior Subordinated
Debentures, the Trust will not make distributions or other payments on the
Trust Securities. In such an event, holders of the Preferred Securities would
not be able to rely on the Preferred Securities Guarantee since the Preferred
Securities Guarantee covers distributions and other payments on the Preferred
Securities only if and to the extent that SunAmerica has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated
Debentures deposited in the Trust as trust assets. See "Risk Factors --
Subordination of Preferred Securities Guarantee and Junior Subordinated
Debentures; Dependence on SunAmerica".
bullet If SunAmerica elects to defer payments of interest on the
Junior Subordinated Debentures by extending the interest period on the Junior
Subordinated Debentures, distributions on the Preferred Securities would also
be deferred but the Trust will continue to accrue interest income (as original
issue discount) in respect of such Debentures which will be taxable to
beneficial owners of Preferred Securities. As a result, beneficial owners of
Preferred Securities during an Extension Period will include their pro rata
share of the interest in gross income in advance of the receipt of cash. See
"Taxation -- Income from the Preferred Securities".
bullet Holders of Preferred Securities will have limited voting rights
and, subject to the right of holders of Preferred Securities to appoint a
Special Regular Trustee upon the occurrence of an Appointment Event, will not
be able to appoint, remove or replace, or to increase or decrease the number
of, Trustees, which rights are vested exclusively in the Common Securities.
bullet While the Series B Preferred is not redeemable prior to June
15, 1997, the Junior Subordinated Debentures (and thus the Preferred
Securities) in certain circumstances will be redeemable prior to that date
upon the occurrence of a Tax Event (as defined herein).
bullet While dividends on the Series B Preferred are eligible for the
dividends received deduction for corporate holders, distributions on the
Preferred Securities are not eligible for the dividends received deduction for
corporate holders. See "Comparison of Preferred Securities and Series B
Preferred" and "Taxation -- Accrual of Original Issue Discount and Premium".
bullet While the Preferred Securities have been approved for listing
on the NYSE, subject to notice of issuance, the Preferred Securities are a new
issue of securities with no established trading market. See "Risk Factors --
Listing and Trading of Preferred Securities and Series B Preferred".
Potential Risk to Non-Exchanging Holders
bullet The liquidity and trading market for untendered Series B
Preferred could be adversely affected to the extent Series B Preferred is
tendered and accepted in the Offer. See "Risk Factors -- Listing and Trading
of Preferred Securities and Series B Preferred".
The Offer
Purpose of the Offer
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies, while
preserving SunAmerica's flexibility with respect to future financings. This
refinancing will permit SunAmerica to deduct interest payable on the Junior
Subordinated Debentures for United States federal income tax purposes;
dividends payable on the Series B Preferred are not deductible. See "The
Offer -- Purpose of the Offer".
Terms of the Offer
Upon the terms and subject to the conditions set forth herein and in
the Letter of Transmittal, the Trust hereby offers to exchange its Preferred
Securities for up to 5,500,000 outstanding shares of Series B Preferred of
SunAmerica. Exchanges will be made on the basis of one Preferred Security for
each share of Series B Preferred validly tendered and accepted for exchange in
the Offer. See "The Offer -- Terms of the Offer".
Expiration Date; Withdrawals
Upon the terms and conditions of the Offer, including the provisions
relating to proration described herein, the Trust will accept for exchange up
to 5,500,000 shares of Series B Preferred, validly tendered and not withdrawn
prior to 12:00 Midnight, New York City time, on May 25, 1995, or if the Offer is
extended by the Trust, in its sole discretion, the latest date and time to
which the Offer has been extended (the "Expiration Date"). Tenders of Series
B Preferred pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless accepted for exchange by the Trust, may be
withdrawn at any time after 40 Business Days (as defined herein) from April
28, 1995. Shares of Series B Preferred not accepted because of proration
will be returned to the tendering Holders at the Trust's expense as
promptly as practicable following the Expiration Date. A "Business Day"
shall mean any day other than a day on which banking institutions in The
City of New York are authorized or required by law to close. See "The
Offer -- Withdrawal of Tenders"; "-- Expiration Date; Extensions;
Amendments; Termination" and "-- Acceptance of Shares and Proration".
Extensions; Amendments; Termination
Except as set forth in the following sentence, the Trust expressly
reserves the right to (i) extend, amend or modify the terms of the Offer in
any manner and (ii) withdraw or terminate the Offer and not accept for
exchange any Series B Preferred, at any time prior to the Expiration Date for
any reason, including (without limitation) if fewer than 2,810,000 shares of
Series B Preferred are tendered (which conditions may be waived by the Trust).
See "The Offer -- Expiration Date; Extensions; Amendments; Termination".
However, the Trust will not accept shares of Series B Preferred validly
tendered in the Offer if as of the Expiration Date there would be fewer than
400 record or beneficial holders of Preferred Securities to be issued in
exchange for such Series B Preferred, which condition may not be waived.
Procedures for Tendering
Each Holder of Series B Preferred wishing to participate in the Offer
must (i) properly complete and sign the Letter of Transmittal or a facsimile
thereof (all references in this Offering Circular/Prospectus to the Letter of
Transmittal shall be deemed to include a facsimile thereof) in accordance with
the instructions contained herein and in the Letter of Transmittal, together
with any required signature guarantees, and deliver the same to The First
National Bank of Chicago, as Exchange Agent, at one of its addresses set forth
in "The Offer -- Exchange Agent and Information Agent" prior to the Expiration
Date and either (a) certificates for the Series B Preferred must be received
by the Exchange Agent at such address or (b) such Series B Preferred must be
transferred pursuant to the procedures for book-entry transfer described
herein and a confirmation of such book-entry transfer must be received by the
Exchange Agent, in each case prior to the Expiration Date or (ii) comply with
the guaranteed delivery procedures described herein.
In order to participate in the Offer, Holders of Series B Preferred
must submit a Letter of Transmittal and comply with the other procedures for
tendering in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date.
LETTERS OF TRANSMITTAL, SERIES B PREFERRED AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO SUNAMERICA, THE TRUST, THE
DEALER MANAGER OR THE INFORMATION AGENT.
Special Procedure for Beneficial Owners
Any beneficial owner whose Series B Preferred is registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender such Series B Preferred should contact such registered
Holder promptly and instruct such registered Holder to tender on such
beneficial owner's behalf. If such beneficial owner wishes to tender on its
own behalf, such owner must, prior to completing and executing a Letter of
Transmittal and delivering its Series B Preferred, either make appropriate
arrangements to register ownership of the Series B Preferred in such owner's
name or obtain a properly completed stock power from the registered Holder.
The transfer of registered ownership may take considerable time and may not be
able to be completed prior to the Expiration Date. See "The Offer --
Procedures for Tendering -- Special Procedure for Beneficial Owners".
Guaranteed Delivery Procedures
If a Holder desires to accept the Offer and time will not permit a
Letter of Transmittal or Series B Preferred to reach the Exchange Agent before
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected in accordance with the
guaranteed delivery procedures set forth in "The Offer -- Procedures for
Tendering -- Guaranteed Delivery".
Acceptance of Shares and Proration
Upon the terms and subject to the conditions of the Offer, if
5,500,000 or fewer shares of Series B Preferred have been validly tendered and
not withdrawn prior to the Expiration Date, the Trust will accept for exchange
all such shares of Series B Preferred. Upon the terms and subject to the
conditions of the Offer, if more than 5,500,000 shares of Series B Preferred
(or, if decreased as described herein, such lesser number as the Trust may
elect to purchase pursuant to the Offer) have been validly tendered and not
withdrawn prior to the Expiration Date, the Trust will accept for exchange
shares of Series B Preferred from each tendering Holder on a pro rata basis,
subject to adjustment to avoid the acceptance for exchange of fractional
shares.
If the Trust decreases the amount of Series B Preferred sought, and
the Offer is scheduled to expire less than ten Business Days from and
including the date that notice of such decrease is first published, sent or
given in the manner specified in "Terms of the Offer -- Expiration Date;
Extensions; Amendments; Termination", then the Offer will remain open for a
minimum of ten Business Days from and including the date of such notice.
All shares of Series B Preferred not accepted pursuant to the Offer,
including shares not purchased because of proration, will be returned to the
tendering Holders at the Trust's expense as promptly as practicable following
the Expiration Date.
Delivery of Preferred Securities
Subject to the terms and conditions of the Offer, the delivery of the
Preferred Securities to be issued pursuant to the Offer will occur as promptly
as practicable following the Expiration Date. See "The Offer -- Terms of the
Offer" and "-- Expiration Date; Extensions; Amendments; Termination".
If proration of tendered shares of Series B Preferred is required,
because of the difficulty in determining the number of shares of Series B
Preferred validly tendered (including shares tendered by the guaranteed
delivery procedures described in "Terms of the Offer -- Procedures for
Tendering"), the Trust does not expect that it would be able to announce the
final proration factor or to commence the exchange for any shares of Series B
Preferred pursuant to the Offer until approximately seven Business Days after
the Expiration Date. Preliminary results of the proration will be announced
by press release as promptly as practicable after the Expiration Date.
Holders of shares of Series B Preferred may obtain such preliminary
information from the Dealer Manager or the Information Agent and may also be
able to obtain such information from their brokers.
Description of Preferred Securities and Junior Subordinated Debentures
The Preferred Securities evidence preferred undivided beneficial
interests in the assets of the Trust and will rank pari passu with, and have
terms equivalent to, the Common Securities; provided that (i) if an Event of
Default under the Declaration occurs and is continuing, the holders of
Preferred Securities will have a priority over holders of the Common
Securities with respect to payments in respect of distributions and payments
upon liquidation, redemption or otherwise and (ii) holders of Common
Securities have the exclusive right (subject to the terms of the Declaration)
to appoint, remove and replace Trustees and to increase or decrease the number
of Trustees, subject to the right of holders of Preferred Securities to
appoint a Special Regular Trustee upon the occurrence of an Appointment Event.
The Declaration does not permit the issuance by the Trust of any securities or
beneficial interests in the assets of the Trust other than the Preferred
Securities and the Common Securities, the incurrence of any indebtedness for
borrowed money by the Trust or the making of any investments other than in the
Junior Subordinated Debentures. The Declaration defines an event of default
with respect to the Trust Securities (an "Event of Default") as the occurrence
and continuance of an "event of default" under the Indenture with respect to
the Junior Subordinated Debentures (an "Indenture Event of Default").
Periodic cash distributions on each Preferred Security will be fixed
at a rate per annum of 9.95% of the stated liquidation amount of $25 per
Preferred Security. Distributions in arrears for more than one quarter will
bear interest thereon at the rate per annum of 9.95% of the stated liquidation
amount of $25 per Preferred Security (to the extent permitted by law),
compounded quarterly. Distributions on the Preferred Securities will be
cumulative, will accrue from the Accrual Date and, except as otherwise
described herein, will be made quarterly in arrears, on the 30th day of March,
June, September and December of each year, commencing on June 30, 1995, but
only if and to the extent that interest payments are made in respect of the
Junior Subordinated Debentures held by the Property Trustee. In addition,
holders of Preferred Securities will be entitled to an additional cash
distribution at the rate of 9 1/4% per annum of the liquidation amount thereof
from March 15, 1995 through the Expiration Date in lieu of dividends
accumulating after March 15, 1995 on their Series B Preferred accepted for
exchange, such additional distribution to be made at the time the first
distribution on the Preferred Securities is made.
The distribution rate and the distribution and other payment dates
for the Preferred Securities will correspond to the interest rate and the
interest and other payment dates on the Junior Subordinated Debentures
deposited in the Trust as trust assets. As a result, if principal or interest
is not paid on the Junior Subordinated Debentures, including as a result of
SunAmerica's election to extend the interest payment period on the Junior
Subordinated Debentures as described below, the Trust will not make payments
on the Trust Securities. The Junior Subordinated Debentures provide that, so
long as SunAmerica shall not be in default in the payment of interest on the
Junior Subordinated Debentures, SunAmerica has the right under the Indenture
to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period from time to time on the Junior
Subordinated Debentures for a period not exceeding 20 consecutive quarterly
interest periods (each, an "Extension Period") and, as a consequence, quarterly
distributions on the Preferred Securities would not be made (but would
continue to accrue with interest thereon at the rate of 9.95% per annum,
compounded quarterly) by the Trust during any such Extension Period. During
an Extension Period, SunAmerica may not declare or pay 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
payments with respect thereto during such Extension Period; provided that
SunAmerica will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any of its Series D Preferred Stock
in accordance with the terms of such stock. Prior to the termination of any
such Extension Period, SunAmerica may further extend such Extension Period;
provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarterly interest
periods. Upon the termination of any Extension Period and the payment of all
amounts then due, SunAmerica may commence a new Extension Period, subject to
the above requirements. SunAmerica may also prepay at any time all or any
portion of the interest accrued during an Extension Period. Consequently,
there could be multiple Extension Periods of varying lengths (up to nine
Extension Periods of 20 consecutive quarterly interest periods each or more
numerous shorter Extension Periods) throughout the term of the Junior
Subordinated Debentures. See "Risk Factors"; "Description of the Junior
Subordinated Debentures -- Interest" and "-- Option to Extend Interest Payment
Period".
There will be deposited in the Trust as trust assets (i) Junior
Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities issued by the
Trust in exchange for the Series B Preferred accepted in the Offer and (ii)
Junior Subordinated Debentures having an aggregate principal amount equal to
the amount of proceeds received by the Trust from the sale of the Common
Securities to SunAmerica. Under the Declaration, if and to the extent
SunAmerica does make interest payments on the Junior Subordinated Debentures
deposited in the Trust as trust assets, the Property Trustee is obligated to
make distributions promptly on the Preferred Securities. The payment of
distributions on the Preferred Securities and payments on liquidation of the
Trust and the redemption of Preferred Securities, as set forth below, in each
case out of moneys held by the Property Trustee in the Property Account, are
guaranteed by SunAmerica on a subordinated basis as and to the extent set
forth under "Description of the Preferred Securities Guarantee". The
Preferred Securities Guarantee is a full and unconditional guarantee from the
time of issuance of the Preferred Securities, but the Preferred Securities
Guarantee covers distributions and other payments on the Preferred Securities
only if and to the extent that SunAmerica has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets.
The Preferred Securities and Common Securities are redeemable on a
Pro Rata Basis (as defined below) from time to time, in whole or in part, to
the same extent as the Junior Subordinated Debentures are redeemable by
SunAmerica, on or after June 15, 1997, upon not less than 30 nor more than 60
days' notice, at $25 per Preferred Security plus accrued and unpaid
distributions thereon to the date of redemption, including distributions
accrued as a result of SunAmerica's election to defer payments of interest on
the Junior Subordinated Debentures, (the "Redemption Price"), payable in cash.
The Preferred Securities will be redeemed upon the maturity or earlier
redemption of the Junior Subordinated Debentures. See "Description of the
Preferred Securities -- Mandatory Redemption". As used in this Offering
Circular/Prospectus the term "Pro Rata Basis" shall mean pro rata to each
holder of Trust Securities according to the aggregate liquidation amount of
the Trust Securities held by the relevant holder in relation to the aggregate
liquidation amount of all Trust Securities outstanding unless, in relation to
a payment, an 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 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
Preferred Securities outstanding, and only after satisfaction of all amounts
owed to the holders of the Preferred Securities, to each holder of Common
Securities pro rata according to the aggregate liquidation amount of the
Common Securities held by the relevant holder in relation to the aggregate
liquidation amount of all the Common Securities outstanding.
In addition, upon the occurrence and during the continuation of a Tax
Event or an Investment Company Event (each as hereinafter defined) arising
from a change in law or a change in legal interpretation or other specified
circumstances, the Trust shall, unless the Junior Subordinated Debentures are
redeemed in the limited circumstances described below, be dissolved with the
result that the Junior Subordinated Debentures will be distributed to the
holders of the Preferred Securities and the Common Securities on a Pro Rata
Basis, in lieu of any cash distribution. In the case of a Tax Event,
SunAmerica will have the right in certain circumstances to redeem the Junior
Subordinated Debentures at any time with the result that the Trust will redeem
the Trust Securities on a Pro Rata Basis to the same extent as the Junior
Subordinated Debentures are redeemed. If the Junior Subordinated Debentures
are distributed to the holders of the Preferred Securities, SunAmerica will
use its best efforts to have the Junior Subordinated Debentures listed on the
New York Stock Exchange or on such other exchange as the Preferred Securities
are then listed. See "Description of the Preferred Securities -- Special
Event Redemption or Distribution".
The Junior Subordinated Debentures will be issued pursuant to an
indenture, dated as of March 15, 1995 (as supplemented by the First
Supplemental Indenture (the "First Supplemental Indenture") to be dated as of
March 15, 1995, the "Indenture") between SunAmerica and The First National
Bank of Chicago, as trustee (the "Indenture Trustee"). See "Description of
the Junior Subordinated Debentures". The Junior Subordinated Debentures will
mature on December 30, 2044 and will bear interest at an annual rate of 9.95%
from the Accrual Date. Interest will be payable quarterly in arrears on the
30th day of March, June, September and December of each year, commencing on
June 30, 1995; provided that, as described above, so long as SunAmerica shall
not be in default in the payment of interest on the Junior Subordinated
Debentures, SunAmerica shall have the right to extend the interest payment
period from time to time for a period not exceeding 20 consecutive quarterly
interest periods. SunAmerica has no current intention of exercising its right
to extend an interest payment period. However, should SunAmerica determine to
exercise such right in the future, the market price of the Preferred
Securities is likely to be affected. See "Risk Factors" and "Description of
the Junior Subordinated Debentures -- Option to Extend Interest Payment
Period".
The Junior Subordinated Debentures will also accrue interest at the
rate of 9 1/4% per annum of the principal amount thereof from March 15, 1995
through the Expiration Date, payable at the time of the first interest payment
on the Junior Subordinated Debentures. No extension of interest will be
permitted with respect to interest accruing from March 15, 1995 through the
Expiration Date.
SunAmerica shall have the right to redeem the Junior Subordinated
Debentures, in whole or in part, from time to time, on or after June 15, 1997,
upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount to be redeemed, plus any accrued and
unpaid interest, to the redemption date, including interest accrued as a
result of SunAmerica's election to defer payments of interest on the Junior
Subordinated Debentures, payable in cash. In addition, upon the occurrence of
a Tax Event, SunAmerica will also have the right if certain conditions are met
to redeem the Junior Subordinated Debentures at any time.
Certain United States Federal Income Tax Considerations
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable event. Gain or loss generally will be
recognized in an amount equal to the difference between the fair market value
on the Expiration Date of the holder's pro rata share of the Junior
Subordinated Debentures represented by the Preferred Securities received in
the exchange and the exchanging Holder's tax basis in the shares of Series B
Preferred surrendered. For this purpose, the fair market value of the Junior
Subordinated Debentures deemed issued in exchange for Series B Preferred on
the Expiration Date will equal the fair market value of the Preferred
Securities on that date. See "Taxation -- Exchange of Series B Preferred for
Preferred Securities".
The Junior Subordinated Debentures will be treated as issued with
"original issue discount" for United States federal income tax purposes.
Holders of Preferred Securities will be required to include their pro rata
share of original issue discount in gross income as it accrues on the Junior
Subordinated Debentures in advance of the receipt of cash. Generally, all of
a Securityholder's taxable interest income with respect to the Junior
Subordinated Debentures will be accounted for as "original issue discount" and
actual distributions of stated interest will not be separately reported as
taxable income. See "Taxation -- Accrual of Original Issue Discount and
Premium" and "-- Potential Extension of Payment Period on the Junior
Subordinated Debentures".
No portion of the amounts received on the Preferred Securities will
be eligible for the dividends received deduction.
The Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the
underlying Junior Subordinated Debentures. A Securityholder who disposes of
his Preferred Securities between record dates for payments of distributions
thereon will nevertheless be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in
income as ordinary income, and to add such amount to his adjusted tax basis in
his pro rata share of the underlying Junior Subordinated Debentures deemed
disposed of. Accordingly, such a Securityholder will recognize a capital loss
to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than the Securityholder's adjusted tax
basis (which will include accrued but unpaid interest). Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
Untendered Shares
Holders of Series B Preferred who do not tender their Series B
Preferred in the Offer or whose Series B Preferred is not accepted for
exchange will continue to hold such Series B Preferred and will be entitled to
all the rights and preferences, and will be subject to all of the limitations,
applicable thereto.
To the extent that Series B Preferred is tendered and accepted in the
Offer, the terms on which untendered Series B Preferred could subsequently be
sold could be adversely affected. See "Risk Factors -- Listing and Trading of
Preferred Securities and Series B Preferred".
Exchange Agent and Information Agent
The First National Bank of Chicago has been appointed as Exchange
Agent in connection with the Offer. Questions and requests for assistance,
requests for additional copies of this Offering Circular/Prospectus or of the
Letter of Transmittal and requests for Notices of Guaranteed Delivery should
be directed to Georgeson & Company, Inc. which has been retained by SunAmerica
and the Trust to act as Information Agent for the Offer. The addresses and
telephone numbers of the Exchange Agent and the Information Agent are set
forth in "The Offer -- Exchange Agent and Information Agent" and on the
outside back cover of this Offering Circular/Prospectus.
Dealer Manager
Merrill Lynch & Co. has been retained as Dealer Manager in connection
with the Offer. Questions with respect to the Offer may be directed to the
Capital Markets Desk at (212) 449-4906. For information regarding fees
payable to the Dealer Manager and Soliciting Dealers (as defined herein), see
"The Offer -- Dealer Manager; Soliciting Dealers".
RISK FACTORS
Prospective exchanging Holders of Series B Preferred who plan to
participate in the Offer should carefully consider, in addition to the other
information set forth elsewhere in this Offering Circular/ Prospectus, the
following:
Tax Consequences of the Offer
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable event. Generally, gain or loss will be
recognized in an amount equal to the difference between the fair market value
on the Expiration Date of the holder's pro rata share of the Junior
Subordinated Debentures represented by the Preferred Securities received in
the exchange and the exchanging Holder's tax basis in the Series B Preferred
exchanged therefor. See "Taxation -- Exchange of Series B Preferred and
Issuance of Preferred Securities". All Holders of Series B Preferred are
advised to consult their tax advisors regarding the United States federal,
state, local and foreign tax consequences of the exchange of Series B
Preferred and the issuance of Preferred Securities.
Ranking of Subordinated Obligations Under Preferred Securities Guarantee and
Junior Subordinated Debentures; Dependence on SunAmerica
The obligations of SunAmerica under the Junior Subordinated
Debentures are unsecured obligations of SunAmerica and will be subordinate and
junior in right of payment to Senior Indebtedness of SunAmerica but senior to
its capital stock. At December 31, 1994, Senior Indebtedness of SunAmerica
(on an unconsolidated basis) aggregated approximately $472.8 million.
SunAmerica's obligations under the Preferred Securities Guarantee are
unsecured and will rank (i) subordinate and junior in right of payment to all
other liabilities of SunAmerica, including the Junior Subordinated Debentures,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by SunAmerica and to any guarantee
now or hereafter entered into by SunAmerica in respect of its capital stock.
Because SunAmerica is a holding company, the Junior Subordinated Debentures
(and SunAmerica's obligations under the Preferred Securities Guarantee) are
also effectively subordinated to all existing and future liabilities,
including trade payables, of SunAmerica's subsidiaries, except to the extent
that SunAmerica is a creditor of the subsidiaries recognized as such. Claims
on SunAmerica's subsidiaries by creditors other than SunAmerica include
substantial claims for policy benefits, as well as other liabilities incurred
in the ordinary course of business. At December 31, 1994, SunAmerica's
subsidiaries had outstanding approximately $8.47 billion of liabilities
(excluding variable annuity liabilities, with respect to which assets are
segregated in separate accounts). In addition, since many of SunAmerica's
subsidiaries are insurance companies subject to regulatory control by various
state insurance departments, the ability of such subsidiaries to pay dividends
or make loans or advances to SunAmerica without prior regulatory approval is
limited by applicable laws and regulations. There are no terms in the
Preferred Securities, the Junior Subordinated Debentures or the Preferred
Securities Guarantee that limit SunAmerica's ability to incur additional
indebtedness, including indebtedness that ranks senior to or pari passu with
the Junior Subordinated Debentures and the Preferred Securities Guarantee, or
the ability of its subsidiaries to incur additional indebtedness. See
"Description of the Preferred Securities Guarantee -- Status of the Guarantee"
and "Description of the Junior Subordinated Debentures -- Subordination".
The Trust's ability to make distributions and other payments on the
Preferred Securities is solely dependent upon SunAmerica making interest and
other payments on the Junior Subordinated Debentures deposited as trust assets
as and when required. If SunAmerica were not to make distributions or other
payments on the Junior Subordinated Debentures for any reason, including as a
result of SunAmerica's election to defer the payment of interest on the Junior
Subordinated Debentures by extending the interest period on the Junior
Subordinated Debentures, the Trust will not make payments on the Trust
Securities. In such an event, holders of the Preferred Securities would not
be able to rely on the Preferred Securities Guarantee since distributions and
other payments on the Preferred Securities are subject to such Guarantee only
if and to the extent that SunAmerica has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debentures
deposited in the Trust as trust assets. Instead, holders of Preferred
Securities would rely on the enforcement by the Property Trustee of its rights
as registered holder of the Junior Subordinated Debentures against SunAmerica
pursuant to the terms of the Indenture and may vote to appoint a Special
Regular Trustee. However, if the Trust's failure to make distributions on the
Preferred Securities is a consequence of SunAmerica's exercise of its right to
extend the interest payment period for the Junior Subordinated Debentures, the
Property Trustee will have no right to enforce the payment of distributions on
the Preferred Securities until an Event of Default under the Declaration shall
have occurred. SunAmerica's obligations under the Preferred Securities
Guarantee are subordinate and junior in right of payment to all other
liabilities of SunAmerica, including the Junior Subordinated Debentures,
except those made pari passu (that is, equal in priority) or subordinate by
their terms to the Preferred Securities Guarantee and senior to its capital
stock or to any guarantee of SunAmerica in respect of its capital stock.
The Declaration provides that SunAmerica shall pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust, including any taxes and all costs and expenses with
respect thereto, to which the Trust may become subject, except for United
States withholding taxes. No assurance can be given that SunAmerica will have
sufficient resources to enable it to pay such debts, obligations, costs and
expenses on behalf of the Trust.
Option to Extend Interest Payment Period; Tax Impact of Extension
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica has the right under
the Indenture to defer payments of interest on the Junior Subordinated
Debentures by extending the interest payment period from time to time on the
Junior Subordinated Debentures for an Extension Period not exceeding 20
consecutive quarterly interest periods, during which no interest shall be due
and payable. In such an event, quarterly distributions on the Preferred
Securities would not be made (but would continue to accrue with interest
thereon at the rate of 9.95% per annum, compounded quarterly) by the Trust
during any such Extension Period. If SunAmerica exercises the right to extend
an interest payment period, SunAmerica may not during such Extension Period
declare or pay dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any of its common stock
or preferred stock; provided that SunAmerica will be permitted to pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion of any
of its Series D Preferred Stock. SunAmerica has outstanding 5,002,500 $2.78
Depositary Shares (the "Series D Depositary Shares"), each representing
one-fiftieth of a share of Series D Preferred Stock. Dividends accrue on each
Series D Depositary Share at the rate of $2.78 per year. On March 1, 1996,
unless previously redeemed, each of the outstanding Series D Depositary Shares
will convert into one share of SunAmerica's common stock and the right to
receive an amount in cash equal to all accrued and unpaid dividends.
Prior to the termination of any Extension Period, SunAmerica may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
20 consecutive quarterly interest periods. Upon the termination of any
Extension Period and the payment of all amounts then due, SunAmerica may
commence a new Extension Period, subject to the above requirements.
SunAmerica may also prepay at any time all or any portion of the interest
accrued during an Extension Period. Consequently, there could be multiple
Extension Periods of varying lengths (up to nine Extension Periods of 20
consecutive quarterly interest periods each or more numerous shorter Extension
Periods) throughout the term of the Junior Subordinated Debentures. See
"Description of the Preferred Securities -- Dividends" and "Description of the
Junior Subordinated Debentures -- Option to Extend Interest Payment Period".
Because SunAmerica has the right to extend the interest payment
period up to 20 consecutive quarterly interest periods on various occasions,
the Junior Subordinated Debentures will be treated as issued with "original
issue discount" for United States federal income tax purposes. As a result,
holders of Preferred Securities will be required to include their pro rata
share of original issue discount in gross income as it accrues for United
States federal income tax purposes in advance of the receipt of cash.
Generally, all of a Securityholder's taxable interest income with respect to
the Junior Subordinated Debentures will be accounted for as "original issue
discount" and actual distributions of stated interest will not be separately
reported as taxable income. See "Taxation -- Accrual of Original Issue
Discount and Premium" and "-- Potential Extension of Payment Period on the
Junior Subordinated Debentures".
Listing and Trading of Preferred Securities and Series B Preferred
The Preferred Securities constitute a new issue of securities with
no established trading market. While the Preferred Securities have been
approved for listing on the NYSE, subject to notice of issuance, there can be
no assurance that an active market for the Preferred Securities will develop
or be sustained in the future on such exchange. Although the Dealer Manager
has indicated to SunAmerica and the Trust that it intends to make a market in
the Preferred Securities as permitted by applicable laws and regulations prior
to the commencement of trading on the NYSE, it is not obligated to do so and
may discontinue any such market-making at any time without notice.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the Preferred Securities. In order to satisfy the NYSE listing
requirements, acceptance of Series B Preferred validly tendered in the Offer is
subject to the condition that as of the Expiration Date there be at least 400
record or beneficial holders of Preferred Securities to be issued in exchange
for such Series B Preferred, which condition may not be waived by SunAmerica
or the Trust.
To the extent Series B Preferred is tendered and accepted in the
Offer, the liquidity and trading market for the Series B Preferred to be
outstanding following the Offer, and the terms upon which such shares of
Series B Preferred could be sold, could be adversely affected. In addition,
if the Offer is substantially subscribed or oversubscribed, there would be a
significant risk that round lot holdings of Series B Preferred outstanding
following the Offer would be limited. See "Listing and Trading of Preferred
Securities and Series B Preferred."
The Offer is for up to 5,500,000 shares of Series B Preferred (or
97.9% of the 5,620,000 shares of Series B Preferred outstanding) rather than
for all the outstanding shares of Series B Preferred, to reduce the risk that
the Series B Preferred would be subject to delisting following consummation of
the Offer.
Under the rules of the NYSE, preferred securities such as the Series
B Preferred are subject to delisting if (i) the aggregate value of
publicly-held shares is less than $2 million and (ii) the number of
publicly-held shares is less than 100,000. Since at least 120,000 shares of
Series B Preferred will remain outstanding following consummation of the
Offer, the number of outstanding shares of Series B Preferred will exceed the
delisting criteria set forth in clause (ii) above. In addition, based on the
market price of the Series B Preferred on the NYSE ($25 3/8 on December 19,
1994, the closing sales price of the Series B Preferred on the NYSE on the
last full trading day immediately prior to SunAmerica's first public
announcement of the Offer, and $26 5/8 on April 26, 1995), the Company
believes that the aggregate value of the minimum number (120,000) of shares of
Series B Preferred which will be outstanding following consummation of the
Offer should exceed the delisting criteria set forth in clause (i) above. See
"Price Range of Series B Preferred". If less than 5,500,000 shares of Series
B Preferred are validly tendered, then the number of shares of Series B
Preferred remaining outstanding, and the market value thereof, will be even
greater.
Special Event Redemption or Distribution
Upon the occurrence and during the continuation of a Tax Event or
Investment Company Event (each as defined herein), which may occur at any
time, the Trust shall, unless the Junior Subordinated Debentures are redeemed
in the limited circumstances described below, be dissolved with the result
that, in the manner described in "Description of the Preferred Securities --
Liquidation Distribution Upon Dissolution", Junior Subordinated Debentures
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, and bearing accrued and unpaid interest equal to accrued and unpaid
distributions on, the Preferred Securities and Common Securities would be
distributed on a Pro Rata Basis to the holders of the Preferred Securities and
Common Securities in liquidation of the Trust. In the case of a Tax Event, in
certain circumstances, SunAmerica shall have the right to redeem at any time
the Junior Subordinated Debentures, in whole or in part, in which event the
Trust will redeem Preferred Securities and Common Securities on a Pro Rata
Basis to the same extent as the Junior Subordinated Debentures are redeemed.
There can be no assurance as to the market prices for Preferred Securities or
the Junior Subordinated Debentures which may be distributed in exchange for
Preferred Securities if a dissolution and liquidation of the Trust were to
occur. Accordingly, the Preferred Securities or the Junior Subordinated
Debentures which the investor may receive on dissolution and liquidation of
the Trust, may trade at a discount to the price of the Series B Preferred
exchanged. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution" and "Description of the Junior Subordinated
Debentures -- General".
Under current United States federal income tax law, a distribution
of the Junior Subordinated Debentures upon a Tax Event or Investment Company
Event would not be a taxable event to holders of the Preferred Securities.
See "Taxation -- Distribution of Junior Subordinated Debentures to Holders of
Preferred Securities".
Limited Voting Rights
Holders of Preferred Securities will have limited voting rights and,
subject to the rights of holders of Preferred Securities to appoint a Special
Regular Trustee upon the occurrence of an Appointment Event, will not be able
to appoint, remove or replace, or to increase or decrease the number of,
Trustees, which rights are vested exclusively in the Common Securities.
Potential Market Volatility During Extension Period
As described above, SunAmerica has the right to extend an interest
payment period on the Junior Subordinated Debentures from time to time for a
period not exceeding 20 consecutive quarterly interest periods. If SunAmerica
determines to extend an interest payment period, or if SunAmerica thereafter
extends an Extension Period or prepays interest accrued during an Extension
Period as described above, the market price of the Preferred Securities is
likely to be affected. In addition, as a result of such rights, the market
price of the Preferred Securities (which represent an undivided interest in
Junior Subordinated Debentures) may be more volatile than other securities on
which original issue discount accrues that do not have such rights. A holder
that disposes of its Preferred Securities during an Extension Period,
therefore, may not receive the same return on its investment as a holder that
continues to hold its Preferred Securities. See "Description of the Junior
Subordinated Debentures -- Option to Extend Interest Payment Period".
COMPARISON OF PREFERRED SECURITIES AND SERIES B PREFERRED
The following is a brief summary of certain terms of the Preferred
Securities and the Series B Preferred. For a more complete description of the
Preferred Securities, see "Description of the Preferred Securities". For a
complete description of the Junior Subordinated Debentures which will be
deposited in the Trust as trust assets and will represent the sole source for
the payment of distributions and other payments on the Preferred Securities,
see "Description of the Junior Subordinated Debentures".
<TABLE>
<CAPTION>
Preferred Securities Series B Preferred
--------------------------------- --------------------------
<S> <C> <C>
Issuer The Trust. Payment of SunAmerica.
distributions and on
liquidation or redemption is
guaranteed on a subordinated
basis as and to the extent
described herein by
SunAmerica.
Distribution/Dividend 9.95% per annum distribution 9 1/4% per annum dividend
Rate payable quarterly in arrears payable on the 15th day of
on the 30th day of March, March, June, September and
June, September and December December of each year, out
of each year, commencing June of funds legally available
30, 1995, from and including therefor, when, as and if
the Accrual Date, but only if, declared by SunAmerica's
and to the extent that, Board of Directors.
interest payments are made in Dividends are cumulative.
respect of the Junior Accumulated unpaid
Subordinated Debentures held dividends do not bear
by the Property Trustee. interest.
During any Extension Period on
the Junior Subordinated
Debentures, distribution
payments on the Preferred
Securities will not be made
but would continue to accrue,
and, in the case of
distributions in arrears for
more than one quarter, would
bear interest at the rate of
9.95% per annum, compounded
quarterly.
Optional Redemption See "Maturity/Mandatory Redeemable at the option
Redemption" below. of SunAmerica on and after
June 15, 1997, in whole or
in part, at a redemption
price equal to 100% of the
liquidation preference of
the shares to be redeemed,
plus accrued and unpaid
dividends, if any, to the
redemption date.
Maturity/Mandatory The Preferred Securities will None.
Redemption be redeemed upon the maturity
or earlier redemption of the
Junior Subordinated
Debentures, at a redemption
price equal to 100% of the
liquidation amount of the
Preferred Securities to be
redeemed, plus accrued and
unpaid distributions, if any,
to the redemption date,
including distributions
accrued as a result of
SunAmerica's election to defer
payments of interest on the
Junior Subordinated
Debentures. The Junior
Subordinated Debentures have a
final maturity of December 30,
2044. See "Description of the
Preferred Securities --
Mandatory Redemption" and "--
Special Event Redemption or
Distribution".
Subordination Subordinated to claims of Subordinated to claims of
creditors of the Trust, if creditors of SunAmerica,
any. The Preferred Securities including holders of
and the Common Securities will SunAmerica's outstanding
rank pari passu with each debt securities and the
other and will have equivalent Junior Subordinated
terms; provided that (i) if an Debentures, and effectively subordinated to all
Event of Default under the obligations of
Declaration occurs and is SunAmerica's subsidiaries,
continuing, the holders of but senior to the common
Preferred Securities will have stock of SunAmerica and
a priority over holders of the pari passu with all other
Common Securities with respect outstanding series of
to payments in respect of preferred stock of
distributions and payments SunAmerica.
upon liquidation, redemption
or otherwise and (ii) holders
of Common Securities have the
exclusive right (subject to
the terms of the Declaration)
to appoint, remove or replace
Trustees and to increase or
decrease the number of
Trustees, subject to the right
of holders of Preferred
Securities to appoint a
Special Regular Trustee upon
the occurrence of an
Appointment Event. The Trust
is not permitted to incur any
indebtedness for borrowed
money. The Declaration
provides that SunAmerica shall
pay for all debts and
obligations (other than with
respect to the Trust
Securities) and all costs and
expenses of the Trust,
including any income taxes,
duties and other governmental
charges, and all costs and
expenses with respect thereto,
to which the Trust may become
subject, except for United
States withholding taxes.
SunAmerica's obligations under
the Preferred Securities
Guarantee will rank
subordinate and junior to all
other liabilities of
SunAmerica, including the
Junior Subordinated
Debentures, except those made
pari passu or subordinate by
their terms, and will be
effectively subordinated to
all obligations of
SunAmerica's subsidiaries, and
senior to all capital stock
now or hereafter issued by
SunAmerica and to any
guarantee now or hereafter
entered into by SunAmerica in
respect of any of its capital
stock.
Listing The Preferred Securities have The Series B Preferred is
been approved for listing on listed on the NYSE.
the NYSE, subject to notice of
issuance. In order to satisfy
the NYSE listing requirements,
acceptance of Series B
Preferred validly tendered in
the Offer is subject to the
condition that as of the
Expiration Date there be at
least 400 record or beneficial
holders of Preferred
Securities to be issued in
exchange for such Series B
Preferred, which condition may
not be waived.
Dividends Received Dividends are not eligible for Dividends are eligible for
Deduction the dividends received the dividends received
deduction for corporate deduction for corporate
holders. holders.
Voting Rights/ Holders of Preferred If dividends shall be in
Enforcement Securities have no voting arrears in an aggregate
rights other than as provided amount equivalent to six
under the Business Trust Act quarterly dividend
or the Trust Indenture Act payments, the Holders have
unless either (i) the right (together with
distributions on the Preferred other classes of preferred
Securities shall be in arrears stock ranking on a parity
for 6 consecutive quarterly with the Series B
distribution periods, or (ii) Preferred either as to
an Event of Default under the dividends or on the
Declaration occurs and is distribution of assets
continuing, in which case upon liquidation) to elect
holders have the right to two directors.
appoint a Special Regular
Trustee. The Property Trustee
has the power to exercise all
rights under the Indenture
with respect to the Junior
Subordinated Debentures and is
also authorized to enforce the
Preferred Securities Guarantee
on behalf of holders of the
Preferred Securities. If the
Trust's failure to make
distributions is a consequence
of SunAmerica's exercise of
its right to extend the
interest payment period for
the Junior Subordinated
Debentures as described under
"Distribution/Dividend Rate",
the Property Trustee will have
no right to enforce the
payment of distributions until
an Event of Default under the
Declaration shall have
occurred. The holders of at
least a majority in
liquidation amount of the
Preferred Securities will have
the right to direct the
Property Trustee with respect
to certain matters under the
Declaration and the 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,
institute a legal proceeding
against SunAmerica to enforce
such rights or the Preferred
Securities Guarantee, as the
case may be.
</TABLE>
SUNAMERICA
SunAmerica is a diversified financial services company with more than
$24 billion of assets owned or under management. At December 31, 1994, these
assets consisted of $14.78 billion of assets owned by SunAmerica, $2.04
billion of assets managed in mutual funds and private accounts and $7.63
billion under custody in retirement trust accounts. Together, the SunAmerica
life insurance companies rank among the largest U.S. issuers of annuities.
Complementing these annuity operations are SunAmerica's asset management
operations; its two broker-dealers, which SunAmerica believes, based on
industry data, represent the largest network of independent registered
representatives in the nation; and its trust company which provides
administrative and custodial services to qualified retirement plans. Through
these subsidiaries, SunAmerica specializes in the sale of tax-deferred
long-term savings products and investments to the expanding preretirement
savings market. SunAmerica markets fixed annuities and fee-generating
variable annuities, mutual funds and trust services, as well as guaranteed
investment contracts. SunAmerica's products are distributed through a broad
spectrum of financial services distribution channels, including independent
registered representatives of SunAmerica's broker-dealer subsidiaries and
unaffiliated broker-dealers, independent general insurance agents and
financial institutions.
The principal executive offices of SunAmerica are located at 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
Recent Developments
For its six months ended March 31, 1995, SunAmerica reported net
income of $92.5 million or $2.01 per share, up 18% on a per share basis from
$79.6 million or $1.71 per share in the comparable period of fiscal 1994
(before cumulative effect of change in accounting for income taxes of $33.5
million or $.80 per share).
Net investment income for the six months ended March 31, 1995
increased by 16.5% and fee income increased by 10.8% as compared to the year
earlier period. These increases occurred despite a difficult environment
characterized by higher interest rates and volatile stock and bond markets.
The increases in investment spread and fee income were partially offset by a
12.5% increase in general and administrative expenses, reflecting the expenses
of the recently acquired Imperial Premium Finance, Inc. ("Imperial") and $2.5
million of expense for an upcoming advertising campaign.
Net investment income for the six months of fiscal 1995 rose to
$164.8 million from $141.5 million in fiscal 1994. The spread on average
invested assets was 3.48%, up from 3.19% a year ago. Fee income rose to $83.6
million, up from $75.5 million in fiscal 1994. Included in fiscal 1995 was
$8.0 million of loan servicing fees resulting from the recent acquisition of
Imperial.
Sales of financial services products rose to $1.54 billion in the
first six months of fiscal 1995 from $1.15 billion in the comparable period of
fiscal 1994, primarily as a result of a $231.9 million increase in annuity
premiums and a near doubling of premiums from guaranteed investment contracts.
The United States Supreme Court recently affirmed the ability of a
national bank to sell annuities issued by a life insurance company. This
decision confirms the ability of SunAmerica to sell its products through
national banks.
SUNAMERICA CAPITAL TRUST I
The Trust is a statutory business trust that was formed under the
Trust Act on March 22, 1995 pursuant to a declaration of trust dated March 21,
1995 among the Trustees and SunAmerica and the filing of a certificate of
trust with the Secretary of State of Delaware. Such declaration of trust will
be amended and restated in its entirety as of the date the Trust accepts
Series B Preferred in the Offer (see "The Offer -- Terms of the Offer")
substantially in the form filed as an exhibit to the Registration Statement of
which this Offering Circular/Prospectus forms a part. The Declaration is
qualified under the Trust Indenture Act. Upon issuance of the Preferred
Securities, the holders thereof will own all of the issued and outstanding
Preferred Securities. SunAmerica has agreed to acquire Common Securities in an
amount equal to at least 3% of the total capital of the Trust and will own,
directly or indirectly, all of the issued and outstanding Common Securities.
The Preferred Securities and the Common Securities will rank pari passu with
each other and will have equivalent terms; provided that (i) if an Event of
Default under the Declaration occurs and is continuing, the holders of
Preferred Securities will have a priority over holders of the Common
Securities with respect to payments in respect of distributions and payments
upon liquidation, redemption or otherwise and (ii) holders of Common
Securities have the exclusive right (subject to the terms of the Declaration)
to appoint, remove or replace Trustees and to increase or decrease the number
of Trustees, subject to the right of holders of Preferred Securities to
appoint a Special Regular Trustee upon the occurrence of an Appointment Event.
The number of Trustees of the Trust shall initially be five. Three
of the Trustees will be the Regular Trustees. The fourth trustee is The Bank
of New York, which is unaffiliated with SunAmerica and which will serve as the
Property Trustee and act as the indenture trustee for purposes of the Trust
Indenture Act. The fifth trustee is an affiliate of The Bank of New York and
will serve as the Delaware Trustee. Pursuant to the Declaration, legal title
to the Junior Subordinated Debentures will be held by the Property Trustee for
the benefit of the holders of the Trust Securities and the Property Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture with respect to the Junior Subordinated Debentures. In addition, the
Property Trustee will maintain exclusive control of the Property Account to
hold all payments in respect of the Junior Subordinated Debentures for the
benefit of the holders of Trust Securities. The Property Trustee will
promptly make distributions to the holders of the Trust Securities out of
funds from the Property Account. The Preferred Securities Guarantee is
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 Preferred Securities. Subject
to the right of holders of Preferred Securities to appoint a Special Regular
Trustee upon the occurrence of an Appointment Event, SunAmerica, as the direct
or indirect owner of all of the Common Securities, has the exclusive right
(subject to the terms of the Declaration) to appoint, remove or replace
Trustees and to increase or decrease the number of Trustees, provided that the
number of Trustees shall at least be three, a majority of which shall be
Regular Trustees.
The Trust exists for the purpose of (a) issuing (i) its Preferred
Securities in exchange for Series B Preferred validly tendered in the Offer
and delivering such Series B Preferred to SunAmerica in consideration of the
deposit by SunAmerica of Junior Subordinated Debentures in the Trust as trust
assets, and (ii) its Common Securities to SunAmerica in exchange for cash and
investing the proceeds thereof in an equivalent amount of Junior Subordinated
Debentures and (b) engaging in such other activities as are necessary or
incidental thereto. The rights of the holders of the Preferred Securities,
including economic rights, rights to information and voting rights, are set
forth in the Declaration, the Business Trust Act and the Trust Indenture Act.
Under the Declaration, the Trust shall not, and the Trustees shall
cause the Trust not to, engage in any activity other than in connection with
the purposes of the Trust or other than as required or authorized by the
Declaration. In particular, the Trust shall not and the Trustees shall not
(a) invest any proceeds received by the Trust from holding the Junior
Subordinated Debentures but shall promptly distribute from the Property
Account all such proceeds to holders of Trust Securities pursuant to the terms
of the Declaration and of the Trust Securities; (b) acquire any assets other
than as expressly provided in the Declaration; (c) possess Trust property for
other than a Trust purpose; (d) make any loans, other than loans represented
by the Junior Subordinated Debentures; (e) possess any power or otherwise act
in such a way as to vary the Trust assets or the terms of the Trust Securities
in any way whatsoever; (f) issue any securities or other evidences of
beneficial ownership of, or beneficial interests in, the Trust other than the
Trust Securities; (g) incur any indebtedness for borrowed money or (h)(i)
direct the time, method and place of exercising any trust or power conferred
upon the Indenture Trustee with respect to the Junior Subordinated Debentures
or the Property Trustee with respect to the 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 Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures 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 the Trust to be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership and that the Trust will continue to
be classified as a grantor trust for United States federal income tax purposes.
The books and records of the Trust will be maintained at the
principal office of the Trust and will be open for inspection by a holder of
Preferred Securities or his representative for any purpose reasonably related
to its interest in the Trust during normal business hours. Each holder of
Preferred Securities will be furnished annually with unaudited financial
statements of the Trust as soon as available after the end of the Trust's
fiscal year.
Except as provided below or under the Business Trust Act and the
Trust Indenture Act, holders of Preferred Securities will have no voting
rights. If (i) distributions on the Preferred Securities are in arrears for
six consecutive quarterly distribution periods, or (ii) an Event of Default
under the Declaration occurs and is continuing, holders of Preferred
Securities 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 SunAmerica. The Special Regular
Trustee shall have the same rights, powers and privileges under the
Declaration as the Regular Trustees. See "Description of the Preferred
Securities -- Voting Rights".
The Property Trustee, for the benefit of the holders of the Trust
Securities, is authorized under the Declaration to exercise all rights under
the Indenture with respect to the Junior Subordinated Debentures, including
its rights as the holder of the Junior Subordinated Debentures to enforce
SunAmerica's obligations under the Junior Subordinated Debentures 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 under
the Preferred Securities Guarantee. If the Trust's failure to make
distributions on the Preferred Securities is a consequence of SunAmerica's
exercise of its right to extend the interest payment period for the Junior
Subordinated Debentures, the Property Trustee will have no right to enforce the
payment of distributions on the Preferred Securities until an Event of Default
shall have occurred. Holders of at least a majority in liquidation amount of
the Preferred Securities will have the right to direct the Property Trustee
with respect to certain matters under the Declaration and the 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, institute a legal proceeding
against SunAmerica to enforce such rights or the Preferred Securities
Guarantee, as the case may be. See "Description of the Preferred Securities --
Voting Rights".
If an Indenture Event of Default occurs and is continuing with
respect to Junior Subordinated Debentures, an Event of Default under the
Declaration will occur and be continuing with respect to the Trust Securities.
In such event, the Declaration provides that the holders of Common Securities
will be deemed to have waived any such Event of Default with respect to the
Common Securities until all Events of Default with respect to the Preferred
Securities have been cured or waived. Until all such Events of Default with
respect to the Preferred Securities 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 and only the holders of the Preferred Securities will have
the right to direct the Property Trustee with respect to certain matters under
the Declaration and consequently under the Indenture. In the event that any
Event of Default with respect to the Preferred Securities is waived by the
holders of the Preferred Securities as provided in the Declaration, the
holders of Common Securities pursuant to the Declaration have agreed that such
waiver also constitutes a waiver of such 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. See
"Description of the Preferred Securities".
The Declaration provides that the Trustees may treat the person in
whose name a Preferred Security is registered on the books and records of the
Trust as the sole holder thereof and of the Preferred Securities represented
thereby for purposes of receiving distributions and for all other purposes
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such certificate or in the Preferred Securities represented
thereby on the part of any person, whether or not the Trust shall have actual
or other notice thereof. Preferred Securities will be issued in fully
registered form. Investors may elect to hold their Preferred Securities
directly or, subject to the rules and procedures of The Depository Trust
Company ("DTC") described under "Description of the Preferred Securities --
Book-Entry; Delivery and Form", hold interests in a global certificate
registered on the books and records of the Trust in the name of DTC or its
nominee. Under the Declaration:
(i) the Trust and the Trustees shall be entitled to deal with
DTC (or any successor depositary) for all purposes, including the
payment of distributions and receiving approvals, votes or consents
under the Declaration, and except as set forth in the Declaration
with respect to the Property Trustee, shall have no obligation to
persons owning Preferred Securities ("Preferred Security Beneficial
Owners") registered in the name of and held by DTC or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall
be exercised only through DTC (or any successor depositary) and shall
be limited to those established by law and agreements between such
Owners and DTC and/or its participants. See "Description of the
Preferred Securities -- Book-Entry; Delivery and Form". With respect
to Preferred Securities registered in the name of and held by DTC or
its nominee, all notices and other communications required under the
Declaration shall be given to, and all distributions on such
Preferred Securities shall be given or made to, DTC (or its
successor).
In the Declaration, SunAmerica has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the Trust, including the fees and expenses of the Trustees and
any taxes and all costs and expenses with respect thereto, to which the Trust
may become subject, except for United States withholding taxes. See "Risk
Factors" and "Description of the Preferred Securities". The foregoing
obligations of SunAmerica under the Declaration are for the benefit of, and
shall be enforceable by, any person to whom any such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice hereof. Any such Creditor may enforce such obligations of
SunAmerica directly against SunAmerica and SunAmerica has irrevocably waived
any right or remedy to require that any such Creditor take any action against
the Trust or any other person before proceeding against SunAmerica.
SunAmerica has agreed in the Declaration to execute such additional agreements
as may be necessary or desirable in order to give full effect to the foregoing.
The foregoing summary of certain provisions of the Declaration does
not purport to be complete and is qualified in its entirety by reference to
the Declaration which has been filed as an exhibit to the Registration
Statement of which this Offering Circular/Prospectus is a part.
The business address of the Trust is c/o SunAmerica Inc., 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three months ended
Years ended September 30, December 31,
------------------------- ------------------
1990 1991 1992 1993 1994 1993 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges (excluding
interest on fixed annuities,
guaranteed investment
contracts and trust
deposits) (1) 2.4 2.7 4.0 6.1 5.8 6.2 5.5
==== ==== ==== ==== ==== ==== ====
Ratio of earnings to fixed
charges (including
interest on fixed annuities,
guaranteed investment
contracts and trust
deposits) (2) 1.1 1.1 1.2 1.4 1.5 1.5 1.5
==== ==== ==== ==== ==== ==== ====
Ratio of earnings to combined
fixed charges and
preferred stock dividends
(excluding interest on
fixed annuities, guaranteed
investment contracts
and trust deposits) (3) 2.0 2.3 2.7 2.8 2.8 2.8 3.1
==== ==== ==== ==== ==== ==== ====
Ratio of earnings to combined
fixed charges and
preferred stock dividends
(including interest on
fixed annuities, guaranteed
investment contracts
and trust deposits) (4) 1.1 1.1 1.2 1.3 1.4 1.3 1.4
==== ==== ==== ==== ==== ==== ====
<FN>
_______________
(1) In computing the ratio of earnings to fixed charges (excluding interest
on fixed annuities, guaranteed investment contracts and trust
deposits), fixed charges consist of interest expense on senior and
subordinated indebtedness. Earnings are computed by adding interest
incurred on senior and subordinated indebtedness to pretax income.
(2) In computing the ratio of earnings to fixed charges (including interest
on fixed annuities, guaranteed investment contracts and trust
deposits), fixed charges consist of interest expense on senior and
subordinated indebtedness, fixed annuity contracts, guaranteed
investment contracts and trust deposits. Earnings are computed by
adding interest incurred on senior and subordinated indebtedness, fixed
annuity contracts, guaranteed investment contracts and trust deposits
to pretax income.
(3) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (excluding interest on fixed annuities,
guaranteed investment contracts and trust deposits), combined fixed
charges and preferred stock dividends consist of interest expense on
senior and subordinated indebtedness and dividends on preferred stock
on a tax equivalent basis. Earnings are computed by adding interest
incurred on senior and subordinated indebtedness to pretax income.
(4) In computing the ratio of earnings to combined fixed charges and
preferred stock dividends (including interest on fixed annuities,
guaranteed investment contracts and trust deposits), combined fixed
charges and preferred stock dividends consist of interest expense on
senior and subordinated indebtedness, fixed annuity contracts,
guaranteed investment contracts and trust deposits and dividends on
preferred stock on a tax equivalent basis. Earnings are computed by
adding interest incurred on senior and subordinated indebtedness, fixed
annuity contracts, guaranteed investment contracts and trust deposits
to pretax income.
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
Reference is made to SunAmerica's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994 (the "Form 10-K"), which is incorporated
by reference in this Offering Circular/Prospectus and which contains
SunAmerica's audited consolidated financial statements, including the
consolidated income statement for SunAmerica's three fiscal years in the
period ended September 30, 1994, consolidated balance sheets as of September
30, 1993 and 1994, and the related notes. Selected unaudited financial
information as of and for the three months ended December 31, 1993 and 1994
should be read in conjunction with the audited consolidated financial
statements and related notes contained in the Form 10-K and the unaudited
consolidated financial statements contained in SunAmerica's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1994 (the "Form 10-Q"), which
report is also incorporated by reference in this Offering Circular/Prospectus.
Such unaudited information reflects, in the opinion of management, all
adjustments, consisting of only normal accruals, necessary for a consistent
presentation with the audited financial information. For information regarding
SunAmerica's results of operations for the six months ended March 31, 1995,
see "SunAmerica -- Recent Developments". Results of operations for the three
months and six months ended December 31, 1994 and March 31, 1995,
respectively, may not necessarily be indicative of the results to be expected
for the full fiscal year.
<TABLE>
<CAPTION>
Three months ended
Years ended September 30, December 31,
------------------------------------------------------------ ---------------------
1990 1991 1992 1993 1994 1993 1994
--------- --------- --------- --------- --------- -------- --------
(In thousands, except per share amounts and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
Results of operations
Net investment income ...... $ 132,947 $ 162,412 $ 219,384 $ 263,791 $ 294,454 $ 70,714 $ 78,109
Net realized investment
losses ........................ (29,319) (46,060) (56,364) (21,287) (21,124) (5,367) (7,066)
Fee income .................... 72,327 92,689 112,831 134,305 150,736 37,627 39,661
General and administrative
expenses....................... (112,860) (120,475) (133,058) (135,790) (132,743) (33,457) (33,108)
Provision for future
guaranty fund assessments . --- --- --- (22,000) --- --- ---
Amortization of deferred
acquisition costs ............. (27,872) (40,088) (48,375) (51,860) (66,925) (15,243) (18,674)
Other income and expenses,
net ........................... 25,644 24,903 16,673 16,852 15,603 2,990 4,612
--------- -------- -------- --------- --------- ---------- --------
Pretax income ................. 60,867 73,381 111,091 184,011 240,001 57,264 63,534
Income tax expense ............ (22,100) (25,900) (34,300) (57,000) (74,700) (17,700) (18,400)
--------- -------- -------- --------- --------- ---------- ---------
Income before cumulative
effect of change in
accounting for income
taxes ........................ 38,767 47,48 76,791 127,011 165,301 39,564 45,134
Cumulative effect of change
in accounting for income
taxes ........................ --- --- --- --- (33,500) (33,500) ---
--------- ------- --------- --------- --------- -------- --------
Net income .................... $ 38,767 $ 47,48 $ 76,791 $ 127,011 $ 131,801 $ 6,064 $ 45,134
========= ======= ========= ========= ========= ======== ========
Earnings per share:
Income before cumulative
effect of change in
accounting for income
taxes...................... $ 1.02 $ 1.32 $ 1.80 $ 2.75 $ 3.58 $ 0.85 $ 0.98
Cumulative effect of
change in accounting
for income taxes... . --- --- --- --- (.81) (0.80) ---
--------- ------- -------- --------- -------- -------- --------
Net income .................. $ 1.02 $ 1.32 $ 1.80 $ 2.75 $ 2.77 $ 0.05 $ 0.98
========= ======= ========= ========= ======== ======== ========
Cash dividends per share
paid to common
shareholders:
Nontransferable Class B
Stock ................... $ 0.180 $ 0.180 $ 0.180 $ 0.252 $ 0.360 $ 0.090 $ 0.135
========= ======= ========= ========= ======== ======== ========
Common Stock ............. $ 0.200 $ 0.200 $ 0.200 $ 0.280 $ 0.400 $ 0.100 $ 0.150
========= ======= ========= ========= ======== ======== ========
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA (continued)
<TABLE>
<CAPTION>
At September 30, At December 31,
--------------------------------------------------------------------- -----------------------------
1990 1991 1992 1993 1994 1993 1994
----------- ----------- ----------- ------------- ------------- ------------- -------------
(In thousands, except book value per share)
<S> <C> <C> <C> <C> <C> <C> <C>
Financial Position
Investments.......... $ 7,275,401 $ 7,596,275 $ 9,428,266 $10,364,952 $ 9,280,390 $10,387,761 $ 9,493,129
Variable annuity
assets............. 2,145,196 2,746,685 3,293,343 4,194,970 4,513,093 4,432,876 4,359,290
Deferred acquisition
costs................ 356,088 392,278 436,209 475,917 581,874 483,092 603,954
Other assets ........ 301,906 279,007 245,833 231,582 280,868 237,346 322,176
----------- ----------- ----------- ------------- ------------- ------------- -------------
Total assets ........ $10,078,591 $11,014,245 $13,403,651 $15,267,421 $14,656,225 $15,541,075 $14,778,549
=========== =========== =========== ============= ============= ============= =============
Reserves for fixed
annuity contracts.... $ 5,523,320 $ 5,359,757 $ 5,143,339 $ 4,934,871 $ 4,519,623 $ 4,810,948 $ 4,545,686
Reserves for
guaranteed
investment
contracts......... 1,294,338 1,598,963 2,023,048 2,216,104 2,783,522 2,378,606 3,018,234
Trust deposits ...... --- --- 367,458 378,986 442,320 382,315 464,840
Variable annuity
liabilities......... 2,145,196 2,746,685 3,293,343 4,194,970 4,513,093 4,432,876 4,359,290
Other payables and
accrued liabilities... 159,416 344,789 1,372,010 1,828,153 860,763 1,678,885 901,347
Long-term notes and
debentures......... --- --- 225,000 380,560 472,835 404,835 472,835
Collateralized
mortgage
obligations and
reverse repurchase
agreements......... 368,907 299,343 182,784 112,032 28,662 241,383 ---
Other senior
indebtedness....... 43,503 38,035 25,919 15,119 --- --- ---
Subordinated notes.... 119,485 117,985 --- --- ---
Deferred income taxes. 40,353 58,779 40,682 96,599 74,319 119,396 54,369
Shareholders' equity.. 384,073 449,909 730,068 1,110,027 961,088 1,091,831 961,948
----------- ----------- ----------- ------------- ------------- ------------- -------------
Total liabilities and
shareholders'
equity............. $10,078,591 $11,014,245 $13,403,651 $15,267,421 $14,656,225 $15,541,075 $14,778,549
=========== =========== =========== =========== =========== =========== ===========
Book value per share.. $ 9.98 $ 12.24 $ 14.54 $ 22.64 $ 18.90 $ 22.12 $ 18.76
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of
SunAmerica and its subsidiaries at December 31, 1994 and as adjusted to give
effect to the issuance of Preferred Securities in exchange for the Series B
Preferred. Interest rates are as of December 31, 1994. The "As Adjusted"
capitalization described in the table below assumes that holders of 5,500,000
shares of Series B Preferred elect to participate in the Offer. To the extent
holders of Series B Preferred do not participate in the Offer, Company-
obligated minority interests in Trust would be reduced and Preferred Stock
would be increased by an amount equal to the additional liquidation value
of the Series B Preferred that remained outstanding.
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------
Actual As Adjusted
------------- --------------
(In thousands)
Indebtedness:
<S> <C> <C>
Long-term notes and debentures:
Medium-term notes due 1998 through 2005
(5-3/8% to 6-3/4%).................... $ 147,835 $ 147,835
8-1/8% debentures due
April 28, 2023........................ 100,000 100,000
9.95% debentures due
February 1, 2012...................... 100,000 100,000
9% notes due January 15, 1999........... 125,000 125,000
------------- --------------
Total indebtedness......................... 472,835 472,835
------------- --------------
Company-obligated minority interests
in Trust <F1>............................ --- 137,500
------------- --------------
Shareholders' equity:
Preferred Stock......................... 374,273 236,773
Nontransferable Class B Stock........... 6,826 6,826
Common Stock............................ 29,327 29,327
Additional paid-in capital.............. 201,536 201,536
Retained earnings....................... 545,020 545,020
Net unrealized losses on debt and
equity securities available for sale.. (195,034) (195,034)
------------- --------------
Total shareholders' equity ............. 961,948 824,448
------------- --------------
Total capitalization....................... $1,434,783 $1,434,783
============= ==============
- ------------
<FN>
<F1> As described in this Offering Circular/Prospectus, the sole asset of
the Trust will be the Junior Subordinated Debentures.
</FN>
</TABLE>
THE OFFER
Purpose of the Offer
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies while
preserving SunAmerica's flexibility with respect to future financings. This
refinancing will permit SunAmerica to deduct interest payable on the Junior
Subordinated Debentures for United States federal income tax purposes;
dividends payable on the Series B Preferred are not deductible.
Following the Offer, and depending on the number of shares of Series
B Preferred tendered, SunAmerica may take additional actions to reduce further
or eliminate the remaining Series B Preferred, including by making purchases
of Series B Preferred in the open market, by making subsequent tender or
exchange offers or by undertaking a recapitalization transaction. Such
transactions could be undertaken on terms which are more favorable or less
favorable than the exchange ratios in the Offer. SunAmerica has made no
decision to take any such actions, and there is no assurance that SunAmerica
will take any such actions.
General
Participation in the Offer is voluntary and Holders of Series B
Preferred should carefully consider whether to accept. Neither the board of
directors of SunAmerica nor SunAmerica nor the Trustees nor the Trust makes
any recommendation to Holders as to whether to tender or refrain from
tendering in the Offer. Holders of Series B Preferred are urged to consult
their financial and tax advisors in making their decisions on what action to
take in light of their own particular circumstances.
Unless the context requires otherwise, the term "Holder" with respect
to the Offer means (i) any person in whose name any shares of Series B
Preferred are registered on the books of SunAmerica or (ii) any other person
who has obtained a properly completed stock power from the registered holder,
or (iii) any person whose shares of Series B Preferred are held of record by
DTC who desires to deliver such Series B Preferred by book-entry transfer at
DTC.
Terms of the Offer
Upon the terms and subject to the conditions set forth herein and in
the Letter of Transmittal, the Trust will exchange its Preferred Securities
for up to 5,500,000 outstanding shares of Series B Preferred. The Offer will
be effected on a basis of one Preferred Security for each share of Series B
Preferred validly tendered and accepted for exchange. See " -- Procedures for
Tendering". Upon the terms and subject to the conditions set forth herein and
in the Letter of Transmittal, the Trust will accept up to 5,500,000 shares of
Series B Preferred validly tendered and not withdrawn prior to the Expiration
Date and, unless the Offer has been withdrawn or terminated, will deliver
Preferred Securities in exchange therefor to tendering Holders of Series B
Preferred as promptly as practicable following the Expiration Date. The Trust
expressly reserves the right, in its sole discretion, to delay acceptance for
exchange of Series B Preferred tendered under the Offer and the delivery of
the Preferred Securities with respect to the Series B Preferred accepted for
exchange (subject to Rules 13e-4 and 14e-1 under the Exchange Act, which
require that the Trust consummate the Offer or return the Series B Preferred
deposited by or on behalf of the Holders thereof promptly after the
termination or withdrawal of the Offer), or to withdraw or terminate the Offer
at any time prior to the Expiration Date for any reason.
In all cases, except to the extent waived by the Trust, delivery of
Preferred Securities issued with respect to the Series B Preferred accepted
for exchange pursuant to the Offer will be made only after timely receipt by
the Exchange Agent of Series B Preferred (or confirmation of book-entry
transfer thereof), a properly completed and duly executed Letter of
Transmittal and any other documents required thereby.
As of the date of this Offering Circular/Prospectus, there were
5,620,000 shares of Series B Preferred outstanding. This Offering
Circular/Prospectus, together with the Letter of Transmittal, is being sent to
all registered Holders as of April 28, 1995.
The Trust shall be deemed to have accepted validly tendered Series
B Preferred (or defectively tendered Series B Preferred with respect to which
the Trust has waived such defect) when, as and if the Trust has given oral or
written notice thereof to the Exchange Agent. The Exchange Agent will act as
agent for the tendering Holders for the purpose of receiving Series B
Preferred from, and remitting Preferred Securities to, tendering Holders who
are participating in the Offer. Upon the terms and subject to the conditions
of the Offer, delivery of Preferred Securities to tendering Holders will be
made as promptly as practicable following the Expiration Date.
If proration of tendered shares of Series B Preferred is required,
because of the difficulty in determining the number of shares of Series B
Preferred validly tendered (including shares tendered by the guaranteed
delivery procedures described in "-- Procedures for Tendering"), the Trust
does not expect that it would be able to announce the final proration factor
or to commence the exchange for any shares of Series B Preferred pursuant to
the Offer until approximately seven Business Days after the Expiration Date.
Preliminary results of the proration will be announced by press release as
promptly as practicable after the Expiration Date. Holders of shares of
Series B Preferred may obtain such preliminary information from the Dealer
Manager, the Information Agent or the Exchange Agent and may also be able to
obtain such information from their brokers.
If any tendered shares of Series B Preferred are not accepted for
exchange because of an invalid tender, proration, the occurrence of certain
other events set forth herein or otherwise, unless otherwise requested by the
Holder under "Special Delivery Instructions" in the Letter of Transmittal,
such shares of Series B Preferred will be returned, without expense, to the
tendering Holder thereof (or in the case of shares of Series B Preferred
tendered by book-entry transfer into the Exchange Agent's account at DTC, such
shares of Series B Preferred will be credited to an account maintained at DTC
designated by the participant therein who so delivered such Series B
Preferred), as promptly as practicable after the Expiration Date or the
withdrawal or termination of the Offer.
Holders of Series B Preferred will not have any appraisal or
dissenters' rights under the Maryland General Corporation Law in connection
with the Offer. The Trust intends to conduct the Offer in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of
the Commission thereunder.
Holders who tender Series B Preferred in the Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the Letter of Transmittal, transfer taxes with respect to the exchange of
Series B Preferred pursuant to the Offer. See "Fees and Expenses; Transfer
Taxes".
Holders tendering Series B Preferred held in global form shall
receive Preferred Securities in global form and holders tendering Series B
Preferred held directly in certificated form shall receive Preferred
Securities in certificated form, in each case unless otherwise specified in
the Letter of Transmittal. See "Procedures for Tendering".
Expiration Date; Extensions; Amendments; Termination
The Offer will expire on the Expiration Date. The Trust reserves the
right to extend the Offer in its sole discretion at any time and from time to
time by giving oral or written notice to the Exchange Agent and by timely
public announcement communicated, unless otherwise required by applicable law
or regulation, by making a release to the Dow Jones News Service. During any
extension of the Offer, all Series B Preferred previously tendered pursuant to
the Offer and not withdrawn will remain subject to the Offer.
Except as provided below, the Trust expressly reserves the right to
(i) extend, amend or modify the terms of the Offer in any manner and (ii)
withdraw or terminate the Offer and not accept for exchange any Series B
Preferred at any time prior to the Expiration Date for any reason, including
(without limitation) if fewer than 2,810,000 shares of Series B are tendered
in the Offer (which conditions may be waived by SunAmerica and the Trust). If
the Trust makes a material change in the terms of the Offer or if it waives a
material condition of the Offer, the Trust will extend the Offer. The minimum
period for which the Offer will be extended following a material change or
waiver, other than a change in the amount of Series B Preferred sought for
exchange, will depend upon the facts and circumstances, including the relative
materiality of the change or waiver. With respect to a change in the amount
of Series B Preferred sought, if required, the Offer will remain open for a
minimum of ten Business Days following public announcement of such change.
Any withdrawal or termination of the Offer will be followed as promptly as
practicable by public announcement thereof. If the Trust withdraws or
terminates the Offer, it will give immediate notice to the Exchange Agent, and
all Series B Preferred theretofore tendered pursuant to the Offer will be
returned promptly to the tendering Holders thereof. See "-- Withdrawal of
Tenders". In order to satisfy the NYSE listing requirements, acceptance of
Series B Preferred validly tendered in the Offer is subject to the condition
that as of the Expiration Date there be at least 400 record or beneficial
holders of Preferred Securities to be issued in exchange for such Series B
Preferred, which condition may not be waived.
Procedures for Tendering
The tender of Series B Preferred by a Holder thereof pursuant to one
of the procedures set forth below will constitute an agreement between such
Holder and the Trust in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
Each Holder of the Series B Preferred wishing to participate in the
Offer must (i) properly complete and sign the Letter of Transmittal in
accordance with the instructions contained herein and in the Letter of
Transmittal, together with any required signature guarantees, and deliver the
same to the Exchange Agent, at one of its addresses set forth in "-- Exchange
Agent and Information Agent" prior to the Expiration Date and either (a)
certificates for the Series B Preferred must be received by the Exchange Agent
at such address or (b) such Series B Preferred must be transferred pursuant to
the procedures for book-entry transfer described below and a confirmation of
such book-entry transfer must be received by the Exchange Agent, in each case
prior to the Expiration Date or (ii) comply with the guaranteed delivery
procedures described below.
In order to participate in the Offer, Holders of Series B Preferred
must submit a Letter of Transmittal and comply with the other procedures for
tendering in accordance with the instructions contained herein and in the
Letter of Transmittal prior to the Expiration Date.
LETTERS OF TRANSMITTAL, SERIES B PREFERRED AND ANY OTHER REQUIRED DOCUMENTS
SHOULD BE SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE TRUST, THE DEALER
MANAGER OR THE INFORMATION AGENT.
Special Procedure for Beneficial Owners. Any beneficial owner whose
Series B Preferred is registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to tender should contact
such registered Holder promptly and instruct such registered Holder to tender
on such beneficial owner's behalf. If such beneficial owner wishes to tender
on its own behalf, such owner must, prior to completing and executing the
Letter of Transmittal and delivering its Series B Preferred, either make
appropriate arrangements to register ownership of the Series B Preferred in
such owner's name or obtain a properly completed stock power from the
registered Holder. The transfer of registered ownership may take considerable
time and may not be able to be completed prior to the Expiration Date.
THE METHOD OF DELIVERY OF SERIES B PREFERRED AND ALL OTHER DOCUMENTS
IS AT THE ELECTION AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED
THAT REGISTERED MAIL, RETURN RECEIPT REQUESTED, BE USED, INSURANCE BE
OBTAINED, AND THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION
DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.
Signature Guarantees. If tendered Series B Preferred is registered
in the name of the signer of the Letter of Transmittal and the Preferred
Securities to be issued in exchange therefor are to be issued (and any
untendered Series B Preferred is to be reissued) in the name of the registered
Holder (which term, for the purposes described herein, shall include any
participant in DTC whose name appears on a security listing as the owner of
Series B Preferred), the signature of such signer need not be guaranteed. If
the tendered Series B Preferred is registered in the name of someone other
than the signer of the Letter of Transmittal, or if Preferred Securities
issued in exchange therefor are to be issued in the name of any other person
other than the signer of the Letter of Transmittal, such tendered Series B
Preferred must be endorsed or accompanied by written instruments of transfer
in form satisfactory to the Trust and duly executed by the registered Holder,
and the signature on the endorsement or instrument of transfer must be
guaranteed by a financial institution (including most banks, savings and loans
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any
of the foregoing hereinafter referred to as an "Eligible Institution"). If
the Preferred Securities and/or the Series B Preferred not exchanged are to be
delivered to an address other than that of the registered Holder appearing on
the register for the Series B Preferred, the signature in the Letter of
Transmittal must be guaranteed by an Eligible Institution.
Book-Entry Transfer. The Trust understands that the Exchange Agent
will make a request promptly after the date of this Offering
Circular/Prospectus to establish accounts with respect to the Series B
Preferred at DTC for the purpose of facilitating the Offer, and subject to the
establishment thereof, any financial institution that is a participant in
DTC's system may make book-entry delivery of Series B Preferred by causing DTC
to transfer such Series B Preferred into the Exchange Agent's account with
respect to the Series B Preferred in accordance with DTC's Automated Tender
Offer Program ("ATOP") procedures for such book-entry transfers. However, the
exchange for the Series B Preferred so tendered will only be made after timely
confirmation (a "Book-Entry Confirmation") of such Book-Entry Transfer of
Series B Preferred into the Exchange Agent's account, and timely receipt by the
Exchange Agent of an Agent's Message (as such term is defined in the next
sentence) and any other documents required by the Letter of Transmittal. The
term "Agent's Message" means a message, transmitted by DTC and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from a participant tendering
Series B Preferred that is the subject of such Book-Entry Confirmation that
such participant has received and agrees to be bound by the terms of the
Letter of Transmittal, and that the Trust may enforce such agreement against
such participant.
Guaranteed Delivery. If a Holder desires to participate in the Offer
and time will not permit a Letter of Transmittal or Series B Preferred to
reach the Exchange Agent before the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if the Exchange Agent has received at its office prior to the
Expiration Date, a letter, telegram or facsimile transmission from an Eligible
Institution setting forth the name and address of the tendering Holder, the
name(s) in which the Series B Preferred is registered and, if the Series B
Preferred is held in certificated form, the certificate numbers of the Series
B Preferred to be tendered, and stating that the tender is being made thereby
and guaranteeing that within five NYSE trading days after the date of
execution of such letter, telegram or facsimile transmission by the Eligible
Institution, the Series B Preferred in proper form for transfer together with
a properly completed and duly executed Letter of Transmittal (and any other
required documents), or a confirmation of book-entry transfer of such Series B
Preferred into the Exchange Agent's account at DTC, will be delivered by such
Eligible Institution. Unless the Series B Preferred being tendered by the
above-described method is deposited with the Exchange Agent within the time
period set forth above (accompanied or preceded by a properly completed Letter
of Transmittal and any other required documents) or a confirmation of
book-entry transfer of such Series B Preferred into the Exchange Agent's
account at DTC in accordance with DTC's ATOP procedures is received, the Trust
may, at its option, reject the tender. In addition to the copy being
transmitted herewith, copies of a Notice of Guaranteed Delivery which may be
used by Eligible Institutions for the purposes described in this paragraph are
available from the Exchange Agent and the Information Agent.
Miscellaneous. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of
Series B Preferred will be determined by the Trust, whose determination will
be final and binding. The Trust reserves the absolute right to reject any or
all tenders not in proper form or the acceptance for exchange of which may, in
the opinion of the Trust's counsel, be unlawful. The Trust also reserves the
absolute right to waive any defect or irregularity in the tender of any Series
B Preferred, and the Trust's interpretation of the terms and conditions of the
Offer (including the instructions in the Letter of Transmittal) will be final
and binding. None of the Trust, the Exchange Agent, the Dealer Manager, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Tenders of Series B Preferred involving any irregularities will not
be deemed to have been made until such irregularities have been cured or
waived. Series B Preferred received by the Exchange Agent that is not validly
tendered and as to which the irregularities have not been cured or waived will
be returned by the Exchange Agent to the tendering Holder (or in the case of
Series B Preferred tendered by book-entry transfer into the Exchange Agent's
account at DTC, such Series B Preferred will be credited to an account
maintained at DTC designated by the participant therein who so delivered such
Series B Preferred), unless otherwise requested by the Holder in the Letter of
Transmittal, as promptly as practicable after the Expiration Date or the
withdrawal or termination of the Offer.
Letter of Transmittal
The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Offer.
The party tendering Series B Preferred for exchange (the
"Transferor") exchanges, assigns and transfers the Series B Preferred to the
Trust, and irrevocably constitutes and appoints the Exchange Agent as the
Transferor's agent and attorney-in-fact to cause the Series B Preferred to be
assigned, transferred and exchanged. The Transferor represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Series B Preferred and to acquire Preferred Securities issuable upon the
exchange of such tendered Series B Preferred and that, when such Transferor's
shares of Series B Preferred are accepted for exchange, the Trust will acquire
good and unencumbered title to such shares of tendered Series B Preferred, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim. The Transferor also warrants that it will, upon
request, execute and deliver any additional documents deemed by the Trust to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Series B Preferred or transfer ownership of such Series B Preferred
on the account books maintained by DTC. All authority conferred by the
Transferor will survive the death, bankruptcy or incapacity of the Transferor
and every obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors, assigns, executors and administrators of such
Transferor.
Withdrawal of Tenders
Tenders of Series B Preferred pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date and, unless accepted for exchange by
the Trust, may be withdrawn at any time after 40 Business Days from April
28, 1995.
To be effective, a written notice of withdrawal delivered by mail,
hand delivery or facsimile transmission must be timely received by the
Exchange Agent at the address set forth below under "-- Exchange Agent and
Information Agent". The method of notification is at the risk and election of
the Holder. Any such notice of withdrawal must specify (i) the Holder named
in the Letter of Transmittal as having tendered Series B Preferred to be
withdrawn, (ii) if the Series B Preferred is held in certificated form, the
certificate numbers of the Series B Preferred to be withdrawn, (iii) that such
Holder is withdrawing his election to have such Series B Preferred exchanged
and (iv) the name of the registered Holder of such Series B Preferred, and
must be signed by the Holder in the same manner as the original signature on
the Letter of Transmittal (including any required signature guarantees) or be
accompanied by evidence satisfactory to the Trust that the person withdrawing
the tender has succeeded to the beneficial ownership of the Series B Preferred
being withdrawn. The Exchange Agent will return the properly withdrawn Series
B Preferred promptly following receipt of notice of withdrawal. If Series B
Preferred has been tendered pursuant to the procedure for book-entry transfer,
any notice of withdrawal must specify the name and number of the account at
DTC to be credited with the withdrawn Series B Preferred and otherwise comply
with DTC's procedures. All questions as to the validity of notice of
withdrawal, including time of receipt, will be determined by the Trust, and
such determination will be final and binding on all parties. Withdrawals of
tenders of Series B Preferred may not be rescinded and any Series B Preferred
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Properly withdrawn Series B Preferred, however, may be retendered by
following the procedures therefor described elsewhere herein at any time prior
to the Expiration Date. See "-- Procedures for Tendering."
Acceptance of Shares and Proration
Upon the terms and subject to the conditions of the Offer, if
5,500,000 or fewer shares of Series B Preferred have been validly tendered and
not withdrawn prior to the Expiration Date, the Trust will accept for exchange
all such shares of Series B Preferred. Upon the terms and subject to the
conditions of the Offer, if more than 5,500,000 shares of Series B Preferred
(or, if decreased as described herein, such lesser number as the Trust may
elect to purchase pursuant to the Offer) have been validly tendered and not
withdrawn prior to the Expiration Date, the Trust will accept for exchange
shares of Series B Preferred from each tendering Holder on a pro rata basis,
subject to adjustment to avoid the acceptance for exchange of fractional
shares.
If the Trust decreases the amount of Series B Preferred sought, and
the Offer is scheduled to expire less than ten Business Days from and
including the date that notice of such decrease is first published, sent or
given in the manner specified in "-- Expiration Date; Extensions; Amendments;
Termination", then the Offer will be extended for ten Business Days from and
including the date of such notice.
All shares of Series B Preferred not accepted pursuant to the Offer,
including shares not purchased because of proration, will be returned to the
tendering Holders at the Trust's expense as promptly as practicable following
the Expiration Date.
Exchange Agent and Information Agent
The First National Bank of Chicago has been appointed as Exchange
Agent for the Offer.
The Exchange Agent:
The First National Bank of Chicago
By Hand or Overnight Courier in By Hand or Overnight Courier in
Chicago: New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission
(For Eligible Institutions Only):
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
Georgeson & Company Inc. has been retained by SunAmerica and the
Trust as the Information Agent to assist in connection with the Offer.
Questions and requests for assistance regarding the Offer, requests for
additional copies of this Offering Circular/Prospectus, the Letter of
Transmittal and requests for Notice of Guaranteed Delivery may be directed to
the Information Agent at Wall Street Plaza, New York, New York 10005. Banks
and brokers call collect: (212) 440-9800; all others telephone (800) 223-2064.
SunAmerica will pay the Exchange Agent and Information Agent
reasonable and customary fees for their services and will reimburse them for
all their reasonable out-of-pocket expenses in connection therewith.
Dealer Manager; Soliciting Dealers
Merrill Lynch & Co., as Dealer Manager, has agreed to solicit
exchanges of Series B Preferred for Preferred Securities. SunAmerica will pay
the Dealer Manager a fee of $0.125 per share of Series B Preferred accepted
pursuant to the Offer. The maximum fee payable to the Dealer Manager is
approximately $687,500 plus such amount, if any, that Merrill Lynch & Co. may
be entitled to pursuant to the next paragraph. SunAmerica will also reimburse
the Dealer Manager for certain reasonable out-of-pocket expenses in connection
with the Offer and will indemnify the Dealer Manager against certain
liabilities, including liabilities under the Securities Act. Merrill Lynch &
Co. engages in transactions with, and from time to time has performed services
for, SunAmerica, including acting as lead underwriter for the issuance of the
Series B Preferred.
The Company will pay to a Soliciting Dealer a solicitation fee of
$0.50 per share of Series B Preferred validly tendered and accepted for
exchange pursuant to the Offer. As used in this Offering Circular/Prospectus,
"Soliciting Dealer" includes (i) any broker or dealer in securities, including
the Dealer Manager in its capacity as a broker or dealer, who is a member of
any national securities exchange or of the National Association of Securities
Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for
membership in the NASD who agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member, or (iii) any bank or trust company, any one of
whom has solicited and obtained a tender pursuant to the Offer. No such fee
shall be payable to a Soliciting Dealer in respect of shares of Series B
Preferred registered in the name of such Soliciting Dealer unless such shares
are held by such Soliciting Dealer as nominee and such shares are being
tendered for the benefit of one or more beneficial owners identified on the
Letter of Transmittal or on the Notice of Solicited Tenders (included in the
materials provided to brokers and dealers). No such fee shall be payable to a
Soliciting Dealer with respect to the tender of shares of Series B Preferred
by a holder unless the Letter of Transmittal accompanying such tender
designates such Soliciting Dealer as such in the box captioned "Solicited
Tenders" or the Notice of Solicited Tenders accompanying such tender
designates such Soliciting Dealer. No such fee shall be payable to the
Soliciting Dealer with respect to the tender of shares of Series B Preferred
by the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. No such fee shall be
payable to the Soliciting Dealer unless the Soliciting Dealer returns a Notice
of Solicited Tenders to the Exchange Agent within 5 business days after the
Expiration Date. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a depositing holder. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be the agent of SunAmerica, the Trust, the
Exchange Agent, the Information Agent or the Dealer Manager for purposes of
the Offer. Soliciting Dealers are not entitled to a solicitation fee for
shares of Series B Preferred beneficially owned by such Soliciting Dealer.
The maximum fee payable to Soliciting Dealers is $2,750,000, exclusive of
the amount that Merrill Lynch & Co. is entitled to pursuant to the
preceding paragraph.
Additional solicitation may be made by telephone or in person by
officers and regular employees of SunAmerica and its affiliates. No
additional compensation will be paid to any such officers and employees who
engage in soliciting tenders.
LISTING AND TRADING OF PREFERRED SECURITIES AND SERIES B PREFERRED
The Preferred Securities constitute a new issue of securities with
no established trading market. While the Preferred Securities have been
approved for listing on the NYSE, subject to notice of issuance, there can be
no assurance that an active market for the Preferred Securities will develop
or be sustained in the future on such exchange. Although the Dealer Manager
has indicated to the Trust that it intends to make a market in the Preferred
Securities as permitted by applicable laws and regulations prior to the
commencement of trading on the NYSE, it is not obligated to do so and may
discontinue any such market-making at any time without notice. Accordingly,
no assurance can be given as to the liquidity of, or trading markets for, the
Preferred Securities. In order to satisfy the NYSE listing requirements,
acceptance of Series B Preferred validly tendered in the Offer is subject to
the condition that as of the Expiration Date there be at least 400 record or
beneficial holders of Preferred Securities to be issued in exchange for such
Series B Preferred, which condition may not be waived.
To the extent that Series B Preferred is tendered and accepted in the
Offer, the terms on which untendered Series B Preferred could subsequently be
sold could be adversely affected. In addition, if the Offer is substantially
subscribed or oversubscribed, there would be a significant risk that round lot
holdings of Series B Preferred outstanding following the Offer would be
limited. See "Risk Factors -- Listing and Trading of Preferred Securities and
Series B Preferred".
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OFFER
Except as described herein, there are no contracts, arrangements,
understandings or relationships in connection with the Offer between
SunAmerica or any of its directors or executive officers, the Trust or the
Trustees and any person with respect to any securities of SunAmerica or the
Trust, including the Junior Subordinated Debentures, the Series B Preferred
and the Preferred Securities.
FEES AND EXPENSES; TRANSFER TAXES
The expenses of soliciting tenders of the Series B Preferred will be
borne by SunAmerica. For compensation to be paid to the Dealer Manager and
Soliciting Dealers, see "The Offer -- Dealer Manager; Soliciting Dealers".
The total cash expenditures to be incurred by SunAmerica in connection with
the Offer, other than fees payable to the Dealer Manager and Soliciting
Dealers, but including the expenses of the Dealer Manager, printing,
accounting and legal fees, and the fees and expenses of the Exchange Agent,
the Information Agent, the Property Trustee, the Delaware Trustee and the
Indenture Trustee, are estimated to be approximately $750,000.
SunAmerica will pay all transfer taxes, if any, applicable to the
exchange of Series B Preferred pursuant to the Offer. If, however,
certificates representing Preferred Securities or shares of Series B Preferred
not tendered or accepted for exchange, are to be delivered to, or are to be
issued in the name of, any person other than the registered Holder of the
Series B Preferred tendered or if a transfer tax is imposed for any reason
other than the exchange of Series B Preferred pursuant to the Offer, then the
amount of any such transfer taxes (whether imposed on the registered Holder or
any other persons) will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
the Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering Holder.
PRICE RANGE OF SERIES B PREFERRED
The Series B Preferred is listed and principally traded on the NYSE.
The following table sets forth, for each period shown, the high and low sales
prices of the Series B Preferred as reported on the NYSE Composite Tape.
Fiscal Year Ended High Low
September 30, 1993 ------- -------
1st Quarter.............................. $26 3/8 $24 7/8
2nd Quarter.............................. $27 $25 1/2
3rd Quarter.............................. $27 7/8 $26 5/8
4th Quarter.............................. $28 1/4 $27 1/8
Fiscal Year Ended High Low
September 30, 1994 ------- -------
1st Quarter.............................. $28 5/8 $26 1/2
2nd Quarter.............................. $27 7/8 $25 1/2
3rd Quarter.............................. $26 1/2 $25
4th Quarter.............................. $26 1/2 $25 1/4
Fiscal Year Ending High Low
September 30, 1995 ------- -------
1st Quarter.............................. $25 1/2 $24 1/2
2nd Quarter.............................. $26 1/2 $25
3rd Quarter (through April 26, 1995)...... $26 5/8 $25 7/8
On December 19, 1994, the last full day of trading prior to the first
public announcement of the Offer, the closing sales price of the Series B
Preferred on the NYSE as reported on the Composite Tape was $25 3/8 per share.
Stockholders are urged to obtain a current market quotation for the Series B
Preferred.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration which is qualified under the Trust Indenture Act. The Property
Trustee, The Bank of New York, but not the other Trustees of the Trust, will
act as the indenture trustee for purposes of the Trust Indenture Act. The
terms of the Preferred Securities and the Declaration include those stated in
the Declaration and those made part of the Declaration by the Trust Indenture
Act. The summary of certain material terms and provisions of the Preferred
Securities and the Declaration set forth below does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declaration, which has been filed as an exhibit to the Registration Statement
of which this Offering Circular/Prospectus forms a part, the Business Trust
Act and the Trust Indenture Act.
General
The Declaration authorizes the Trust to issue the Preferred
Securities, which represent preferred undivided beneficial interests in the
assets of the Trust, and the Common Securities, which represent common
undivided beneficial interests in the assets of the Trust. All of the Common
Securities will be owned, directly or indirectly, by SunAmerica. The Common
Securities and the Preferred Securities rank pari passu with each other and
will have equivalent terms except that (i) if an Event of Default under the
Declaration occurs and is continuing, the rights of the holders of the Common
Securities to payment in respect of periodic distributions and payments upon
liquidation, redemption or otherwise are subordinated to the rights of the
holders of the Preferred Securities and (ii) holders of Common Securities have
the exclusive right (subject to the terms of the Declaration) to appoint,
remove or replace Trustees and to increase or decrease the number of Trustees,
subject to the right of holders of Preferred Securities to appoint a Special
Regular Trustee upon the occurrence of an Appointment Event. The Declaration
does not permit the issuance by the Trust of any securities or other evidences
of beneficial ownership of, or beneficial interests in, the Trust other than
the Preferred Securities and the Common Securities, the incurrence of any
indebtedness for borrowed money by the Trust or the making of any investment
other than in the Junior Subordinated Debentures. Pursuant to the
Declaration, the Property Trustee will own and hold the Junior Subordinated
Debentures as trust assets for the benefit of the holders of the Preferred
Securities and the Common Securities. The payment of distributions out of
moneys held by the Property Trustee and payments on redemption of the
Preferred Securities or liquidation of the Trust are guaranteed by SunAmerica
on a subordinated basis as and to the extent described under "Description of
the Preferred Securities Guarantee." The Property Trustee will hold the
Preferred Securities Guarantee for the benefit of holders of the Preferred
Securities. The Preferred Securities Guarantee is a full and unconditional
guarantee from the time of issuance of the Preferred Securities, but the
Preferred Securities Guarantee covers distributions and other payments on the
Preferred Securities only if and to the extent that SunAmerica has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debentures deposited in the Trust as trust assets. See "Voting
Rights".
Distributions
Distributions on the Preferred Securities will be fixed at a rate per
annum of 9.95% of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon
at the rate per annum of 9.95% of the stated liquidation amount of $25 per
Preferred Security (to the extent permitted by law), compounded quarterly.
The term "distributions" as used herein includes any such interest payable
unless otherwise stated. The amount of distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months and
for any period shorter than a full quarterly period for which distributions are
computed, the amount of the distribution payable will be computed on the basis
of the actual number of days elapsed in such a 30-day month.
Distributions on the Preferred Securities will be cumulative, will
accrue from the first day following the Expiration Date (the "Accrual Date")
and, except as otherwise described below, will be payable quarterly in
arrears, on March 30, June 30, September 30 and December 30 of each year,
commencing on June 30, 1995, but only if, and to the extent that, interest
payments are made in respect of Junior Subordinated Debentures held by the
Property Trustee. In addition, holders of Preferred Securities will be
entitled to an additional cash distribution at the rate of 9 1/4% per annum of
the liquidation amount thereof from March 15, 1995 through the Expiration Date
in lieu of dividends accumulating after March 15, 1995 on their Series B
Preferred accepted for exchange, such additional distribution to be made at the
time the first distribution on the Preferred Securities is made.
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica has the right under
the Indenture to defer payments of interest on the Junior Subordinated
Debentures by extending the interest payment period from time to time on the
Junior Subordinated Debentures for a period not exceeding 20 consecutive
quarterly interest periods and, as a consequence, quarterly distributions on
the Preferred Securities would not be made (but would continue to accrue with
interest thereon at the rate of 9.95% per annum, compounded quarterly) by the
Trust during any such Extension Period. If SunAmerica exercises the right to
extend an interest payment period, SunAmerica may not declare or pay dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock during such
Extension Period; provided that SunAmerica will be permitted to pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion of any
of its Series D Preferred Stock in accordance with the terms of such stock.
Prior to the termination of any such Extension Period, SunAmerica may further
extend such Extension Period; provided that such Extension Period together
with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Upon the termination of any Extension
Period and the payment of all amounts then due, SunAmerica may commence a new
Extension Period, subject to the above requirements. SunAmerica may also
prepay at any time all or any portion of the interest accrued during an
Extension Period. Consequently, there could be multiple Extension Periods of
varying lengths (up to nine Extension Periods of 20 consecutive quarterly
interest periods each or more numerous shorter Extension Periods) throughout
the term of the Junior Subordinated Debentures. See "Risk Factors";
"Description of the Junior Subordinated Debentures -- Interest" and "-- Option
to Extend Interest Payment Period". Payments of accrued distributions will be
payable to holders of Preferred Securities as they appear on the books and
records of the Trust on the first record date after the end of an Extension
Period.
Distributions on the Preferred Securities must be paid on the dates
payable to the extent that the Property Trustee has cash on hand in the
Property Account to permit such payment. The funds available for distribution
to the holders of the Preferred Securities will be limited to payments
received by the Property Trustee in respect of the Junior Subordinated
Debentures that are deposited in the Trust as trust assets. See "Description
of the Junior Subordinated Debentures". If SunAmerica does not make interest
payments on the Junior Subordinated Debentures, the Property Trustee will not
make distributions on the Preferred Securities. Under the Declaration, if and
to the extent SunAmerica does make interest payments on the Junior
Subordinated Debentures deposited in the Trust as trust assets, the Property
Trustee is obligated to make distributions on the Trust Securities on a Pro
Rata Basis. The payment of distributions on the Preferred Securities is
guaranteed by SunAmerica on a subordinated basis as and to the extent set
forth under "Description of the Preferred Securities Guarantee". The Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities but the Preferred Securities Guarantee
covers distributions and other payments on the Preferred Securities only if
and to the extent that SunAmerica has made a payment to the Property Trustee
of interest or principal on the Junior Subordinated Debentures deposited in
the Trust as trust assets. As used in this Offering Circular/Prospectus the
term "Pro Rata Basis" shall mean pro rata to each holder of Trust Securities
according to the aggregate liquidation amount of the Trust Securities held by
the relevant holder in relation to the aggregate liquidation amount of all
Trust Securities outstanding unless, in relation to a payment, an 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 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 outstanding,
and only after satisfaction of all amounts owed to the holders of the
Preferred Securities, to each holder of Common Securities pro rata according
to the aggregate liquidation amount of the Common Securities held by the
relevant holder in relation to the aggregate liquidation amount of all the
Common Securities outstanding.
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which will be the March 15, June 15, September 15 or December 15
prior to the relevant Distribution payment date. The Declaration provides
that the payment dates or record dates for the Preferred Securities shall
be the same as the payment dates and record dates for the Junior
Subordinated Debentures. Distributions payable on any Preferred Securities
that are not punctually paid on any Distribution date as a result of
SunAmerica having failed to make the corresponding interest payment on the
Junior Subordinated Debentures will forthwith cease to be payable to the
person in whose name such Preferred Security is registered on the relevant
record date, and such defaulted Distribution will instead be payable to the
person in whose name such Preferred Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within
an Extension Period unless SunAmerica has elected to make a full or partial
payment of interest accrued on the Junior Subordinated Debentures on such
Distribution payment date. Distributions on the Preferred Securities will
be paid through the Property Trustee who will hold amounts received in
respect of the Junior Subordinated Debentures in the Property Account for
the benefit of the holders of the Preferred and Common Securities. All
distributions paid with respect to the Trust Securities shall be paid on a
Pro Rata Basis to the holders thereof entitled thereto. If any date on
which distributions are to be made on the Preferred Securities is not a
Business Day, then payment of the distribution to be made on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date.
Special Event Redemption or Distribution
If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Trust shall, unless the Junior Subordinated Debentures are
redeemed in the limited circumstances described below, be dissolved with the
result that, after satisfaction of creditors of the Trust, Junior Subordinated
Debentures with an aggregate principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities and the Common Securities would
be distributed on a Pro Rata Basis to the holders of the Preferred Securities
and the Common Securities in liquidation of such holders' interests in the
Trust, within 90 days following the occurrence of such Special Event;
provided, however, that in the case of the occurrence of a Tax Event, as a
condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may
rely on any then applicable published revenue rulings of the Internal Revenue
Service, to the effect that the holders of the Preferred Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such dissolution and distribution of Junior Subordinated Debentures;
and, provided, further, that, if at the time there is available to the Trust
the opportunity to eliminate, within such 90 day period, the Special Event by
taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure, which has no adverse effect
on the Trust or SunAmerica or the holders of the Preferred Securities, the
Trust will pursue such measure in lieu of dissolution. Furthermore, if in the
case of the occurrence of a Tax Event, (i) the Regular Trustees have received
an opinion (a "Redemption Tax Opinion") of nationally recognized independent
tax counsel experienced in such matters that, as a result of a Tax Event,
there is more than an insubstantial risk that SunAmerica would be precluded
from deducting the interest on the Junior Subordinated Debentures for United
States federal income tax purposes even if the Junior Subordinated Debentures
were distributed to the holders of Preferred Securities and Common Securities
in liquidation of such holders' interests in the Trust as described above or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust, SunAmerica shall have
the right, upon not less than 30 nor more than 60 days notice, to redeem the
Junior Subordinated Debentures in whole or in part for cash within 90 days
following the occurrence of such Tax Event, and promptly following such
redemption Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a Pro Rata Basis; provided, however, that if at the time
there is available to SunAmerica or the Regular Trustees the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some ministerial
action, such as filing a form or making an election, or pursuing some other
similar reasonable measure, which has no adverse effect on the Trust,
SunAmerica or the holders of the Preferred Securities, SunAmerica will pursue
such measure in lieu of redemption and provided further that SunAmerica shall
have no right to redeem the Junior Subordinated Debentures while the Regular
Trustees on behalf of the Trust are pursuing any such ministerial action. The
Common Securities will be redeemed on a Pro Rata Basis with the Preferred
Securities, except that if an Event of Default under the Declaration has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after the
Expiration Date as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation and
the publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the Expiration Date, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges or (iii) interest payable by SunAmerica to the Trust on the Junior
Subordinated Debentures is not, or within 90 days of the date thereof will not
be, deductible by SunAmerica for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced
in practice under the Investment Company Act of 1940, as amended (the "1940
Act"), that as a result of the occurrence of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), there is more than an insubstantial risk that the
Trust is or will be considered an "investment company" which is required to be
registered under the 1940 Act, which Change in 1940 Act Law becomes effective
on or after the Expiration Date.
On the date fixed for any distribution of Junior Subordinated
Debentures, upon dissolution of the Trust, (i) the Preferred Securities and
the Common Securities will no longer be deemed to be outstanding and (ii)
certificates representing Preferred Securities will be deemed to represent
Junior Subordinated Debentures having an aggregate principal amount equal to
the stated liquidation amount of, and bearing accrued and unpaid interest
equal to accrued and unpaid distributions on, such Preferred Securities until
such certificates are presented to SunAmerica or its agent for transfer or
reissuance.
There can be no assurance as to the market price for the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Junior Subordinated Debentures which the investor may
subsequently receive on dissolution and liquidation of the Trust, may trade at
a discount to the price of the Preferred Securities exchanged. If the Junior
Subordinated Debentures are distributed to the holders of Preferred Securities
upon the dissolution of the Trust, SunAmerica will use its best efforts to
list the Junior Subordinated Debentures on the NYSE or on such other exchange
on which the Preferred Securities are then listed.
Mandatory Redemption
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity, upon redemption or otherwise, the proceeds from such repayment or
payment will be promptly applied to redeem Preferred Securities and Common
Securities having an aggregate liquidation amount equal to the Junior
Subordinated Debentures so repaid, upon not less than 30 nor more than 60
days' notice, at the Redemption Price. The Common Securities will be entitled
to be redeemed on a Pro Rata Basis with the Preferred Securities, except that
if an Event of Default under the Declaration has occurred and is continuing,
the Preferred Securities will have a priority over the Common Securities with
respect to payment of the Redemption Price. Subject to the foregoing, if
fewer than all outstanding Preferred Securities and Common Securities are to be
redeemed, the Preferred Securities and Common Securities will be redeemed on a
Pro Rata Basis. In the event fewer than all outstanding Preferred Securities
are to be redeemed, Preferred Securities registered in the name of and held by
DTC or its nominee will be redeemed pro rata as described under
"Book-Entry-Only; Delivery and Form" below.
Redemption Procedures
The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable) then immediately prior to the
close of business on the redemption date, provided that SunAmerica has paid to
the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Junior Subordinated Debentures,
distributions will cease to accrue on the Preferred Securities called for
redemption, such Preferred Securities shall no longer be deemed to be
outstanding and all rights of holders of such Preferred Securities so called
for redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Preferred Securities
which have been so called for redemption. If any date fixed for redemption
of Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.
If SunAmerica fails to repay Junior Subordinated Debentures on maturity or on
the date fixed for this redemption or if payment of the Redemption Price in
respect of Preferred Securities is improperly withheld or refused and not paid
by the Property Trustee or by SunAmerica pursuant to the Preferred Securities
Guarantee described under "Description of the Preferred Securities Guarantee",
distributions on such Preferred Securities will continue to accrue, from the
original redemption date of the Preferred Securities to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
If a partial redemption of the Preferred Securities would result in
the delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed,
SunAmerica pursuant to the Indenture will only redeem Debentures in whole and,
as a result, the Trust may only redeem the Preferred Securities in whole.
Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), SunAmerica or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary dissolution,
liquidation, winding-up or termination of the Trust, the holders of the
Preferred Securities and Common Securities at the date of dissolution,
winding-up or termination of the Trust will be entitled to receive on a Pro
Rata Basis solely out of the assets of the Trust, after satisfaction of
liabilities of creditors (to the extent not satisfied by SunAmerica as
provided in the Declaration), an amount equal to the aggregate of the stated
liquidation amount of $25 per Trust Security plus accrued and unpaid
distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
liquidation, winding-up or termination, Junior Subordinated Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Trust Securities and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid distributions on such Trust Securities, shall
be distributed on a Pro Rata Basis to the holders of the Preferred Securities
and Common Securities in exchange therefor.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid on a Pro Rata Basis. The holders of the Common Securities will
be entitled to receive distributions upon any such dissolution on a Pro Rata
Basis with the holders of the Preferred Securities, except that if an Event of
Default under the Declaration has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
payment of the Liquidation Distribution.
Pursuant to the Declaration, the Trust shall terminate: (i) on
December 31, 2044, (ii) when all of the Trust Securities shall have been
called for redemption and the amounts necessary for redemption thereof shall
have been paid to the holders of Trust Securities in accordance with the terms
of the Trust Securities, or (iii) when all of the Junior Subordinated
Debentures shall have been distributed to the holders of Trust Securities in
exchange for all of the Trust Securities in accordance with the terms of the
Trust Securities.
No Merger, Consolidation or Amalgamation of the Trust
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets to, any
corporation or other entity.
Declaration Events of Default
An Indenture Event of Default will constitute an event of default
under the Declaration with respect to the Trust Securities (an "Event of
Default"); provided that pursuant to the Declaration, the holder of the Common
Securities will be deemed to have waived any such Event of Default with
respect to the Common Securities until all Events of Default with respect to
the Preferred Securities have been cured or waived. Until all such Events of
Default with respect to the Preferred Securities 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, and only the holders of the Preferred
Securities will have the right to direct the Property Trustee with respect to
certain matters under the Declaration and consequently under the Indenture.
In the event that any Event of Default with respect to the Preferred Securities
is waived by the holders of the Preferred Securities as provided in the
Declaration, the holders of Common Securities pursuant to the Declaration have
agreed that such waiver also constitutes a waiver of such 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. See "Voting Rights".
Upon the occurrence of an Event of Default, the Property Trustee as
the holder of all of the Junior Subordinated Debentures will have the right
under the Indenture to declare the principal of and interest on the Junior
Subordinated Debentures to be immediately due and payable. In addition, the
Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture. See "Description of the Junior Subordinated
Debentures".
Voting Rights
Except as provided below, under "Modification and Amendment of the
Declaration" and "Description of the Preferred Securities Guarantee --
Amendments and Assignment" and as otherwise required by the Business Trust
Act, the Trust Indenture Act and the Declaration, the holders of the Preferred
Securities will have no voting rights.
If (i) the Trust fails to make distributions in full on the Preferred
Securities for 6 consecutive quarterly distribution periods, or (ii) an Event
of Default under the Declaration occurs and is continuing (each, an
"Appointment Event"), then the holders of the Preferred Securities, acting as
a single class, will be entitled, by the vote of holders of Preferred
Securities representing a majority in aggregate liquidation amount of the
outstanding Preferred Securities, to appoint a Special Regular Trustee (who
need not be an officer or an employee of or otherwise affiliated with
SunAmerica) who shall have the same rights, powers and privileges under the
Declaration as the Regular Trustees. Any holder of Preferred Securities
(other than SunAmerica or any of its affiliates) shall have the right to
nominate any person to be appointed as Special Regular Trustee. For purposes
of determining whether the Trust has failed to pay distributions in full for 6
consecutive quarterly distribution periods, distributions shall be deemed to
remain in arrears, notwithstanding any payments in respect thereof, until full
cumulative distributions have been or contemporaneously are paid with respect
to all quarterly distribution periods terminating on or prior to the date of
payment of such cumulative distributions. Not later than 30 days after such
right to appoint a Special Regular Trustee arises, the Regular Trustees will
convene a meeting for the purpose of appointing a Special Regular Trustee. If
the Regular Trustees fail to convene such meeting within such 30-day period,
the holders of Preferred Securities representing 10% in liquidation amount of
the outstanding Preferred Securities will be entitled to convene such meeting.
The provisions of the Declaration relating to the convening and conduct of the
meetings of the holders will apply with respect to any such meeting. If, at
any such meeting, holders of less than a majority in aggregate liquidation
amount of Preferred Securities entitled to vote for the appointment of a
Special Regular Trustee vote for such appointment, no Special Regular Trustee
shall be appointed. Any Special Regular Trustee may be removed without cause
at any time by holders of Preferred Securities representing a majority in
liquidation amount of the Preferred Securities and holders of Preferred
Securities representing 10% in liquidation amount of the Preferred Securities
shall be entitled to convene a meeting for such purpose. Any Special Regular
Trustee appointed shall cease to be a Special Regular Trustee if the
Appointment Event pursuant to which the Special Regular Trustee was appointed
and all other Appointment Events have been cured and cease to be continuing.
Notwithstanding the appointment of any such Special Regular Trustee,
SunAmerica shall retain all rights under the Indenture, including the right to
extend the interest payment period as provided under "Description of the Junior
Subordinated Debentures -- Option to Extend Interest Payment Period". If such
an extension occurs, there will be no Indenture Event of Default for failure
to make any scheduled interest payment during the Extension Period on the date
originally scheduled.
Subject to the requirements of the second to last sentence of this
paragraph, the holders of a majority in aggregate liquidation amount of the
Preferred Securities have the right (i) on behalf of all holders of Trust
Securities, to waive any past default that is waivable under the Declaration
and (ii) to direct the time, method and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including the right
to direct the Property Trustee, as the holder of the Junior Subordinated
Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising
any trust or power conferred on the Indenture Trustee with respect to the
Junior Subordinated Debentures, (ii) waive any past default that is waivable
under Section 6.06 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Junior Subordinated
Debentures shall be due and payable; provided that where a consent under the
Indenture would require the consent of (1) holders of Junior Subordinated
Debentures representing a specified percentage greater than a majority in
principal amount of the Junior Subordinated Debentures or (2) each holder of
Junior Subordinated Debentures affected thereby, no such consent shall be
given by the Property Trustee without the prior consent of, in the case of
clause (1) above, holders of Preferred Securities representing such specified
percentage of the aggregate liquidation amount of the Preferred Securities or,
in the case of clause (2) above, each holder of all Preferred Securities
affected thereby. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the holders of Preferred Securities. The
Property Trustee shall notify all holders of record of Preferred Securities of
any notice of default received from the Indenture Trustee with respect to the
Junior Subordinated Debentures. Other than with respect to directing the
time, method and place of conducting any proceeding for any remedy available
to the Property Trustee or the Indenture Trustee as set forth above, the
Property Trustee shall be under no obligation to take any of the foregoing
actions at the direction of the holders of the Preferred Securities unless the
Property Trustee shall have obtained an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that the Trust will not be classified for United States federal income tax
purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action. If the Property
Trustee fails to enforce its rights under the Declaration (including, without
limitation, its rights, powers and privileges as a holder of the Debentures
under the Indenture), 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, institute a legal proceeding directly against
SunAmerica to enforce the Property Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Property Trustee or
any other Person.
A waiver of an Indenture Event of Default by the Property Trustee at
the direction of holders of the Preferred Securities will constitute a waiver
of the corresponding Event of Default under the Declaration in respect of the
Trust Securities.
In the event the consent of the Property Trustee as the holder of the
Junior Subordinated Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, the Property Trustee shall request the direction of
the holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a majority in liquidation amount of
the Trust Securities voting together as a single class; provided, however,
that where any such amendment, modification or termination under the Indenture
would require the consent of holders of Junior Subordinated Debentures
representing a specified percentage greater than a majority in principal
amount of the Junior Subordinated Debentures, the Property Trustee may only
give such consent at the direction of the holders of Trust Securities
representing such specified percentage of the aggregate liquidation amount of
the Trust Securities; and, provided, further, that the Property Trustee shall
be under no obligation to take any such action in accordance with the
directions of the holders of the Trust Securities unless the Property Trustee
has obtained an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will
be treated as a grantor trust for United States federal income tax purposes
following such action.
Any required approval or direction of holders of Preferred Securities
may be given at a separate meeting of holders of Preferred Securities convened
for such purpose, at a meeting of all of the holders of Trust Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or distribute
Junior Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by SunAmerica or by any
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with SunAmerica shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
The procedures by which persons owning Preferred Securities
registered in the name of and held by DTC or its nominee may exercise their
voting rights are described under "Book-Entry; Delivery and Form" below.
Subject to the right of holders of Preferred Securities to appoint
a Special Regular Trustee upon the occurrence of an Appointment Event, holders
of the Preferred Securities will have no rights to increase or decrease the
number of Trustees or to appoint, remove or replace a Trustee, which rights
are vested exclusively in the holders of the Common Securities.
Modification and Amendment of the Declaration
The Declaration may be modified and amended on approval of a majority
of the Regular Trustees, provided that, (i) if any proposed modification or
amendment provides for, or the Regular Trustees otherwise propose to effect,
(A) any action that would adversely affect the powers, preferences or special
rights of the Trust Securities, whether by way of amendment to the Declaration
or otherwise, or (B) the dissolution, winding-up or termination of the Trust
other than pursuant to the terms of the Declaration, then the holders of the
outstanding Trust Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least 66 2/3% in liquidation amount of the Trust
Securities, provided that if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of 66 2/3% in liquidation amount of such class of
Securities.
Notwithstanding the foregoing, (i) no amendment or modification may
be made to the Declaration unless the Regular Trustees shall have obtained (A)
either a ruling from the Internal Revenue Service or a written unqualified
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the Trust to be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust
will continue to be treated as a grantor trust for purposes of United States
federal income taxation and (B) a written unqualified opinion of nationally
recognized independent counsel experienced in such matters to the effect that
such amendment will not cause the Trust to be an "investment company" which
is required to be registered under the 1940 Act; (ii) certain specified
provisions of the Declaration may not be amended without the consent of all of
the holders of the Trust Securities, (iii) no amendment which adversely
affects the rights, powers and privileges of the Property Trustee shall be
made without the consent of the Property Trustee, (iv) Article IV of the
Declaration relating to the obligation of SunAmerica to purchase the Common
Securities and to pay certain obligations and expenses of the Trust as
described under "SunAmerica Capital Trust I" may not be amended without the
consent of SunAmerica, (v) the rights of holders of Common Securities under
Article V of the Declaration to increase or decrease the number of, and to
appoint, replace or remove, Trustees (other than a Special Regular Trustee)
shall not be amended without the consent of each holder of Common Securities
and (vi) the rights of holders of Preferred Securities under the Declaration to
appoint or remove a Special Regular Trustee shall not be amended without the
consent of each holder of Preferred Securities.
The Declaration further provides that it may be amended without the
consent of the holders of the Trust Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective
or inconsistent with any other provision of this Declaration, (iii) to add to
the covenants, restrictions or obligations of SunAmerica, and (iv) to conform
to changes in, or a change in interpretation or application of certain 1940
Act requirements by the Commission, which amendment does not adversely affect
the rights, preferences or privileges of the holders.
Book-Entry; Delivery and Form
Preferred Securities will be issued in fully registered form.
Investors may elect to hold their Preferred Securities directly or, subject to
the rules and procedures of DTC described below, hold interests in a global
certificate (the "Preferred Securities Global Certificate") registered in the
name of DTC or its nominee. However, tendering holders of Series B Preferred
held in global form shall initially receive an interest in the Preferred
Securities Global Certificate and tendering holders of Series B Preferred held
directly in certificated form shall initially receive Preferred Securities in
certificated form, in each case unless otherwise specified in the Letter of
Transmittal. See "The Offer - Procedures for Tendering".
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities that its participants ("Participants") deposit with
DTC. DTC also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by
the NYSE, the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Upon issuance of a Preferred Securities Global Certificate, DTC will
credit on its book-entry registration and transfer system the number of
Preferred Securities represented by such Preferred Securities Global
Certificate to the accounts of institutions that have accounts with DTC.
Ownership of beneficial interests in a Preferred Securities Global Certificate
will be limited to Participants or persons that may hold interests through
Participants. The ownership interest of each actual purchaser of each
Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in the Preferred
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers. So long as
DTC, or its nominee, is the owner of a Preferred Securities Global
Certificate, DTC or such nominee, as the case may be, will be considered the
sole owner and holder of record of the Preferred Securities represented by such
Preferred Securities Global Certificate for all purposes.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of
the Preferred Securities are being redeemed, DTC will reduce pro rata (subject
to adjustment to eliminate fractional Preferred Securities) the amount of
interest of each Direct Participant in the Preferred Securities to be redeemed.
Although voting with respect to the Preferred Securities is limited,
in those instances in which a vote is required, neither DTC nor Cede & Co.
itself will consent or vote with respect to Preferred Securities. Under its
usual procedures, DTC would mail an Omnibus Proxy to the Trust as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities represented by a
Preferred Series Global Certificate will be made by the Property Trustee to
DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participants and not of DTC, the Trust or
SunAmerica, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to DTC is the
responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository
with respect to the Preferred Securities at any time by giving reasonable
notice to the Trust. Under such circumstances, if a successor securities
depository is not obtained, Preferred Security certificates will be required
to be printed and delivered. Additionally, the Trust may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depository). In that event, certificates for the Preferred
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Trust and SunAmerica believe to
be reliable, but the Trust and SunAmerica take no responsibility for the
accuracy thereof.
Registrar, Transfer Agent and Paying Agent
Payment of distributions and payments on redemption of the Preferred
Securities will be payable, the transfer of the Preferred Securities will be
registrable, and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate liquidation amount, at
the principal corporate trust office of the Property Trustee in The City of
New York; provided that payment of distributions may be made at the option of
the Regular Trustees on behalf of the Trust by check mailed to the address of
the persons entitled thereto and that the payment on redemption of any
Preferred Security will be made only upon surrender of such Preferred Security
to the Property Trustee.
The Bank of New York or one of its affiliates will act as registrar
and transfer agent for the Preferred Securities. The Bank of New York will
also act as paying agent and, with the consent of the Regular Trustees, may
designate additional paying agents.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or SunAmerica may require) in respect of any
tax or other governmental charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
Information Concerning the Property Trustee
The Property Trustee, prior to a default with respect to the Trust
Securities, undertakes to perform only such duties as are specifically set
forth in the Declaration 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. Subject to such provision, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Declaration at
the request of any holder of Preferred Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which
might be incurred thereby. The Property 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 Property Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
SunAmerica and certain of its affiliates maintain a deposit account
and banking relationship with the Property Trustee.
Governing Law
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
Miscellaneous
The Preferred Securities have been approved for listing on the NYSE,
subject to notice of issuance.
The Regular Trustees are authorized and directed to take such action
as they deem reasonable in order that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act or that the
Trust will not be classified for United States federal income tax purposes as
an association taxable as a corporation or a partnership and will be treated
as a grantor trust for United States federal income tax purposes. In this
connection, the Regular Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the Declaration,
that the Regular Trustees determine in their discretion to be reasonable and
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of holders of the Trust Securities.
SunAmerica and the Regular Trustees on behalf of the Trust will be
required to provide to the Property Trustee annually a certificate as to
whether or not SunAmerica and the Trust, respectively, is in compliance with
all the conditions and covenants under the Declaration.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by SunAmerica for the
benefit of the holders from time to time of Preferred Securities. The
Preferred Securities Guarantee is 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 Preferred Securities. The terms of the Preferred Securities Guarantee
include those stated in such Guarantee and those made part of the Preferred
Securities Guarantee by the Trust Indenture Act. The summary set forth below
does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Preferred
Securities Guarantee, which is filed as an exhibit to the Registration
Statement of which this Offering Circular/Prospectus forms a part, and the
Trust Indenture Act.
General
Pursuant to the Preferred Securities Guarantee, SunAmerica will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities, the Guarantee Payments
(as defined below) (without duplication of amounts theretofore paid by the
Trust), to the extent not paid by the Trust, regardless of any defense, right
of set-off or counterclaim that the Trust may have or assert. The following
payments or distributions with respect to the Preferred Securities to the
extent not paid or made by the Trust (the "Guarantee Payments") will be
subject to the Guarantee (without duplication): (i) any accrued and unpaid
distributions on the Preferred Securities and the redemption price, including
all accrued and unpaid distributions to the date of the redemption, with
respect to the Preferred Securities called for redemption by the Trust but if
and only to the extent that in each case SunAmerica has made a payment to the
Property Trustee of interest or principal on the Junior Subordinated
Debentures and (ii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
Junior Subordinated Debentures to holders of Preferred Securities or the
redemption of all of the Preferred Securities upon the maturity or redemption
of the Junior Subordinated Debentures), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of payment, to the extent the Trust has funds available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to holders of Preferred Securities in liquidation of the Trust.
SunAmerica's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by SunAmerica to the holders of Preferred
Securities or by causing the Trust to pay such amounts to such holders.
Certain Covenants of SunAmerica
In the Preferred Securities Guarantee, SunAmerica will covenant that,
so long as the Preferred Securities remain outstanding, SunAmerica will not
declare or pay any dividends on, or 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) SunAmerica 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 Event of Default under the
Declaration or (iii) SunAmerica shall have given notice of its selection of an
Extension Period as provided in the Indenture and such period, or any
extension thereof, is continuing; provided that SunAmerica will be permitted
to pay accrued dividends (and cash in lieu of fractional shares) upon the
conversion of any of its Series D Preferred Stock in accordance with the terms
of such stock. In addition, so long as the Preferred Securities remain
outstanding, SunAmerica has agreed (i) to remain the sole direct or indirect
owner of all of the outstanding Common Securities and shall not cause or permit
the Common Securities to be transferred except to the extent permitted by the
Declaration; provided that any permitted successor of SunAmerica under the
Indenture may succeed to SunAmerica's ownership of the Common Securities and
(ii) to use reasonable efforts to cause the Trust to continue to be treated as
a grantor trust for United States federal income tax purposes except in
connection with a distribution of Junior Subordinated Debentures.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no consent will be
required), the Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount
of the outstanding Preferred Securities. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth under
"Description of the Preferred Securities -- Voting Rights". All guarantees
and agreements contained in the Preferred Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of SunAmerica and
shall inure to the benefit of the holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving SunAmerica that is permitted under the Indenture, SunAmerica may not
assign its obligations under the Preferred Securities Guarantee.
Termination of the Preferred Securities Guarantee
The Preferred Securities Guarantee will terminate and be of no
further force and effect as to the Preferred Securities upon full payment of
the Redemption Price of all Preferred Securities, or upon distribution of the
Junior Subordinated Debentures to the holders of Preferred Securities in
exchange for all of the Preferred Securities, or upon full payment of the
amounts payable upon liquidation of the Trust. Notwithstanding the foregoing,
the Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities must restore payment of any sums paid with respect to the Preferred
Securities or the Preferred Securities Guarantee.
Status of the Preferred Securities Guarantee
SunAmerica's obligations under the Preferred Securities Guarantee to
make the Guarantee Payments will constitute an unsecured obligation of
SunAmerica and will rank (i) subordinate and junior in right of payment to all
other liabilities of SunAmerica, including the Junior Subordinated Debentures,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by SunAmerica and to any guarantee
now or hereafter entered into by SunAmerica in respect of any of its capital
stock. Because SunAmerica is a holding company, SunAmerica's obligations
under the Preferred Securities Guarantee are also effectively subordinated to
all existing and future liabilities, including trade payables, of SunAmerica's
subsidiaries, except to the extent that SunAmerica is a creditor of the
subsidiaries recognized as such. The Declaration provides that each holder of
Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under
the guarantee without first instituting a legal proceeding against any other
person or entity). The Preferred Securities Guarantee will be deposited with
The Bank of New York, as indenture trustee, to be held for the benefit of the
holders of the Preferred Securities. The Bank of New York shall enforce the
Preferred Securities Guarantee on behalf of the holders of the Preferred
Securities. The holders of not less than a majority in aggregate liquidation
amount of the Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available in respect of
the Preferred Securities Guarantee, including the giving of directions to The
Bank of New York. If The Bank of New York fails to enforce the Preferred
Securities Guarantee as above provided, any holder of Preferred Securities
may, after a period of 30 days has elapsed from such holder's written request
to The Bank of New York to enforce the Preferred Securities Guarantee,
institute a legal proceeding directly against SunAmerica to enforce its rights
under the Preferred Securities Guarantee, without first instituting a legal
proceeding against the Trust or any other person or entity.
Governing Law
The Preferred Securities Guarantee will be governed by and construed
in accordance with the laws of the State of New York.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the Junior Subordinated
Debentures which will be deposited in the Trust as trust assets. The terms of
the Junior Subordinated Debentures include those stated in the Indenture dated
March 15, 1995 between SunAmerica and The First National Bank of Chicago, as
trustee (the "Indenture Trustee") as supplemented by the First Supplemental
Indenture dated March 15, 1995 between SunAmerica and the Indenture Trustee
(as so supplemented, the "Indenture"), forms of which have been filed as
exhibits to the Registration Statement of which this Offering
Circular/Prospectus forms a part, and those made part of the Indenture by the
Trust Indenture Act. The following description does not purport to be
complete and is qualified in its entirety by reference to the Indenture and
the Trust Indenture Act. Whenever particular provisions or defined terms in
the Indenture are referred to herein, such provisions or defined terms are
incorporated by reference herein. Section and Article references used herein
are references to provisions of the Indenture.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that junior
subordinated debentures may be issued thereunder from time to time in one or
more series (collectively, together with the Junior Subordinated Debentures,
the "Subordinated Debentures"). The Junior Subordinated Debentures constitute
a separate series under the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Junior Subordinated Debentures
may be distributed to the holders of the Trust Securities in liquidation of
the Trust. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution".
General
The Junior Subordinated Debentures are unsecured, subordinated
obligations of SunAmerica, limited in aggregate principal amount to an amount
equal to the sum of (i) the stated liquidation amount of the Preferred
Securities issued by the Trust in the Offer and (ii) the proceeds received by
the Trust upon issuance of the Common Securities to SunAmerica (which proceeds
will be used to purchase an equal principal amount of Junior Subordinated
Debentures).
The entire principal amount of the Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, on December 30, 2044. The Junior Subordinated Debentures are not
subject to any sinking fund.
If Junior Subordinated Debentures are distributed to holders of
Preferred Securities in dissolution of the Trust, such Junior Subordinated
Debentures will be so issued in certificated form in denominations of $25 and
integral multiples thereof and may be transferred or exchanged at the offices
described below.
Payments of principal and interest on Junior Subordinated Debentures
will be payable, the transfer of the Junior Subordinated Debentures will be
registrable, and Junior Subordinated Debentures will be exchangeable for
Junior Subordinated Debentures of other denominations of a like aggregate
principal amount, at the corporate trust office of the Indenture Trustee in
The City of New York; provided that payment of interest may be made at the
option of SunAmerica by check mailed to the address of the persons entitled
thereto and that the payment of principal with respect to any Junior
Subordinated Debenture will be made only upon surrender of such Junior
Subordinated Debenture to the Indenture Trustee.
If the Junior Subordinated Debentures are distributed to the holders
of Preferred Securities upon the dissolution of the Trust, SunAmerica will use
its best efforts to list the Junior Subordinated Debentures on the NYSE or on
such other exchange on which the Preferred Securities are then listed.
Optional Redemption
Except as provided below, the Junior Subordinated Debentures may not
be redeemed prior to June 15, 1997. SunAmerica shall have the right to redeem
the Junior Subordinated Debentures, in whole or in part, from time to time, on
or after June 15, 1997, upon not less than 30 nor more than 60 days' notice,
at a redemption price equal to 100% of the principal amount to be redeemed,
plus any accrued and unpaid interest, to the redemption date, including
interest accrued during an Extension Period. SunAmerica will also have the
right to redeem the Junior Subordinated Debentures at any time upon the
occurrence of a Tax Event if certain conditions are met as described under
"Description of the Preferred Securities -- Special Event Redemption or
Distribution".
If SunAmerica gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, SunAmerica will deposit
irrevocably with the Indenture Trustee funds sufficient to pay the applicable
redemption price and will give irrevocable instructions and authority to pay
such redemption price to the holders of the Junior Subordinated Debentures.
If notice of redemption shall have been given and funds deposited as required,
then upon the date of such deposit, interest will cease to accrue on the
Junior Subordinated Debentures called for redemption, such Junior Subordinated
Debentures will no longer be deemed to be outstanding and all rights of
holders of such Junior Subordinated Debentures so called for redemption will
cease, except the right of the holders of such Junior Subordinated Debentures
to receive the applicable redemption price, but without interest on such
redemption price. If any date fixed for redemption of Junior Subordinated
Debentures is not a Business Day, then payment of the redemption price payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.
If payment of the redemption price in respect of Junior Subordinated
Debentures is improperly withheld or refused and not paid by SunAmerica,
interest on such Junior Subordinated Debentures will continue to accrue, from
the original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the applicable redemption price. If fewer than all of the Junior
Subordinated Debentures are to be redeemed, the Junior Subordinated Debentures
to be redeemed shall be selected by lot or pro rata or in some other equitable
manner determined by the Indenture Trustee.
In the event of any redemption in part, SunAmerica shall not be
required to (i) issue, register the transfer of or exchange any Junior
Subordinated Debentures during a period beginning at the opening of business
15 days before any selection for redemption of Junior Subordinated Debentures
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Junior
Subordinated Debentures to be redeemed and (ii) register the transfer of or
exchange any Junior Subordinated Debentures so selected for redemption, in
whole or in part, except the unredeemed portion of any Junior Subordinated
Debentures being redeemed in part. (Section 2.05).
Interest
The Junior Subordinated Debentures will bear interest at an annual
rate of 9.95% from the Accrual Date. In addition, holders of the Junior
Subordinated Debentures will be entitled to interest ("Pre-issuance Accrued
Interest") at the rate of 9 1/4% per annum of the principal amount thereof
from March 15, 1995 through the Expiration Date, payable at the time of the
first interest payment on the Junior Subordinated Debentures. Interest will
be payable quarterly in arrears on March 30, June 30, September 30 and
December 30 of each year (each, an "Interest Payment Date"), commencing on
June 30, 1995, to the person in whose name such Junior Subordinated Debenture
is registered, subject to certain exceptions, at the close of business on the
March 15, June 15, September 15 or December 15 next preceding such Interest
Payment Date. Interest payable on any Junior Subordinated Debenture that is
not punctually paid or duly provided for on any interest payment date will
forthwith cease to be payable to the person in whose name such Junior
Subordinated Debenture is registered on the relevant record date, and such
defaulted interest will instead be payable to the person in whose name such
Junior Subordinated Debenture is registered on the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that interest shall not be considered payable by SunAmerica on any interest
payment date falling within an Extension Period unless SunAmerica has elected
to make a full or partial payment of interest accrued on the Junior
Subordinated Debentures on such interest payment date.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter
than a full quarterly period for which interest is computed, the amount of
interest payable will be computed on the basis of the actual number of days
elapsed in such a 30-day month. If any date on which interest is payable on
the Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
Option to Extend Interest Payment Period
So long as SunAmerica shall not be in default in the payment of
interest on the Junior Subordinated Debentures, SunAmerica shall have the
right to extend the interest payment period from time to time for a period not
exceeding 20 consecutive quarterly interest periods. SunAmerica has no
current intention of exercising its right to extend an interest payment
period. No extension of interest will be permitted with respect to interest
accruing from March 15, 1995 through the Expiration Date. No interest shall
be due and payable during an Extension Period, except at the end thereof.
During any Extension Period, SunAmerica shall not declare or pay any dividends
on, or 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 payments with respect thereto; provided that SunAmerica will be
permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion of any of its Series D Preferred Stock in accordance with
the terms of such stock. Prior to the termination of any such Extension
Period, SunAmerica may further extend the interest payment period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
On the interest payment date occurring at the end of each Extension Period,
SunAmerica shall pay to the holders of Junior Subordinated Debentures of
record on the record date for such interest payment date (regardless of who
the holders of record may have been on other dates during the Extension
Period) all accrued and unpaid interest on the Junior Subordinated Debentures,
together with interest thereon at the rate specified for the Junior
Subordinated Debentures to the extent permitted by applicable law, compounded
quarterly ("Compounded Interest"). Upon the termination of any Extension
Period and the payment of all amounts then due, SunAmerica may commence a new
Extension Period, subject to the above requirements. SunAmerica may also
prepay at any time all or any portion of the interest accrued during an
Extension Period. Consequently, there could be multiple Extension Periods of
varying lengths (up to nine Extension Periods of 20 consecutive quarterly
interest periods each or more numerous shorter Extension Periods) throughout
the term of the Junior Subordinated Debentures. The failure by SunAmerica to
make interest payments during an Extension Period would not constitute a
default or an event of default under the Indenture or SunAmerica's currently
outstanding indebtedness.
If the Property Trustee shall be the sole holder of the Junior
Subordinated Debentures, SunAmerica shall give the Property Trustee notice of
its selection of such Extension Period one Business Day prior to the earlier
of (i) the date the distributions on the Preferred Securities are payable or
(ii) the date the Trust is required to give notice to the NYSE or other
applicable self-regulatory organization or to holders of the Preferred
Securities of the record date or the date such distribution is payable, but in
any event not less than one Business Day prior to such record date. The Trust
shall give notice of SunAmerica's selection of such Extension Period to the
holders of the Preferred Securities.
If Junior Subordinated Debentures have been distributed to holders
of Trust Securities, SunAmerica shall give the holders of the Junior
Subordinated Debentures notice of its selection of such Extension Period ten
Business Days prior to the earlier of (i) the next succeeding interest payment
date or (ii) the date SunAmerica is required to give notice to the NYSE (if
the Junior Subordinated Debentures are then listed thereon) or other
applicable self-regulatory organization or to holders of the Junior
Subordinated Debentures of the record or payment date of such related interest
payment.
Compounded Interest
Payments of Compounded Interest on the Junior Subordinated Debentures
held by the Trust will make funds available to pay any interest on
distributions in arrears in respect of the Preferred Securities pursuant to
the terms thereof.
Certain Covenants of SunAmerica Applicable to the
Junior Subordinated Debentures
In the Indenture, SunAmerica will covenant that, so long as the
Preferred Securities remain outstanding, SunAmerica will not 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)
SunAmerica 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 Indenture Event of Default with respect to the Junior
Subordinated Debentures or (iii) SunAmerica shall have given notice of its
selection of an Extension Period as provided in the Indenture and such period,
or any extension thereof, is continuing; provided that SunAmerica will be
permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion of any of its Series D Preferred Stock in accordance with
the terms of such stock. In addition, so long as the Preferred Securities
remain outstanding, SunAmerica has agreed (i) to remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent
permitted by the Declaration; provided that any permitted successor of
SunAmerica under the Indenture may succeed to SunAmerica's ownership of the
Common Securities, (ii) to comply fully with all of its obligations and
agreements contained in the Declaration and (iii) not to take any action which
would cause the 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 Debentures.
Subordination
The Indenture provides that the Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness of
SunAmerica. In the event (a) of any insolvency or bankruptcy proceedings, or
any receivership, liquidation, reorganization or other similar proceedings in
respect of SunAmerica or its property or any proceeding for voluntary
liquidation, dissolution or other winding up of SunAmerica, or (b) that
Subordinated Debentures of any series are declared due and payable before
their expressed maturity because of the occurrence of an Event of Default
pursuant to Section 6.01 of the Indenture (under circumstances other than as
set forth in clause (a) above), then the holders of all Senior Indebtedness
shall first be entitled to receive payment of the full amount due thereon in
money, before the holders of any of the Subordinated Debentures are entitled to
receive a payment on account of the principal of, premium, if any, or interest
on the indebtedness evidenced by such Subordinated Debentures. In the event
and during the continuation of any default in payment of any Senior
Indebtedness or if any event of default shall exist under any Senior
Indebtedness, as "event of default" is defined therein or in the agreement
under which the same is outstanding, no payment of the principal of, premium,
if any, or interest on the Subordinated Debentures shall be made. (Section
14.02).
The term "Senior Indebtedness" shall mean the principal of and
premium, if any, and interest on (a) all indebtedness of SunAmerica, whether
outstanding on the date of the Indenture or thereafter created, (i) for money
borrowed by SunAmerica (including, without limitation, indebtedness issued or
to be issued pursuant to the Indenture dated as of April 15, 1993 between
SunAmerica and The First National Bank of Chicago, as Trustee), (ii) for money
borrowed by, or obligations of, others and either assumed or guaranteed,
directly or indirectly, by SunAmerica, (iii) in respect of letters of credit
and acceptances issued or made by banks, or (iv) constituting purchase money
indebtedness, or indebtedness secured by property included in the property,
plant and equipment accounts of SunAmerica at the time of the acquisition of
such property by SunAmerica, for the payment of which SunAmerica is directly
liable, and (b) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any such indebtedness. As used
in the preceding sentence the term "purchase money indebtedness" means
indebtedness evidenced by a note, debenture, bond or other instrument (whether
or not secured by any lien or other security interest) issued or assumed as
all or a part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of SunAmerica.
Notwithstanding anything to the contrary in the Indenture or the Subordinated
Debentures, Senior Indebtedness shall not include (i) any indebtedness of
SunAmerica which, by its terms or the terms of the instrument creating or
evidencing it, is subordinate in right of payment to or pari passu with the
Subordinated Debentures, as the case may be, and, in particular, the
Subordinated Debentures 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 SunAmerica which is a financing
vehicle of SunAmerica in connection with the issuance of preferred securities
by such financing vehicle, or (ii) any indebtedness of SunAmerica to a
subsidiary of SunAmerica. (Section 1.01).
The Indenture does not limit the aggregate amount of indebtedness,
including Senior Indebtedness, that may be issued. As of December 31, 1994,
Senior Indebtedness of SunAmerica (on an unconsolidated basis) aggregated
approximately $472.8 million all of which is unsecured. Because SunAmerica is
a holding company, the Junior Subordinated Debentures are also effectively
subordinated to all existing and future liabilities, including trade payables,
of SunAmerica's subsidiaries, except to the extent that SunAmerica is a
creditor of the subsidiaries recognized as such. Claims on SunAmerica's
subsidiaries by creditors other than SunAmerica include substantial claims for
policy benefits, as well as other liabilities incurred in the ordinary course
of business. At December 31, 1994, SunAmerica's subsidiaries had outstanding
approximately $8.47 billion of liabilities (excluding variable annuity
liabilities, with respect to which assets are segregated in separate
accounts). In addition, since many of SunAmerica's subsidiaries are insurance
companies subject to regulatory control by various state insurance
departments, the ability of such subsidiaries to pay dividends or make loans
or advances to SunAmerica without prior regulatory approval is limited by
applicable laws and regulations. There are no terms in the Preferred
Securities, the Junior Subordinated Debentures or the Preferred Securities
Guarantee that limit SunAmerica's ability to incur additional indebtedness,
including indebtedness that ranks senior to or pari passu with the Junior
Subordinated Debentures and the Preferred Securities Guarantee, or the ability
of its subsidiaries to incur additional indebtedness. See "Description of the
Preferred Securities Guarantee -- Status of the Preferred Securities
Guarantee".
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 a series of Subordinated
Debentures:
(a) failure for 30 days to pay interest on the Subordinated
Debentures of such series when due; provided that a valid extension of the
interest payment period by SunAmerica shall not constitute a default in the
payment of interest for this purpose; or
(b) failure to pay principal of or premium, if any, on the
Subordinated Debentures of such series when due whether at maturity, upon
redemption, by declaration or otherwise; or
(c) failure to observe or perform any other covenant contained in
the Indenture with respect to such series for 90 days after written notice to
SunAmerica from the Indenture Trustee or the holders of at least 25% in
principal amount of the outstanding Subordinated Debentures of such series; or
(d) certain events in bankruptcy, insolvency or reorganization of
SunAmerica.
In each and every such case, unless the principal of all the
Subordinated Debentures of that series shall have already become due and
payable, either the Indenture Trustee or the holders of not less than 25% in
aggregate principal amount of the Subordinated Debentures of that series then
outstanding, by notice in writing to SunAmerica (and to the Indenture Trustee
if given by such holders), may declare the principal of all the Subordinated
Debentures of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable.
(Section 6.01).
The holders of a majority in aggregate outstanding principal amount
of the Subordinated Debentures of that series have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee. (Section 6.06). The Indenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Subordinated Debentures of that series may declare the principal due and
payable immediately upon an Event of Default with respect to such series, but
the holders of a majority in aggregate outstanding principal amount of
Subordinated Debentures of such series may annul such declaration and waive the
default if the default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by acceleration and any
premium has been deposited with the Indenture Trustee. (Sections 6.01 and
6.06).
The holders of a majority in aggregate outstanding principal amount
of the Subordinated Debentures of that series may, on behalf of the holders of
all the Subordinated Debentures of that series, waive any past default, except
a default in the payment of principal, premium, if any, or interest (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal otherwise than by acceleration and any
premium has been deposited with the Indenture Trustee) or a call for
redemption of Junior Subordinated Debentures. (Section 6.06). SunAmerica is
required to file annually with the Indenture Trustee a certificate as to
whether or not SunAmerica is in compliance with all the conditions and
covenants under the Indenture.
An Indenture Event of Default also constitutes an Event of Default
under the Declaration. See "Description of the Preferred Securities --
Declaration Events of Default".
Modification of the Indenture
The Indenture contains provisions permitting SunAmerica and the
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of the outstanding Subordinated Debentures of each series
affected, to modify the Indenture or any supplemental indenture affecting the
rights of the holders of such Subordinated Debentures; provided that no such
modification may, without the consent of the holder of each outstanding
Subordinated Debenture affected thereby, (i) extend the fixed maturity of any
Subordinated Debentures of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, without the consent of
the holder of each Subordinated Debenture so affected or (ii) reduce the
percentage of Subordinated Debentures, the holders of which are required to
consent to any such modification, without the consent of the holders of each
Subordinated Debenture then outstanding and affected thereby. (Section 9.02).
Book-Entry and Settlement
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities (see "Description of the Preferred Securities"), such
Junior Subordinated Debentures will be issued in fully registered form. In
such event, investors may elect to hold their Junior Subordinated Debentures
directly or, subject to the rules and procedures of DTC, hold interests in a
global certificate registered in the name of DTC or its nominee.
For a description of DTC and DTC's book-entry system, see
"Description of the Preferred Securities -- Book-Entry; Delivery and Form".
As of the date of this Offering Circular/Prospectus, the description herein of
DTC's book-entry system and DTC's practices as they relate to purchases,
transfers, notices and payments with respect to the Preferred Securities apply
in all material respects to any Junior Subordinated Debentures registered in
the name of and held by DTC or its nominee.
Consolidation, Merger and Sale
The Indenture will provide that SunAmerica may not consolidate with
or merge into any other person or transfer or lease its properties and assets
substantially as an entirety to any person and may not permit any person to
merge into or consolidate with SunAmerica unless (i) either SunAmerica will be
the resulting or surviving entity or any successor or purchaser is a
corporation organized under the laws of the United States of America, any
State or the District of Columbia, and any such successor or purchaser
expressly assumes SunAmerica's obligations under the Indenture and (ii)
immediately after giving effect to the transaction no Event of Default shall
have occurred and be continuing.
Defeasance and Discharge
Under the terms of the Indenture, SunAmerica will be discharged from
any and all obligations in respect of the Junior Subordinated Debentures
(except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if (i) SunAmerica irrevocably deposits with the Indenture
Trustee cash or U.S. Government Obligations, as trust funds in an amount
certified to be sufficient to pay at maturity (or upon redemption) the
principal of, premium, if any, and interest on all outstanding Junior
Subordinated Debentures; (ii) SunAmerica delivers to the Indenture Trustee an
opinion of counsel to the effect that the holders of the Junior Subordinated
Debentures will not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance and that defeasance will not
otherwise alter such holders' United States federal income tax treatment of
principal, premium and interest payments on such Junior Subordinated
Debentures (such opinion must be based on a ruling of the Internal Revenue
Service or a change in United States federal income tax law occurring after
the date of such Indenture, since such a result would not occur under current
tax law); and (iii) no event or condition shall exist that, pursuant to
certain provisions described under "Subordination" above, would prevent
SunAmerica from making payments of principal of, premium, if any, and interest
on the Junior Subordinated Debentures at the date of the irrevocable deposit
referred to above. (Section 11.01).
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.
(Section 13.05).
Information Concerning the Indenture Trustee
The Indenture Trustee, prior to default, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after default,
shall exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. (Section 7.01). Subject to such
provision, the Indenture Trustee is under no obligation to exercise any of the
powers vested in it by the Indenture at the request of any holder of Junior
Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities that might be incurred thereby.
(Section 7.02). The Indenture Trustee is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance
of its duties if the Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it. (Section 7.01). The Indenture
Trustee is one of a number of banks with which SunAmerica and its subsidiaries
maintain ordinary banking and trust relationships.
Miscellaneous
SunAmerica will have the right at all times to assign any of its
rights or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of SunAmerica; provided that, in the event of any such assignment,
SunAmerica will remain jointly and severally liable for all such obligations.
Subject to the foregoing, the Indenture will be binding upon and inure to the
benefit of the parties thereto and their respective successors and assigns.
The Indenture provides that it may not otherwise be assigned by the parties
thereto other than by SunAmerica to a successor or purchaser pursuant to a
consolidation, merger or sale permitted by the Indenture. (Section 13.11).
DESCRIPTION OF THE SERIES B PREFERRED
The summary of the terms of the Series B Preferred set forth below
does not purport to be complete and is subject to, and qualified in its
entirety by reference to the provisions of SunAmerica's Articles of
Incorporation and the Articles Supplementary for the Series B Preferred,
copies of which may be obtained from SunAmerica upon request.
The Series B Preferred ranks on a parity as to payment of dividends
and distribution of assets upon dissolution, liquidation or winding-up of
SunAmerica with the outstanding Adjustable Rate Cumulative Preferred Stock,
Series C and the Series D Preferred Stock of SunAmerica and senior to the
Common Stock and Nontransferable Class B Stock of SunAmerica as to the payment
of dividends and distribution of assets upon dissolution, liquidation or
winding-up of SunAmerica. The transfer agent, registrar, dividend disbursing
agent and redemption agent for the Series B Preferred is Bank of America, N.T.
and S.A.
Dividends. Subject to the rights of holders of other classes of
stock of SunAmerica ranking on a parity with or senior to the Series B
Preferred which may from time to time be issued by SunAmerica, the holders of
Series B Preferred are entitled to receive, when, as and if the Board of
Directors declares a dividend on the Series B Preferred, out of assets legally
available for dividends, cumulative preferential cash dividends from the issue
date of the Series B Preferred (June 29, 1992), accruing at the rate per share
of Series B Preferred 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 accrue whether or not SunAmerica
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
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.
So long as any shares of Series B Preferred are outstanding, no
dividend (other than a dividend in shares of Common Stock, Nontransferable
Class B Stock or any other class of stock of SunAmerica at any time ranking
junior as to dividends and assets to the Series B Preferred and any other
class of outstanding Preferred Stock (collectively, the "Junior Stock")) shall
be paid or declared or any other distribution ordered or made upon any Junior
Stock, nor shall any sum or sums be set aside for or applied to the purchase
or redemption of Series B Preferred or any other class of outstanding
Preferred Stock or the purchase, redemption or other acquisition for value of
any Junior Stock, unless, in each case, full cumulative dividends accumulated
on all shares of Series B Preferred and all other shares of outstanding
Preferred Stock shall have been paid in full. All dividends declared upon the
Series B Preferred and any other class of outstanding Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on the
Series B Preferred and such other class of Preferred Stock shall in all cases
bear to each other the same ratio that the respective dividend rights per
share of the Series B Preferred and such other class of Preferred Stock bear
to each other. Holders of Series B Preferred shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends as described herein.
Liquidation Rights. Subject to the rights of holders of other
classes of stock of SunAmerica ranking on a parity with or senior to Series B
Preferred, in the event of any liquidation, dissolution or winding-up of the
business of SunAmerica, whether voluntary or involuntary (any such event, a
"Liquidation"), the holders of Series B Preferred, after payment or provisions
for payment of the debts and other liabilities of SunAmerica, will be entitled
to receive for each share of Series B Preferred, 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 to holders
of Series B Preferred and shares of any other class of outstanding Preferred
Stock, the holders of shares of Series B Preferred and such other shares shall
be paid ratably in proportion to the full distributable amounts to which
holders of shares of Series B Preferred and such other shares are respectively
entitled upon Liquidation. The full preferential amount payable to holders of
Series B Preferred and shares of any other class of outstanding Preferred
Stock upon Liquidation will be paid in full before any distribution or payment
is made to holders of Junior Stock.
Redemption. The Series B Preferred is not redeemable prior to June
15, 1997. On and after such date, the Series B Preferred is redeemable in
cash at the option of SunAmerica, in whole or in part, from time to time upon
not less than 30 or more than 60 days notice, at a redemption price of $25.00
per share plus an amount equal to the sum of all accrued and unpaid dividends
thereon to the date fixed for redemption.
The Series B Preferred is not entitled to the benefits of any sinking
fund.
Voting Rights. The Series B Preferred does not entitle holders
thereof to voting rights, except (i) SunAmerica may not alter any of the
provisions of the Articles of Incorporation of SunAmerica or the Articles
Supplementary relating to the Series B Preferred which would materially and
adversely affect any right, preference or privilege of the Series B Preferred
without the affirmative vote of the holders of at least two-thirds of the
Series B Preferred 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 B Preferred 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 are in arrears in an aggregate amount equivalent to
six full quarterly dividends (a "Series B Preferred Dividend Default"), or
(iii) as required by law. In the event of a Series B Preferred Dividend
Default, the holders of the outstanding shares of Series B Preferred will be
entitled to elect, together with the holders of all other outstanding classes
of Preferred Stock ranking on a parity with Series B Preferred 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
shares of Series B Preferred and all other outstanding classes of Preferred
Stock ranking on a parity with Series B Preferred are paid.
Miscellaneous. The holders of Series B Preferred have no preemptive
rights. Shares of Series B Preferred validly tendered and accepted for
exchange in the Offer will be delivered to SunAmerica by the Trust and will
assume the status of authorized but unissued shares of Preferred Stock and may
thereafter be reissued in the same manner as other authorized but unissued
shares of Preferred Stock.
RELATIONSHIP BETWEEN THE PREFERRED SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debentures, such payments will be sufficient to
cover distributions and other payments due on the Preferred Securities
primarily because (i) the aggregate principal amount of Junior Subordinated
Debentures held as trust assets will be equal to the sum of the aggregate
stated liquidation amount of the Preferred Securities and the proceeds
received by the Trust upon issuance of the Common Securities to SunAmerica;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debentures will match the distribution rate and distribution and
other payment dates for the Preferred Securities; (iii) the Declaration
provides that SunAmerica shall pay for all debts and obligations (other than
with respect to the Trust Securities) and all costs and expenses of the Trust,
including any taxes and all costs and expenses with respect thereto, to which
the Trust may become subject, except for United States withholding taxes; and
(iv) the Declaration further provides that the Trustees shall not cause or
permit the Trust, among other things, to engage in any activity that is not
consistent with the limited purposes of the Trust. With respect to clause
(iii) above, however, no assurance can be given that SunAmerica will have
sufficient resources to enable it to pay such debts, obligations, costs and
expenses on behalf of the Trust.
Payments of distributions and other payments due on the Preferred
Securities are guaranteed by SunAmerica on a subordinated basis as and to the
extent set forth under "Description of the Preferred Securities Guarantee".
If SunAmerica does not make interest or other payments on the Junior
Subordinated Debentures, the Trust will not make distributions or other
payments on the Preferred Securities. Under the Declaration, if and to the
extent SunAmerica does make interest or other payments on the Junior
Subordinated Debentures, the Property Trustee is obligated to make
distributions or other payments on the Preferred Securities. The Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities, but the Preferred Securities Guarantee
covers distributions and other payments on the Preferred Securities only if
and to the extent that SunAmerica has made a payment to the Property Trustee
of interest or principal on the Junior Subordinated Debentures deposited in the
Trust as trust assets.
If an Appointment Event occurs, the Declaration provides that the
holders of the Preferred Securities may appoint a Special Regular Trustee who
will have the same rights, powers and privileges under the Declaration as the
Regular Trustees. The Property Trustee will have the power to exercise all
rights, powers and privileges under the Indenture with respect to the Junior
Subordinated Debentures, including its rights as the holder of the Junior
Subordinated Debentures to enforce SunAmerica's obligations under the Junior
Subordinated Debentures upon the occurrence of an Indenture Event of Default,
and will also have the right to enforce the Preferred Securities Guarantee on
behalf of the holders of the Preferred Securities. In addition, the holders
of at least a majority in liquidation amount of the Preferred Securities will
have the right to direct the Property Trustee with respect to certain matters
under the Declaration and the 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, institute a legal proceeding against SunAmerica to enforce such
rights or the Preferred Securities Guarantee, as the case may be. See
"Description of the Preferred Securities" and "Description of the Preferred
Securities Guarantee".
SunAmerica and the Trust believe that the above mechanisms and
obligations, taken together, are equivalent to a full and unconditional
guarantee by SunAmerica of payments due on the Preferred Securities.
If a Special Event shall occur and be continuing, the Trust shall be
dissolved unless the Junior Subordinated Debentures are redeemed in the
limited circumstances described below, with the result that Junior
Subordinated Debentures held by the Trust having an aggregate principal amount
equal to the aggregate stated liquidation amount of the Preferred Securities
and Common Securities will be distributed on a Pro Rata Basis in exchange for
the outstanding Preferred Securities and Common Securities, subject in the
case of a Tax Event to SunAmerica's right in certain circumstances to redeem
Junior Subordinated Debentures as described under "Description of the
Preferred Securities -- Special Event Redemption or Distribution". The
Preferred Securities represent preferred undivided beneficial interests in the
assets of the Trust, a statutory business trust which exists for the purpose
of (a) issuing (i) its Preferred Securities in exchange for Series B
Preferred validly tendered in the Offer and delivering such Series B Preferred
to SunAmerica in consideration for the deposit by SunAmerica of Junior
Subordinated Debentures in the Trust as trust assets, and (ii) its Common
Securities to SunAmerica in exchange for cash and investing the proceeds
thereof in an equivalent amount of Junior Subordinated Debentures and (b)
engaging in such other activities as are necessary or incidental thereto.
Upon any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the holders of Preferred Securities will be entitled
to receive the Liquidation Distribution in cash or Junior Subordinated
Debentures and will be entitled to the benefits of the Preferred Securities
Guarantee with respect to any such distribution. See "Description of the
Preferred Securities -- Liquidation Distribution Upon Dissolution". Upon any
voluntary or involuntary liquidation or bankruptcy of SunAmerica, the holders
of Junior Subordinated Debentures would be subordinated creditors of
SunAmerica, subordinated in right of payment to all Senior Indebtedness, but
entitled to receive payment in full of principal, premium, if any, and
interest, before any stockholders of SunAmerica receive payments or
distributions.
A default or event of default under any Senior Indebtedness would not
constitute a default or event of default under the Junior Subordinated
Debentures. However, in the event of payment defaults under, or acceleration
of, Senior Indebtedness, the subordination provisions of the Junior
Subordinated Debentures provide that no payments may be made in respect of the
Junior Subordinated Debentures. Failure to make required payments on the
Junior Subordinated Debentures would constitute an event of default under the
Indenture.
TAXATION
In the opinion of Davis Polk & Wardwell, counsel to SunAmerica and
the Trust, the following are the material United States federal income tax
consequences of the issuance of Preferred Securities in exchange for the
Series B Preferred pursuant to the Offer, and of the ownership and disposition
of Preferred Securities. Unless otherwise stated, this summary deals only
with Preferred Securities held as capital assets by holders who acquire the
Preferred Securities pursuant to the Offer ("Initial Holders"). It does not
deal with special classes of holders, such as dealers in securities or
currencies, life insurance companies, persons holding Preferred Securities as
a hedge against or which are hedged against currency risks or as part of a
straddle, or persons whose functional currency is not the United States
dollar. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change (possibly on a retroactive basis).
ALL SERIES B PREFERRED HOLDERS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OF SERIES B
PREFERRED FOR PREFERRED SECURITIES AND OF THE OWNERSHIP AND DISPOSITION OF
PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR OTHER TAX LAWS.
Exchange of Series B Preferred for Preferred Securities
The exchange of Series B Preferred for Preferred Securities pursuant
to the Offer will be a taxable transaction. In the case of an Initial Holder
who owns solely Series B Preferred, or not more than one percent of such stock
and not more than one percent of any other class of SunAmerica stock, gain or
loss will be recognized in an amount equal to the difference between the fair
market value on the Expiration Date of the Preferred Securities (representing
an undivided interest in the Junior Subordinated Debentures) received in the
exchange and the exchanging Holder's tax basis in the Series B Preferred
exchanged therefor and will be long-term capital gain or loss if the Series B
Preferred has been held for more than one year as of such date. A holder's
aggregate tax basis in his pro rata share of the underlying Junior
Subordinated Debentures will be equal to his pro rata share of their "issue
price" on the Expiration Date as defined below.
Holders of Series B Preferred who actually or constructively own more
than one percent of any other class of SunAmerica stock are advised to consult
their tax advisors as to the income tax consequences of exchanging Series B
Preferred.
Classification of the Trust
In connection with the issuance of the Preferred Securities, Davis
Polk & Wardwell, counsel to SunAmerica and the Trust, will render its opinion
generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, each holder of Preferred
Securities (a "Securityholder") will be considered the owner of a pro rata
portion of the Junior Subordinated Debentures held by the Trust. Accordingly,
each Securityholder will be required to include in gross income his pro rata
share of the income accrued on the Junior Subordinated Debentures.
Accrual of Original Issue Discount and Premium
The Junior Subordinated Debentures will be considered to have been
issued with "original issue discount" and each Securityholder, including a
taxpayer who otherwise uses the cash method of accounting, will be required to
include his pro rata share of original issue discount on the Junior
Subordinated Debentures in income as it accrues, in accordance with a constant
yield method based on a compounding of interest, before the receipt of cash
distributions on the Preferred Securities. Generally, all of a
Securityholder's taxable interest income with respect to the Junior
Subordinated Debentures will be accounted for as "original issue discount" and
actual distributions of stated interest will not be separately reported as
taxable income. So long as the interest payment period is not extended, cash
distributions received by an initial Holder for any quarterly interest period
(assuming no disposition prior to the record date for such distribution) will
equal or exceed the sum of the daily accruals of income for such quarterly
interest period, unless the issue price of the Junior Subordinated Debentures
(as defined below) is less than $25.
The total amount of "original issue discount" on the Junior
Subordinated Debentures will equal the difference between the "issue price" of
the Junior Subordinated Debentures and their "stated redemption price at
maturity." Because SunAmerica has the right to extend the interest payment
period of the Junior Subordinated Debentures, all of the stated interest
payments on the Junior Subordinated Debentures will be includible in
determining their "stated redemption price at maturity." The "issue price" of
each $25 principal amount of the Junior Subordinated Debentures will be equal
to the fair market value of a Preferred Security on the Expiration Date
(reduced by Pre-Issuance Accrued Interest), which may be more or less than
$25, with the result that the total amount of original issue discount on the
Junior Subordinated Debentures may be more or less than the amount of stated
interest payable with respect thereto.
A Securityholder's initial tax basis for his pro rata share of the
Junior Subordinated Debentures will be equal to his pro rata share of their
"issue price," as defined above, and will be increased by original issue
discount accrued with respect thereto, and reduced by the amount of cash
distributions (including the amount of Pre-issuance Accrued Interest) paid to
such Securityholder. No portion of the amounts received on the Preferred
Securities will be eligible for the dividends received deduction.
Potential Extension of Payment Period on the Junior Subordinated Debentures
Securityholders will continue to accrue original issue discount with
respect to their pro rata share of the Junior Subordinated Debentures during
an extended interest payment period, and any holders who dispose of Preferred
Securities prior to the record date for the payment of interest following such
extended interest payment period will not receive from the Trust any cash
related thereto.
Distribution of Junior Subordinated Debentures to Holders of Preferred
Securities
Under current law, a distribution by the Trust of the Junior
Subordinated Debentures as described under the caption "Description of the
Preferred Securities -- Special Event Redemption or Distribution", will be
non-taxable and will result in the Securityholder receiving directly his pro
rata share of the Junior Subordinated Debentures previously held indirectly
through the Trust, with a holding period and tax basis equal to the holding
period and adjusted tax basis such Securityholder was considered to have had
in his pro rata share of the underlying Junior Subordinated Debentures prior
to such distribution.
Treatment of the Payment of Pre-issuance Accrued Interest
"Pre-issuance Accrued Interest" payable on the first interest payment
date should be treated as a return of capital with respect to a
Securityholder's pro rata interest in the Junior Subordinated Debentures,
reducing the Securityholder's tax basis in his pro rata share of the Junior
Subordinated Debentures.
Market Discount and Bond Premium
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debentures with
market discount, acquisition premium or amortizable bond premium. Such
holders are advised to consult their tax advisors as to the income tax
consequences of the acquisition, ownership and disposition of the Preferred
Securities.
Disposition of the Preferred Securities
Upon on a sale, exchange or other disposition of the Preferred
Securities (including a distribution of cash in redemption of a
Securityholder's Preferred Securities upon redemption or repayment of the
underlying Junior Subordinated Debentures, but excluding the distribution of
Junior Subordinated Debentures), a Securityholder will be considered to have
disposed of all or part of his pro rata share of the Junior Subordinated
Debentures, and will recognize gain or loss equal to the difference between
the amount realized and the Securityholder's adjusted tax basis in his pro
rata share of the underlying Junior Subordinated Debentures deemed disposed
of. Gain or loss will be capital gain or loss (except to the extent of any
accrued market discount with respect to such Securityholder's pro rata share of
the Junior Subordinated Debentures not previously included in income). See
"Market Discount and Bond Premium" above. Such gain or loss will be long-term
capital gain or loss if the Preferred Securities have been held for more than
one year.
The Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the
underlying Junior Subordinated Debentures. A Securityholder who disposes of
his Preferred Securities between record dates for payments of distributions
thereon will nevertheless be required to include accrued but unpaid interest
on the Junior Subordinated Debentures through the date of disposition in
income as ordinary income, and to add such amount to his adjusted tax basis in
his pro rata share of the underlying Junior Subordinated Debentures deemed
disposed of. Accordingly, such a Securityholder will recognize a capital loss
to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than the Securityholder's adjusted tax
basis (which will include accrued but unpaid interest). Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is
any corporation, individual, partnership, estate or trust that is, as to the
United States, a foreign corporation, a non-resident alien individual, a
foreign partnership or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law:
(i) payments by the Trust or any of its paying agents to any
holder of a Preferred Security who or which is a United States Alien
Holder will not be subject to United States federal withholding tax,
provided that (a) the beneficial owner of the Preferred Security does
not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of SunAmerica entitled to vote,
(b) the beneficial owner of the Preferred Security is not a
controlled foreign corporation that is related to SunAmerica through
stock ownership, and (c) either (A) the beneficial owner of the
Preferred Security certifies to the Trust or its agent, under
penalties of perjury, that it is not a United States holder and
provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business
(a "Financial Institution") and holds the Preferred Security
certifies to the Trust or its agent under penalties of perjury that
such statement has been received from the beneficial owner by it or
by a Financial Institution between it and the beneficial owner and
furnishes the Trust or its agent with a copy thereof;
(ii) a United States Alien Holder of a Preferred Security will
not be subject to United States federal withholding tax on any gain
realized upon the sale or other disposition of a Preferred Security;
and
(iii) any gain realized by a United States Alien Holder upon
the exchange of Series B Preferred for Preferred Securities will not
be subject to United States federal withholding tax.
Information Reporting to Holders
The Trust will report the original issue discount that accrued during
the year with respect to the Junior Subordinated Debentures, and any gross
proceeds received by the Trust from the retirement or redemption of the Junior
Subordinated Debentures, annually to the holders of record of the Preferred
Securities and the Internal Revenue Service. The Trust currently intends to
deliver such reports to holders of record prior to January 31 following each
calendar year. It is anticipated that persons who hold Preferred Securities
as nominees for beneficial holders will report the required tax information to
beneficial holders on Form 1099.
Backup Withholding
Payments made on, and proceeds from the sale of Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will generally
be allowed as a credit against the holder's federal income tax, provided the
required information is timely filed with the Internal Revenue Service.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon for the Trust by Richards, Layton &
Finger, Wilmington, Delaware, special Delaware counsel to the Trust. The
validity of the Preferred Securities Guarantee and the Junior Subordinated
Debentures will be passed upon for the Trust and SunAmerica by Davis Polk &
Wardwell, New York, New York, special counsel to SunAmerica and the Trust.
Davis Polk & Wardwell will rely as to matters of Maryland law on Piper &
Marbury, Baltimore, Maryland. Certain legal matters in connection with the
Preferred Securities, the Preferred Securities Guarantee and the Junior
Subordinated Debentures will be passed upon for the Trust and SunAmerica by
Susan L. Harris, Vice President and General Counsel - Corporate Affairs of
SunAmerica. Ms. Harris holds options, granted under SunAmerica's Employee
Stock Plan, to purchase in the aggregate less than 1% of SunAmerica's common
stock. David W. Ferguson, a partner of Davis Polk & Wardwell, is a director
of First SunAmerica Life Insurance Company, a subsidiary of SunAmerica.
EXPERTS
The consolidated financial statements incorporated in this Offering
Circular/Prospectus by reference to the Annual Report on Form 10-K for the
year ended September 30, 1994 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
ERISA MATTERS
SunAmerica and certain affiliates of SunAmerica, including Anchor
National Life Insurance Company and Sun Life Insurance Company of America, may
each be considered a "party in interest" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a
"disqualified person" within the meaning of the Code with respect to many
employee benefit plans. Prohibited transactions within the meaning of ERISA
or the Code may arise, for example, if the securities offered hereby are
acquired by a pension or other employee benefit plan with respect to which
SunAmerica or any of its affiliates is a service provider, unless such
securities are acquired pursuant to an exemption for transactions effected on
behalf of such plan by a "qualified professional asset manager" or pursuant to
any other available exemption. Any such pension or employee benefit plan
proposing to invest in the securities offered hereby should consult with its
legal counsel.
Facsimile copies of the Letter of Transmittal will be accepted.
Letters of Transmittal, certificates representing shares of Series B Preferred
and any other required documents should be sent by each Holder of Series B
Preferred or his broker, dealer, commercial bank, trust company or other
nominee to the Exchange Agent at one of the addresses as set forth below:
The Exchange Agent is:
The First National Bank of Chicago
By Hand or Overnight Courier in By Hand or Overnight Courier in
Chicago: New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission
(For Eligible Institutions Only):
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
The Information Agent is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
Any questions or requests for assistance or additional copies of this
Offering Circular/Prospectus, the Letter of Transmittal or for copies of the
Notice of Guaranteed Delivery may be directed to the Information Agent at its
telephone number and location set forth above. You may also contact your
broker, dealer, commercial bank or trust company or other nominee for
assistance concerning the Offer.
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
APPENDIX A
Appendix A - Graphic Information Omitted from Electronic Filing
The diagram is entitled "Diagram of Offer". The diagram includes boxes
representing the Trust, the three Regular Trustees, the Property Trustee
and the Delaware Trustee, SunAmerica and the Holders of Series B Preferred.
Arrows between such boxes depict the exchange of Preferred Securities for
Series B Preferred in the Offer, the purchase of Common Securities of the
Trust by SunAmerica for cash, the purchase by the Trust with such cash of
Junior Subordinated Debentures of SunAmerica and the deposit of Junior
Subordinated Debentures of SunAmerica in the Trust in respect of the
aggregate liquidation amount of the Preferred Securities issued in
connection with the Offer. There are two explanatory notes at the bottom
of the diagram, which state:
bullet Existing Holders of Series B Preferred who participate in the Offer
will receive one Preferred Security of the Trust for each outstanding
share of Series B Preferred that is validly tendered and accepted for
exchange.
bullet The principal amount of Junior Subordinated Debentures delivered to
SunAmerica Capital Trust I as trust assets will be equal to the sum
of (i) the aggregate liquidation amount of the Preferred Securities
issued in connection with the Offer and (ii) the purchase price of
the Common Securities issued to SunAmerica.
EXHIBIT B
SUNAMERICA FILES REGISTRATION STATEMENT TO
EXCHANGE SERIES B PREFERRED STOCK
LOS ANGELES, California -- December 21, 1994 -- SunAmerica Inc.
(NYSE: SAI) announced that it has filed a registration statement with the
Securities and Exchange Commission in connection with its proposed offer to
exchange its Junior Subordinated Debentures (the "Debentures") due 2025 for up
to 5,500,000 shares of the company's outstanding 9 1/4% Preferred Stock,
Series B.
In connection with the exchange, SunAmerica Capital, L.P., a
newly-formed limited partnership of which two subsidiaries of SunAmerica are
general partners proposed to offer its Cumulative Preferred Securities upon
delivery to the Partnership of the Debentures.
The two offers will commence concurrently. Terms of the
Debentures and the Cumulative Preferred Securities will be determined at the
time of commencement of the offers, which is expected to occur in early 1995
following SEC clearance of the registration statement. Merrill Lynch & Co.
will serve as sole dealer manager for the offers.
A registration statement relating to these securities has been
filed with the SEC, but has not yet become effective. These securities may
not be sold, nor may offers to buy be accepted prior to the time the
registration statement becomes effective.
This communication shall not constitute an offer to sell or
solicit any offer to buy, nor shall there be any sale of these securities in
any state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities law of any such state.
SunAmerica is a financial services company specializing in the
sale of long-term savings products and investments to the expanding
pre-retirement market. At September 30, 1994, the company held more than $23
billion of assets, including those on its balance sheet, in mutual funds and
in retirement trust accounts.
EXHIBIT C
This is neither an offer to exchange or to sell nor a solicitation of an offer
to exchange or buy any of these securities. The Offer is made only by the
Offering Circular/Prospectus and the related Letter of Transmittal and the
Offer is not being made to, nor will tenders be accepted from or on behalf of,
holders of these securities in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities or blue sky
laws of such jurisdiction. In any jurisdiction where the securities or blue
sky laws require the Offer to be made by a licensed broker or dealer, the
Offer is being made on behalf of the Trust by Merrill Lynch & Co. or one or
more other brokers or dealers which are licensed under the laws of such
jurisdiction.
Notice of Offer to Holders of
SUNAMERICA INC.
9 1/4% Preferred Stock, Series B
SunAmerica Capital Trust I, a Delaware statutory business trust (the
"Trust") is offering, upon the terms and subject to the conditions set forth
in its Offering Circular/Prospectus dated April 27, 1995 (the "Offering
Circular/Prospectus") and the accompanying Letter of Transmittal (the "Letter
of Transmittal" which, together with the Offering Circular/Prospectus,
constitute the "Offer"), to exchange its 9.95% Trust Originated Preferred
SecuritiesSM ("TOPrSSM") (the "Preferred Securities") for up to 5,500,000
shares of outstanding 9 1/4% Preferred Stock, Series B (the "Series B
Preferred") of SunAmerica Inc., a Maryland corporation ("SunAmerica").
Exchanges will be made on the basis of one (1) Preferred Security for each
share of Series B Preferred validly tendered and accepted for exchange in the
Offer. Shares of Series B Preferred not accepted for exchange because of
proration will be returned. In connection with the Offer, SunAmerica will
deposit in the Trust as trust assets its 9.95% Junior Subordinated Debentures,
Series A, due 2044 as set forth in the Offering Circular/Prospectus.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
MAY 25, 1995, UNLESS EXTENDED.
NEITHER THE BOARD OF DIRECTORS OF SUNAMERICA NOR SUNAMERICA NOR THE
TRUSTEES NOR THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF SERIES B
PREFERRED AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER. EACH
HOLDER OF SERIES B PREFERRED MUST MAKE ITS OWN DECISION ON WHAT ACTION TO TAKE
IN LIGHT OF ITS OWN PARTICULAR CIRCUMSTANCES.
Upon the terms and conditions of the Offer, including the provisions
relating to proration described in the Offering Circular/Prospectus, the Trust
will accept for exchange up to 5,500,000 shares of Series B Preferred, validly
tendered and not withdrawn prior to 12:00 midnight, New York City time, on May
25, 1995, or if the Offer is extended by the Trust, in its sole discretion,
the latest date and time to which the Offer has been extended (the "Expiration
Date"). Tenders of Series B Preferred pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date and, unless accepted for exchange by
the Trust, may be withdrawn at any time after 40 business days after April 28,
1995. Shares of Series B Preferred not accepted because of proration will be
returned to the tendering holders at SunAmerica's expense as promptly as
practicable following the Expiration Date.
<PAGE>
Subject to the next sentence, the Trust expressly reserves the right
to extend, amend or modify the terms of the Offer, and not accept for exchange
any Series B Preferred, at any time prior to the Expiration Date for any
reason, including (without limitation) if holders of fewer than 2,810,000
shares of Series B Preferred are tendered (which condition may be waived by
the Trust). In addition, acceptance of Series B Preferred validly tendered in
the Offer is subject to the condition that there be at least 400 record or
beneficial owners of Preferred Securities to be issued in exchange for Series
B Preferred, which condition may not be waived.
The purpose of the Offer is to refinance the Series B Preferred with
the Preferred Securities and to achieve certain tax efficiencies while
preserving SunAmerica's flexibility with respect to future financings.
_______________
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co.
The Offering Circular/Prospectus and Letter of Transmittal contain
important information which should be read before any action is taken by
holders of Series B Preferred. Tenders may be made only by a properly
completed and executed Letter of Transmittal and in conformance with the terms
thereof and of the Offering Circular/Prospectus.
SunAmerica will pay to Soliciting Dealers (as defined in the Offering
Circular/Prospectus) designated by the record or beneficial owner, as
appropriate, of Series B Preferred a solicitation fee of $0.50 per share of
Series B Preferred validly tendered and accepted for exchange pursuant to the
Offer, subject to certain conditions. Soliciting Dealers are not entitled to
a solicitation fee for shares of Series B Preferred beneficially owned by such
Soliciting Dealer.
The information required to be disclosed by paragraph (d)(1) of Rule
13e-4 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, is contained in the Offering Circular/Prospectus and is
incorporated herein by reference.
The Offering Circular/Prospectus and the related Letter of
Transmittal are first being sent to holders of Series B Preferred on April 28,
1995 and are being furnished to brokers, dealers, banks and similar persons
whose names, or names of whose nominees, appear on the lists of holders of the
Series B Preferred or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Series B Preferred.
Any questions or requests for assistance may be directed to the
Information Agent and the Dealer Manager at the addresses and telephone
numbers set forth below. Requests for copies of the Offering
Circular/Prospectus or of the Letter of Transmittal or the Notice of
Guaranteed Delivery may be directed to Georgeson & Company, Inc., the
Information Agent, at (800) 223-2064, and copies will be forwarded promptly at
SunAmerica's expense. Shareholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
Wall Street Plaza
<PAGE>
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
or
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1305
(212) 449-4906
April 28, 1995
EXHIBIT D
LETTER OF TRANSMITTAL
To Tender Shares of 91/4% Preferred Stock,
Series B (the "Series B Preferred")
of
SUNAMERICA INC.
Pursuant to the offer by SUNAMERICA CAPITAL TRUST I to exchange
its 9.95% Trust Originated Preferred SecuritiesSM ("TOPrSSM"),
for up to 5,500,000 outstanding shares of Series B Preferred
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MAY 25, 1995, UNLESS THE OFFER IS EXTENDED.
The Exchange Agent for the Offer is: The First National Bank of Chicago
By Hand or Overnight Courier in Chicago: By Hand or Overnight Courier in
New York:
The First National Bank of Chicago, First Chicago Trust Company of
Exchange Agent New York
One North State Street 14 Wall Street
9th Floor 8th Floor - Window 2
Attention: Securities Processing New York, New York 10005
Suite 0124
Chicago, Illinois 60602
By Mail:
(registered or certified mail recommended)
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission:
(For Eligible Institutions Only)
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- -------------
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
This Letter of Transmittal is to be completed by holders of shares of
Series B Preferred, either (i) if certificates for shares of Series B
Preferred are to be forwarded herewith or (ii) unless an Agent's Message (as
defined in the accompanying Offering Circular/Prospectus of SunAmerica Inc. and
SunAmerica Capital Trust I dated April 27, 1995 (the "Offering
Circular/Prospectus")) is utilized, if tenders of shares of Series B Preferred
are to be made by book-entry transfer into the account of The First National
Bank of Chicago, as Exchange Agent (the "Exchange Agent"), at The Depository
Trust Company ("DTC") pursuant to the procedures described under "The Offer --
Procedures for Tendering" in the Offering Circular/Prospectus. Holders of
shares of Series B Preferred who tender shares of Series B Preferred by
book-entry transfer are referred to herein as "Book-Entry Shareholders."
Any holder of Series B Preferred who submits this Letter of Transmittal and
tenders shares of Series B Preferred in accordance with the instructions
contained herein prior to the Expiration Date (as defined in the Offering
Circular/Prospectus) will thereby have directed SunAmerica Capital Trust I
(the "Trust") to deliver its 9.95% Trust Originated Preferred Securities
("TOPrS") (the "Preferred Securities") in exchange for such holder's Series B
Preferred and in consideration of the deposit by SunAmerica Inc.
("SunAmerica") with the Trust as trust assets of its 9.95% Junior Subordinated
Debentures, Series A, due 2044 (the "Junior Subordinated Debentures") as set
forth in the Offering Circular/Prospectus. Tenders of Series B Preferred
pursuant to this Letter of Transmittal are subject to withdrawal as described
in the Offering Circular/Prospectus under the caption "The Offer -- Withdrawal
of Tenders".
DESCRIPTION OF SHARES OF SERIES B PREFERRED TENDERED
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s) Shares of Series B Preferred Tendered
(Please fill in, if blank) (Attach additional list if necessary)
Certificate Total Number of Number of
Number(s)* Shares Represented Shares
by Certificate(s)* Tendered**
<S> <C> <C> <C>
Total Shares
<FN>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, the holder will be deemed to have tendered
the full number of shares of Series B Preferred represented by the
tendered certificates. See Instruction 4. </TABLE>
<PAGE>
( ) CHECK HERE IF TENDERED SHARES OF SERIES B PREFERRED ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering
Institution................................................................
Account No.
...........................................................................
Transaction Code No.
...........................................................................
( ) CHECK HERE IF TENDERED SHARES OF SERIES B PREFERRED ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Stockholder(s) ......................................
Date of Execution of Notice of Guaranteed Delivery........................
..........................................................................
Name of Institution which Guaranteed Delivery.............................
..........................................................................
If delivery is by book-entry transfer:
Name of Tendering Institution .........................................
Account No. ................
Transaction Code No. .....................................................
__________________
SOLICITED TENDERS
(SEE INSTRUCTION 11)
SunAmerica will pay to any Soliciting Dealer, as defined in Instruction 11,
a solicitation fee of $0.50 per share of Series B Preferred validly tendered
and accepted for exchange pursuant to the Offer (as herein defined).
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm:________________________________________________________________
(Please Print)
Name of Individual Broker or Financial Consultant:___________________________
Identification Number (if known):____________________________________________
Address:_____________________________________________________________________
_____________________________________________________________________________
(Include Zip Code)
The following is to be completed ONLY if customer's Series B Preferred held
in nominee name are tendered.
BENEFICIAL OWNERS NUMBER OF SHARES OF SERIES B PREFERRED TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
Beneficial Owner No. 1...................................___________________
Beneficial Owner No. 2...................................___________________
Beneficial Owner No. 3...................................___________________
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that: (i) it has complied with the applicable
requirements of the Securities Exchange Act of 1934 and the applicable rules
and regulations thereunder, in connection with such solicitations; (ii) it is
entitled to such compensation for such solicitation under the terms and
conditions of the Offer; (iii) in soliciting tenders of shares of Series B
Preferred, it has used no soliciting materials other than those furnished by
SunAmerica and the Trust; and (iv) if it is a foreign broker or dealer not
eligible for membership in the National Association of Securities Dealers,
Inc. (the "NASD"), it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations outside the United States to the same extent
as though it were an NASD member.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Exchange
Agent.
SOLICITING DEALERS ARE NOT ENTITLED TO A FEE FOR SHARES OF SERIES B
PREFERRED BENEFICIALLY OWNED BY SUCH SOLICITING DEALER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to SunAmerica Capital Trust I, a Delaware
statutory business trust (the "Trust"), the above-described shares of 9 1/4%
Preferred Stock, Series B, no par value (the "Series B Preferred"), pursuant
to the offer by the Trust to exchange its 9.95% Trust Originated Preferred
Securities (the "Preferred Securities") for up to 5,500,000 shares of Series B
Preferred of SunAmerica Inc. ("SunAmerica"), upon the terms and subject to the
conditions set forth in the Offering Circular/Prospectus, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which, together with
the Offering Circular/Prospectus, constitute the "Offer"). Shares of Series B
Preferred not accepted for exchange because of proration will be returned.
Subject to and effective upon acceptance for exchange of the shares of
Series B Preferred tendered herewith, the undersigned hereby sells, assigns
and transfers to or upon the order of the Trust all right, title and interest
in and to all the shares of Series B Preferred that are being tendered hereby
and appoints the Exchange Agent the true and lawful agent and attorney-in-fact
of the undersigned with respect to such shares of Series B Preferred, with full
power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such shares of Series B Preferred or transfer ownership of such shares of
Series B Preferred on the account books maintained by DTC, together, in any
<PAGE>
such case, with all accompanying evidences of transfer and authenticity, to
the Exchange Agent for the account of the Trust, (b) present such shares of
Series B Preferred for transfer on the books of SunAmerica and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
shares of Series B Preferred, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the shares
of Series B Preferred tendered hereby and to acquire Preferred Securities
issuable upon the exchange of such tendered Series B Preferred and that, when
the undersigned's shares of Series B Preferred are accepted for exchange, the
Trust will acquire good and unencumbered title to such shares of tendered
Series B Preferred, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Trust to
be necessary or desirable to complete the exchange, assignment and transfer of
tendered Series B Preferred or transfer ownership of such Series B Preferred.
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, legal representatives,
successors, assigns, executors and administrators of the undersigned. Except
as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of shares of Series B Preferred
pursuant to any one of the procedures described in "The Offer -- Procedures
for Tendering" of the Offering Circular/Prospectus and in the instructions
hereto will constitute agreements between the undersigned and the Trust upon
the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Exchange Instructions", please
cause Preferred Securities to be issued, and return any shares of Series B
Preferred not tendered or not accepted for exchange, in the name(s) of the
undersigned (and, in the case of shares of Series B Preferred tendered by
book-entry transfer, by credit to the account at DTC). Similarly, unless
otherwise indicated under "Special Delivery Instructions", please mail any
certificates for shares of Series B Preferred not tendered or not accepted for
exchange (and accompanying documents, as appropriate), and any certificates
for Preferred Securities, to the undersigned at the address shown below the
undersigned's signature(s). If both "Special Exchange Instructions" and
"Special Delivery Instruction" are completed, please cause Preferred
Securities to be issued, and return any shares of Series B Preferred not
tendered or not accepted for exchange, in the name(s) of, and deliver any
certificates for such Series B Preferred or Preferred Securities to, the
person(s) so indicated (and in the case of shares of Series B Preferred
tendered by book-entry transfer, by credit to the account at DTC so
indicated). The undersigned recognizes that the Trust has no obligation,
pursuant to the "Special Exchange Instructions", to transfer any shares of
Series B Preferred from the name of the registered holder(s) thereof if the
Trust does not accept for exchange any of the shares of Series B Preferred so
tendered.
SPECIAL EXCHANGE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5 and 7)
To be completed ONLY if certificates To be completed ONLY if certificates
for Preferred Securities are to be for shares of Series B Preferred
issued, or beneficial interests in not tendered or not accepted for
certificates representing exchange, or certificates for
Preferred Securities are to be Preferred Securities, are to be
recorded, or certificates for shares mailed to someone other than the
of Series B Preferred not tendered undersigned, or to the undersigned at
or not accepted for exchange are to an address other than that shown
be issued, or beneficial interests in below the undersigned's signature(s).
global securities representing shares
of Series B Preferred not accepted
for exchange are to be recorded, in
the name of someone other than the
undersigned.
Issue ( ) certificates for Mail ( ) certificates for
Preferred Securities shares of Series B
in name of: Preferred to:
Record ( ) beneficial interests in ( ) certificates for
certificates representing Preferred Securities to:
Preferred Securities to
DTC account of:
Name..............................
Issue ( ) certificates for (Please Print)
shares of Series B
Preferred to: Address...........................
..................................
Record ( ) beneficial interests (Zip Code)
in shares of Series B
Preferred to DTC
account of:
Name..................................
(Please Print)
Address...............................
......................................
(Zip Code)
......................................
(Taxpayer Identification No.)
SIGN HERE
(Please complete Substitute Form W-9 below)
.........................................
.........................................
Signature(s) of Owner(s)
Dated ................., 1995
Name(s)..................................
<PAGE>
.........................................
(Please Print)
Capacity (full title)....................
Address..................................
.........................................
(Include Zip Code)
Area Code and
Telephone No. ...........................
(Must be signed by registered holder(s) exactly as name(s) appear(s)
on certificate(s) for shares of Series B Preferred or on a security
position listing or by person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in
a fiduciary or representative capacity, please set forth full title
and see Instruction 5.)
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized
Signature...................................
Name........................................
Title.......................................
Address.....................................
Name of Firm................................
Area Code and
Telephone Number............................
Dated ........................, 1995
PAYER'S NAME: SUNAMERICA INC.
Name(s) as shown above on certificate(s) for shares of Series B Preferred
(if joint ownership, list first and circle the name of the person or entity
whose number you enter in Part I below).
Address (if holder does not complete, signature in Part III below will
constitute a certification that the address on the reverse hereof is
correct).
City, State, and Zip Code
SUBSTITUTE Social Security
Form W-9 Number
Department of the Part I -- PLEASE OR
Treasury Internal PROVIDE YOUR TIN IN ___________________
Revenue Service THE BOX AT RIGHT AND Employer
Payer's Request For CERTIFY BY SIGNING Identification
Taxpayer AND DATING BELOW Number
Identification TIN Applied For ( )
Number (TIN)
And Certification
Part II --
For Payees exempt from backup withholding,
write "Exempt" here.
_________________
Part III -- Certification. Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to backup withholding.
Certification Instructions. You must cross out item (2) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of under reporting interest or dividends on your tax
return. However, if you have been notified by the IRS that you are no
longer subject to backup withholding, do not cross out item (2).
SIGNATURE______________________________________ DATE________________________
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART I OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (a) I have mailed or
delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number within 60 days, thirty-one (31) percent of all
reportable payments made to me will be withheld until I provide a properly-
certified Taxpayer Identification Number to the Exchange Agent.
________________________________________________ ________________________
Signature Date
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offers
1. Guarantee of Signatures. No signature guarantee is required on
this Letter of Transmittal (i) if tendered shares of Series B Preferred are
registered in the name(s) of the undersigned and the Preferred Securities to
be issued in exchange therefor are to be issued (and any shares of Series B
Preferred not tendered or not accepted for exchange are to be returned) in the
name of the registered holder(s) (which term, for the purposes described
herein, shall include any participant in DTC whose name appears on a security
listing as the owner of shares of Series B Preferred) and (ii) such holder(s)
have not completed the instruction entitled "Special Exchange Instructions" or
"Special Delivery Instructions" on this Letter of Transmittal. If the
tendered shares of Series B Preferred are registered in the name(s) of someone
other than the undersigned or if the Preferred Securities to be issued in
exchange therefor are to be issued (or shares of Series B Preferred not
tendered or not accepted for exchange are to be returned) in the name of any
other person, such tendered shares of Series B Preferred must be endorsed or
accompanied by written instruments of transfer in form satisfactory to the
Trust and duly executed by the registered holder, and the signature on the
endorsement or instrument of transfer must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion
Program or the Stock Exchange Medallion Program (any of the foregoing
hereinafter referred to as an "Eligible Institution"). See Instruction 5.
2. Delivery of Letter of Transmittal and Series B Preferred. This
Letter of Transmittal is to be completed by holders of shares of Series B
Preferred either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offering Circular/Prospectus) is utilized,
if tenders are to be made pursuant to the procedure for tender by book-entry
transfer set forth under "The Offer -- Procedures for Tendering -- Book-Entry
Transfer" in the Offering Circular/Prospectus. Certificates for shares of
Series B Preferred, or timely confirmation (a "Book-Entry Confirmation") of
a book-entry transfer of such shares of Series B Preferred into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or a facsimile
hereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in the case of a book-entry delivery, and
any other documents required by this Letter of Transmittal, must be received
by the Exchange Agent at one of its addresses set forth herein prior to the
Expiration Date.
If a holder of Series B Preferred desires to participate in the Offer
and time will not permit this Letter of Transmittal or shares of Series B
Preferred to reach the Exchange Agent before the Expiration Date or the
procedure for book-entry transfer cannot be completed on a timely basis, a
tender may be effected if the Exchange Agent has received at its office prior
to the Expiration Date, a letter, telegram or facsimile transmission from an
Eligible Institution setting forth the name and address of the tendering
Holder, the name(s) in which the shares of Series B Preferred are registered
and, if the shares of Series B Preferred are held in certificated form, the
certificate numbers of the shares of Series B Preferred to be tendered, and
stating that the tender is being made thereby and guaranteeing that within
five New York Stock Exchange, Inc. ("NYSE") trading days after the date of
execution of such letter, telegram or facsimile transmission by the Eligible
Institution, the shares of Series B Preferred in proper form for transfer
<PAGE>
together with a properly completed and duly executed Letter of Transmittal
(and any other required documents), or a confirmation of book-entry transfer
of such shares of Series B Preferred into the Exchange Agent's account at DTC,
will be delivered by such Eligible Institution. Unless the shares of Series B
Preferred being tendered by the above-described method are deposited with the
Exchange Agent within the time period set forth above (accompanied or preceded
by a properly completed Letter of Transmittal and any other required
documents) or a confirmation of book-entry transfer of such Series B Preferred
into the Exchange Agent's account at DTC in accordance with DTC's Automated
Tender Offer Program ("ATOP") procedures is received, the Trust may, at its
option, reject the tender.
The method of delivery of shares of Series B Preferred and all other
required documents, including delivery through DTC, is at the option and risk
of the tendering shareholder. If certificates for shares of Series B
Preferred are sent by mail, registered mail with return receipt requested,
properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted,
and no fractional shares of Series B Preferred will be accepted for exchange.
By executing this Letter of Transmittal (or facsimile hereof), the tendering
holder waives any right to receive any notice of the acceptance of the shares
of Series B Preferred for exchange.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of shares of Series B Preferred should
be listed on a separate signed schedule attached hereto.
4. Partial Tenders. (Not applicable to Book-Entry Shareholders) If
fewer than all the shares of Series B Preferred represented by any certificate
delivered to the Exchange Agent are to be tendered, fill in the number of
shares of Series B Preferred which are to be tendered in the box entitled
"Number of Shares Tendered". In such case, a new certificate for the
remainder of the shares of Series B Preferred represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the appropriate box on this Letter of
Transmittal, as promptly as practicable following the Expiration Date. All
shares of Series B Preferred represented by certificates delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the shares of Series B Preferred tendered hereby, the
signature(s) must correspond with the name(s) as written on the face of the
certificates without alteration, enlargement or any change whatsoever.
If any of the shares of Series B Preferred tendered hereby are held
of record by two or more persons, all such persons must sign this Letter of
Transmittal.
If any of the shares of Series B Preferred tendered hereby are
registered in different names on different certificates, it will be necessary
to complete, sign and submit as many separate Letters of Transmittal as there
are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s)
of the shares of Series B Preferred tendered hereby, no endorsements of
certificates or separate stock powers are required unless Preferred Securities
issued in exchange therefor are to be issued, or shares of Series B Preferred
<PAGE>
not tendered or not exchanged are to be returned, in the name of any person
other than the registered holder(s). Signatures on any such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the shares of Series B Preferred tendered hereby,
certificates must be endorsed or accompanied by appropriate stock powers, in
either case, signed exactly as the name(s) of the registered holder(s)
appear(s) on the certificates for such shares of Series B Preferred.
Signature(s) on any such certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Trust of the authority of such person so
to act must be submitted.
6. Stock Transfer Taxes. SunAmerica will pay all stock transfer
taxes, if any, applicable to the exchange of any shares of Series B Preferred
pursuant to the Offer. If, however, certificates representing Preferred
Securities are to be delivered to, or shares of Series B Preferred not
tendered or accepted for exchange, are to be issued in the name of, any person
other than the registered holder of the Series B Preferred tendered or if a
transfer tax is imposed for any reason other than the exchange of Series B
Preferred pursuant to the Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted with this Letter of Transmittal,
the amount of such transfer taxes will be billed directly to such tendering
holder.
7. Special Exchange and Delivery Instructions. If certificates
representing Preferred Securities are to be issued in the name of, or any
shares of Series B Preferred not tendered or not accepted for exchange are to
be issued or to be returned to, a person other than the person(s) signing this
Letter of Transmittal or any certificates for Preferred Securities or
certificates for shares of Series B Preferred not tendered or not accepted for
exchange are to be mailed to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal
at an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed. Book-Entry Shareholders may
request that shares of Series B Preferred not accepted for exchange be
credited to such account maintained at DTC as such Book-Entry Shareholder may
designate under "Special Exchange Instructions". If no such instructions are
given, such shares of Series B Preferred not accepted for exchange will be
returned by crediting the account at DTC.
8. Substitute Form W-9. Under the federal income tax laws, the
Exchange Agent may be required to withhold 31% of the amount of any payments
made to certain shareholders pursuant to the Offer. In order to avoid such
backup withholding, each tendering shareholder, and, if applicable, each other
payee, must provide such shareholder's or payee's correct taxpayer
identification number and certify that such shareholder or payee is not
subject to such backup withholding by completing the Substitute Form W-9 set
forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. Certain shareholders or payees (including, among others, all
corporations and certain foreign individual(s) are not subject to these backup
<PAGE>
withholding and reporting requirements. In order to satisfy the Exchange
Agent that a foreign individual qualifies as an exempt recipient, such
shareholder or payee must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Exchange Agent. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a taxpayer identification number if you do not have one and how
to complete the Substitute Form W-9 if Shares are held in more than one name),
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
9. Waiver of Conditions. The conditions of the Offer may be waived
by the Trust from time to time in accordance with, and subject to the
limitations described in, the Offering Circular/Prospectus, provided that
acceptance of Series B Preferred validly tendered in the Offer is subject to
the condition that as of the Expiration Date there be at least 400 record or
beneficial holders of Preferred Securities to be issued in exchange of such
Series B Preferred, which condition may not be waived.
10. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offering Circular/Prospectus and this
Letter of Transmittal may be obtained from the Trust or the Information Agent
at their respective addresses or telephone numbers set forth below.
11. Solicited Tenders. SunAmerica will pay to a Soliciting Dealer
(as defined herein) a solicitation fee of $0.50 per share of Series B
Preferred validly tendered and accepted for exchange pursuant to the Offer.
For purposes of this Instruction 11, "Soliciting Dealer" includes (i) any
broker or dealer in securities, including the Dealer Manager in its capacity
as a dealer or broker, who is a member of any national securities exchange or
of the National Association of Securities Dealers, Inc. (the "NASD"), (ii) any
foreign broker or dealer not eligible for membership in the NASD who agrees to
conform to the NASD's Rules of Fair Practice in soliciting tenders outside the
United States to the same extent as though it were an NASD member, or (iii)
any bank or trust company, any one of whom has solicited and obtained a tender
pursuant to the Offer. No such fee shall be payable to a Soliciting Dealer
in respect of shares of Series B Preferred registered in the name of such
Soliciting Dealer unless such shares of Series B Preferred are held by such
Soliciting Dealer as nominee and such shares of Series B Preferred are being
tendered for the benefit of one or more beneficial owners identified on the
Letter of Transmittal or on the Notice of Solicited Tenders (included in the
materials provided to brokers and dealers). No such fee shall be payable to a
Soliciting Dealer with respect to the tender of shares of Series B Preferred
by a holder unless the Letter of Transmittal accompanying such tender
designates such Soliciting Dealer as such in the box captioned "Solicited
Tenders" or the Notice of Solicited Tenders accompanying such tender
designates such Soliciting Dealer. No such fee shall be payable to a
Soliciting Dealer with respect to the tender of shares of Series B Preferred
by the holder of record, for the benefit of the beneficial owner, unless the
beneficial owner has designated such Soliciting Dealer. No such fee shall be
payable to a Soliciting Dealer if such Soliciting Dealer is required for any
reason to transfer the amount of such fee to a depositing holder. No broker,
dealer, bank, trust company or fiduciary shall be deemed to be the agent of
SunAmerica, the Trust, the Exchange Agent, the Information Agent or the Dealer
Manager. Soliciting Dealers are not entitled to a solicitation fee for shares
of Series B Preferred beneficially owned by such Soliciting Dealer.
No such fee shall be payable to a Soliciting Dealer unless the
Soliciting Dealer returns a Notice of Solicited Tenders to the Exchange Agent
within 5 business days after expiration of the Offer.
<PAGE>
(DO NOT WRITE IN SPACES BELOW)
Date Received_________ Accepted By________ Checked By__________
Shares of Shares of Shares of Shares of
Series B Series B Series B No. of Series B
Preferred Preferred Preferred Preferred Preferred Certificate
Surrendered Tendered Accepted Securities Returned Block No.
- ----------- --------- --------- ---------- --------- ------------
__________________________________________________________________
Delivery Prepared By _________ Checked By_________ Date________
SunAmerica Capital Trust I
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Call Toll-Free: (800) 871-2000
The Information Agent for the Offer is:
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
All Others Call Toll-Free:
(800) 223-2064
<PAGE>
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
250 Vesey Street
North Tower
New York, New York 10281-1201
(212) 449-4906
April 28, 1995
EXHIBIT E
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.95% TRUST ORIGINATED PREFERRED SECURITIESSM ("TOPrSSM")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth in the
Offering Circular/Prospectus by
SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
April 28, 1995
To Our Clients:
Enclosed for your consideration are the Offering Circular/Prospectus
dated April 27, 1995 (the "Offering Circular/Prospectus") and the related
Letter of Transmittal (which together constitute the "Offer") in connection
with the Offer by SunAmerica Capital Trust I, a Delaware statutory business
trust (the "Trust") to exchange its 9.95% Trust Originated Preferred
Securities ("TOPrS") (the "Preferred Securities") for up to 5,500,000 shares
of outstanding 9 1/4% Preferred Stock, Series B (the "Series B Preferred") of
SunAmerica Inc., a Maryland corporation ("SunAmerica") that are validly
tendered and accepted for exchange pursuant to the Offer. In connection with
the Offer, SunAmerica will deposit in the Trust as trust assets its 9.95%
Junior Subordinated Debentures, Series A, due 2044 as set forth in the
Offering Circular/Prospectus.
Pursuant to the Offer, exchanges will be made on the basis of one (1)
Preferred Security for each share of Series B Preferred validly tendered and
accepted for exchange in the Offer. Shares of Series B Preferred not accepted
for exchange because of proration will be returned.
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
The Trust will accept for exchange all shares of Series B Preferred
validly tendered and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to
proration described in the Offering Circular/Prospectus. We are the holder of
record of shares of Series B Preferred held for your account. A tender of
such shares of Series B Preferred can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is
<PAGE>
furnished to you for your information only and cannot be used by you to tender
shares of Series B Preferred held by us for your account.
We request instructions as to whether you wish us to tender any or
all of the shares of Series B Preferred held by us for your account, upon the
terms and subject to the conditions set forth in the Offering
Circular/Prospectus and the Letter of Transmittal. We also request that you
designate, in the box captioned "Soliciting Tenders", any Soliciting Dealer
who solicited your tender of shares of Series B Preferred.
Your attention is invited to the following:
1. The Offer, the proration period and withdrawal rights expire at
12:00 Midnight, New York City time, on May 25, 1995, unless the Offer is
extended.
2. Subject to the next sentence, the Trust expressly reserves the
right to extend, amend or modify the terms of the Offer, and not accept for
exchange any Series B Preferred, at any time prior to the date of expiration
of the Offer for any reason, including (without limitation) if holders of fewer
than 2,810,000 shares of Series B Preferred are tendered (which condition may
be waived by the Trust). In addition, acceptance of Series B Preferred
validly tendered in the Offer is subject to the condition that there be at
least 400 record or beneficial holders of Preferred Securities to be issued
in exchange for Series B Preferred, which condition may not be waived.
3. Any stock transfer taxes applicable to the exchange of shares of
Series B Preferred pursuant to the Offer will be paid by SunAmerica, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your shares of Series B
Preferred, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An
envelope to return your instructions to us is enclosed. If you authorize
tender of your shares of Series B Preferred, all such shares of Series B
Preferred will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the Expiration Date.
As described in the Offering Circular/Prospectus, if fewer than all
shares of Series B Preferred validly tendered prior to the Expiration Date are
to be accepted by the Trust, the Trust will accept shares of Series B
Preferred from each tendering holder on a pro rata basis, subject to
adjustment to avoid the acceptance for exchange of fractional shares.
THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR
ON BEHALF OF, HOLDERS OF SHARES OF SERIES B PREFERRED IN ANY JURISDICTION IN
WHICH THE MAKING OF THE OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE LAWS OF SUCH JURISDICTION. IN THOSE JURISDICTIONS THE LAWS OF WHICH
REQUIRE THAT THE OFFER BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL
BE DEEMED TO BE MADE ON BEHALF OF THE TRUST BY MERRILL LYNCH & CO. OR ONE OR
MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH
JURISDICTION.
Instructions with Respect to the Offer
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offering Circular/Prospectus dated April 27, 1995 and the related
Letter of Transmittal in connection with the Offer by the Trust to exchange
its Preferred Securities for up to 5,500,000 shares of outstanding 9 1/4%
Preferred Stock, Series B of SunAmerica that are validly tendered and accepted
<PAGE>
for exchange. Pursuant to the Offer, exchanges will be made on the basis of
one Preferred Security for each share of Series B Preferred validly tendered
and accepted for exchange in the Offer. Shares of Series B Preferred not
accepted for exchange because of proration will be returned.
This will instruct you to tender the number of shares of Series B
Preferred indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Offering
Circular/Prospectus and the related Letter of Transmittal.
( ) By checking this box, all shares of Series B Preferred held by you
for our account, including fractional shares, will be tendered in the
Offer. If fewer than all shares of Series B Preferred are to be
tendered, we have checked the box and indicated below the aggregate
number of shares of Series B Preferred to be tendered by you.
________________shares(*)
____________________
* Unless otherwise indicated, it will be assumed that all shares of
Series B Preferred held by us for your account are to be tendered.
Please designate in the box below any Soliciting Dealer who solicited your
tender.
SOLICITED TENDERS
The undersigned represents that the Soliciting Dealer who solicited
and obtained this tender is:
Name of Firm:___________________________________________________________
(Please Print)
Name of Individual Broker
or Financial Consultant:________________________________________________
Identification Number (if known):_______________________________________
Address:________________________________________________________________
________________________________________________________________________
(Include Zip Code)
SIGN HERE
............................ ...............................
............................ ...............................
Signature(s) Please print name(s) and
address(es) here
Dated.......................
EXHIBIT F
SUNAMERICA CAPITAL TRUST I
OFFER TO EXCHANGE ITS
9.95% TRUST ORIGINATED PREFERRED SECURITIESSM ("TOPrSSM")
(liquidation amount $25 per
Preferred Security and
guaranteed to the extent set forth in the
Offering Circular/Prospectus by
SunAmerica Inc.)
FOR UP TO 5,500,000 OUTSTANDING SHARES OF
9 1/4% PREFERRED STOCK, SERIES B
OF
SUNAMERICA INC.
April 28, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees
We have been appointed by SunAmerica Inc., a Maryland corporation
("SunAmerica") and SunAmerica Capital Trust I, a Delaware statutory business
trust (the "Trust"), to act as Dealer Manager in connection with the offer by
the Trust to exchange, upon the terms and subject to the conditions set forth
in the Offering Circular/Prospectus referred to below and the related Letter
of Transmittal (which together constitute the "Offer"), its 9.95% Trust
Originated Preferred Securities ("TOPrS") (the "Preferred Securities") for up
to 5,500,000 shares of outstanding 9 1/4% Preferred Stock, Series B (the
"Series B Preferred") of SunAmerica that are validly tendered and accepted for
exchange pursuant to the Offer. In connection with the Offer, SunAmerica will
deposit in the Trust as trust assets its 9.95% Junior Subordinated Debentures,
Series A, due 2044 as set forth in the Offering Circular/Prospectus referred
to below.
- ----------------
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
Pursuant to the Offer, exchanges will be made on the basis of one
Preferred Security for each share of Series B Preferred validly tendered and
accepted for exchange in the Offer. Shares of Series B Preferred not accepted
for exchange because of proration will be returned.
The Trust will accept for exchange all shares of Series B Preferred
validly tendered and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to
proration described in the Offering Circular/Prospectus dated April 27, 1995
(the "Offering Circular/Prospectus").
<PAGE>
For your information and for forwarding to your clients for whom you
hold shares of Series B Preferred registered in your name or in the name of
your nominee, we are enclosing the following documents:
1. Offering/Circular Prospectus dated April 27, 1995;
2. Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing
information relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the shares of Series B Preferred and all other required
documents cannot be delivered to the Exchange Agent by the
Expiration Date (as defined in the Offering/Circular
Prospectus), or the book-entry transfer of the shares of Series
B Preferred cannot be completed by the Expiration Date;
4. A form of letter that may be sent to your clients of whose
accounts you hold shares of Series B Preferred registered in
your name or in the name of your nominee, with space provided
for obtaining such clients' instructions and designation of
Soliciting Dealer with regard to the Offer; and
5. Return envelope addressed to The First National Bank of
Chicago, the Exchange Agent.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MAY 25, 1995, UNLESS THE OFFER IS EXTENDED.
NEITHER THE BOARD OF DIRECTORS OF SUNAMERICA NOR SUNAMERICA NOR THE
TRUSTEES NOR THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF SERIES B
PREFERRED AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING IN THE OFFER.
HOLDERS OF SERIES B PREFERRED ARE URGED TO CONSULT THEIR FINANCIAL AND TAX
ADVISORS IN MAKING THEIR DECISIONS ON WHAT ACTION TO TAKE IN LIGHT OF THEIR
OWN PARTICULAR CIRCUMSTANCES.
SunAmerica will pay to a Soliciting Dealer (as defined herein) a
solicitation fee of $0.50 per share of Series B Preferred validly tendered and
accepted for exchange pursuant to the Offer. For purposes of this letter,
"Soliciting Dealer" includes (i) any broker or dealer in securities, including
the Dealer Manager in its capacity as a broker or dealer, who is a member of
any national securities exchange or of the National Association of Securities
Dealers, Inc. (the "NASD"), (ii) any foreign broker or dealer not eligible for
membership in the NASD who agrees to conform to the NASD's Rules of Fair
Practice in soliciting tenders outside the United States to the same extent as
though it were an NASD member, or (iii) any bank or trust company, any one of
whom has solicited and obtained a tender pursuant to the Offer. No such fee
shall be payable to a Soliciting Dealer in respect of shares of Series B
Preferred registered in the name of such Soliciting Dealer unless such shares
of Series B Preferred are held by such Soliciting Dealer as nominee and such
shares of Series B Preferred are being tendered for the benefit of one or more
beneficial owners identified on the Letter of Transmittal or on the Notice of
Solicited Tenders. No such fee shall be payable to a Soliciting Dealer with
respect to the tender of shares of Series B Preferred by a holder unless the
Letter of Transmittal accompanying such tender designates such Soliciting
Dealer as such in the box captioned "Solicited Tenders" or the Notice of
Solicited Tenders accompanying such tender designates such Soliciting Dealer.
<PAGE>
No such fee shall be payable to a Soliciting Dealer with respect to the tender
of shares of Series B Preferred by the holder of record, for the benefit of
the beneficial owner, unless the beneficial owner has designated such
Soliciting Dealer. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such
fee to a depositing holder. No broker, dealer, bank, trust company or
fiduciary shall be deemed to be the agent of SunAmerica, the Trust, the
Exchange Agent, the Information Agent or the Dealer Manager. Soliciting
Dealers are not entitled to a solicitation fee for shares of Series B
Preferred beneficially owned by such Soliciting Dealer.
SunAmerica will upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers. SunAmerica will
pay all stock transfer taxes applicable to the acceptance of shares of Series
B Preferred pursuant to the Offer, subject to Instruction 6 of the Letter of
Transmittal.
Soliciting Dealers should take care to ensure proper record-keeping
to document their entitlement to any solicitation fee.
In order for a Soliciting Dealer to receive a solicitation fee, the
Exchange Agent must have received from such Soliciting Dealer a properly
completed and duly executed Notice of Solicited Tenders in the form attached
hereto (or facsimile thereof) within 5 business days after expiration of the
Offer.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent or the undersigned at the addresses and telephone
numbers set forth in the back cover of the Offering Circular/Prospectus.
Very truly yours,
MERRILL LYNCH & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF SUNAMERICA, THE TRUST, THE TRUSTEES OF THE TRUST,
THE DEALER MANAGER, THE INFORMATION AGENT OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF
ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
NOTICE OF SOLICITED TENDERS
List below the number of shares of Series B Preferred whose tender
you have solicited. All shares of Series B Preferred beneficially owned by a
beneficial owner, whether in one account or several, and in however many
capacities, must be aggregated for purposes of completing the tables below.
Any questions as to what constitutes beneficial ownership should be directed
to the Exchange Agent. If the space below is inadequate, list the shares of
Series B Preferred in a separate signed schedule and affix the list to this
Notice of Solicited Tenders. Please do not complete the sections of the table
headed "TO BE COMPLETED ONLY BY EXCHANGE AGENT."
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE EXCHANGE
AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER OF THE OFFERING
CIRCULAR/PROSPECTUS. ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED
<PAGE>
TENDERS SHOULD BE DIRECTED TO THE INFORMATION AGENT AT THE TELEPHONE NUMBER
SET FORTH ON THE BACK COVER OF THE OFFERING CIRCULAR/PROSPECTUS.
SOLICITED TENDERS OF SHARES OF SERIES B PREFERRED NOT BENEFICIALLY
OWNED BY SOLICITING DEALER
<TABLE>
<CAPTION>
TO BE COMPLETED TO BE COMPLETED TO BE COMPLETED TO BE COMPLETED
BY THE SOLICITING BY THE SOLICITING ONLY BY ONLY BY
DEALER DEALER EXCHANGE AGENT EXCHANGE AGENT
NUMBER OF FEE
NUMBER OF SHARES VOI TICKET SHARES $0.50 PER
BENEFICIAL OWNERS TENDERED NUMBER* ACCEPTED SHARE
<S> <C> <C> <C> <C>
Beneficial Owner No. 1......
------------------- ------------------- ----------------- -----------------
Beneficial Owner No. 2......
------------------- ------------------- ----------------- -----------------
Beneficial Owner No. 3......
------------------- ------------------- ----------------- -----------------
Beneficial Owner No. 4......
------------------- ------------------- ----------------- -----------------
Beneficial Owner No. 5......
------------------- ------------------- ----------------- -----------------
Total.....................
------------------- ------------------- ----------------- -----------------
<FN>
* Complete if shares of Series B Preferred delivered by book-entry transfer.
</TABLE>
All questions as to the validity, form and eligibility (including
time of receipt) of Notices of Solicited Tenders will be determined by the
Exchange Agent, in its sole discretion, which determination will be final and
binding. Neither the Exchange Agent nor any other person will be under any
duty to give notification of any defects or irregularities in any Notice of
Solicited Tenders or incur any liability for failure to give such notification.
The undersigned hereby confirms that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, and the
applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offering Circular/Prospectus; (iii) in
soliciting tenders of shares of Series B Preferred, it has used no soliciting
materials other than those furnished by SunAmerica or the Trust; and (iv) if
it is a foreign broker or dealer not eligible for membership in the NASD, it
has agreed to conform to the NASD's Rules of Fair Practice in making
solicitations outside the United States to the same extent as though it were
an NASD member.
- ------------------------------ -------------------------------
Printed Firm Name Address
- ------------------------------ -------------------------------
Authorized Signature Area Code and Telephone Number
EXHIBIT G
NOTICE OF GUARANTEED DELIVERY
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if (i) certificates for shares of 9
1/4% Preferred Stock, Series B (the "Series B Preferred") of SunAmerica Inc.
("SunAmerica") cannot be delivered to the Exchange Agent by the Expiration Date
(as defined in the Offering Circular/Prospectus of SunAmerica and SunAmerica
Capital Trust I dated April 27, 1995 (the "Offering Circular/Prospectus")),
(ii) the procedure for book-entry transfer of shares of Series B Preferred (as
set out in the Offering Circular/Prospectus) cannot be completed by the
Expiration Date or (iii) the Letter of Transmittal (or a facsimile thereof)
and all other required documents cannot be delivered to the Exchange Agent
prior to the Expiration Date. This form, properly completed and duly
executed, may be delivered by hand or facsimile transmission or mail to the
Exchange Agent. See the Offering Circular/Prospectus.
To: The First National Bank of Chicago, Exchange Agent
By Hand or Overnight By Hand or Overnight
Courier in Chicago: Courier in New York:
The First National Bank First Chicago Trust Company
of Chicago, of New York
Exchange Agent 14 Wall Street
One North State Street 8th Floor - Window 2
9th Floor New York, New York 10005
Attention: Securities Processing
Suite 0124
Chicago, Illinois 60602
By Mail:
(registered or certified mail recommended)
The First National Bank of Chicago,
Exchange Agent
Registered Securities Processing Unit
One First National Plaza
Suite 0124
Chicago, Illinois 60670-0124
By Facsimile Transmission:
(For Eligible Institutions Only)
(312) 407-1067 or (212) 240-8938
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(800) 524-9472 (Chicago) or (212) 240-8800 (New York)
Delivery of this Notice of Guaranteed Delivery to an address other than
as set forth above or transmission of instructions via facsimile transmission
to a number other than as set forth above will not constitute a valid delivery.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to SunAmerica Capital Trust I (the
"Trust"), upon the terms and conditions set forth in the Offering
Circular/Prospectus dated April 27, 1995 and the related Letter of Transmittal
(which constitute the "Offer"), receipt of which is hereby acknowledged, the
number of shares of Series B Preferred set forth below, pursuant to the
guaranteed delivery procedure set forth in the Offering Circular/Prospectus.
SIGN HERE
Number of shares of Series B
Preferred tendered:..................
Certificate Nos. (if available)
...................................
.......................................
.......................................
...................................
If shares of Series B Preferred will be (Signature(s))
tendered by book-entry transfer:
...................................
Name of Tendering (Name(s)) (Please Print)
Institution:.........................
...................................
(Address)
Account No. ...........................
...................................
(Zip Code)
...................................
(Area Code and Telephone No.)
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office branch or agency in the
United States, guarantees (a) that the above named person(s) "own(s)" the
shares of Series B Preferred tendered hereby within the meaning of Rule 14e-4
under the Securities Exchange Act of 1934, as amended, (b) that such tender of
shares of Series B Preferred complies with Rule 14e-4 and (c) to deliver to
the Exchange Agent either the shares of Series B Preferred tendered hereby, in
proper form for transfer, or confirmation of the book-entry transfer of the
shares of the Series B Preferred tendered hereby into the account of the
Exchange Agent at the Depository Trust Company, in each case together with a
properly completed and duly executed Letter(s) of Transmittal (or facsimile(s)
thereof), with any required signature guarantees (or an Agent's message (as
defined in the Offering Circular/Prospectus)) and any other required documents
within five New York Stock Exchange trade days after the date of execution of
this Notice.
.............................................
(Name of Firm)
.............................................
(Authorized Signature)
.............................................
(Name)
.............................................
(Address)
.............................................
(Zip Code)
Dated: .................. .............................................
(Area Code and Telephone No.)
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
EXHIBIT H
[SUNAMERICA INC. LETTERHEAD]
April 28, 1995
To Holders of 9 1/4%
Preferred Stock, Series B:
SunAmerica Capital Trust I, a newly organized special purpose
Delaware statutory business trust (the "Trust"), all of whose common
beneficial interests are owned by SunAmerica Inc. ("SunAmerica"), is proposing
an exchange offer for up to 5,500,000 shares of outstanding 9 1/4% Preferred
Stock, Series B (the "Series B Preferred") of SunAmerica. The Trust is
offering (the "Offer") to exchange its 9.95% Trust Originated Preferred
Securities (the "Preferred Securities") for shares of Series B Preferred on
the basis of one Preferred Security for each share of Series B Preferred
validly tendered and not withdrawn pursuant to the Offer. Shares of Series B
Preferred not accepted for exchange because of proration or otherwise will be
returned. In connection with the Offer, SunAmerica will deposit in the Trust
as trust assets its 9.95% Junior Subordinated Debentures, Series A, due 2044.
The Offer is explained in detail in the enclosed Offering
Circular/Prospectus and Letter of Transmittal. If you want to tender your
shares and to participate in the Offer, the instructions for tendering are
also set forth in detail in the enclosed materials. I encourage you to read
these materials carefully before making any decision with respect to the
Offer. Neither SunAmerica nor its Board of Directors makes any recommendation
to any stockholder whether to tender or to refrain from tendering in the Offer.
Very truly yours,
Eli Broad
Chairman, President and
Chief Executive Officer
EXHIBIT I
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer
- -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
Give the
For this type of account SOCIAL SECURITY number
of:
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first individual on
the account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint funds, the
first individual on the
account(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the minor is
account) the only contributor, the
minor(1)
6. Account in the name of The ward, minor or
guardian or committee for incompetent person(3)
a designated ward, minor
or incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also
trustee)
b. So-called trust The actual owner(2)
account that is not a
legal or valid trust
under State law
8. Sole proprietorship The owner(4)
account
Give the
For this type of account SOCIAL SECURITY number
of:
9. A valid trust, estate, or Legal entity (Do not furnish
pension trust the identifying number of the
personal representative or
trustee unless the legal entity
itself is not designated in the
account title).(5)
10. Corporate account The corporation
11. Association, club, The organization
religious, charitable,
educational or other
tax-exempt organization
account
12. Partnership account The partnership
13. A broker or registered The broker or nominee
nominee
14. Account with the The public entity
Department of
Agriculture in the name
of a public entity (such as
a State or local
government, school
district or prison) that
receives agricultural
program payments
- ------------------------
1 List first and circle the name of the person whose number you furnish.
2 Circle the minor's name and furnish the minor's social security number.
3 Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
4 You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.
5 List first and circle the name of the legal trust, estate, or pension trust.
Note: if no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
How to Obtain a TIN
If you don't have a taxpayer identification number
or you don't know your number, obtain Form SS-5,
Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification
Number, at the local office of the Social Security
Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup
withholding on ALL payments by the Payer include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section
501(a), or an individual retirement plan, or a
custodial account under section 403(b)(7).
o The United States or any agency or
instrumentality thereof.
o A State, the District of Columbia, a possession of
the United States or any subdivision or
instrumentality thereof.
o A foreign government, a political subdivision of a
foreign government, or any agency or
instrumentality thereof.
o An international organization or any agency or
instrumentality thereof.
o A registered dealer in securities or commodities
registered in the U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under
section 584(a).
o An exempt charitable reminder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the
Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not
generally subject to backup withholding include the
following:
o Payments to nonresident aliens subject to
withholding under section 1441.
o Payments to partnerships not engaged in a trade
or business in the U.S. and which have at least
one nonresident partner.
o Payments of patronage dividends where the
amount received is not paid in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to
backup withholding include the following:
o Payments of interest on obligations issued by
individuals.
Note: You may be subject to backup withholding
if this interest is $600 or more and is paid in the
course of the payer's trade of business and you have
not provided your correct taxpayer identification
number to the payer.
o Payments of tax-exempt interest (including
exempt-interest dividends under section 852).
o Payments described in section 6049(b)(5) to
nonresident aliens.
o Payments on tax-free covenant bonds under
section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file
Substitute Form W-9 to avoid possible erroneous
backup withholding. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE
FORM IN PART II, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
Certain payments, other than interest, dividends
and patronage dividends that are not subject to
information reporting are also not subject to backup
withholding. For details, see the regulations under
sections 6041, 6041A(a), 6045 and 6050A.
Privacy Act Notice. -- Section 6019 requires most
recipients of dividend, interest or other payments to
give their correct taxpayer identification numbers to
payers who must report the payments to IRS. IRS
uses the numbers for identification purposes and to
help verify the accuracy of tax returns. Payers must
be given the numbers whether or not recipients are
required to file tax returns. Payers must generally
withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not
furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer
Identification Number. -- If you fail to furnish your
taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure
unless your failure is due to reasonable cause and
not to willful neglect.
(2) Civil Penalty for False Information With Respect
to Withholding. -- If you make a false statement
with no reasonable basis which results in no
imposition of backup withholding, you are subject to
a penalty of $500.
(3) Criminal Penalty for Falsifying Information. --
Wilfully falsifying certifications or affirmations may
subject you to criminal penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
Exhibit J
OFFER TO EXCHANGE UP TO 5,500,000 SHARES OF 9 1/4% PREFERRED STOCK, SERIES B
OF SUNAMERICA INC. FOR 9.95% TRUST ORIGINATED PREFERRED SECURITIESSM
("TOPrSSM") OF SUNAMERCIA CAPITAL TRUST I
Conditions for Payment of Fees to Soliciting Dealers
SunAmerica Inc. will pay to a Soliciting Dealer a solicitation fee of
$0.50 per share of 9 1/4% Preferred Stock, Series B (the "Series B Preferred")
validly tendered and accepted for exchange pursuant to the Offer, as long as
the Soliciting Dealer is NOT the beneficial owner of the shares of Series B
Preferred and is designated as Soliciting Dealer by the beneficial owner.
All of the above is subject to additional conditions, including that the
Soliciting Dealer completes and delivers a Notice of Solicited Tenders to the
Exchange Agent within 5 business days of the expiration of the Offer, as set
forth in full in the Offering Circular/Prospectus dated April 27, 1995 (the
"Offering Circular/Prospectus") relating to the Offer.
These conditions are required as a matter of law and are set forth in
full under the caption "The Offer -- Dealer Manager; Soliciting Dealers" (page
39) of the Offering Circular/Prospectus.
______________
SM "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
EXHIBIT K
SUNAMERICA INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
INDENTURE
Dated as of March 15, 1995
Junior Subordinated Debentures
TABLE OF CONTENTS(*)
(*) This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms or
provisions.
Page
PARTIES............................................... 1
RECITALS:
Purpose of Indenture.................................. 1
Compliance with legal requirements.................... 1
Purpose of and consideration for Indenture............ 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined; other terms defined
in the Trust Indenture Act of 1939, as
amended, or by reference therein in the
<PAGE>
Securities Act of 1933, as amended,
to have the meanings assigned therein.. 2
Affiliate.............................. 2
Authenticating Agent................... 2
Board of Directors..................... 2
Board Resolution....................... 2
Business day........................... 3
Certificate............................ 3
Common Securities......................
Company................................ 3
Corporate Trust Office................. 3
Declaration of Trust................... 3
Debenture or Debentures................ 3
Debentureholder........................ 3
Default................................ 4
Depository............................. 4
Event of Default....................... 4
Global Debenture....................... 4
Governmental Obligations............... 4
Guarantee.............................. 5
Indenture.............................. 5
Interest Payment Date.................. 5
Officers' Certificate.................. 5
Opinion of Counsel..................... 5
Outstanding............................ 5
Person................................. 6
Predecessor Debenture.................. 6
Preferred Securities................... 6
Property Trustee....................... 6
Responsible Officer.................... 6
Security Exchange...................... 6
Senior Indebtedness.................... 7
Subsidiary............................. 7
SunAmerica Capital Trust............... 8
Trustee................................ 8
Trust Indenture Act.................... 8
ARTICLE TWO
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
SECTION 2.01. Designation, terms, amount, authentication
and delivery of Debentures............. 8
SECTION 2.02. Form of Debentures and Trustee's
certificate............................ 10
SECTION 2.03. Date and denominations of Debentures and
provisions for payment of principal,
premium and interest................... 10
SECTION 2.04. Execution of Debentures................ 11
SECTION 2.05. Exchange of Debentures................. 12
(a) Registration and transfer of
Debentures......................... 12
(b) Debentures to be accompanied by
proper instruments of transfer..... 13
<PAGE>
(c) Charges upon exchange, transfer
or registration of Debentures...... 13
(d) Restrictions on transfer or exchange
at time of redemption.............. 13
SECTION 2.06. Temporary Debentures................... 13
SECTION 2.07. Mutilated, destroyed, lost or stolen
Debentures............................. 14
SECTION 2.08. Cancellation of surrendered Debentures 15
SECTION 2.09. Provisions of Indenture and Debentures for
sole benefit of parties and Debentureholders 15
SECTION 2.10. Appointment of Authenticating Agent.... 15
SECTION 2.11. Global Debenture....................... 16
(a) Authentication and Delivery; Legend 16
(b) Transfer of Global Debenture....... 16
(c) Issuance of Debentures in
definitive form.................... 16
ARTICLE THREE
REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption of Debentures............... 17
SECTION 3.02. (a) Notice of redemption............... 17
(b) Selection of Debentures in case
less than all Debentures to be redeemed 18
SECTION 3.03. (a) When Debentures called for
redemption become due and payable.. 18
(b) Receipt of new Debenture upon
partial payment.................... 18
SECTION 3.04. Sinking Fund for Debentures............ 18
SECTION 3.05. Satisfaction of Sinking Fund Payments
with Debentures........................ 19
SECTION 3.06. Redemption of Debentures for Sinking Fund 19
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of principal of (and premium, if any)
and interest on Debentures............. 19
SECTION 4.02. Maintenance of office or agency for payment
of Debentures, designation of office or agency
<PAGE>
for payment, registration, transfer and exchange
of Debentures.......................... 20
SECTION 4.03. (a) Duties of paying agent............. 20
(b) Company as payment agent........... 20
(c) Holding sums of trust.............. 21
SECTION 4.04. Appointment to fill vacancy in Office of
Trustee................................ 21
ARTICLE FIVE
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 5.01. Company to furnish Trustee information as to
names and addresses of Debentureholders 21
SECTION 5.02. (a) Trustee to preserve information as to
names and addresses of Debentureholders
received by it in capacity of paying
agent.............................. 21
(b) Trustee may destroy list of
Debentureholders on certain conditions 21
(c) Trustee to make information as to
names and addresses of Debentureholders
available to "applicants" or mail
communications to Debentureholders
in certain circumstances........... 21
(d) Procedure if Trustee elects not to
make information available to
applicants......................... 22
(e) Company and Trustee not accountable
for disclosure of information...... 22
SECTION 5.03. (a) Annual and other reports to be filed by
Company with Trustee............... 23
(b) Additional information and reports
to be filed with Trustee and Securities
and Exchange Commission............ 23
(c) Summaries of information and reports
to be transmitted by Company to
Debentureholders................... 23
(d) Annual Certificate to be furnished
to Trustee......................... 23
SECTION 5.04. (a) Trustee to transmit annual report to
Debentureholders................... 23
(b) Trustee to transmit certain further
<PAGE>
reports to Debentureholders........ 24
(c) Copies of reports to be filed with
stock exchanges and Securities and
Exchange Commission................ 24
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. (a) Events of Default defined.......... 25
(b) Acceleration of maturity upon Event
of Default......................... 26
(c) Waiver of default and rescission of
declaration of maturity............ 26
(d) Restoration of former position and
rights upon curing default......... 26
(e) Certain rights of holders of
Preferred Securities............... 27
SECTION 6.02. (a) Covenant of Company to pay to Trustee
whole amount due on Debentures on
Default in payment of interest or
principal (and premiums, if any)... 27
(b) Trustee may recover judgment for
whole amount due on Debentures on
failure of Company to pay.......... 27
(c) Filing of proof of claim by Trustee
in bankruptcy, reorganization or
receivership proceeding............ 28
(d) Rights of action and of asserting
claims may be enforced by Trustee
without possession of Debentures... 28
SECTION 6.03. Application of moneys collected by Trustee 28
SECTION 6.04. Limitation on suits by holders of Debentures 29
SECTION 6.05. (a) Remedies cumulative................ 29
(b) Delay or omission in exercise of rights
not waiver of default.............. 30
SECTION 6.06. Rights of holders of majority in principal
amount of Debentures to direct Trustee and
to waive defaults...................... 30
SECTION 6.07. Trustee to give notice of defaults known
to it, but may withhold in certain
circumstances.......................... 31
SECTION 6.08. Requirements of an undertaking to pay
<PAGE>
costs in certain suits under Indenture or
against Trustee........................ 31
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. (a) Upon Event of Default occurring and
continuing, Trustee shall exercise powers
vested in it, and use same degree of care
and skill in their exercise, as prudent
individual would use............... 32
(b) Trustee not relieved from liability for
negligence or willful misconduct except
as provided in this section........ 32
(1) Prior to Event of Default and
after the curing of all Events of
Default which may have occurred 32
(i) Trustee not liable except
for performance of duties
specifically set forth..... 32
(ii) In absence of bad faith,
Trustee may conclusively
rely on certificates or
opinions furnished it hereunder,
subject to duty to examine the
same if specifically required to
be furnished to it......... 32
(2) Trustee not liable for error of
judgment made in good faith by
responsible officer unless Trustee
negligent..................... 32
(3) Trustee not liable for action or non-
action in accordance with direction of
holders of majority in principal amount
of debentures................. 32
(4) Trustee need not expend own funds
without adequate indemnity.... 33
SECTION 7.02. Subject to provisions of Section 7.01:
(a) Trustee may rely on documents believed
genuine and properly signed or
presented.......................... 33
(b) Sufficient evidence by certain
instruments provided for........... 33
(c) Trustee may consult with counsel and act
on advice or Opinion of Counsel.... 33
(d) Trustee may require indemnity from
Debentureholders................... 33
<PAGE>
(e) Trustee not liable for actions in good
faith believed to be authorized.... 33
(f) Prior to Event of Default, Trustee not
bound to investigate facts or matters
stated in certificates, etc., unless requested
in writing by Debentureholders..... 33
(g) Trustee may perform duties directly or
through agents or attorneys........ 34
SECTION 7.03 (a) Trustee not liable for recitals in
Indenture or in Debentures......... 34
(b) No representations by Trustee as to
validity of Indenture or of Debentures 34
(c) Trustee not accountable for use of
Debentures or proceeds............. 34
SECTION 7.04. Trustee, paying agent or Debenture
Registrar may own Debentures........... 34
SECTION 7.05. Moneys received by Trustee to be held in
trust without interest................. 34
SECTION 7.06. (a) Trustee entitled to compensation,
reimbursement and indemnity....... 34
(b) Obligations to Trustee to be secured by
lien prior to Debentures........... 35
SECTION 7.07. Right of Trustee to rely on certificate of
officers of Company where no other
evidence specifically prescribed....... 35
SECTION 7.08. (a) Trustee acquiring conflicting interest
to eliminate conflict or resign.... 35
(b) Notice to Debentureholders in case
of failure to comply with
subsection (a)..................... 35
(c) Definition of conflicting interest. 35
(d) Definition of certain terms........ 38
(e) Calculation of percentages of
Debentures......................... 39
(f) Trustee resignation not required under
certain circumstances.............. 40
SECTION 7.09. Requirements for eligibility of Trustee 41
SECTION 7.10. (a) Resignation of Trustee and appointment
of successor....................... 41
(b) Removal of Trustee by Company or by
<PAGE>
court on Debentureholders'
application........................ 41
(c) Removal of Trustee by holders of
majority in principal amount of
Debentures......................... 42
(d) Time when resignation or removal of
Trustee effective.................. 42
(e) One Trustee for each series........ 42
SECTION 7.11. (a) Acceptance by successor to Trustee. 42
(b) Trustee with respect to less than
all series......................... 42
(c) Company to confirm Trustee's rights 43
(d) Successor Trustee to be qualified.. 43
(e) Notice of succession............... 43
SECTION 7.12. Successor to Trustee by merger, consolida-
tion or succession to business......... 43
SECTION 7.13. (a) Limitations on rights of Trustee as a
creditor to obtain payment of certain
claims within four months prior to
default or during default, or to realize
on property as such creditor thereafter 44
(b) Certain creditor relationships excluded 46
(c) Definition of certain terms........ 46
ARTICLE EIGHT
CONCERNING THE DEBENTUREHOLDERS
SECTION 8.01. Evidence of action by Debentureholders. 47
SECTION 8.02. Proof of execution of instruments and of
holding of Debentures.................. 48
SECTION 8.03. Who may be deemed owners of Debentures. 48
SECTION 8.04. Debentures owned by Company or controlled
or controlling companies disregarded for
certain purposes....................... 48
SECTION 8.05. Instruments executed by Debentureholders
bind future holders.................... 49
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for which supplemental indenture
may be entered into without consent of
<PAGE>
Debentureholders....................... 49
SECTION 9.02. Modification of Indenture with consent
of Debentureholders.................... 50
SECTION 9.03. Effect of supplemental indentures...... 51
SECTION 9.04. Debentures may bear notation of changes
by supplemental indentures............. 51
SECTION 9.05. Opinion of Counsel..................... 52
ARTICLE TEN
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01. Company May Consolidate, Etc. Only on
Certain Terms........................ 52
SECTION 10.02. Successor Corporation Substituted.... 52
SECTION 10.03. Opinion of Counsel................... 52
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and discharge of Indenture 53
SECTION 11.02. Application by Trustee of Funds Deposited
for Payment of Debentures............ 55
SECTION 11.03. Application by Trustee of funds deposited
for payment of Debentures............ 55
SECTION 11.04. Repayment of moneys held by paying agent 55
SECTION 11.05. Repayment of moneys held by Trustee.. 55
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, stockholders, officers and
directors of Company exempt from individual
liability............................ 56
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors and assigns of Company bound
by Indenture......................... 56
SECTION 13.02. Acts of board, committee or officer of
successor company valid.............. 56
SECTION 13.03. Surrender of powers of Company....... 56
<PAGE>
SECTION 13.04. Required notices or demands may be served
by mail.............................. 56
SECTION 13.05. Indenture and Debentures to be construed
in accordance with laws of the State of
New York............................. 57
SECTION 13.06. (a) Officers' Certificate and Opinion of
Counsel to be furnished upon appli-
cations or demands by Company... 57
(b) Statements to be included in each
certificate or opinion with respect to
compliance with condition or
covenant........................ 57
SECTION 13.07. Payments due on Sundays or holidays.. 57
SECTION 13.08. Provisions required by Trust Indenture
Act of 1939 to control............... 57
SECTION 13.09. Indenture may be executed in counterparts 58
SECTION 13.10. Separability of indenture provisions. 58
SECTION 13.11. Assignment by Company to subsidiary.. 58
SECTION 13.12. Holders of Preferred Securities
as third party beneficiaries of
this Indenture....................... 58
ARTICLE FOURTEEN
SUBORDINATION OF DEBENTURES
SECTION 14.01. Agreement to Subordinate............. 58
SECTION 14.02. Rights of Senior Indebtedness In the Event
of Insolvency, etc. of the Company... 58
SECTION 14.03. Payment Over of Proceeds Received
on Debentures........................ 59
SECTION 14.04. Payments to Debentureholders......... 61
SECTION 14.05. Holders of Debentures Authorize Trustee to
Effectuate Subordination of Debentures 61
SECTION 14.06. Notice to Trustee.................... 61
SECTION 14.07. Trustee's May Hold Senior Indebtedness 62
SECTION 14.08. Applicability of Article Fourteen to
Paying Agents........................ 62
ACCEPTANCE OF TRUST BY TRUSTEE........................ 62
TESTIMONIUM........................................... 63
<PAGE>
SIGNATURES AND SEALS.................................. 64
ACKNOWLEDGMENTS....................................... 65
THIS INDENTURE, is dated as of the 15th day of March, 1995, between
SunAmerica Inc., a corporation duly organized and existing under the laws of
the State of Maryland (hereinafter sometimes referred to as the "Company"),
and The First National Bank of Chicago, a national banking association, as
Trustee (hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has fully
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debentures (hereinafter referred to as the
"Debentures"), in an unlimited aggregate principal amount to be issued from
time to time in one or more series as in this Indenture provided, as registered
Debentures without coupons, to be authenticated by the certificate of the
Trustee;
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication to be
borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed
or will be done and performed prior to the issuance of such Debentures, and the
execution of this Indenture has been and the issuance hereunder of the
Debentures has been or will be prior to issuance in all respects duly
authorized, and the Company, in the exercise of the legal right and power in
it vested, executes this Indenture and proposes to make, execute, issue and
deliver the Debentures:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are and are to be authenticated, issued and delivered, and in
consideration of the premises and of the acquisition and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee, for the equal and proportionate benefit (subject to the provisions of
this Indenture) of the respective holders from time to time of the Debentures,
without any discrimination, preference or priority of any one Debenture over
any other by reason of priority in the time of issue, sale or negotiation
thereof, or otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have
the respective meanings specified in this Section. All other terms used in
<PAGE>
this Indenture which are defined in the Trust Indenture Act of 1939, as
amended, or which are by reference in such Act defined in the Securities Act
of 1933, as amended (except as herein otherwise expressly provided or unless
the context otherwise requires), shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at
the date of this instrument.
Affiliate:
The term "Affiliate" of the Company shall mean any company at least a majority
of whose outstanding voting stock shall at the time be owned by the Company,
or by one or more direct or indirect subsidiaries of the Company or by the
Company and one or more direct or indirect subsidiaries of the Company. For
the purposes only of this definition of the term "Affiliate", the term "voting
stock", as applied to the stock of any company, shall mean stock of any class
or classes having ordinary voting power for the election of a majority of the
directors of such company, other than stock having such power only by reason
of the occurrence of a contingency.
Authenticating Agent:
The term "Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Debentures, as the case may be, appointed with
respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors of the
Company, or any committee of such Board duly authorized to act hereunder.
Board Resolution:
The term "Board Resolution" shall mean a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Company to have
been adopted or consented to by the Board of Directors and to be in full force
and effect, and delivered to the Trustee.
Business day:
The term "business day", with respect to any series of Debentures, shall mean
any day other than a day on which banking institutions in the Borough of
Manhattan, the City and State of New York, are authorized or obligated by law
or executive order to close.
Certificate:
The term "Certificate" shall mean a certificate signed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company. The Certificate need not comply with the provisions of
Section 13.06.
Common Securities:
The term "Common Securities" shall mean the common undivided beneficial
interests in the assets of the applicable SunAmerica Capital Trust.
Company:
The term "Company" shall mean SunAmerica Inc., a corporation duly organized
<PAGE>
and existing under the laws of the State of Maryland, and, subject to the
provisions of Article Ten, shall also include its successors and assigns.
Corporate Trust Office:
The term "Corporate Trust Office" shall mean the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Indenture is
located at One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Administration.
Declaration of Trust:
The term "Declaration of Trust" shall mean the Declaration of Trust of the
SunAmerica Capital Trust, if any, specified in the applicable Board Resolution
or supplemental indenture establishing a particular series of Debentures
pursuant to Section 2.01 hereof.
Debenture or Debentures:
The term "Debenture" or "Debentures" shall mean any Debenture or Debentures,
as the case may be, authenticated and delivered under this Indenture.
Debentureholder:
The term "Debentureholder", "holder of Debentures", "registered holder", or
other similar term, shall mean the person or persons in whose name or names a
particular Debenture shall be registered on the books of the Company kept for
the purpose in accordance with the terms of this Indenture.
Default:
The term "Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
Depository:
The term "Depository" shall mean, with respect to Debentures of any series,
for which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
Event of Default:
The term "Event of Default" with respect to Debentures of a particular series
shall mean any event specified in Section 6.01(a), continued for the period of
time, if any, therein designated.
Global Debenture:
The term "Global Debenture" shall mean, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee
to the Depository or pursuant to the Depository's instruction, all in
accordance with the Indenture, which shall be registered in the name of the
Depository or its nominee.
Governmental Obligations:
<PAGE>
The term, "Governmental Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank (as defined in Section 3(a)
(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Governmental Obligation or the
specific payment of principal of or interest on the Governmental Obligation
evidenced by such depository receipt.
Guarantee:
The term "Guarantee" shall mean the guarantee, if any, that the Company may
enter into that operates directly or indirectly for the benefit of holders of
Preferred Securities issued by a SunAmerica Capital Trust.
Indenture:
The term "Indenture" shall mean this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented.
Interest Payment Date:
The term "Interest Payment Date" when used with respect to any installment of
interest on a Debenture of a particular series shall mean the date specified
in such Debenture or in a Board Resolution or in an indenture supplemental
hereto with respect to such series as the fixed date on which an installment
of interest with respect to Debentures of that series is due and payable.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company and who shall be satisfactory to the Trustee. Each
such certificate shall include the statements provided for in Section 13.06,
if and to the extent required by the provisions thereof.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be an employee of or counsel for the Company and who shall be
satisfactory to the Trustee. Each such opinion shall include the statements
provided for in section 13.06, if and to the extent required by the provisions
thereof.
Outstanding:
The term "Outstanding", when used with reference to Debentures of any series,
shall, subject to the provisions of Section 8.01, mean, as of any particular
time, all Debentures of that series theretofore authenticated and delivered by
<PAGE>
the Trustee under this Indenture, except (a) Debentures theretofore canceled
by the Trustee or any paying agent, or delivered to the Trustee or any paying
agent for cancellation or which have previously been canceled; (b) Debentures
or portions thereof for the payment or redemption of which moneys or
Governmental Obligations in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust for the holders of such
Debentures by the Company (if the Company shall act as its own paying agent);
provided, however, that if such Debentures or portions of such Debentures are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as in Article Three provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and (c) Debentures in
lieu of or in substitution for which other Debentures shall have been
authenticated and delivered pursuant to the terms of Section 2.07.
Person:
The term "Person" means any individual, corporation, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Predecessor Debenture:
The term "Predecessor Debenture" of any particular Debenture shall mean every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.07 in
lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture.
Preferred Securities:
The term "Preferred Securities" shall mean the preferred undivided beneficial
interests in the assets of the applicable SunAmerica Capital Trust.
Property Trustee:
The term "Property Trustee" means the entity performing the function of the
Property Trustee under the applicable Declaration of Trust of a SunAmerica
Capital Trust.
Responsible Officer:
The term "Responsible Officer" when used with respect to the Trustee shall
mean the chairman of the board of directors, the president, any vice
president, the secretary, the treasurer, any trust officer, any corporate
trust officer or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity
with the particular subject.
Security Exchange:
"Security Exchange" when used with respect to the Debentures of any series
which are held as trust assets of a SunAmerica Capital Trust pursuant to the
Declaration of Trust of such SunAmerica Capital Trust, means the distribution
of the Debentures of such series by such SunAmerica Capital Trust in exchange
for the Preferred Securities and Common Securities of such SunAmerica Capital
Trust in dissolution of such SunAmerica Capital Trust pursuant to the
<PAGE>
Declaration of Trust of such SunAmerica Capital Trust.
Senior Indebtedness:
The term "Senior Indebtedness" means the principal of and premium, if any, and
interest on (a) all indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, (i) for money borrowed by the
Company (including, without limitation, indebtedness issued or to be issued
pursuant to the Subordinated Indenture dated as of April 15, 1993 between the
Company 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 of 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 this Indenture or the Debentures,
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 Debentures, as
the case may be, and, in particular, the Debentures shall rank pari passu with
all other debt securities and guarantees in respect of those debt securities,
issued to (y) any other SunAmerica Capital Trust and (z) any other trusts,
partnerships or any other entity affiliated with the Company which is a
financing vehicle of the Company ("Financing Entity") in connection with an
issuance of preferred securities by such Financing Entity, or (ii) any
indebtedness of the Company to a Subsidiary.
Subsidiary:
The term "Subsidiary" shall mean any corporation at least a majority of whose
outstanding voting stock shall at the time be owned by the Company or by one
or more subsidiaries or by the Company and one or more Subsidiaries. For the
purposes only of this definition of the term "Subsidiary", the term "voting
stock", as applied to the stock of any corporation, shall mean stock of any
class or classes having ordinary voting power for the election of a majority
of the directors of such corporation, other than stock having such power only
by reason of the occurrence of a contingency.
SunAmerica Capital Trust:
The term "SunAmerica Capital Trust" shall mean such statutory business trust
created under the laws of the State of Delaware specified in the applicable
Board Resolution or supplemental indenture establishing a particular series of
Debentures pursuant to Section 2.01 hereof.
Trustee:
The term "Trustee" shall mean The First National Bank of Chicago and, subject
to the provisions of Article Seven, shall also include its successors and
assigns, and, if at any time there is more than one person acting in such
capacity hereunder, "Trustee" shall mean each such person. The term "Trustee"
<PAGE>
as used with respect to a particular series of the Debentures shall mean the
trustee with respect to that series.
Trust Indenture Act:
The term "Trust Indenture Act", subject to the provisions of Section 9.01 and
9.02, shall mean the Trust Indenture Act of 1939, as amended and in effect at
the date of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
Section 2.01. The aggregate principal amount of Debentures which may
be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the aggregate
principal amount of Debentures of that series from time to time authorized by
or pursuant to a Board Resolution or pursuant to one or more indentures
supplemental hereto, prior to the initial issuance of Debentures of a
particular series. Prior to the initial issuance of Debentures of any series,
there shall be established in or pursuant to a Board Resolution, and set forth
in an Officers' Certificate, or established in one or more indentures
supplemental hereto:
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the Debentures
of that series which may be authenticated and delivered under this Indenture
(except for Debentures authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debentures of that
series):
(3) the date or dates on which the principal of the Debentures of
the series is payable;
(4) the rate or rates at which the Debentures of the series shall
bear interest or the manner of calculation of such rate or rates, if any;
(5) 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 date for the
determination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend the interest payment periods and
the duration of such extension;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debentures of the series may
be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debentures of the series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a holder thereof and the
period or periods within which, the price or prices at which, and the terms
and conditions upon which, Debentures of the series shall be redeemed or
<PAGE>
purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Debentures of the series including the form of
the Certificate of Authentication for such series;
(10) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall be
issuable;
(11) any and all other terms with respect to such series (which terms
shall not be inconsistent with the terms of this Indenture); and
(12) whether the Debentures are issuable as a Global Debenture and,
in such case, the identity of the Depository for such series.
(13) If the Debentures of such series are to be deposited as trust
assets in a SunAmerica Capital Trust the name of the applicable SunAmerica
Capital Trust (which shall distinguish such statutory business trust from
all other SunAmerica Capital Trusts) into which the Debentures of such
series are to be deposited as trust assets and the date of its Declaration
of Trust.
All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to any such Board Resolution or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 2.02. The Debentures of any series and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution and as set forth in
an Officers' Certificate, and may have such letters, numbers or other marks
of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which
Debentures of that series may be listed, or to conform to usage.
SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in the denominations of $25 or any integral multiple thereof,
subject to Section 2.01(10). The Debentures of a particular series shall bear
interest payable on the dates and at the rate specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of America which
at the time is legal tender for public and private debt, at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
the City and State of New York. Each Debenture shall be dated the date of its
authentication. Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.
The interest installment on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name said
<PAGE>
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on the regular record date for such interest installment. In the
event that any Debenture of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Debenture will be paid upon presentation and surrender
of such Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Debentures of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of business
on a special record date for the payment of such Defaulted Interest, which
shall be fixed in the following manner: the Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed to be paid on each
such Debenture and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall
not be more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first class
postage prepaid, to each Debentureholder at his or her address as it appears
in the Debenture Register (as hereinafter defined), not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the persons in whose
names such Debentures (or their Predecessor Debentures) are registered on
such special record date and shall be no longer payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the requirements
of any securities exchange on which such Debentures may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or more
indentures supplemental hereto establishing the terms of any series of
Debentures pursuant to Section 2.01 hereof, the term "regular record date" as
used in this Section with respect to a series of Debentures with respect to
any Interest Payment Date for such series shall mean either the fifteenth day
of the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the first day of a month, or the last day of the
month immediately preceding the month in which an Interest Payment Date
<PAGE>
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the fifteenth day of a month, whether or not such
date is business day.
Subject to the foregoing provisions of this Section, each Debenture of
a series delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debenture of such series shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
SECTION 2.04. The Debentures shall, subject to the provisions of
Section 2.06, be printed on steel engraved borders or fully or partially
engraved, or legibly typed, as the proper officers of the Company may
determine, and shall be signed on behalf of the Company by its President or
one of its Vice Presidents, under its corporate seal attested by its Secretary
or one of its Assistant Secretaries. The signature of the President or a Vice
President and/or the signature of the Secretary or an Assistant Secretary in
attestation of the corporate seal, upon the Debentures, may be in the form of
a facsimile signature of a present or any future President or Vice President
and of a present or any future Secretary or Assistant Secretary and may be
imprinted or otherwise reproduced on the Debentures and for that purpose the
Company may use the facsimile signature of any person who shall have been a
President or Vice President, or of any person who shall have been a Secretary
or Assistant Secretary, notwithstanding the fact that at the time the
Debentures shall be authenticated and delivered or disposed of such person
shall have ceased to be the President or a Vice President, or the Secretary or
an Assistant Secretary, of the Company, as the case may be. The seal of the
Company may be in the form of a facsimile of the seal of the Company and may
be impressed, affixed, imprinted or otherwise reproduced on the Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed
by the Trustee with respect to such Debentures, upon any Debenture executed by
the Company shall be conclusive evidence that the Debenture so authenticated
has been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series executed by
the Company to the Trustee for authentication, together with a written order
of the Company for the authentication and delivery of such Debentures, signed
by its President or any Vice President and its Treasurer or any Assistant
Treasurer, and the Trustee in accordance with such written order shall
authenticate and deliver such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
<PAGE>
Trustee.
SECTION 2.05. (a) Debentures of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for
such purpose in the Borough of Manhattan, the City and State of New York, for
other Debentures of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Debentures so surrendered for exchange, the Company
shall execute, the Trustee shall authenticate and such office or agency shall
deliver in exchange therefor the Debenture or Debentures of the same series
which the Debentureholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a register
or registers (herein referred to as the "Debenture Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register the Debentures and the transfers of Debentures as in this Article
provided and which at all reasonable times shall be open for inspection by the
Trustee. The registrar for the purpose of registering Debentures and transfer
of Debentures as herein provided shall be appointed as authorized by Board
Resolution (the "Debenture Registrar").
Upon surrender for transfer of any Debenture at the office or agency
of the Company designated for such purpose in the Borough of Manhattan, the
City and State of New York, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in the name of the
transferee or transferees a new Debenture or Debentures of the same series as
the Debenture presented for a like aggregate principal amount.
All Debentures presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so required
by the Company or the Debenture Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or registration
of transfer of Debentures, or issue of new Debentures in case of partial
redemption of any series, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.06, the second paragraph of Section
3.03 and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the outstanding Debentures of the same series and
ending at the close of business on the day of such mailing, nor (ii) to
register the transfer of or exchange any Debentures of any series or portions
thereof called for redemption. The provisions of this Section 2.05 are, with
respect to any Global Debenture, subject to Section 2.11 hereof.
SECTION 2.06. Pending the preparation of definitive Debentures of any
series, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Debentures (printed, lithographed or typewritten) of any
authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued, but with such omissions,
<PAGE>
insertions and variations as may be appropriate for temporary Debentures, all
as may be determined by the Company. Every temporary Debenture of any series
shall be executed by the Company and be authenticated by the Trustee upon the
same conditions and in substantially the same manner, and with like effect, as
the definitive Debentures of such series. Without unnecessary delay the
Company will execute and will furnish definitive Debentures of such series and
thereupon any or all temporary Debentures of such series may be surrendered in
exchange therefor (without charge to the holders), at the office or agency of
the Company designated for the purpose in the Borough of Manhattan, the City
and State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures of such series, unless the
Company advises the Trustee to the effect that definitive Debentures need not
be executed and furnished until further notice from the Company. Until so
exchanged, the temporary Debentures of such series shall be entitled to the
same benefits under this Indenture as definitive Debentures of such series
authenticated and delivered hereunder.
SECTION 2.07. In case any temporary or definitive Debenture shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and deliver, a new Debenture of the
same series bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's Debenture
and of the ownership thereof. The Trustee may authenticate any such
substituted Debenture and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any
substituted Debenture, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Debenture which has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a
mutilated Debenture) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as they may require to
save them harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this Section in
substitution for any Debenture which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether
or not the mutilated, destroyed, lost or stolen Debenture shall be found at
any time, or be enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Debentures of the same series duly issued hereunder. All Debentures shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures, and shall preclude (to the extent lawful) any and
all other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
<PAGE>
SECTION 2.08. All Debentures surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be canceled by it, and no Debentures
shall be issued in lieu thereof except as expressly required or permitted by
any of the provisions of this Indenture. On request of the Company, the
Trustee shall deliver to the Company canceled Debentures held by the Trustee.
In the absence of such request the Trustee may dispose of canceled Debentures
in accordance with its standard procedures and deliver a certificate of
disposition to the Company. If the Company shall otherwise acquire any of the
Debentures, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Debentures unless and
until the same are delivered to the Trustee for cancellation.
SECTION 2.09. Nothing in this Indenture or in the Debentures, express
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Debentures,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debentures.
SECTION 2.10. So long as any of the Debentures of any series remain
outstanding there may be an Authenticating Agent for any or all such series of
Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or
partial redemption thereof, and Debentures so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Debentures by the Trustee shall be deemed
to include authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof.
Each Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and which is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If the Company shall establish pursuant to Section
2.01 that the Debentures of a particular series are to be issued as one or
more Global Debentures, then the Company shall execute and the Trustee shall,
in accordance with Section 2.04, authenticate and deliver, one or more Global
Debentures which (i) shall represent, and shall be denominated in an aggregate
amount equal to the aggregate principal amount of, all of the Outstanding
Debentures of such series, (ii) shall be registered in the name of the
<PAGE>
Depository or its nominee, (iii) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided
in Section 2.11 of the Indenture, this Debenture may be transferred, in whole
but not in part, only to another nominee of the Depository or to a successor
Depository or to a nominee of such successor Depository."
(b) Notwithstanding the provisions of Section 2.05, the Global
Debenture of a series may be transferred, in whole but not in part and in the
manner provided in Section 2.05, only to another nominee of the Depository for
such series, or to a successor Depository for such series selected or approved
by the Company or to a nominee of such successor Depository.
(c) If at any time the Depository for a series of Debentures notifies
the Company that it is unwilling or unable to continue as Depository for such
series or if at any time the Depository for such series shall no longer be
registered or in good standing under the Exchange Act, or other applicable
statute or regulation and a successor Depository for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11
shall no longer be applicable to the Debentures of such series and the Company
will execute, and subject to Section 2.05, the Trustee will authenticate and
deliver Debentures of such series in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Debentures of such series in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures of any series shall no longer be represented by
one or more Global Debentures and that the provisions of this Section 2.11
shall no longer apply to the Debentures of such series. In such event the
Company will execute and subject to Section 2.05, the Trustee, upon receipt of
an Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver Debentures of such series in definitive registered
form without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debentures of
such series in exchange for such Global Debentures. Upon the exchange of the
Global Debentures for such Debentures in definitive registered form without
coupons, in authorized denominations, the Global Debentures shall be canceled
by the Trustee. Such Debentures in definitive registered form issued in
exchange for the Global Debentures pursuant to this Section 2.11(c) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Debentures to the Depository for delivery to the persons in whose names such
Debentures are so registered.
ARTICLE THREE
REDEMPTION OF DEBENTURES AND
SINKING FUND PROVISIONS
SECTION 3.01. The Company may redeem the Debentures of any series
issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Debentures of any
series in accordance with the right reserved so to do, it shall give notice of
such redemption to holders of the Debentures of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less
<PAGE>
than 30 days and not more than 60 days before the date fixed for redemption
of that series to such holders at their last addresses as they shall appear
upon the Debenture Register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or
not the registered holder receives the notice. In any case, failure duly to
give such notice to the holder of any Debenture of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Debentures of
such series or any other series. In the case of any redemption of Debentures
prior to the expiration of any restriction on such redemption provided in the
terms of such Debentures or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debentures of that series are to
be redeemed, and shall state that payment of the redemption price of such
Debentures to be redeemed will be made at the office or agency of the Company
in the Borough of Manhattan, the City and State of New York, upon presentation
and surrender of such Debentures, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, that from and after said
date interest will cease to accrue and that the redemption is for a sinking
fund, if such is the case. If less than all the Debentures of a series are to
be redeemed, the notice to the holders of Debentures of that series to be
redeemed in whole or in part shall specify the particular Debentures to be so
redeemed. In case any Debenture is to be redeemed in part only, the notice
which relates to such Debenture shall state the portion of the principal
amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Debenture, a new Debenture or
Debentures of such series in principal amount equal to the unredeemed portion
thereof will be issued.
(b) If less than all the Debentures of a series are to be redeemed,
the Company shall give the Trustee at least 45 days' notice in advance of the
date fixed for redemption as to the aggregate principal amount of Debentures
of the series to be redeemed, and thereupon the Trustee shall select, by lot
or in such other manner as it shall deem appropriate and fair in its
discretion and which may provide for the selection of a portion or portions
(equal to $25 or any integral multiple thereof) of the principal amount of
such Debentures of a denomination larger than $25, the Debentures to be
redeemed and shall thereafter promptly notify the Company in writing of the
numbers of the Debentures to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as
the case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or
such paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption shall have
been completed as above provided, the Debentures or portions of Debentures of
the series to be redeemed specified in such notice shall become due and
<PAGE>
payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption and interest on such Debentures or portions of Debentures shall
cease to accrue on and after the date fixed for redemption, unless the Company
shall default in the payment of such redemption price and accrued interest
with respect to any such Debenture or portion thereof. On presentation and
surrender of such Debentures on or after the date fixed for redemption at the
place of payment specified in the notice, said Debentures shall be paid and
redeemed at the applicable redemption price for such series, together with
interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment
payable on such date shall be payable to the registered holder at the close of
business on the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
deliver to the holder thereof, at the expense of the Company, a new Debenture
or Debentures of the same series, of authorized denominations in principal
amount equal to the unredeemed portion of the Debenture so presented.
SECTION 3.04. The provisions or Sections 3.04, 3.05 and 3.06 shall be
applicable to any sinking fund for the retirement of Debentures of a series,
except as otherwise specified as contemplated by section 2.01 for Debentures
of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Debentures of any series is herein referred to as
on "optional sinking fund payment". If provided for by the terms of Debentures
for any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Debentures of any series as provided for by the
terms of Debentures of such series.
SECTION 3.05. The Company (i) may deliver outstanding Debentures of a
series (other than any previously called for redemption) and (ii) may apply as
a credit Debentures of a series which have been redeemed either at the
election of the Company pursuant to the terms of such Debentures or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Debentures, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Debentures of such series
required to be made pursuant to the terms of such Debentures as provided for
by the terms of such series; provided that such Debentures have not been
previously so credited. Such Debentures shall be received and credited for
such purpose by the Trustee at the redemption price specified in such
Debentures for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking fund
payment date for any series of Debentures, the Company will deliver to the
Trustee an Officers' Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms for that series,
the portion thereof, if any, which is to be satisfied by delivering and
crediting Debentures of that series pursuant to Section 3.05 and the basis for
such credit and will, together with such Officers' Certificate, deliver to the
Trustee any Debentures to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Debentures to be
redeemed upon such sinking fund payment date in the manner specified in
<PAGE>
Section 3.02 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
3.02. Such notice having been duly given, the redemption of such Debentures
shall be made upon the terms and in the manner stated in Section 3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the Debentures as
follows:
SECTION 4.01. The Company will duly and punctually pay or cause to be
paid the principal of (and premium, if any) and interest on the Debentures of
that series at the time and place and in the manner provided herein and
established with respect to such Debentures.
SECTION 4.02. So long as any series of the Debentures remain
outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, the City and State of New York, with respect to each such series
and at such other location or locations as may be designated as provided in
this Section 4.02, where (i) Debentures of that series may be presented for
payment, (ii) Debentures of that series may be presented as hereinabove
authorized for registration of transfer and exchange, and (iii) notices and
demands to or upon the Company in respect of the Debentures of that series and
this Indenture may be given or served, such designation to continue with
respect to such office or agency until the Company shall, by written notice
signed by its President or a Vice President and delivered to the Trustee,
designate some other office or agency for such purposes or any of them. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or more paying
agents for all or any series of the Debentures, other than the Trustee, the
Company will cause each such paying agency to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Debentures of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust for the benefit
of the persons entitled thereto:
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor of such Debentures) to make any payment of
the principal of (and premium, if any) or interest on the Debentures of that
series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
<PAGE>
any series of the Debentures, it will on or before each due date of the
principal of (and premium, if any) or interest on Debentures of that series,
set aside, segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Debentures of that series until such sums shall be
paid to such persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of such action, or any failure (by it or any other
obligor on such Debentures) to take such action. Whenever the Company shall
have one or more paying agents for any series of Debentures, it will, prior to
each due date of the principal of (and premium, if any) or interest on any
Debentures of that series, deposit with the paying agent a sum sufficient to
pay the principal (and premium, if any) or interest so becoming due, such sum
to be held in trust for the benefit of the persons entitled to such principal,
premium or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the Trustee all
sums held in trust by the Company or such paying agent, such sums to be held
by the Trustee upon the same terms and conditions as those upon which such
sums were held by the Company or such paying agent; and, upon such payment by
any paying agent to the Trustee, such paying agent shall be released from all
further liability with respect to such money.
SECTION 4.04. The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
ARTICLE FIVE
Debentureholders' Lists and Reports by the Company and the Trustee
SECTION 5.01. The Company will furnish or cause to be furnished to
the Trustee (a) on a monthly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Debentures as of
such regular record date, provided, that the Company shall not be obligated to
furnish or cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Trustee by
the Company and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; provided, however, no such list need be furnished for
any series for which the Trustee shall be the Debenture Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current a form
as is reasonably practicable, all information as to the names and addresses of
the holders of Debentures contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
<PAGE>
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of such series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall within five business days after the receipt of such application, at its
election, either:
(1) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section 5.02; or
(2) inform such applicants as to the approximate number of holders of
Debentures of such series or of all Debentures, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee, in accordance with the provisions of subsection (a) of this Section
5.02, and as to the approximate cost of mailing to such Debentureholders the
form of proxy or other communication, if any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the
case may be, whose name and address appears in the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 5.02, a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests
of the holders of Debentures of such series or of all Debentures, as the case
may be, or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Debentureholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise, the Trustee shall be relieved of any obligation or
duty to such applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the holders of Debentures in accordance with the
provisions of subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).
SECTION 5.03. (a) The Company covenants and agrees to file with the
<PAGE>
Trustee, within 15 days after the Company is required to file the same with
the Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15 (d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time
to time by the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service which provides for
evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section as may be required by rules and regulations prescribed from time to
time by the Commission.
(d) The Company covenants and agrees to furnish to the Trustee, on or
before May 15 in each calendar year in which any of the Debentures are
outstanding, or on or before such other day in each calendar year as the
Company and the Trustee may from time to time agree upon, a Certificate as to
his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this subsection (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
SECTION 5.04. (a) On or before July 15 in each year in which any of
the Debentures are outstanding, the Trustee shall transmit by mail, first
class postage prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, a brief report dated as of the preceding
May 15, with respect to any of the following events which may have occurred
within the previous twelve months (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of subsection (c) of Section 7.08;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report, and
for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debentures, on any property or funds held or collected
by it as Trustee if such advances so remaining unpaid aggregate more than
1/2 of 1% of the principal amount of the Debentures outstanding on the date
<PAGE>
of such report;
(4) any change to the amount, interest rate, and maturity date of all
other indebtedness owing by the Company, or by any other obligor on the
Debentures, to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except any indebtedness based upon a creditor relationship
arising in any manner described in paragraph (2), (3), (4), or (6) of
subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property subject to
the lien of this Indenture (and the consideration thereof, if any) which it
has not previously reported;
(7) any additional issue of Debentures which the Trustee has not
previously reported; and
(8) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures or the Debentures of any series,
except any action in respect of a default, notice of which has been or is to
be withheld by it in accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage prepaid,
to the Debentureholders, as their names and addresses appear upon the
Debenture Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of
this Section (or if no such report has yet been so transmitted, since the date
of execution of this Indenture), for the reimbursement of which it claims or
may claim a lien or charge prior to that of the Debentures of any series on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection if such advances remaining
unpaid at any time aggregate more than 10% of the principal amount of
Debentures of such series outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the Company,
with each stock exchange upon which any Debentures are listed (if so listed)
and also with the Commission. The Company agrees to notify the Trustee when
any Debentures become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Debentureholders
on Event of Default
SECTION 6.01. (a) Whenever used herein with respect to Debentures of
a particular series, "Event of Default" means any one or more of the following
events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon any of
the Debentures of that series, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the Company
<PAGE>
in accordance with the terms of any indenture supplemental hereto, shall not
constitute a default in the payment of interest for this purpose;
(2) default in the payment of the principal of (or premium, if any,
on) any of the Debentures of that series as and when the same shall become
due and payable whether at maturity, upon redemption, by declaring or
otherwise, or in any payment required by any sinking or analogous fund
established with respect to that series;
(3) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company with
respect to that series contained in such Debentures or otherwise established
with respect to that series of Debentures pursuant to Section 2.01 hereof or
contained in this Indenture (other than a covenant or agreement which has
been expressly included in this Indenture solely for the benefit of one or
more series of Debentures other than such series) for a period of 90 days
after the date on which written notice of such failure, requiring the same
to be remedied and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Company by the Trustee, by
registered or certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Debentures of that series
at the time outstanding;
(4) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of the Company under the Federal Bankruptcy Code or any other
similar applicable Federal or State law, and such decree or order shall have
continued unvacated and unstayed for a period of 90 days; or an involuntary
case shall be commenced under such Code in respect of the Company and shall
continue undismissed for a period of 90 days or an order for relief in such
case shall have been entered; or a decree or order of a court having
jurisdiction in the premises shall have been entered for the appointment on
the ground of insolvency or bankruptcy of a receiver or custodian or
liquidator or trustee or assignee in bankruptcy or insolvency of the Company
or of its property, or for the winding up or liquidation of its affairs, and
such decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
liquidation or reorganization under the Federal Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of
any such petition, or shall consent to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator or trustee
or assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors.
(b) In each and every such case, unless the principal of all the
Debentures of that series shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Debentures of that series then outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by such Debentureholders),
may declare the principal of all the Debentures of that series to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything contained in this Indenture or
in the Debentures of that series or established with respect to that series
pursuant to Section 2.01 hereof to the contrary notwithstanding.
<PAGE>
(c) Section 6.01(b), however, is subject to the condition that if,
at any time after the principal of the Debentures of that series shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debentures
of that series and the principal of (and premium, if any, on) any and all
Debentures of that series which shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to
the extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Debentures of
that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and any and all defaults under the Indenture,
other than the nonpayment of principal on Debentures of that series which
shall not have become due by their terms, shall have been remedied or waived
as provided in Section 6.06 then and in every such case the holders of a
majority in aggregate principal amount of the Debentures of that series then
outstanding (subject to, in the case of any series of Debentures held as trust
assets of a SunAmerica Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such SunAmerica Capital
Trust as may be required under the Declaration of Trust of such SunAmerica
Capital Trust), by written notice to the Company and to the Trustee, may
rescind and annul such declaration and its consequences with respect to that
series of Debentures; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Debentures of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the Debentures
of any series, a Default with respect to the Debentures of such series shall
have occurred, the Company expressly acknowledges that under the circumstances
set forth in the applicable Declaration of Trust, any holder of Preferred
Securities of the applicable SunAmerica Capital Trust may enforce directly
against the Company the applicable Property Trustee's rights hereunder. In
furtherance of the foregoing and for the avoidance of any doubt, the Company
acknowledges that, under the circumstances described in the applicable
Declaration of Trust, any such holder of Preferred Securities, in its own
name, in the name of the applicable SunAmerica Capital Trust or in the name of
the holders of the Preferred Securities issued by such SunAmerica Capital
Trust, may institute or cause to be instituted a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce the applicable Property Trustee's rights
hereunder directly against the Company as issuer of the applicable series of
Debentures, and may prosecute such proceeding to judgment or final decree, and
enforce the same against the Company.
SECTION 6.02. (a) The Company covenants that (1) in case default
shall be made in the payment of any installment of interest on any of the
Debentures of a series, or any payment required by any sinking or analogous
fund established with respect to that series as and when the same shall have
become due and payable, and such default shall have continued for a period of
<PAGE>
10 business days, or (2) in case default shall be made in the payment of the
principal of (or premium, if any, on) any of the Debentures of a series when
the same shall have become due and payable, whether upon maturity of the
Debentures of a series or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Debentures of that series, the whole amount that
then shall have become due and payable on all such Debentures for principal
(and premium, if any) or interest, or both, as the case may be, with interest
upon the overdue principal (and premium, if any) and (to the extent that
payment of such interest is enforceable under applicable law and without
duplication of any other amounts paid by the Company or the applicable
SunAmerica Capital Trust in respect thereof) upon overdue installments of
interest at the rate per annum expressed in the Debentures of that series;
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, and the amount payable to the Trustee
under Section 7.06.
(b) In case the Company shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or other obligor
upon the Debentures of that series and collect in the manner provided by law
out of the property of the Company or other obligor upon the Debentures of
that series wherever situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings affecting the Company, any other obligor on such
Debentures, or the creditors or property of either, the Trustee shall have the
power to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of
the holders of Debentures of such series allowed for the entire amount due and
payable by the Company or such other obligor under the Indenture at the date
of institution of such proceedings and for any additional amount which may
become due and payable by the Company or such other obligor after such date,
and to collect and receive any moneys or other property payable or deliverable
on any such claim, and to distribute the same after the deduction of the
amount payable to the Trustee under Section 7.06; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
holders of Debentures of such series to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of such
payments directly to such Debentureholders, to pay to the Trustee any amount
due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures of
that series, may be enforced by the Trustee without the possession of any of
such Debentures, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the Trustee of any
amounts due under Section 7.06, be for the ratable benefit of the holders of
the Debentures of such series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
<PAGE>
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Debentures of that series or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Debentureholder
in any such proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to Section
6.02 with respect to a particular series of Debentures shall be applied in the
order following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the several Debentures of that series, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06; and
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and interest,
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Debentures for principal (and premium,
if any) and interest, respectively.
SECTION 6.04. No holder of any Debenture of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless such holder previously shall have given
to the Trustee written notice of an Event of Default and of the continuance
thereof with respect to Debentures of such series specifying such Event of
Default, as hereinbefore provided, and unless also the holders of not less
than 25% in aggregate principal amount of the Debentures of such series then
outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity, shall have failed to institute any such action, suit or proceeding;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Debenture of such series with every other such taker and
holder and Trustee, that no one or more holders of Debentures of such series
shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Debentures, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Debentures of such series. For
the protection and enforcement of the provisions of this Section, each and
every Debentureholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
<PAGE>
Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of
(and premium, if any) and interest on such Debenture, as therein provided, on
or after the respective due dates expressed in such Debenture (or in the case
of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or
redemption date, shall not be impaired or affected without the consent of such
holder.
SECTION 6.05. (a) All powers and remedies given by this Article to
the Trustee or to the Debentureholders shall, to the extent permitted by law,
be deemed cumulative and not exclusive of any others thereof or of any other
powers and remedies available to the Trustee or the holders of the debentures,
by judicial proceedings or otherwise, to enforce performance or observance of
the covenants and agreements contained in this Indenture or otherwise
established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of
the Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article or by law to the Trustee or to the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders.
SECTION 6.06. The holders of a majority in aggregate principal amount
of the Debentures of any series at the time outstanding, determined in
accordance with Section 8.04 (with, in the case of any series of Debentures
held as trust assets of a SunAmerica Capital Trust and with respect to which a
Security Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such SunAmerica Capital Trust
as may be required under the Declaration of Trust of such SunAmerica Capital
Trust), shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such
series; provided, however, that such direction shall not be in conflict with
any rule of law or with this Indenture or unduly prejudicial to the rights of
holders of Debentures of any other series at the time outstanding determined
in accordance with Section 8.04 not parties thereto. Subject to the
provisions of Section 7.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible
Officer or Officers of the Trustee, determine that the proceeding so directed
would involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Debentures of any series at the time
outstanding affected thereby, determined in accordance with section 8.04 (with,
in the case of any series of Debentures held as trust assets of a SunAmerica
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such SunAmerica Capital Trust as may be required
under the Declaration of Trust of such SunAmerica Capital Trust), may on behalf
of the holders of all of the Debentures of such series waive any past default
in the performance of any of the covenants contained herein or established
pursuant to section 2.01 with respect to such series and its consequences,
except a default in the payment of the principal of, or premium, if any, or
interest on, any of the Debentures of that series as and when the same shall
become due by the terms of such Debentures otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 6.01(c)) or a call for redemption of
<PAGE>
Debentures of that series. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Debentures of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 6.07. The Trustee shall, within 90 days after the occurrence
of a default with respect to a particular series, transmit by mail, first
class postage prepaid, to the holders of Debentures of that series, as their
names and addresses appear upon the Debenture Register, notice of all defaults
with respect to that series known to the Trustee, unless such defaults shall
have been cured before the giving of such notice (the term "defaults" for the
purposes of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided, that, except in
the case of default in the payment of the principal of (or premium, if any) or
interest on any of the Debentures of that series or in the payment of any
sinking fund installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
that series; provided further, that in the case of any default of the
character specified in Section 6.01(a)(3) with respect to Debentures of such
series no such notice to the holders of the Debentures of that series shall be
given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long
as the Trustee is acting as paying agent for such series of Debentures or (ii)
any default as to which the Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Indenture shall
have obtained written notice.
SECTION 6.08. All parties to this Indenture agree, and each holder of
any Debentures by his or her acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding more than 10% in
aggregate principal amount of the outstanding Debentures of any series, or to
any suit instituted by any Debentureholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Debenture of such
series, on or after the respective due dates expressed in such Debenture or
established pursuant to this Indenture.
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an Event
of Default with respect to Debentures of a series and after the curing of all
<PAGE>
Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of such series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a
series has occurred (which has not been cured or waived), the Trustee shall
exercise with respect to Debentures of that series such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to
Debentures of a series and after the curing or waiving of all such Events of
Default with respect to that series which may have occurred:
(i) the duties and obligations of the Trustee shall with
respect to Debentures of such series be determined solely by the
express provisions of this Indenture, and the Trustee shall not be
liable with respect to Debentures of such series except for the
performance of such duties and obligations as are specifically set
forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to Debentures of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures of any series at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under
this Indenture with respect to the Debentures of that series; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 7.02. Except as otherwise provided in Section 7.01:
<PAGE>
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to the genuine and
to have been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein contained shall,
however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to a series of the Debentures (which has not
been cured or waived) to exercise with respect to Debentures of that series
such of the rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security, or other papers or documents, unless requested in writing so
to do by the holders of not less than a majority in principal amount of the
outstanding Debentures of the particular series affected thereby (determined
as provided in Section 8.04); provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as
a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 7.03. (a) The recitals contained herein and in the
<PAGE>
Debentures (other than the Certificate of Authentication on the Debentures)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application
by the Company of any of the Debentures or of the proceeds of such Debentures,
or for the use or application of any moneys paid over by the Trustee in
accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any
paying agent other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Debenture Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, paying
agent or Debenture Registrar.
SECTION 7.05. Subject to the provisions of Section 11.05, all moneys
received by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it
hereunder except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Debentures.
SECTION 7.07. Except as otherwise provided in Section 7.01, whenever
in the administration of the provisions of this Indenture the Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers' Certificate
<PAGE>
delivered to the Trustee and such certificate, in the absence of negligence or
bad faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted to be taken by it under the provisions
of this Indenture upon the faith thereof.
SECTION 7.08. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, with respect to the
Debentures of any series and if the Default to which such conflicting interest
relates has not been cured, duly waived or otherwise eliminated, within 90
days after ascertaining that it has such conflicting interest, it shall either
eliminate such conflicting interest, except as otherwise provided herein, or
resign with respect to the Debentures of that series in the manner and with
the effect specified in Section 7.10 and the Company shall promptly appoint a
successor Trustee in the manner provided herein.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, with respect to the Debentures
of any series the Trustee shall, within ten days after the expiration of such
90-day period, transmit notice of such failure by mail, first class postage
prepaid, to the Debentureholders of that series as their names and addresses
appear upon the registration books.
(c) For the purposes of this Section the Trustee shall be deemed to
have a conflicting interest with respect to the Debentures of any series if a
Default has occurred and is continuing and:
(1) the Trustee is trustee under this Indenture with respect to the
outstanding Debentures of any series other than that series, or is trustee
under another indenture under which any other securities, or certificates of
interest or participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral trust indenture
under which the only collateral consists of Debentures issued under this
Indenture; provided that there shall be excluded from the operation of this
paragraph the Debentures of any series other than that series and any other
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
outstanding if (i) this Indenture and such other indenture or indentures and
all series of securities issuable thereunder are wholly unsecured and rank
equally and such other indenture or indentures (and such series) are
hereafter qualified under the Trust Indenture Act, unless the Commission
shall have found and declared by order pursuant to subsection (b) of Section
305 or subsection (c) of Section 307 of the Trust Indenture Act, that
differences exist between (A) the provisions of this Indenture with respect
to Debentures of that series and with respect to one or more other series or
(B) the provisions of this Indenture and the provisions of such other
indenture or indentures (or such series), which are so likely to involve a
material conflict of interest as to make it necessary in the public interest
or for the protection of investors to disqualify the Trustee from acting as
such under this Indenture with respect to the Debentures of that series and
such other series or such other indenture or indentures, or (ii) the Company
shall have sustained the burden of proving, on application to the Commission
and after opportunity for hearing thereon, that the trusteeship under this
Indenture with respect to Debentures of that series and such other series or
such other indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or for
the protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to Debentures of that series and such
other series or under such other indentures;
(2) the Trustee or any of its directors or executive officers is an
<PAGE>
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director and/or an executive officer of the
Trustee and a director and/or an executive officer of the Company, but may
not be at the same time an executive officer of both the Trustee and the
Company; (B) if and so long as the number of directors of the Trustee in
office is more than nine, one additional individual may be a director and/or
an executive officer of the Trustee and a director of the Company; and (C)
the Trustee may be designated by the Company or by an underwriter for the
Company to act in the capacity of transfer agent, registrar, custodian,
paying agent, fiscal agent, escrow agent, or depository, or in any other
similar capacity, or, subject to the provisions of paragraph (1) of this
subsection (c), to act as trustee whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or 10%
or more of the voting securities of the Trustee is beneficially owned either
by an underwriter for the Company or by any director, partner, or executive
officer thereof, or is beneficially owned, collectively by any two or more
such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), (A) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company, not including the
Debentures issued under this Indenture and securities issued under any other
indenture under which the Trustee is also trustee, or (B) 10% or more of any
class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), 5% or more of the voting securities of any person
who, to the knowledge of the Trustee, owns 10% or more of the voting
securities of, or controls directly or indirectly or is under direct or
indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection (c) defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company;
(9) the Trustee owns, on the date of Default upon the Debentures of
any series or any anniversary of such Default while such Default upon the
Debentures issued under this Indenture remains outstanding, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflict interest under paragraph (6), (7), or (8) of
<PAGE>
this subsection (c). As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator or testamentary
trustee of an estate which includes them, the provisions of the preceding
sentence shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities in such estate do not exceed
25% of such voting securities or 25% of any such class of security.
Promptly after the dates of any such Default upon the Debentures issued
under this Indenture and annually in each succeeding year that the
Debentures issued under this Indenture remain in Default, the Trustee shall
make a check of its holding of such securities in any of the above-mentioned
capacities as of such dates. If the Company fails to make payment in full
of principal of or interest on any of the Debentures when and as the same
becomes due and payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holding of such securities in
any of the above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered as
though beneficially owned by the Trustee for the purposes of paragraphs (6),
(7) and (8) of this subsection (c); or
(10) except under the circumstances described in paragraph (1), (3),
(4), (5) or (6) of subsection (b) of Section 7.13 the Trustee shall be or
shall become a creditor of the Company.
For purposes of paragraph (1) of this subsection (c), and of Section
6.06, the term "series of securities" or "securities" means a series, class or
group of securities issuable under an indenture pursuant to whose terms
holders of one such series may vote to direct the indenture trustee, or
otherwise take action pursuant to a vote of such holders, separately from
holders of another such series; provided, that, "series of securities" or
"series" shall not include any series of securities issuable under an
indenture if all such series rank equally and are wholly secured.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection (c) shall not be construed as indicating that the ownership
of such percentages of securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed
to be in "default", when a default in payment of principal shall have
continued for 30 days or more and shall not have been cured; and (C) the
Trustee shall not be deemed to be the owner or holder of (i) any security
which it holds as collateral security (as trustee or otherwise) for any
obligation which is not in default as defined in clause (B) above, or (ii) any
security which it holds as collateral security under this Indenture,
irrespective of any Default hereunder, or (iii) any security which it holds as
agent for collection, or as custodian, escrow agent or depositary, or in any
similar representative capacity.
Except as above provided, the word "security" or securities" as used
in this Indenture shall mean any note, stock, treasury stock, bond, debenture,
<PAGE>
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral trust certificate, pre-organization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas, or other mineral rights, or, in general, any interest or
instrument commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
shall mean every person, who, within one year prior to the time as of which
the determination is made, has purchased from the Company with a view to, or
has offered or sold for the Company in connection with, the distribution of
any security of the Company, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or has
had a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest was
limited to a commission from an underwriter or dealer not in excess of the
usual and customary distributors' or sellers' commission.
(2) The term "director" shall mean any member of the board of
directors of a corporation or any individual performing similar functions
with respect to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder thereof to vote in the direction or management
of the affairs of a person, or any security issued under or pursuant to any
trust, agreement or arrangement whereby a trustee or trustees or agent or
agents for the owner or holder of such security are presently entitled to
vote in the direction or management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the Debentures.
(6) The term "executive officer" shall mean the chairman of the board
of directors, president, every vice president, every assistant vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom is
referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
<PAGE>
person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof, provided, however, that any voting securities of an issuer
shall be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
the case of secured evidences of indebtedness, all of which are issued under
a single indenture, differences in the interest rates or maturity dates of
various series thereof shall not be deemed sufficient to constitute such
series different classes; and provided, further, that, in the case of
unsecured evidences of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to constitute them
securities of different classes, whether or not they are issued under a
single indenture.
(f) Except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Debentures issued under this
Indenture, or in the payment of any sinking or analogous fund installment, the
Trustee shall not be required to resign as provided by this Section 7.08 if
such Trustee shall have sustained the burden of proving, on application to the
Commission and after opportunity for hearing thereon, that (i) the default
under the Indenture may be cured or waived during a reasonable period and
under the procedures described in such application and (ii) a stay of the
Trustee's duty to resign will not be inconsistent with the interests of
Debentureholders. The filing of such an application shall automatically stay
the performance of the duty to resign until the Commission orders otherwise.
Any resignation of the Trustee shall become effective only upon the
appointment of a successor trustee and such successor's acceptance of such an
appointment.
<PAGE>
SECTION 7.09. There shall at all times be a Trustee with respect to
the Debentures issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a
corporation or other person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million dollars, and subject to
supervision or examination by Federal, State, Territorial, or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter appointed,
may at any time resign with respect to the Debentures of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first class postage prepaid, to the Debentureholders of
such series, as their names and addresses appear upon the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee with respect to Debentures of such series by written
instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee with respect
to Debentures of such series, or any Debentureholder of that series who has
been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appointment a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the Company
or by any Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company may remove the Trustee with respect to all Debentures and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 6.08, unless the Trustee's duty to resign is
<PAGE>
stated as provided herein, any Debentureholder who has been a bona fide
holder of a Debenture or Debentures for at least six months may, on behalf
of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor trustee. Such court may thereupon after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Debentures of a series pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Debentures of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Debentures of any particular series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Debentures, every such successor trustee
so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor trustee with
respect to the Debentures of one or more (but not all) series, the Company,
the retiring Trustee and each successor trustee with respect to the Debentures
of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates, (2) shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee and that no Trustee
shall be responsible for any act or failure to act on the part of any other
Trustee hereunder; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee shall with
<PAGE>
respect to the Debentures of that or those series to which the appointment of
such successor trustee relates have no further responsibility for the exercise
of rights and powers or for the performance of the duties and obligations
vested in the Trustee under this Indenture, and each such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental indenture, the
property and money held by such retiring Trustee hereunder with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates.
(c) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, power and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(e) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. In case any Debentures shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 7.13. (a) Subject to the provisions of subsection (b) of
this Section, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within three months prior to
a default, as defined in subsection (b) of this Section, or subsequent to such
a default, then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special account for the benefit of the Trustee
individually, the holders of the Debentures and the holders of other indenture
securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
<PAGE>
paragraph (2) of this subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three months'
period, or an amount equal to the proceeds of any such property, if disposed
of, subject, however, to the rights, if any, of the Company and its other
creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable thereon, and
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to
a third person, and (iii) distributions made in cash, securities, or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such three
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Debentureholders and the holders of other indenture
securities in such manner that the Trustee, the Debentureholders and the
holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in a case for reorganization pursuant
to the Federal Bankruptcy Code or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
<PAGE>
of the Trustee, the Debentureholders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to
such claim, in bankruptcy or receivership or in a case for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or a case for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, the Debentureholders and the holders of other indenture securities,
in accordance with the provisions of this paragraph, the funds and property
held in such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions
to be made to the Trustee, the Debentureholders and the holders of other
indenture securities with respect to their respective claims, in which event
it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for
any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to
apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three
months' period, it shall be subject to the provisions of this subsection (a)
if and only if the following conditions exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such three months' period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property other than cash which shall at any time be subject to the lien,
if any, of this Indenture or of discharging tax liens or other prior liens
or encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Debentureholders at the time
and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, subscription agent, fiscal agent or depositary, or
other similar capacity;
<PAGE>
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a Company
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptance or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment in full
of the principal of (or premium, if any) or interest upon any of the
Debenture or upon the other indenture securities when and as such principal
(or premium, if any) or interest becomes due and payable.
(2) The term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act)
outstanding under any other indenture (A) under which the Trustee is also
trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C) under which a default
exists at the time of the apportionment of the funds and property held in
said special account.
(3) The term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other orders
drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon , the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon any of the
Debentures.
ARTICLE EIGHT
Concerning the Debentureholders
SECTION 8.01. Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Debentures of a particular series may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action) the fact that at the time of taking any
<PAGE>
such action the holders of such majority or specified percentage of that
series have joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such holders of Debentures of that
series in person or by agent or proxy appointed in writing.
If the Company shall solicit from the Debentureholders of any series
any request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the
determination of Debentureholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record date shall be
deemed to be Debentureholders for the purposes of determining whether
Debentureholders of the requisite proportion of outstanding Debentures of that
series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for
that purpose the outstanding Debentures of that series shall be computed as of
the record date; provided that no such authorization, agreement or consent by
such Debentureholders on the record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Debentureholder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any person of
any of the Debentures shall be sufficient if made in the following manner;
(a) The fact and date of the execution by any such person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of
such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any Debenture Registrar shall be
affected by any notice to the contrary.
SECTION 8.04. In determining whether the holders of the requisite
aggregate principal amount of Debentures of a particular series have concurred
in any direction, consent or waiver under this Indenture, Debentures of that
series which are owned by the Company or any other obligor on the Debentures
of that series or by any Subsidiary of the Company or of such other obligor on
the Debentures of that series shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on
<PAGE>
any such direction, consent or waiver, only Debentures of such series which
the Trustee actually knows are so owned shall be so disregarded. Debentures
so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not a person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. In case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by the
holders of the majority or percentage in aggregate principal amount of the
Debentures of a particular series specified in this Indenture in connection
with such action, any holder of a Debenture of that series which is shown by
the evidence to be included in the Debentures the holders of which have
consented to such action may, by filing written notice with the Trustee, and
upon proof of holding as provided in Section 8.02, revoke such action so far
as concerns such Debenture. Except as aforesaid any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures of a particular
series specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent
of the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
contained herein or otherwise established with respect to the Debentures; or
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the holders of
the Debentures of all or any series as the Board of Directors and the
Trustee shall consider to be for the protection of the holders of Debentures
of all or any series, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions,
conditions or provisions a default or an Event of Default with respect to
such series permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction, condition or provision
such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default or may limit the right of the holders of a majority in aggregate
<PAGE>
principal amount of the Debentures of such series to waive such default; or
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture as shall not be
inconsistent with the provisions of this Indenture and shall not adversely
affect the interests of the holders of the Debentures of any series; or
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Debenture outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in Section
8.01) of the holders of not less than a majority in aggregate principal amount
of the Debentures of each series affected by such supplemental indenture or
indentures at the time outstanding (and, in the case of any series of
Debentures held as trust assets of a SunAmerica Capital Trust and with respect
to which a Security Exchange has not theretofore occurred, such consent of
holders of the Preferred Securities and the Common Securities of such
SunAmerica Capital Trust as may be required under the Declaration of Trust of
such SunAmerica Capital Trust), the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Debentures of such series under
this Indenture; provided, however, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debentures of any series, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Debenture (and, in the case of any series of Debentures held as trust
assets of a SunAmerica Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such SunAmerica Capital
Trust as may be required under the Declaration of Trust of such SunAmerica
Capital Trust) then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders (and,
<PAGE>
in the case of any series of Debentures held as trust assets of a SunAmerica
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such SunAmerica Capital Trust as may be required
under the Declaration of Trust of such SunAmerica Capital Trust) required to
consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders of
any series affected thereby under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth
in general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to such series, be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Debentures of the series affected
thereby shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be and be deemed
to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.04. Debentures of any series, affected by a supplemental
indenture, authenticated and delivered after the execution of such
supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided
such form meets the requirements of any exchange upon which such series may be
listed, as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures of that series so modified as to
conform, in the opinion of the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Debentures of that series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of Section 7.01,
may receive an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article is authorized or permitted by, and
conforms to, the terms of this Article and that it is proper for the Trustee
under the provisions of this Article to join in the execution thereof.
ARTICLE TEN
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. The Company shall not consolidate with or merge into
<PAGE>
any other Person or transfer or lease its properties and assets substantially
as an entirety to any Person, and the Company shall not permit any other
Person to consolidate with or merge into the Company, unless:
(a) either the Company shall be the continuing corporation, or the
corporation (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the
Company substantially as an entity are transferred or leased shall be a
corporation organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Debentures and this Indenture; and
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing.
SECTION 10.02 The successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer or
lease is made shall succeed to and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as
if such successor corporation had been named as the Company herein, and
thereafter (except in the case of a lease to another Person) the predecessor
corporation shall be relieved of all obligations and covenants under the
Indenture and the Debentures and, in the event of such conveyance or transfer,
any such predecessor corporation may be dissolved and liquidated.
SECTION 10.03. The Trustee, subject to the provisions of Section
7.01, may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance, transfer or other disposition, and
any such assumption, comply with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. (A) If at any time (a) the Company shall have paid
or caused to be paid the principal of and interest on all the Debentures of
any series Outstanding hereunder (other than Debentures of such series which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.07) as and when the same shall have become due and
payable, or (b) the Company shall have delivered to the Trustee for
cancellation all Debentures of any series theretofore authenticated (other
than any Debentures of such series which shall have been destroyed, lost or
stolen and which shall have been replaced or paid as provided in Section 2.07)
or (c) (i) all the Debentures of series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and (ii) the Company shall have
irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount in cash (other than moneys repaid by the Trustee or
any paying agent to the Company in accordance with Section 11.04) or
Government Obligations, maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash, or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (A) the principal and interest on all
<PAGE>
Debentures of such series on each date that such principal or interest is due
and payable and (B) any mandatory sinking fund payments on the dates on which
such payments are due and payable in accordance with the terms of the
Indenture and the Debentures of such series; and if, in any such case, the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect (except
as to (i) rights of registration of transfer and exchange of Debentures of
such series and the Company's right of optional redemption, if any, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Debentures,
(iii) rights of holders of Debentures to receive payments of principal thereof
and interest thereon, upon the original stated due dates therefor (but not
upon acceleration), and remaining rights of the Debentureholders to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the holders of
Debentures of such series as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them, and (vi) the
obligations of the Company under Section 4.02) and the Trustee, on demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture; provided,
that the rights of Holders of the Debentures to receive amounts in respect of
principal of and interest on the Debentures held by them shall not be delayed
longer than required by then-applicable mandatory rules or policies of any
securities exchange upon which the Debentures are listed. The Company agrees
to reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture or the Debentures of such series.
(B) The following provisions shall apply to the Debentures of each
series unless specifically otherwise provided in a Board Resolution or
indenture supplemental hereto provided pursuant to Section 2.01. In addition
to discharge of the Indenture pursuant to the next preceding paragraph, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Debentures of a series on the date of the deposit referred to in
subparagraph (a) below, and the provisions of this Indenture with respect to
the Debentures of such series shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Debentures of such series
and the Company's right of optional redemption, if any, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Debentures, (iii) rights of
holders of Debentures to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the holders of Debentures to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) the rights of the Holders of
Debentures as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them and (vi) the obligations of the
Company under Section 4.02) and the Trustee, at the expense of the Company,
shall at the Company's request, execute proper instruments acknowledging the
same, if
(a) with reference to this provision the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the holders of the Debentures of such series (i) cash in
an amount, or (ii) Governmental Obligations maturing as to principal and
interest at such times and in such amounts as will insure the availability
of cash or (iii) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
<PAGE>
principal and interest on all Debentures of such series on each date that
such principal or interest is due and payable and (B) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture and the Debentures of such series;
(b) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the Company
is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the
holders of the Debentures of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same amount
and in the same manner and at the same times, as would have been the case if
such deposit, defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision have
been complied with; and
(e) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from making
payments of the principal of or interest on the Debentures of such series on
the date of such deposit.
SECTION 11.02 Subject to Section 11.04, all moneys deposited with the
Trustee (or other trustee) pursuant to Section 11.01 shall be held in trust
and applied by it to the payment, either directly or through any paying agent
(including the Company acting as its own paying agent), to the Holders of the
particular Debentures of such series for the payment or redemption of which
such moneys have been deposited with the Trustee, of all sums due and to
become due thereon for principal and interest; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 11.03 In connection with the satisfaction and discharge of
this Indenture with respect to Debentures of any series, all moneys then held
by any paying agent under the provisions of this Indenture with respect to
such series of Debentures shall, upon demand of the Company, be repaid to it
or paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys.
SECTION 11.04 Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Security
of any series and not applied but remaining unclaimed for two years after the
date upon which such principal or interest shall have become due and payable,
shall, upon the written request of the Company and unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Company by the Trustee for such series or such
paying agent, and the Holder of the Debentures of such series shall, unless
otherwise required by mandatory provisions of applicable escheat or abandoned
or unclaimed property laws, thereafter look only to the Company for any
payment which such holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon cease;
provided, however, that the Trustee or such paying agent, before being
required to make any such repayment with respect to moneys deposited with it
<PAGE>
for any payment series, shall at the expense of the Company, mail by
first-class mail to holders of such Debentures at their addresses as they
shall appear on the Debenture Register, notice, that such moneys remain and
that, after a date specified therein, which shall not be less than thirty days
from the date of such mailing or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 11.05 The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the Governmental
Obligations deposited pursuant to Section 11.01 or the principal or interest
received in respect of such obligations.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligations, covenant or
agreement of this Indenture, or of any Debenture, or for any claim based
thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statue or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Debentures.
ARTICLE THIRTEEN
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 13.02. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful sole successor of the Company.
SECTION 13.03. The Company by instrument in writing executed by
authority of two-thirds of its Board of Directors and delivered to the Trustee
may surrender any of the powers reserved to the Company and thereupon such
power so surrendered shall terminate both as to the Company and as to any
<PAGE>
successor corporation.
SECTION 13.04. Except as otherwise expressly provided herein any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first class
postage prepaid in a post-office letterbox addressed (until another address
is filed in writing by the Company with the Trustee), as follows: SunAmerica
Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022, Attention:
Secretary. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.
SECTION 13.05. This Indenture and each Debenture shall be deemed to
be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.
SECTION 13.06. (a) Upon any application or demand by the Company to
the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture (other than the certificate provided pursuant to
Section 5.03(d) of this Indenture) shall include (1) a statement that the
person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (4) a statement as to whether or not,
in the opinion of such person, such condition or covenant has been complied
with.
SECTION 13.07. Except as provided pursuant to Section 2.01 pursuant
to a Board Resolution, and as set forth in an Officers' Certificate, or
established in one or more indentures supplemental to the Indenture, in any
case where the date of maturity of interest or principal of any Debenture or
the date of redemption of any Debenture shall not be a business day then
payment of interest or principal (and premium, if any) may be made on the next
succeeding business day with the same force and effect as if made on the
nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
SECTION 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
<PAGE>
together constitute but one and the same instrument.
SECTION 13.10. In case any one or more of the provisions contained in
this Indenture or in the Debentures of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Debentures, but this Indenture and such Debentures shall
be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 13.11. The Company will have the right at all times to assign
any of its rights or obligations under this 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, this Indenture is binding upon
and inures to the benefit of the parties thereto and their respective
successors and assigns. This Indenture may not otherwise be assigned by the
parties hereto.
SECTION 13.12. The Company hereby acknowledges that, to the extent
specifically set forth herein, prior to a Security Exchange with respect to
the Debentures of any series held as trust assets of a SunAmerica Capital
Trust, the holders of the Preferred Securities of such SunAmerica Capital
Trust shall expressly be third party beneficiaries of this Indenture.
ARTICLE FOURTEEN
Subordination of Debentures
SECTION 14.01. The Company, for itself, its successors and assigns,
covenants and agrees, and each holder of a Debenture, by its acceptance
thereof, likewise covenants and agrees, that the payment of the principal of,
premium, if any, and interest on, each and all of the Debentures and is hereby
expressly subordinated, to the extent and in the manner hereinafter in this
Article Fourteen set forth, in right of payment to the prior payment in full
of all Senior Indebtedness.
SECTION 14.02.
(a) In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to the Company or to its creditors, as such,
or to its property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, and in the event of any execution sale,
then the holders of Senior Indebtedness shall be entitled to receive payment
in full of principal thereof and interest due thereon (including without
limitation, except to the extent, if any, prohibited by mandatory provisions
of law, post-petition interest in any such proceedings) in money of all
Senior Indebtedness before the holders of Debentures are entitled to receive
any payment on account of the principal of or interest on the indebtedness
evidenced by the Debentures, and to that end the holders of Senior
Indebtedness shall be entitled to receive for application in payment thereof
any payment or distribution of any kind or character, whether in cash or
property or securities, which may be payable or deliverable in connection
with any such proceedings or sale in respect of the principal of or interest
on the Debentures other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article Fourteen with
<PAGE>
respect to the Debentures, to the payment of all indebtedness of the nature
of Senior Indebtedness, provided that the rights of the holders of the
Senior Indebtedness are not altered by such reorganization or readjustment;
(b) In the event and during the continuation of any default in payment
of any Senior Indebtedness or if any event of default, as therein defined,
shall exist under any Senior Indebtedness or any agreement pursuant to which
any Senior Indebtedness is issued, no payment of the principal of, premium
if any, or interest on the Debentures shall be made and the Company
covenants that it will, upon ascertaining any such default or event of
default, provide written notice to the Trustee of such default or event of
default;
(c) In the event that the Debentures of any series are declared due
and payable before their expressed maturity because of the occurrence of an
Event of Default (under circumstances when the provisions of subsection (a)
of this Section 14.02 shall not be applicable), the holders of all Senior
Indebtedness shall be entitled to receive payment in full in money of such
Senior Indebtedness before such holders of Debentures are entitled to
receive any payment on account of the principal of or interest on the
Debentures; and
(d) No holder of Senior Indebtedness shall be prejudiced in his right
to enforce subordination of the Debentures by any act or failure to act on
the part of the Company.
SECTION 14.03 In the event that, notwithstanding the provisions of
Section 14.02, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in this Article Fourteen with respect to the Debentures, to the
payment of all indebtedness of the nature of Senior Indebtedness, provided
that the rights of the holders of the Senior Indebtedness are not altered by
such reorganization or readjustment) shall be received by the holders or by the
Trustee for their benefit in connection with any proceedings or sale referred
to in subsection (a) of Section 14.02 before all Senior Indebtedness is paid
in full in money, such payment or distribution shall be paid over to the
holders of such Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the Senior
Indebtedness held or represented by each, for application to the payment of
all Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full in money, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.
From and after the payment in full in money of all Senior
Indebtedness, the holders of Debentures (together with the holders of any
other indebtedness of the Company which is subordinate in right of payment to
the payment in full of all Senior Indebtedness, which is not subordinate in
right of payment to the Debentures and which by its terms grants such right of
subrogation to the holder thereof) shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets
or securities of the Company applicable to the Senior Indebtedness until the
Debentures shall be paid in full, and, for the purposes of such subrogation,
no such payments or distributions to the holders of Senior Indebtedness of
assets or securities, which otherwise would have been payable or distributable
to holders of Debentures , shall, as between the Company, its creditors other
<PAGE>
than the holders of Senior Indebtedness, and the holders, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Article Fourteen are and are intended
solely for the purpose of defining the relative rights of the holders, on the
one hand, and the holders of the Senior Indebtedness, on the other hand, and
nothing contained in this Article Fourteen or elsewhere in this Indenture or
in the Debentures is intended to or shall impair as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders, the
obligation of the Company, which is unconditional and absolute, to pay to the
holders the principal of and interest on the Debentures as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the holders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture subject to the rights of the holders of Senior Indebtedness, under
Section 14.02, to receive cash, property or securities of the Company
otherwise payable or deliverable to the holders of the Debentures.
Upon any distribution or payment in connection with any proceedings or
sale referred to in subsection (a) of Section 14.02, the Trustee, subject as
between the Trustee and the holders to the provisions of Sections 7.01 and
7.02 hereof, shall be entitled to rely upon a certificate of the liquidating
trustee or agent or other person making any distribution or payment to the
Trustee for the purpose of ascertaining the holders of Senior Indebtedness
entitled to participate in such payment or distribution, the amount of such
Senior Indebtedness or the amount payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article Fourteen . In the event that the Trustee determines, in good faith,
that further evidence is required with respect to the right of any person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Section 14.03, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, as to the extent to which such person
is entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such person under this Section 14.03, and if
such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to
receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness, and shall not be liable to any such
holders if it shall in good faith pay over or distribute to holders of
Debentures or the Company or any other person moneys or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of Article Fourteen
of this Indenture or otherwise.
SECTION 14.04 Nothing contained in this Article Fourteen or
elsewhere in this Indenture, or in any of the Debentures, shall prevent at any
time, (a) the Company from making payments at any time of principal of or
interest on the Debentures, except under the conditions described in Section
14.02 or during the pendency of any proceedings or sale therein referred to,
provided, however, that payments of principal of or interest on the Debentures
shall only be made by the Company within three business days of the due dates
for such payments or (b) the application by the Trustee of any moneys
deposited with it hereunder to the payment of or on account of the principal
of or interest on the Debentures, if at the time of such deposit the Trustee
did not have written notice in accordance with Section 14.06 of any event
prohibiting the making of such deposit by the Company or if in the event of
redemption, the Trustee did not have such written notice prior to the time
<PAGE>
that the notice of redemption pursuant to Section 3.02 was given (which notice
of redemption shall in no event be given more than 60 days prior to the date
fixed for redemption).
SECTION 14.05 Each Debentureholder by his acceptance of a Debenture
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination as
provided in this Article Fourteen and appoints the Trustee as attorney-in-fact
for any and all such purposes, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the immediate filing of a claim for the
unpaid balance of such Debentureholder's Debentures in the form required in
said proceedings and cause said claim to be approved.
SECTION 14.06 Notwithstanding the provisions of this Article
Fourteen or any other provisions of this Indenture, the Trustee shall not be
charged with the knowledge of the existence of any facts which would prohibit
the making of any payment of moneys to the Trustee, unless and until the
Trustee shall have received written notice thereof from the Company or from
the holder or the representative of any class of Senior Indebtedness; provided,
however, that if at least two business days prior to the date upon which by
the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of either the cash amount payable
at maturity or interest on any Debenture) the Trustee shall not have received
with respect to such monies the notice provided for in this Section 14.06,
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such monies and to apply the
same to the purpose for which they were received, and shall not be affected by
any notice to the contrary, which may be received by it on or after such two
business days prior to such date.
SECTION 14.07 The Trustee shall be entitled to all the rights set
forth in this Article Fourteen with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness.
SECTION 14.08 In case at any time any paying agent other than the
Trustee shall be appointed by the Company and be then acting hereunder, the
term "Trustee" as used in this Article Fourteen shall in such case (unless the
context shall otherwise require) be construed as extending to and including
such paying agent within its meaning as fully for all intents and purposes as
if such paying agent were named in this Article Fourteen in place of the
Trustee.
The First National Bank of Chicago, as Trustee, hereby accepts the
trust in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SUNAMERICA INC.
By ______________________________
<PAGE>
Attest:
By ______________________
Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
Attest:
By _______________________________
By ______________________
Assistant Secretary
STATE OF CALIFORNIA )
ss.:
COUNTY OF LOS ANGELES )
On _____________ __, 1995 before me, ____________, Notary Public,
personally appeared ________________ and
/ / personally known to me -OR -
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
_____________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _____________________
/ / CORPORATE OFFICER(S) ______________________
/ / PARTNER(S)
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
<PAGE>
SUNAMERICA INC
STATE OF ILLINOIS )
ss.:
COUNTY OF COOK )
On ______________ __, 1995 before me, ___________, Notary Public,
personally appeared ___________________ and
/ / personally known to me - OR -
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
_____________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _________________________
/ / CORPORATE OFFICER(S) / / TRUST OFFICER
/ / ATTORNEY-IN-FACT
/ / TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
THE FIRST NATIONAL BANK OF CHICAGO
EXHIBIT L
- ------------------------------------------------------------
SUNAMERICA INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
-------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of March 15, 1995
TO
INDENTURE
Dated as of March 15, 1995
-------------------
___% Junior Subordinated Debentures,
Series A, Due 2044
- ------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE, dated as of the 15th day of
March, 1995 (the "First Supplemental Indenture"), between SUNAMERICA INC., a
corporation duly organized and existing under the laws of the State of Maryland
(hereinafter sometimes referred to as the "Company"), and The First National
Bank of Chicago, a national banking association, as trustee (hereinafter
sometimes referred to as the "Trustee") under the Indenture dated as of March
15, 1995 between the Company and the Trustee (the "Indenture"; all terms used
and not defined herein are used as defined in the Indenture),
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the future issuance of its junior subordinated
debentures (the "Debentures"), said Debentures to be issued from time to time
in series as might be determined by the Company under the Indenture, in an
<PAGE>
unlimited aggregate principal amount which may be authenticated and delivered
thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debentures to
be known as its ____% Junior Subordinated Debentures, Series A, Due 2044 (said
series being hereinafter referred to as the "Series A Debentures"), the form
and substance of such Series A Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this First
Supplemental Indenture; and
WHEREAS, the Company has caused to be formed SunAmerica Capital
Trust I ("SunAmerica Capital I") as a statutory business trust under the
Business Trust Act of the State of Delaware (12 Del. Code Section 3801 et
seq.) pursuant to a declaration of trust dated March 21, 1995 (the "Original
Declaration") and the filing of a certificate of trust with the Secretary of
State of the State of Delaware on March 22, 1995; and
WHEREAS, the Original Declaration is to be amended and restated
in its entirety pursuant to an Amended and Restated Declaration of Trust dated
as of May __, 1995 (such Amended and Restated Declaration of Trust, as amended
from time to time, the "Declaration of Trust"; and
WHEREAS, SunAmerica Capital I has offered (the "Offer") to
issue its ___% Trust Originated Preferred Securities (the "Preferred
Securities") to holders of the 9 1/4% Preferred Stock, Series B ("Series B
Preferred") of the Company in exchange for such Series B Preferred; and
WHEREAS, in connection with such Offer and the purchase by the
Company of the Common Securities (as defined in the Declaration of Trust) of
SunAmerica Capital I, the Company will deposit, and SunAmerica Capital I will
purchase, respectively, as trust assets Series A Debentures; and
WHEREAS, pursuant to the Declaration of Trust, the legal title
to the Series A Debentures shall be owned and held of record in the name of
The Bank of New York or its successor under the Declaration of Trust, as
Property Trustee (the "Property Trustee") in trust for the benefit of holders
of the Preferred Securities and the Common Securities; and
WHEREAS, upon the occurrence of a Special Event (as defined in
the Declaration of Trust) the Regular Trustees (as defined in the Declaration
of Trust) of SunAmerica Capital I shall, unless the Series A Debentures are
redeemed as described herein, dissolve SunAmerica Capital I and cause to be
distributed to the holders of the Preferred Securities and Common Securities,
on a Pro Rata basis (determined as provided in the terms of the Preferred
Securities and Common Securities attached as Exhibits B and C to the
Declaration of Trust), Series A Debentures and in connection with a
Liquidation Distribution (as defined in the Declaration of Trust) the Regular
Trustees may cause to be distributed to holders of Preferred Securities and
Common Securities, on such a Pro Rata basis, Series A Debentures (each a
"Dissolution Event"); and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this First Supplemental
Indenture, and all requirements necessary to make this First Supplemental
Indenture a valid instrument, in accordance with its terms, and to make the
Series A Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed and fulfilled, and the execution and delivery hereof have been in
all respects duly authorized;
<PAGE>
NOW THEREFORE, in consideration of the purchase and acceptance
of the Series A Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Series A Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE ONE
General Terms and Conditions of
the Series A Debentures
SECTION 1.01. There shall be and is hereby authorized a series
of Debentures designated the "______% Junior Subordinated Debentures, Series
A, Due 2044", limited in aggregate principal amount to the sum of (i)
$[___________], plus (ii) a dollar amount equal to the principal amount of
Series A Debentures purchased by SunAmerica Capital I with the proceeds
received by SunAmerica Capital I from the purchase by the Company of the
Common Securities of SunAmerica Capital I, which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Series A Debentures. The Series A Debentures shall mature and the principal
shall be due and payable together with all accrued and unpaid interest
thereon, including Compounded Interest (as hereinafter defined) on ________
__, 2044, and shall be issued in the form of registered Series A Debentures
without coupons.
SECTION 1.02. The Series A Debentures shall be issued in
certificated form. Principal and interest on the Series A Debentures issued
in certificated form will be payable, the transfer of such Series A Debentures
will be registrable and such Series A Debentures will be exchangeable for
Series A Debentures bearing identical terms and provisions at the office or
agency of the Company in the Borough of Manhattan, The City and State of New
York; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such address as shall
appear in the Debenture register and that the payment of principal with
respect to the Series A Debentures will only be made upon surrender of the
Series A Debentures to the Trustee. Notwithstanding the foregoing, so long as
the Property Trustee is the legal owner and record holder of the Series A
Debentures, the payment of the principal of and interest on (including
Compounded Interest, if any) on the Series A Debentures held by the Property
Trustee will be made by the Company in immediately available funds on the
payment date therefor at such place and to the Property Account (as defined in
the Declaration of Trust) established and maintained by the Property Trustee
pursuant to the Declaration of Trust.
SECTION 1.03. Each Series A Debenture will bear interest at
the rate of ____% per annum from (*) , 1995 until the principal
thereof becomes due and payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum, compounded
quarterly, payable (subject to the provisions of Article Three) quarterly in
arrears on March 30, June 30, September 30 and December 30 of each year (each,
an "Interest Payment Date", commencing on June 30, 1995), to the person in
whose name such Series A Debenture or any predecessor Series A Debenture is
registered, at the close of business on the regular record date for such
interest installment, which, except as set forth below, shall be the close of
business on the March 15, June 15, September 15 or December 15 next preceding
that Interest Payment Date. In addition, each Series A Debenture will bear
interest at the rate of 9 1/4% per annum from March 15, 1995 through
(*) Insert first day following Expiration Date.
<PAGE>
(*) , 1995 ("Pre-issuance Interest"), payable on June 30, 1995, to the
person in whose name such Series A Debenture is registered at the close of
business on the regular record date for such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered holders on such regular record date, and
may be paid to the person in whose name the Series A Debenture (or one or more
Predecessor Debentures) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered holders of the
Series A Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Series A Debentures
may be listed, and upon such notice as may be required by such exchange, all
as more fully provided in the Indenture.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for any period
shorter than a full quarterly interest period for which interest is computed,
the amount of interest payable will be computed on the basis of the actual
number of days elapsed in such a 30-day month. In the event that any date on
which interest is payable on the Series A Debentures is not a business day,
then payment of interest payable on such date will be made on the next
succeeding day which is a business day (and without any interest or other
payment in respect of any such delay), except that, if such business day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding business day, in each case with the same force and
effect as if made on such date.
ARTICLE TWO
Optional Redemption
of the Series A Debentures
SECTION 2.01. Except as provided in Section 2.02, Series A
Debentures may not be redeemed by the Company prior to June 15, 1997. Subject
to the terms of Article Three of the Indenture, the Company shall have the
right to redeem the Series A Debentures, in whole or in part, from time to
time, on or after June 15, 1997, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon,
including Compounded Interest, if any, to the date of such redemption (the
"Optional Redemption Price"). Any redemption pursuant to this paragraph will
be made upon not less than 30 nor more than 60 days' notice, at the Optional
Redemption Price.
SECTION 2.02. If, at any time, a Tax Event (as defined below)
shall occur or be continuing after receipt of a Dissolution Tax Opinion (as
defined below) and (i) the Regular Trustees and the Company shall have
received an opinion (a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Series A Debentures for United
States federal income tax purposes even if the Series A Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holder's interest in SunAmerica Capital I as set forth in
the Declaration of Trust or (ii) the Regular Trustees shall have been informed
by such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to SunAmerica Capital I, the Company shall have the right at any
time, upon not less than 30 nor more than 60 days notice, to redeem the Series
A Debentures in whole or in part for cash at the Optional Redemption Price
<PAGE>
within 90 days following the occurrence of such Tax Event; provided, however,
that, if at the time there is available to the Company or the Regular Trustees
on behalf of SunAmerica Capital I the opportunity to eliminate, within such 90
day period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure, which has no adverse effect on SunAmerica Capital
I, the Company or the
holders of the Preferred Securities, the Company or the Regular Trustees on
behalf of SunAmerica Capital I will pursue such measure in lieu of redemption
and provided further that the Company shall have no right to redeem the Series
A Debentures while the Regular Trustees on behalf of SunAmerica Capital I are
pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees
shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after (*)(*) , 1995, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after (**) , 1995, there is more than an
insubstantial risk that (i) SunAmerica Capital I is, or will be within 90 days
of the date thereof, subject to United States federal income tax with respect
to income accrued or received on the Series A Debentures, (ii) SunAmerica
Capital I is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of taxes, duties or other governmental charges or
(iii) interest payable by the Company to SunAmerica Capital I on the Series A
Debentures is not, or within 90 days of the date thereof will not be,
deductible by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue ruling of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of a dissolution of SunAmerica Capital I and distribution
of the Series A Debentures as provided in the Declaration of Trust.
SECTION 2.03. If the Series A Debentures are only partially
redeemed pursuant to this Article Two, the Series A Debentures will be
redeemed pro rata or by lot or by any other method utilized by the Trustee.
Notwithstanding the foregoing, if a partial redemption of the Series A
Debentures would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and will only redeem the Series A Debentures in whole.
ARTICLE THREE
Extension of Interest Payment Period
(*)(*) Insert Expiration Date.
<PAGE>
SECTION 3.01. So long as the Company is not in default in the
payment of interest on the Series A Debentures, the Company shall have the
right, at any time during the term of the Series A Debentures, from time to
time to extend the interest payment period of such Series A Debentures (other
than with respect to Pre-issuance Interest) for up to 20 consecutive quarterly
interest periods (the "Extended Interest Payment Period"), at the end of which
period the Company shall pay all interest accrued and unpaid thereon (together
with interest thereon at the rate of __% per annum to the extent permitted by
applicable law, compounded quarterly ("Compounded Interest")). During such
Extended Interest Payment Period the Company shall not declare or pay any
dividend 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 payments with respect thereto; provided that the
Company may pay accrued dividends (and cash in lieu of fractional shares) upon
conversion of its Series D Mandatory Conversion Premium Dividend Preferred
Stock in accordance with the terms of such stock. Prior to the termination of
any such Extended Interest Payment Period, the Company may pay all or any
portion of the interest accrued on the Series A Debentures on any Interest
Payment Date to holders of record on the regular record date for such Interest
Payment Date or from time to time further extend such Period, provided that
such Period together with all such further extensions thereof shall not exceed
20 consecutive quarterly interest periods. Upon the termination of any
Extended Interest Payment Period and upon the payment of all accrued and
unpaid interest then due, together with Compounded Interest, the Company may
select a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof. At the end of the
Extended Interest Payment Period the Company shall pay all interest accrued
and unpaid on the Series A Debentures including any Compounded Interest which
shall be payable to the holders of the Series A Debentures in whose names the
Series A Debentures are registered in the Debenture register on the first
record date after the end of the Extended Interest Payment Period.
SECTION 3.02. (a) So long as the Property Trustee is the
legal owner and holder of record of the Series A Debentures, at the time the
Company selects an Extended Interest Payment Period, the Company shall give
both the Property Trustee and the Trustee written notice of its selection of
such Extended Interest Payment Period one business day prior to the earlier of
(i) the next succeeding date on which distributions on the Preferred
Securities are payable or (ii) the date SunAmerica Capital I is required to
give notice of the record date or the date such distributions are payable to
the New York Stock Exchange or other applicable self-regulatory organization
or to holders of the Preferred Securities, but in any event not less than one
business day prior to such record date. The Company shall cause SunAmerica
Capital I to give notice of the Company's selection of such Extended Interest
Payment Period to the holders of the Preferred Securities.
(b) If as a result of a Dissolution Event Series A Debentures
have been distributed to holders of Preferred Securities and Common
Securities, at the time the Company selects an Extended Interest Payment
Period, the Company shall give the holders of the Series A Debentures and the
Trustee written notice of its selection of such Extended Interest Payment
Period 10 business days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) the date the Company is required to give notice
of the record or payment date of such interest payment to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Series A Debentures.
<PAGE>
ARTICLE FOUR
Covenants Applicable to Series A Debentures
SECTION 4.01. So long as any Preferred Securities remain
outstanding, the Company will not declare or pay any dividend 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 payments
with respect thereto, if at such time (i) the Company shall be in default with
respect to its Guarantee Payments (as defined in the Guarantee Agreement) or
other payment obligations under the Guarantee Agreement, (ii) there shall have
occurred any Event of Default under the Indenture with respect to the Series A
Debentures or (iii) the Company shall have given notice of its selection of an
Extended Interest Payment Period and such Period, or any extension thereof, is
continuing; provided that 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 in
accordance with the terms of such stock.
SECTION 4.02. In connection with the distribution of the
Series A Debentures to the holders of the Preferred Securities upon a
Dissolution Event, the Company will use its best efforts to list such Series A
Debentures on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed and traded.
SECTION 4.03. The Company covenants and agrees for the benefit
of the holders of the Preferred Securities to comply fully with all of its
obligations and agreements under the Declaration of Trust, including, without
limitation, its obligations under Article IV thereof.
SECTION 4.04. Prior to the distribution of Series A Debentures
to the holders of Preferred Securities upon a Dissolution Event, the Company
covenants and agrees for the benefit of the holders of the Preferred
Securities (i) not to cause or permit the Common Securities to be transferred
except as permitted by the Declaration of Trust and (ii) not to take any
action which would cause the Trust to cease to be treated as a grantor trust
for United States federal income tax purposes, except in connection with a
distribution of the Series A Debentures as provided in the Declaration of
Trust.
ARTICLE FIVE
Form of Series A Debenture
SECTION 5.01. The Series A Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially
in the following forms:
(FORM OF FACE OF DEBENTURE)
No. $
CUSIP NO. 866930AE0
SUNAMERICA INC.
% JUNIOR SUBORDINATED DEBENTURE,
SERIES A, DUE 2044
<PAGE>
SunAmerica Inc., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to) for value received, hereby promises to pay to
, or registered assigns, the principal sum of _________
Dollars on , 2044, and to pay interest on said principal sum
from (*) , 1995 or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears
on March 30, June 30, September 30 and December 30 of each year commencing
June 30, 1995 at the rate of % per annum plus Compounded Interest, if any,
until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum. In addition,
the Company promises to pay to such holder or registered assigns interest at
the rate of 9 1/4% per annum from March 15, 1995 through (**) , 1995
("Pre-issuance Interest"), payable on June 30, 1995. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a
360-day year of twelve 30-day months and for any period shorter than a full
quarterly interest period for which interest is computed, the amount of
interest payable will be computed on the basis of the actual number of days
elapsed in such a 30-day month. In the event that any date on which interest
is payable on this Debenture is not a business day, then payment of interest
payable on such date will be made on the next succeeding day which is a
business day (and without any interest or other payment in respect of any such
delay), except that, if such business day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding business day, in
each case with the same force and effect as if made on such date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Debentures, as
defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the close
of business on the March 15, June 15, September 15 or December 15 next
preceding such Interest Payment Date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered holders on such regular record date, and may be paid to the person
in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall
be given to the registered holders of this series of Debentures not less than
10 days prior to such special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Debenture shall be
payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City and State of New York, in any coin or
currency of the United States of America which at the time of payment is legal
tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed
to the registered holder at such address as shall appear in the Debenture
register and that the payment of principal will only be made upon the
surrender of this Debenture to the Trustee. Notwithstanding the foregoing, so
long as the owner and record holder of this Debenture is the Property Trustee
(as defined in the Indenture referred to on the reverse hereof), the payment
of the principal of (and premium, if any) and interest (including Compounded
Interest, if any) on this Debenture will be made at such place and to such
(*) Insert first day following Expiration Date.
(**) Insert Expiration Date.
<PAGE>
account of the Property Trustee as may be designated by the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each Holder hereof, by his
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such Holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse side hereof, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to
be executed.
Dated______________________
SUNAMERICA INC.
By_________________________
Attest:
By_________________________
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
<PAGE>
_____________________________
_____________________________ _________________________
as Trustee or as Authentication Agent
By___________________________ _________________________
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures
of the Company (herein sometimes referred to as the "Debentures"), specified
in the Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of March 15, 1995 duly executed and
delivered between the Company and The First National Bank of Chicago, a
national banking association, as Trustee (herein referred to as the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
March 15, 1995 between the Company and the Trustee (said Indenture as so
supplemented being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures, and, to the extent specifically set forth in the Indenture, the
holders of Senior Indebtedness and Preferred Securities. By the terms of the
Indenture, the Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Debentures is limited in aggregate principal amount
as specified in said First Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may
not be redeemed by the Company prior to June 15, 1997. The Company shall have
the right to redeem this Debenture at the option of the Company, without
premium or penalty, in whole or in part at any time on or after June 15, 1997
(an "Optional Redemption"), at a redemption price equal to 100% of the
principal amount plus any accrued but unpaid interest, including any
Compounded Interest, if any, to the date of such redemption (the "Optional
Redemption Price"). Any redemption pursuant to this paragraph will be made
upon not less than 30 nor more than 60 days' notice, at the Optional
Redemption Price.
If, at any time, a Tax Event (as defined below) shall occur or
be continuing after receipt of a Dissolution Tax Opinion (as defined below)
and (i) the Regular Trustees and the Company shall have received an opinion (a
"Redemption Tax Opinion") of a nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more
than an insubstantial risk that the Company would be precluded from deducting
the interest on the Series A Debentures for United States federal income tax
purposes even if the Series A Debentures were distributed to the holders of
Preferred Securities and Common Securities in liquidation of such holder's
interest in SunAmerica Capital I as set forth in the Declaration of Trust or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion (as defined below) cannot be delivered to SunAmerica
Capital I, the Company shall have the right at any time, upon not less than 30
nor more than 60 days notice, to redeem the Series A Debentures in whole or in
part for cash at the Optional Redemption Price within 90 days following the
occurrence of such Tax Event; provided, however, that, if at the time there is
available to the Company or the Regular Trustees on behalf of SunAmerica
Capital I the opportunity to eliminate, within such 90 day period, the Tax
Event by taking some ministerial action ("Ministerial Action"), such as filing
a form or making an election, or pursuing some other similar reasonable
<PAGE>
measure, which has no adverse effect on SunAmerica Capital I, the Company or
the holders of the Preferred Securities, the Company or the Regular Trustees on
behalf of SunAmerica Capital I will pursue such measure in lieu of redemption
and provided further that the Company shall have no right to redeem the Series
A Debentures while the Regular Trustees on behalf of SunAmerica Capital I are
pursuing any such Ministerial Action.
"Tax Event" means that the Company and the Regular Trustees
shall have obtained an opinion of nationally recognized independent tax
counsel experienced in such matters (a "Dissolution Tax Opinion") to the
effect that on or after (*)(*) , 1995, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after (**)(*) , 1995, there is more than an
insubstantial risk that (i) SunAmerica Capital I is, or will be within 90 days
of the date thereof, subject to United States federal income tax with respect
to income accrued or received on the Series A Debentures, (ii) SunAmerica
Capital I is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of taxes, duties or other governmental charges or
(iii) interest payable by the Company to SunAmerica Capital I on the Series A
Debentures is not, or within 90 days of the date thereof will not be,
deductible by the Company for United States federal income tax purposes.
"No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel experienced in such matters, which opinion
may rely on any then applicable published revenue ruling of the Internal
Revenue Service, to the effect that the holders of the Preferred Securities
will not recognize any gain or loss for United States federal income tax
purposes as a result of a dissolution of SunAmerica Capital I and distribution
of the Series A Debentures as provided in the Declaration of Trust.
If the Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption or as a result of a Tax Event as described
above, the Debentures will be redeemed pro rata or by lot or in some other
equitable manner determined by the Trustee. Notwithstanding the foregoing, if
a partial redemption of the Series A Debentures would result in the delisting
of the Preferred Securities by any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and will only redeem
the Series A Debentures in whole.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
- -------------
(*)(*) Insert Expiration Date.
(**)(*) Insert Expiration Date.
<PAGE>
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth therein.
The Indenture 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 the Debentures of each series affected at the
time outstanding, as defined in the Indenture (and, in the case of any series
of Debentures held as trust assets of a SunAmerica Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of holders of the Preferred Securities and the Common Securities of such
SunAmerica Capital Trust as may be required under the Declaration of Trust of
such SunAmerica Capital Trust), to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed
maturity of any Debentures of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof, without the consent
of the holder of each Debenture so affected or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Debenture (and, in the case of any series of Debentures held as trust assets
of a SunAmerica Capital Trust and with respect to which a Security Exchange
has not theretofore occurred, such consent of the holders of the Preferred
Securities and the Common Securities of such SunAmerica Capital Trust as may
be required under the Declaration of Trust of such SunAmerica Capital Trust)
then outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Debentures of a series at the time outstanding affected thereby (subject, in
the case of any series of Debentures held as trust assets of a SunAmerica
Capital Trust and with respect to which a Securities Exchange has not
theretofore occurred, to such consent of holders of Preferred Securities and
Common Securities of such SunAmerica Capital Trust as may be required under
the Declaration of Trust of such SunAmerica Capital Trust), on behalf of the
Holders of the Debentures of such series, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture with respect to such series, and its consequences,
except a default in the payment of the principal of or premium, if any, or
interest on any of the Debentures of such series. Any such consent or waiver
by the registered Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Debenture and of any Debenture issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
Subject to Section 13.13 of the Indenture, no reference herein
to the Indenture (other than such Section) and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any,
and interest on this Debenture at the time and place at the rate and in the
money herein prescribed.
So long as the Company is not in default in the payment of
interest on the Debentures, the Company shall have the right, at any time
during the term of the Debentures, from time to time to extend the interest
payment period of such Debentures (other than with respect to Pre-issuance
<PAGE>
Interest) for up to 20 consecutive quarterly interest periods (the "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
of __% per annum to the extent permitted by applicable law, compounded
quarterly ("Compounded Interest")). During such Extended Interest Payment
Period the Company shall not declare or pay any dividend 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 payments
with respect thereto, provided that the Company may pay accrued dividends (and
cash in lieu of fractional shares) upon conversion of its Series D Mandatory
Conversion Premium Dividend Preferred Stock in accordance with the terms of
such Stock. Prior to the termination of any such Extended Interest Payment
Period, the Company may pay all or any portion of the interest accrued on the
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Extended Interest Payment Period, provided that such Period together with
all such further extensions thereof shall not exceed 20 consecutive quarterly
interest periods. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest then due,
together with Compounded Interest, the Company may select a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest
on this Debenture shall be due and payable during an Extended Interest Payment
Period, except at the end thereof. At the end of the Extended Interest
Payment Period the Company shall pay all interest accrued and unpaid on the
Series A Debentures including any Compounded Interest which shall be payable
to the holders of the Series A Debentures in whose names the Series A
Debentures are registered in the Debenture register on the first record date
after the end of the Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
in the Borough of Manhattan, The City and State of New York accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures
of authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute
owner hereof (whether or not this Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and interest due hereon
and for all other purposes, and neither the Company nor the Trustee nor any
paying agent nor any Debenture Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
<PAGE>
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereto. As provided in the Indenture and subject to certain limitations
therein set forth, Debentures of this Series are exchangeable for a like
aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE SIX
Original Issue of Series A Debentures
SECTION 6.01. Series A Debentures in the aggregate principal
amount equal to the sum of $ plus a dollar amount equal to the
principal amount of Series A Debentures purchased by SunAmerica Capital I with
the proceeds received by SunAmerica Capital I from the purchase by the Company
of the Common Securities of SunAmerica Capital I, may, upon execution of this
First Supplemental Indenture, be executed by the Company and delivered to the
Trustee for authentication, and the trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
its Chairman, its President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.
ARTICLE SEVEN
Miscellaneous Provisions
SECTION 7.01. Except as otherwise expressly provided in this
First Supplemental Indenture or in the form of Series A Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Series A Debenture that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 7.02. The Indenture, as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
SECTION 7.03. The recitals herein contained are made by the
Company and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this First Supplemental Indenture.
SECTION 7.04. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
<PAGE>
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
SUNAMERICA INC.
By________________________________
Attest:
________________________________
Secretary
THE FIRST NATIONAL BANK OF
CHICAGO, as Trustee
By_________________________________
Attest:
_________________________________
Assistant Secretary
STATE OF CALIFORNIA )
) ss.:
COUNTY OF [ ] ) ___________________, 1995
On the ______ day ______________, in the year one thousand nine
hundred ninety-five, before me personally came ________________________ to me
known, who, being by me duly sworn, did depose and say that he resides at
_______________________________; that he is _______________ Officer of
SUNAMERICA INC., one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of said corporation; that
the seal affixed to the said instrument is such corporation seal; that it was
so affixed by authority of the Board of Directors of said corporation, and
that he signed his name thereto by like authority.
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK ) _________ __, 1995
On the ______ day of ___________, in the year one thousand nine
<PAGE>
hundred ninety-five, before me personally came ________________________ to me
known, who, being by me duly sworn, did depose and say that (s)he resides at
_______________________________, that (s)he is a(n) __________ of THE FIRST
NATIONAL BANK OF CHICAGO, one of the corporations described in and which
executed the above instrument; that (s)he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation and that (s)he signed his (her) name thereto by like authority.
________________________________
NOTARY PUBLIC
My Commission Expires
EXHIBIT M
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May ____, 1995, is
executed and delivered by SunAmerica Inc., a Maryland corporation (the
"Guarantor"), and The Bank of New York, as the initial Guarantee Trustee (as
defined herein) for the benefit of the Holders (as defined herein) from time
to time of the Preferred Securities (as defined herein) of SunAmerica Capital
Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of May ____, 1995 among the trustees of
the Issuer named therein, SunAmerica Inc., as Sponsor, and the Holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing as of the date hereof in accordance with the Offer
(as defined herein) $____ aggregate liquidation amount of its ___% Trust
Originated Preferred Securities (the "Preferred Securities") representing
undivided beneficial interests in the assets of the Issuer and having the
terms set forth in Exhibit B to the Declaration;
WHEREAS, the Preferred Securities will be issued by the Issuer
upon deposit of the Guarantor's Debentures (as defined herein) with the Issuer
as trust assets; and
WHEREAS, as incentive for the Holders to exchange shares of the
Guarantor's Series B Preferred Stock (as defined herein) for Preferred
Securities pursuant to the Offer, the Guarantor desires to irrevocably and
unconditionally agree, to the extent set forth herein, to pay to the Holders
of the Preferred Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the exchange of Series B
Preferred Stock for Preferred Securities, which exchange the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee Agreement for the benefit of the Holders from time to time of the
Preferred Securities.
ARTICLE I
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided
beneficial interests in the assets of the Issuer, having the terms set forth
in Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures
issued by the Guarantor under the Indenture to the Property Trustee and
entitled the "__ % Junior Subordinated Debentures, Series A, due 2044".
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but if and
only to the extent that in each case the Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or
the redemption of all the Preferred Securities upon the maturity or redemption
of the Debentures as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer
has funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each
such Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate
of the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of March 15, 1995
between the Guarantor and The First National Bank of Chicago, as trustee, and
the First Supplemental Indenture thereto dated such date, pursuant to which
the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are
the record owners of Preferred Securities whose liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) represents more than 50% of the liquidation amount
of all outstanding Preferred Securities.
"Offer" means the offer by the Issuer to exchange Preferred
Securities for outstanding Series B Preferred Stock in consideration for the
deposit by the Guarantor of Debentures as trust assets of the Issuer, all as
described in an Offering Circular/Prospectus dated April __, 1995.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Guarantee Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Series B Preferred Stock" means the 9-1/4% Preferred Stock,
Series B of the Guarantor.
"66-2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66-23% or more of the liquidation amount of all
Preferred Securities.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control; and
(c) the application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer.
SECTION 2.2 Lists of Holders of Preferred Securities.
(a) The Guarantor shall provide the Guarantee Trustee with
such information as is required under Section 312(a) of the Trust Indenture
Act at the times and in the manner provided in Section 312(a); and
(b) the Guarantee Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee.
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form, in the manner and at the times provided by Section 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the
Commission and the Holders of the Preferred Securities, as applicable, such
documents, reports and information as required by Section 314(a)(1)-(3) (if
any) of the Trust Indenture Act and the compliance certificates required by
Section 314(a)(4) and (c) of the Trust Indenture Act, any such certificates to
be provided in the form, in the manner and at the times required by Section
314(a)(4) and (c) of the Trust Indenture Act (provided that any certificate to
be provided pursuant to Section 314(a)(4) of the Trust Indenture Act shall be
provided within 120 days of the end of each fiscal year of the Issuer).
SECTION 2.5 Evidence of Compliance with
Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Guarantee Agreement which relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given pursuant to Section 314(c) shall comply with Section
314(e) of the Trust Indenture Act.
SECTION 2.6 Events of Default; Waiver.
(a) Subject to Section 2.6(b), Holders of Preferred
Securities may by vote of at least a Majority in liquidation amount of the
Preferred Securities, (A) direct the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon by the Guarantee Trustee or
(B) on behalf of the Holders of all Preferred Securities waive any past
Event of Default and its consequences. Upon such waiver, any such default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Guarantee Agreement,
but no such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive
payment of the Guarantee Payments in accordance with this Guarantee Agreement,
or to institute suit for the enforcement of any such payment, shall not be
impaired without the consent of each such Holder.
SECTION 2.7 Disclosure of Information.
The disclosure of information as to the names and addresses of
the Holders of the Preferred Securities in accordance with Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law, or any law
hereafter enacted which does not specifically refer to Section 312 of the
Trust Indenture Act, nor shall the Guarantee Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section 312(b)
of the Trust Indenture Act.
SECTION 2.8 Conflicting Interest.
The Declaration shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee in trust for the benefit of the Holders of the Preferred Securities.
The Guarantee Trustee shall not transfer its right, title and interest in the
Guarantee Agreement to any Person except a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee or to a Holder of Preferred Securities exercising his or her
rights pursuant to Section 5.4. The right, title and interest of the
Guarantee Trustee to the Guarantee Agreement shall vest automatically in each
Person who may hereafter be appointed as Guarantee Trustee in accordance with
Article IV. Such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders of the Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the
Property Trustee hereunder in respect of the Guarantee Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of that Guarantee Trustee or its agents or their
creditors.
(d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known to
the Guarantee Trustee, unless such defaults shall have been cured before the
giving of such notice; provided, that, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers, of the Guarantee Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Preferred
Securities. The Guarantee Trustee shall not be deemed to have knowledge of
any default except any default as to which the Guarantee Trustee shall have
received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.
(e) The Guarantee Trustee shall not resign as a Trustee unless
a Successor Guarantee Trustee has been appointed and accepted that appointment
in accordance with Article IV.
SECTION 3.2 Certain Rights and Duties of the
Guarantee Trustee.
(a) The Guarantee Trustee, before the occurrence of an Event
of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6(a)), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this
Guarantee Agreement, and the Guarantee Trustee shall not
be liable except for the performance of such duties and
obligations as are specifically set forth in this
Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement
against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Preferred Securities
as provided herein relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.2(a) and (b):
(i) Whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon a certificate, which
shall comply with the provisions of Section 314(e) of the Trust
Indenture Act, signed by any authorized officer of the Guarantor;
(ii) The Guarantor Trustee (A) may consult with counsel
(which may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees) selected by it in good faith
and with due care and the written advice or opinion of such
counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning
the administration of this Guarantee Agreement from any court of
competent jurisdiction;
(iii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it in good faith and with due care;
(iv) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holders of Preferred
Securities, unless such Holders shall have offered to the Guarantee
Trustee reasonable security and indemnity against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction;
provided that nothing contained in this clause (iv) shall relieve the
Guarantee Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Guarantee Agreement, and
to use the same degree of care and skill in this exercise, as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs; and
(v) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Qualifications.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2.
If the Guarantee Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee
Trustee and the Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.1(a) has
been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor and the Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold office until his
successor shall have been appointed or until its removal or
resignation.
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request")
in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or
upon such later date as is specified therein; provided, however, that
no such resignation of the Guarantee Trustee shall be effective until
a Successor Guarantee Trustee possessing the qualifications to act as
Guarantee Trustee under Section 4.1(a) has been appointed and has
accepted such appointment by instrument executed by such Successor
Guarantee Trustee and delivered to Guarantor and the resigning
Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days
after delivery to the Guarantor of a Resignation Request, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon after such notice, if any, as it may deem proper
and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer) regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. The Guarantor's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.2 Waiver of Notice.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of
the Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with,
the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Enforcement of Guarantee.
The Guarantor and the Guarantee Trustee expressly
acknowledge that (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right
to direct the time, method and place of conducting any proceeding for any
remedy available in respect of this Guarantee Agreement including the
giving of directions to the Guarantee Trustee, or exercising any trust or
other power conferred upon the Guarantee Trustee under this Guarantee
Agreement, and (iv) if the Guarantee Trustee fails to enforce this
Guarantee Agreement, any Holder of Preferred Securities may, after a period
of 30 days has elapsed from such Holder's written request to the Guarantee
Trustee to enforce this Guarantee Agreement, institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Issuer,
the Guarantee Trustee, or any other Person.
SECTION 5.5 Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not
merely of collection. This Guarantee Agreement will not be discharged except
by payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer).
SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at the time
of any such payment, any amounts are due and unpaid under this Guarantee
Agreement. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, the
Guarantor will not declare or pay any dividend 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 payments with
respect thereto, if at such time (i) the Guarantor shall be in default with
respect to its Guarantee Payments or other payment obligations hereunder, (ii)
there shall have occurred any event of default under the Indenture or (iii)
the Guarantor shall have given notice of its selection of an Extension Period
(as defined in the Indenture) and such period, or any extension thereof, is
continuing; provided that the Guarantor will be permitted to pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion of any
of its Series D Mandatory Conversion Premium Dividend Preferred Stock in
accordance with the terms of such stock. In addition, so long as any
Preferred Securities remain outstanding, the Guarantor (i) will remain the
sole direct or indirect owner of all of the outstanding Common Securities and
shall not cause or permit the Common Securities to be transferred except to
the extent such transfer is permitted under Section 9.1(c) of the Declaration;
provided that any permitted successor of the Guarantor under the Indenture may
succeed to the Guarantor's ownership of the Common Securities and (ii) will
not take any action which would cause the Issuer to cease to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures as provided in the Declaration.
SECTION 6.2 Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in
right of payment to all other liabilities of the Guarantor, including the
Debentures, except those made pari passu or subordinate by their terms, and
(ii) senior to all capital stock now or hereafter issued by the Guarantor
and to any guarantee now or hereafter entered into by the Guarantor in
respect of any of its capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect upon full payment of the Redemption Price of all Preferred
Securities, upon the distribution of Debentures to Holders of Preferred
Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to the Preferred Securities
or this Guarantee Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Guarantee Agreement 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 negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Preferred
Securities might properly be paid.
SECTION 8.2 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Guarantor 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 and in a manner such Indemnified Person reasonably believed to
be within the scope of authority conferred on such Indemnified Person by this
Guarantee Agreement, 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 negligence or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Ten of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION 9.2 Amendments.
Except with respect to any changes which do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than 66-2/3% in liquidation amount of the
Preferred Securities. The provisions of Section 12.2 of the Declaration
concerning meetings of Holders shall apply to the giving of such approval.
SECTION 9.3 Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address set forth
below or such other address as the Guarantor may give notice of to the
Holders:
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Facsimile No.: (310) 772-6025
Attention: Treasurer
(b) if given to the Guarantee Trustee, to the address set
forth below or such other address as the Guarantee Trustee may give notice to
the Holders:
The Bank of New York
101 Barclay Street
New York, New York 10286
Facsimile No.: 212-815-5999
Attention: Corporate Trust Trustee Administration
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Genders.
The masculine, feminine and neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 9.5 Benefit.
This Guarantee Agreement is solely for the benefit of the
Holders and subject to Section 3.1(a) is not separately transferable from the
Preferred Securities.
SECTION 9.6 Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SUNAMERICA INC.
By:________________________
Name:
Title:
THE BANK OF NEW YORK,
As Guarantee Trustee
By:________________________
Name:
Title:
EXHIBIT N
[LETTERHEAD OF DAVIS POLK & WARDWELL]
(212) 450-4608
April 25, 1995
SunAmerica Inc.
SunAmerica Capital Trust I
1 SunAmerica Center
Los Angeles, California 90067
Re: Registration Statement on Form S-4
Registration Nos. 33-56951-01 and 33-56961-02
Ladies and Gentlemen:
We have acted as special counsel for SunAmerica Inc.
("SunAmerica") and SunAmerica Capital Trust I (the "Trust") in connection with
the Trust's offer (the "Offer") to issue its 9.95% Trust Originated Preferred
Securities (the "Preferred Securities") for up to 5,500,000 outstanding shares
of its 9 1/4% Preferred Stock, Series B (the "Series B Preferred"). In
connection therewith, we have prepared the discussion set forth under the
caption "Taxation" (the "Discussion") in the Offering Circular/Prospectus (the
"Offering Circular/Prospectus") that is part of the Registration Statement on
Form S-4 (Registration Nos. 33-56951-01 and 33-56961-02) filed by SunAmerica
and the Trust with the Securities and Exchange Commission.
In rendering our opinion, we have examined the form of Amended
and Restated Declaration of Trust of SunAmerica Capital Trust I dated as of
May __, 1995 (the "Declaration") included as an Exhibit to the Registration
Statement, and have assumed that the Trustees will conduct the affairs of the
Trust in accordance with the Declaration. We hereby confirm our opinion as
set forth in the Discussion, which is a summary of the material United States
federal income tax consequences of the exchange of Series B Preferred for
Preferred Securities pursuant to the Offer, and of the ownership and
disposition of the Preferred Securities.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the caption
"Taxation" in the Offering Circular/Prospectus. The issuance of such consent
does not concede that we are an "expert" for the purposes of the Securities
Act of 1933.
Very truly yours,
/s/ DAVIS POLK & WARDWELL
___________________________
