<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1996
REGISTRATION NO. 333-14201, 333-14201-01, 333-14201-02, 333-14201-03 AND 333-
14201-04
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
SUNAMERICA INC. MARYLAND 86-0176061
SUNAMERICA CAPITAL
TRUST III DELAWARE 95-6994850
SUNAMERICA CAPITAL
TRUST IV DELAWARE 95-6994851
SUNAMERICA CAPITAL
TRUST V DELAWARE TO BE APPLIED FOR
SUNAMERICA CAPITAL
TRUST VI DELAWARE TO BE APPLIED FOR
(EXACT NAME OF (STATE OR OTHER JURISDICTION OF (I.R.S EMPLOYER
REGISTRANT AS INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
SPECIFIED IN
ITS CHARTER)
1 SUNAMERICA CENTER
LOS ANGELES, CALIFORNIA 90067-6022
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
SUSAN L. HARRIS, ESQ.
SENIOR VICE PRESIDENT AND
GENERAL COUNSEL--CORPORATE AFFAIRS
SUNAMERICA INC.
1 SUNAMERICA CENTER
LOS ANGELES, CALIFORNIA 90067-6022
(310) 772-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
DAVID W. FERGUSON, ESQ.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement becomes effective.
--------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1)(2) PER UNIT(3) OFFERING PRICE FEE(5)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior debt securities,
subordinated debt
securities and junior
subordinated debt
securities
(collectively, "Debt
Securities") of
SunAmerica Inc. .......
Warrants of SunAmerica
Inc. to purchase Debt
Securities.............
Warrants of SunAmerica
Inc. to purchase
preferred stock or
depositary shares......
Warrants of SunAmerica
Inc. to purchase common
stock..................
Preferred Stock of
SunAmerica Inc. .......
Depositary Shares of
SunAmerica Inc. .......
Common Stock of
SunAmerica Inc. .......
Stock Purchase Contracts
of SunAmerica Inc. ....
Stock Purchase Units of
SunAmerica Inc. ....... $1,231,500,000 100% $1,231,500,000 $373,181.82
Prepaid Stock Purchase
Contracts of SunAmerica
Inc....................
Preferred Securities of
SunAmerica Capital
Trust III..............
Preferred Securities of
SunAmerica Capital
Trust IV...............
Preferred Securities of
SunAmerica Capital
Trust V................
Preferred Securities of
SunAmerica Capital
Trust VI...............
Guarantees of Preferred
Securities of
SunAmerica Capital
Trust III, SunAmerica
Capital Trust IV,
SunAmerica Capital
Trust V and SunAmerica
Capital Trust VI by
SunAmerica Inc.(4).....
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(footnotes on following page)
<PAGE>
(1) Such indeterminate number or amount of Debt Securities, Warrants,
Preferred Stock, Depositary Shares, Common Stock, Stock Purchase Contracts
and Stock Purchase Units of SunAmerica and Preferred Securities of
SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica
Capital Trust V and SunAmerica Capital Trust VI as may from time to time
be issued at indeterminate prices. Junior Subordinated Debt Securities may
be issued and sold to SunAmerica Capital Trust III, SunAmerica Capital
Trust IV, SunAmerica Capital Trust V and SunAmerica Capital Trust VI, in
which event such Junior Subordinated Debt Securities may later be
distributed to the holders of Preferred Securities upon a dissolution of
SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica
Capital Trust V and SunAmerica Capital Trust VI and the distribution of
the assets thereof.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign
currencies as shall result in an aggregate initial offering price for all
securities of $1,231,500,000. In addition, this Registration Statement
includes such presently indeterminate number of Offered Securities (as
defined herein) as may be issuable from time to time upon conversion or
exchange of the Offered Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and exclusive of accrued interest and dividends,
if any.
(4) SunAmerica is also registering under this registration statement all other
obligations that it may have with respect to Preferred Securities issued
by SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica
Capital Trust V and SunAmerica Capital Trust VI. No separate consideration
will be received for any Guarantee or any other such obligations.
(5) Previously paid. Does not include certain securities of SunAmerica Inc.,
SunAmerica Capital Trust III and SunAmerica Capital Trust IV covered by
Registration Statement No. 33-62405 being carried over to this
Registration Statement. Also does not include the Registration Fee
previously paid with respect to such securities.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
----------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT ALSO RELATES TO $518,500,000 OF
SECURITIES REGISTERED AND REMAINING UNISSUED UNDER REGISTRATION STATEMENT NOS.
33-62405, 33-62405-02 AND 33-62405-03 PREVIOUSLY FILED BY SUNAMERICA INC.,
SUNAMERICA CAPITAL TRUST III AND SUNAMERICA CAPITAL TRUST IV, IN RESPECT OF
WHICH $344,827.59 HAS BEEN PAID TO THE COMMISSION AS FILING FEES. SUCH
REGISTRATION STATEMENT IS ACCORDINGLY AMENDED TO REFLECT THE INFORMATION
CONTAINED HEREIN, INCLUDING THE ADDITION OF SUNAMERICA CAPITAL TRUST V AND
SUNAMERICA CAPITAL TRUST VI AS REGISTRANTS. IN THE EVENT THAT ANY OF SUCH
PREVIOUSLY REGISTERED SECURITIES ARE OFFERED PRIOR TO THE EFFECTIVE DATE OF
THIS REGISTRATION STATEMENT, THE AMOUNT OF SUCH SECURITIES WILL NOT BE
INCLUDED IN ANY PROSPECTUS HEREUNDER. THE AMOUNT OF SECURITIES BEING
REGISTERED, TOGETHER WITH THE REMAINING SECURITIES REGISTERED UNDER
REGISTRATION STATEMENT NOS. 33-62405, 33-62405-02 AND 33-62405-03 REPRESENTS
THE MAXIMUM AMOUNT OF SECURITIES WHICH ARE EXPECTED TO BE OFFERED FOR SALE.
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus, a prospectus
supplement covering Premium Equity Redemption Cumulative Security Units, %
PERCS Units, to be issued by SunAmerica Inc. and a base prospectus for
SunAmerica Inc., SunAmerica Capital Trust III, SunAmerica Capital Trust IV,
SunAmerica Capital Trust V and SunAmerica Capital Trust VI.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN 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 LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUPPLEMENT ISSUED October 31, 1996 (Subject to Completion)
(To Prospectus dated October , 1996)
7,000,000 Units
[LOGO] SUMAMERICA
% PERCS(R) UNITS
(Premium Equity Redemption Cumulative Security Units--PERCS(R) Units)
----------
The securities offered hereby are 7,000,000 Premium Equity Redemption
Cumulative Security Units, % PERCS Units (the "Securities") of SunAmerica
Inc., a Maryland corporation (the "Company"). Each Security has a Stated
Amount of $ . Aggregate payments ("PERCS Payments") of % of the Stated
Amount per annum will be made or accrue on each Security semi-annually in
arrears on and of each year, commencing , 1997, until the
Final Settlement Date of , 1999. PERCS Payments will consist of
interest on Treasury Notes payable by the United States Government at the
rate of % per annum and unsecured, unsubordinated contract fees ("Contract
Fees") payable by the Company at the rate of % per annum, subject to the
Company's option to defer payment of Contract Fees. Each Security will
consist of (a) a stock purchase contract ("Purchase Contract") under
which (i) the holder will purchase from the Company on the Final
Settlement Date or an earlier Acceleration Date (defined herein), for an
amount equal to the Stated Amount, initially one share of Common Stock
of the Company, subject to adjustment under certain circumstances, if
such purchase occurs on the Final Settlement Date or Mandatory
Acceleration Date (defined herein), or such lesser number of shares of
Common Stock as may be payable as described below if such purchase
occurs on a Company Acceleration Date (defined herein) and (ii) the
Company will pay the holder the Contract Fees described herein, and
(b) % United States Treasury Notes having a principal amount equal
to the Stated Amount and maturing on the Final Settlement Date.
(continued on next page)
----------
PRIOR TO THE OFFERING MADE HEREBY THERE HAS BEEN NO PUBLIC MARKET FOR
THE SECURITIES. THE SECURITIES HAVE BEEN APPROVED FOR LISTING ON
THE NEW YORK STOCK EXCHANGE ("NYSE"), SUBJECT TO OFFICIAL
NOTICE OF ISSUANCE, UNDER THE SYMBOL "SIP". ON
OCTOBER 30, 1996, THE LAST CLOSING PRICE OF
THE COMMON STOCK ON THE NYSE
COMPOSITE TAPE WAS $37 7/8 PER
SHARE.
----------
SEE "RISK FACTORS" BEGINNING ON PAGE S-12 OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SECURITIES, INCLUDING
THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF CONTRACT
FEES ON THE SECURITIES MAY BE DEFERRED.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------
PRICE $ A SECURITY
----------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PURCHASE PRICE OF PROCEEDS (DEFICIT) TO
PUBLIC COMMISSIONS(1) TREASURY NOTES THE COMPANY(2)
-------- -------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Per Security... $ $ $ $( )
Total(3)....... $ $ $ $( )
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriters."
(2) Before deducting expenses payable by the Company estimated at $ . Does
not include proceeds per Security and total proceeds of $ and $ ,
respectively ($ and $ , respectively, if the Underwriters' over-
allotment option is exercised in full), receivable by the Company upon
settlement of Purchase Contracts.
(3) The Company has granted to the Underwriters an option, exercisable within
30 days of the date hereof, to purchase up to an aggregate of 1,050,000
additional Securities at the price to public less underwriting discounts
and commissions for the purpose of covering over-allotments, if any. If
the Underwriters exercise such option in full, the total price to public,
underwriting discounts and commissions and proceeds (deficit) to the
Company will be $ , $ and $( ), respectively. See "Underwriters."
----------
The Securities are offered, subject to prior sale, when, as and if accepted
by the Underwriters named herein, and subject to approval of certain legal
matters by counsel for the Underwriters. It is expected that delivery of the
Securities offered hereby will be made only in book-entry form through the
facilities of The Depositary Trust Company on or about , 1996 against
payment therefor in immediately available funds.
----------
MORGAN STANLEY & CO.
Incorporated
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
October , 1996
<PAGE>
(continued from previous page)
The Treasury Notes will be pledged to the Collateral Agent (defined herein)
to secure the holders' obligations to purchase Common Stock under the Purchase
Contracts. Unless a holder of Securities elects to pay cash to settle the
underlying Purchase Contracts, an Acceleration (defined herein) occurs or
certain termination events occur, as described herein, principal of the
Treasury Notes underlying such Securities, when paid at maturity, will
automatically be applied to satisfy in full the holder's obligation to
purchase Common Stock under the Purchase Contracts. For so long as a Purchase
Contract remains in effect, such Purchase Contract and the Treasury Notes
securing it will not be separable and may be transferred only as an integrated
Security. A holder of Securities will have the right to remove the Treasury
Notes underlying such Securities by paying the Stated Amount to settle the
Purchase Contract and, under certain circumstances described herein, will
receive a Prepaid Security (defined herein) as a result of such settlement.
See "Description of the Purchase Contracts--Acceleration of the Securities--
Certain Provisions Applicable to Acceleration" and "--Holder's Early
Settlement of Securities."
At any time or from time to time prior to the Final Settlement Date, the
Company may accelerate (a "Company Acceleration") the outstanding Securities,
in whole or in part. On the effective date of any such acceleration (a
"Company Acceleration Date"), the Company will have the obligation to deliver
an amount per Security initially equal to $ , declining by $ on each
day following the date of issue to $ on , 1999, and equal to $
thereafter (the "Company Acceleration Price"), payable in shares of Common
Stock having an aggregate Current Market Price (defined herein) equal to the
applicable Company Acceleration Price. In addition, holders will also receive
an amount in cash equal to all accrued and unpaid PERCS Payments. The Company
may only accelerate the Securities if the Current Market Price of a share of
Common Stock on the Notice Date (defined herein) is equal to or exceeds the
Company Acceleration Price applicable to such Notice Date. Automatic
acceleration ("Mandatory Acceleration") of the outstanding Securities will
also occur upon certain mergers or consolidations of the Company. In the event
of any Acceleration, the Purchase Contract Agent (defined herein), on behalf
of the holders of Securities that have been accelerated, will sell on the
second Business Day (defined herein) preceding the Acceleration Date the
Treasury Notes underlying such holders' Securities and automatically apply the
proceeds of such sales (excluding accrued interest) to satisfy in full such
holders' obligations to purchase Common Stock under the Purchase Contracts on
the Acceleration Date. Any proceeds from such sales in excess of the Stated
Amount will be returned to such holders. In the event that the proceeds
(excluding accrued interest) from the sale of such Treasury Notes is less than
the Stated Amount, such proceeds nevertheless will satisfy in full the
holders' obligations to purchase Common Stock under the Purchase Contracts on
the Acceleration Date.
The opportunity for equity appreciation afforded by an investment in the
Securities is limited because the Company may, at its option, accelerate the
Securities at any time prior to the Final Settlement Date at the Company
Acceleration Price. Although not obligated to do so, the Company may be
expected to accelerate the Securities prior to the Final Settlement Date if
the market price of the Common Stock exceeds the Company Acceleration Price,
in which event owners of Securities will receive less than one share of Common
Stock for each Security. Because the price of the Common Stock is subject to
market fluctuations, the value of the Common Stock received by an owner of
Securities upon settlement of the Securities may be more or less than the
amount paid for the Securities offered hereby. Holders of Securities have no
voting rights and no right to Common Stock prior to the Final Settlement Date
or an earlier Acceleration Date.
The Securities will be represented by global certificates registered in the
name of The Depositary Trust Company ("'DTC") or its nominee. Beneficial
interest in the securities will be shown on and transfers thereof will be
effected only through records maintained by participants in DTC. Except as
described herein, Securities in certificated form will not be issued in
exchange for global certificates. See "Description of Purchase Contracts--
Book-Entry System."
S-2
<PAGE>
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED, OR INCORPORATED BY
REFERENCE, IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN
THE REGISTERED SECURITIES TO WHICH THEY RELATE IN ANY JURISDICTION WHERE, OR
TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
PROSPECTUS SUPPLEMENT ----
<S> <C>
Prospectus Supplement Summary....... S-4
Risk Factors........................ S-13
Use of Proceeds..................... S-15
Common Stock Price Ranges and
Dividends.......................... S-16
Capitalization...................... S-17
Selected Consolidated Financial
Data............................... S-18
Description of the Securities....... S-20
Description of the Purchase
Contracts.......................... S-21
Certain Provisions of the Purchase
Contract Agreement and the Pledge
Agreement.......................... S-29
Description of Prepaid Securities... S-33
Certain United States Federal Income
Tax Considerations................. S-36
United States State and Local Tax
Considerations..................... S-38
Underwriters........................ S-39
Legal Matters....................... S-40
</TABLE>
<TABLE>
<CAPTION>
PAGE
PROSPECTUS ----
<S> <C>
Available Information............... 3
Incorporation of Certain Documents
by Reference...................... 4
The Company......................... 5
The SunAmerica Trusts............... 5
Use of Proceeds..................... 9
Consolidated Ratios of Earnings to
Fixed Charges and Earnings to
Combined Fixed Charges and
Preferred Stock Dividends......... 10
Description of the Senior Debt
Securities and Subordinated
Debt Securities................... 11
Description of the Junior
Subordinated Debt Securities...... 19
Description of Capital Stock........ 25
Description of Depositary Shares.... 31
Description of Warrants............. 34
Description of the Preferred
Securities........................ 34
Description of the Preferred
Securities Guarantees............. 36
Description of the Stock Purchase
Contracts and Stock Purchase Units. 39
Plan of Distribution................. 39
Legal Matters........................ 40
Experts.............................. 40
ERISA Matters........................ 41
</TABLE>
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES
OFFERED HEREBY, THE COMMON STOCK, THE SERIES E DEPOSITARY SHARES (AS DEFINED
IN THE ACCOMPANYING PROSPECTUS) OF THE COMPANY, OR THE MERRILL LYNCH & CO.
INC. 7 1/4% STRYPES DUE JUNE 15, 1999 (THE "STRYPES") PAYABLE WITH SHARES OF
COMMON STOCK, AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED WITH RESPECT TO THE SECURITIES
OFFERED HEREBY, THE SERIES E DEPOSITARY SHARES AND THE STRYPES ON THE NEW YORK
STOCK EXCHANGE OR OTHERWISE AND WITH RESPECT TO THE COMMON STOCK ON THE NEW
YORK STOCK EXCHANGE, THE PACIFIC STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial statements
appearing elsewhere in this Prospectus Supplement, in the accompanying
Prospectus and in the documents incorporated herein by reference. Certain terms
used in this summary are defined elsewhere in this Prospectus Supplement.
Unless otherwise indicated, all information in this Prospectus Supplement
assumes that the Underwriters' over-allotment option is not exercised.
THE COMPANY
The Company is a diversified financial services company specializing in
retirement savings products and services. At June 30, 1996, the Company held
$36.17 billion of assets throughout its businesses, including $23.40 billion of
assets on its balance sheet, $2.12 billion of assets managed in mutual funds
and private accounts and $10.65 billion of assets under custody in retirement
trust accounts. Together, the Company's life insurance companies rank among the
largest U.S. issuers of annuities. Complementing these annuity operations are
the Company's asset management operations; its three broker-dealers, which the
Company believes, based on industry data, represent the largest network of
independent registered representatives in the nation; and its trust company,
which provides administrative and custodial services to qualified retirement
plans. Through these subsidiaries, the Company specializes in the sale of tax-
deferred long-term savings products and investments to the expanding
preretirement savings market. The Company markets fixed annuities and fee-
generating variable annuities, mutual funds and trust services, as well as
guaranteed investment contracts. The Company's products are distributed through
a broad spectrum of financial services distribution channels, including
independent registered representatives of the Company's broker-dealer
subsidiaries and unaffiliated broker-dealers, independent general insurance
agents and financial institutions.
Since the beginning of fiscal 1996, the Company has made several acquisitions
that have added a total of $4.7 billion in annuity reserves and enhanced its
position in the financial institution and qualified teachers markets. On
December 29, 1995, the Company purchased CalFarm Life Insurance Company, which
on such date had approximately $650 million in annuity reserves. On February
29, 1996, the Company acquired Ford Life Insurance Company, which had annuity
reserves of approximately $3.1 billion on such date and on April 1, 1996
purchased approximately $960 million in annuity reserves from The Central
National Life Insurance Company of Omaha. On January 2, 1996, the Company
purchased Houston-based broker-dealer Advantage Capital Corp., further
strengthening its distribution network. This acquisition added more than 1,000
representatives to the Company's broker-dealer network, bringing its number of
independent registered representatives to more than 6,600.
The principal executive offices of the Company are located at 1 SunAmerica
Center, Los Angeles, California, 90067-6022, telephone number (310) 772-6000.
RECENT DEVELOPMENTS
RECENT FINANCIAL RESULTS
For its fiscal year ended September 30, 1996, the Company reported
preliminary unaudited net income of $274.4 million or $1.95 per share, up 37%
on a per share basis from $194.2 million or $1.42 per share in fiscal 1995.
Net investment income for the fiscal year ended September 30, 1996 increased
35% to $492.8 million from $365.6 million in fiscal 1995 and fee income
increased 22% to $220.4 million from $180.4 million in the prior year. These
increases were partially offset by a 28% increase in general and administrative
expenses and a 26% increase in amortization of deferred acquisition costs.
S-4
<PAGE>
PROPOSED COMMON STOCK DIVIDEND INCREASE
In August 1996, the Board of Directors of the Company stated their intent to
approve a quarterly dividend increase from $.075 per share (which reflects the
August 1996 two-for-one stock split) to $.10 per share at their next regularly
scheduled Board meeting in November. The declaration and payment of dividends
is subject to the discretion of the Board of Directors, based on the Board's
determination of the financial condition, results of operations and cash
requirements of the Company.
S-5
<PAGE>
THE OFFERING
Securities..................
7,000,000 Premium Equity Redemption Cumulative
Security Units, % PERCS Units.
Stated Amount............... $ per Security.
% of the Stated Amount per annum, payable or
PERCS Payments......... accruing semi-annually in arrears. These
payments will consist of interest on the
Treasury Notes (defined below) payable by the
United States Government at the rate of % of
the Stated Amount per annum and unsecured,
unsubordinated contract fees ("Contract Fees")
payable or accruing semi-annually by the
Company at the rate of % of the Stated Amount
per annum, subject to the Company's option to
defer Contract Fees. Amounts payable on the
first Payment Date (defined below) will be
adjusted as described under "Description of the
Securities--General."
Payment Dates............... and of each year, commencing ,
1997, through and including the Final
Settlement Date referred to below (each, a
"Payment Date").
Right to Defer Contract
Fees........................ The Company may, at its option, defer the
payment of Contract Fees on the Purchase
Contracts in whole or in part until no later
than the Final Settlement Date (or an earlier
Company Acceleration Date (defined below) or
Mandatory Acceleration Date (defined herein)
(collectively, an "Acceleration Date")).
However, deferred installments of Contract Fees
will bear additional Contract Fees at the rate
of % per annum (compounding on each succeeding
Payment Date) until paid (such deferred
installments of Contract Fees together with the
additional Contract Fees are referred to herein
as the "Deferred Contract Fees"). See "Risk
Factors--Right to Defer Contract Fees" and
"Description of the Purchase Contracts--
Contract Fees."
Final Settlement Date.......
, 1999 (the "Final Settlement Date"). On
the Final Settlement Date, the Stated Amount
per Security will automatically be applied to
the purchase of initially one share of Common
Stock, par value $1.00 per share ("Common
Stock"), of the Company, subject to adjustment
under certain circumstances (the "Settlement
Rate").
Components of the
Securities.................. The Securities will be issued under a Purchase
Contract Agreement to be dated as of ,
1996 (the "Purchase Contract Agreement"),
between the Company and The Bank of New York,
as agent for the holders of the Securities
(together with any successor thereto in such
capacity, the "Purchase Contract Agent").
Each Security offered hereby (each, a
"Security" and collectively, the "Securities")
will consist of (a) a stock purchase contract
("Purchase Contract") under which (i) the
holder will purchase from the Company on the
Final Settlement Date or an
S-6
<PAGE>
earlier Acceleration Date, for an amount in
U.S. dollars equal to the Stated Amount,
initially one share of Common Stock, subject to
adjustment under certain circumstances, if such
purchase occurs on the Final Settlement Date or
Mandatory Acceleration Date (defined herein),
or such lesser number of shares of Common Stock
as may be payable as described below if such
purchase occurs on a Company Acceleration Date
(defined below), and (ii) the Company will pay
Contract Fees to the holder, and (b) % United
States Treasury Notes due , 1999
("Treasury Notes") having a principal amount
equal to the Stated Amount and maturing on the
Final Settlement Date.
The aggregate fair market value of the Treasury
Notes (excluding accrued interest) at the time
of purchase may exceed their aggregate
principal amount, in which case the Company
shall, for the benefit of the Securityholders,
provide the amount of such excess as additional
purchase price for the Treasury Notes (such
amount, the "Initial Premium Payment"). Holders
will not directly receive any cash as a result
of any Initial Premium Payment.
The Treasury Notes will be pledged with The
First National Bank of Chicago, as collateral
agent for the Company (together with any
successor thereto in such capacity, the
"Collateral Agent"), to secure the holders'
obligations to purchase Common Stock under the
Purchase Contracts. Unless an Acceleration
(defined below) occurs, or the Purchase
Contracts are terminated upon a Bankruptcy
Event or a Sale of Assets (each defined herein)
or an Early Settlement (defined below) has
occurred, the principal of the Treasury Notes
underlying such Securities, when paid at
maturity, will automatically be applied to
satisfy in full the holders' obligations to
purchase Common Stock under the Purchase
Contracts on the Final Settlement Date. For so
long as a Purchase Contract remains in effect,
such Purchase Contract and the Treasury Notes
securing it will not be separable and may be
transferred only as an integrated Security.
Holders of Securities have no voting rights and
no right to Common Stock prior to the Final
Settlement Date or an earlier Acceleration
Date.
Acceleration of Company Acceleration. At any time or from time
Securities.................. to time prior to the Final Settlement Date, the
Company may accelerate (a "Company
Acceleration") the outstanding Securities, in
whole or in part. On the effective date of any
such acceleration (a "Company Acceleration
Date"), the Company will have the obligation to
deliver an amount per Security initially equal
to $ , declining by $ on each day following
the date of issue (computed on the basis of a
360-day year of twelve-30 day months) to $
on , 1999, and equal to $ thereafter
(the "Company Acceleration Price"), payable in
S-7
<PAGE>
shares of Common Stock having an aggregate
Current Market Price (defined herein) equal to
such Company Acceleration Price. In addition,
holders will also receive an amount in cash
equal to accrued and unpaid PERCS Payments
payable with respect to such Securities to and
including the Company Acceleration Date. The
Company may only accelerate the Securities at
its option if the Current Market Price of a
share of Common Stock on the second Business
Day prior to the Notice Date (defined herein)
is equal to or exceeds the Company Acceleration
Price applicable to such Notice Date. See
"Description of the Purchase Contracts--
Acceleration of the Securities--Company
Acceleration."
The opportunity for equity appreciation
afforded by an investment in the Securities is
limited because of the Company's right to
accelerate the Securities at any time prior to
the Final Settlement Date. Although not
obligated to do so, the Company may be expected
to accelerate the Securities prior to the Final
Settlement Date (or any earlier Mandatory
Acceleration Date) if the market price for the
Common Stock exceeds the Company Acceleration
Price for five consecutive Business Days
(defined herein). If the Company elects to
accelerate the Securities, in whole or in part,
the equity appreciation, exclusive of accrued
and unpaid PERCS Payments payable with respect
to the Securities, realized on an investment in
the Securities will, for any owner of
Securities accelerated by the Company, be
limited to the excess, if any, of (i) the value
of the Common Stock received in payment of such
Company Acceleration Price (such Company
Acceleration Price being initially $ and
declining thereafter to $ as indicated
above), over (ii) the price paid by such owner
for such Securities (the initial price being
the Price to Public for each Security shown on
the cover page of this Prospectus Supplement
and the price thereafter being subject to
market fluctuations). Because the number of
shares of Common Stock to be delivered to
holders of Securities in payment of such
Company Acceleration Price will be determined
on the basis of the market price of the Common
Stock prior to the Notice Date, the value of
the shares of Common Stock on the date of
delivery thereof to such holders may be more or
less than the Company Acceleration Price on a
Company Acceleration Date. A recent closing
sale price of the Common Stock on the NYSE is
set forth on the cover page of this Prospectus
Supplement.
Mandatory Acceleration. In addition,
immediately prior to the effectiveness of a
merger or consolidation of, or statutory share
exchange involving, the Company that results in
the conversion or exchange of the Common Stock
into, or the right to receive, other securities
or other property, each outstanding Security
will automatically be accelerated (a "Mandatory
Acceleration" and, together with a Company
Acceleration, an "Acceleration"). On the
Mandatory Acceleration Date, the Company will
have the
S-8
<PAGE>
obligation to deliver initially one share of
Common Stock, subject to the adjustments
described herein. In addition, holders have the
right to receive (i) an amount in cash equal to
the accrued and unpaid PERCS Payments payable
with respect to such Security to but excluding
the Mandatory Acceleration Date plus (ii) an
amount in cash initially equal to $ ,
declining by $ on each day following the
date of issue of the Securities (computed on
the basis of a 360-day year of twelve-30 day
months) to $ on , 1999, and equal to
zero thereafter, determined with reference to
such Mandatory Acceleration Date, unless sooner
accelerated by the Company as described above.
At the option of the Company, it may deliver on
such Mandatory Acceleration Date, in lieu of
some or all of the cash consideration described
in clause (ii) of the preceding sentence,
shares of Common Stock. The number of shares of
Common Stock to be delivered in lieu of any
cash consideration described in such clause
(ii) will be determined by dividing the amount
of such consideration that the Company has
elected to deliver in Common Stock by the
Current Market Price of the Common Stock
determined as of the second Business Day
immediately preceding the Notice Date. Because
the price of the Common Stock is subject to
market fluctuations, the value of the Common
Stock received by an owner of Securities upon
Mandatory Acceleration of the Securities may be
more or less than the amount paid for the
Securities offered hereby. See "Description of
the Purchase Contracts--Acceleration of the
Securities--Mandatory Acceleration."
Sale of Treasury Notes. Unless a holder elects,
as described below, to pay in U.S. dollars the
Stated Amount in immediately available funds
not later than 5:00 p.m., New York City time on
the third Business Day immediately preceding
the Acceleration Date, the Purchase Contract
Agent on behalf of such holder pursuant to the
Purchase Contract Agreement (defined below)
will sell on the second Business Day
immediately preceding the Acceleration Date the
Treasury Notes underlying such holder's
Securities and automatically apply on the
Acceleration Date, out of the proceeds of such
sale, an amount equal to the Stated Amount to
satisfy in full such holder's obligation to
purchase the Common Stock under the Purchase
Contract on the Acceleration Date. Any excess
proceeds (in respect of premium on the sale of
the Treasury Notes) will be paid to such
holder. In the event that the proceeds from the
sale of such Treasury Notes (exclusive of
accrued interest on the Treasury Notes) is less
than the Stated Amount, such proceeds
nevertheless will satisfy in full the holder's
obligation to purchase the Common Stock under
the Purchase Contract on the Acceleration Date.
Amounts in respect of accrued interest on the
Treasury Notes will be paid to the holder as a
component of the accrued PERCS Payments paid on
the Acceleration Date. See "Description of the
Purchase Contracts--Acceleration of the
Securities--General Provisions Applicable to
Acceleration."
S-9
<PAGE>
Holders' Right to Receive Treasury Notes Upon
Acceleration. In the event of an Acceleration
of Securities, holders of Securities so
accelerated may elect to pay to the Company
through the Purchase Contract Agent by no later
than 5:00 p.m., New York City time on the third
Business Day immediately preceding the
Acceleration Date in immediately available
funds an amount in U.S. dollars equal to the
Stated Amount per Security so accelerated, in
which event each such electing holder will
receive the Treasury Notes securing such
holder's obligation to purchase the Common
Stock under the Purchase Contract within three
Business Days of the receipt of such amount.
Because any Treasury Notes received by such
holder will include accrued interest, the
Company will pay on the Acceleration Date only
accrued Contract Fees to holders of Securities
who elect to settle in cash after a notice of
Acceleration with respect to such Securities
has been given. HOLDERS MAY MAKE THE ELECTION
REFERRED TO IN THIS PARAGRAPH ONLY IN INTEGRAL
MULTIPLES OF SECURITIES. See "Description
of the Purchase Contracts--Acceleration of the
Securities--General Provisions Applicable to
Acceleration."
Termination.................
The Purchase Contracts (including the right to
receive Contract Fees or Deferred Contract Fees
and the obligation to purchase Common Stock)
will automatically terminate upon certain
events of bankruptcy, insolvency or
reorganization with respect to the Company
(each, a "Bankruptcy Event") or upon a sale,
assignment, transfer, lease or conveyance of
all or substantially all of the properties and
assets of the Company to any person which
results in a voluntary liquidation, dissolution
or winding up of the Company (a "Sale of
Assets"). Upon such termination, the Collateral
Agent will release the Treasury Notes held by
it to the Purchase Contract Agent for
distribution to the holders, although there may
be a delay before such release and distribution
in the case of a Bankruptcy Event. In the case
of a Sale of Assets, holders will be entitled
to receive in cash unpaid Contract Fees and
Deferred Contract Fees, if any, through the
date of Board of Director approval of such Sale
of Assets, payable on the tenth Business Day
following the date of such approval. In the
case of a Bankruptcy Event, holders will not be
entitled to receive accrued and upaid Contract
Fees and Deferred Contract Fees, if any.
Relationship to Common The aggregate of the Contract Fees and interest
Stock....................... payments on the Treasury Notes will be paid or
accrued at a rate per annum that is greater
than the current dividend yield on the Common
Stock. However, the opportunity for equity
appreciation afforded by an investment in the
Securities is less than that afforded by a
direct investment in the Common Stock.
S-10
<PAGE>
Voting Rights............... The Securities will not entitle holders to any
rights with respect to the Common Stock,
including voting rights. See "Risk Factors--No
Shareholder Rights."
Listing of the Securities...
The Securities have been approved for listing
on the New York Stock Exchange, subject to
official notice of issuance, under the symbol
"SIP."
NYSE Symbol of Common SAI.
Stock.......................
Holder's Early Settlement...
A holder of Securities may settle (an "Early
Settlement") the underlying Purchase Contracts
prior to the Final Settlement Date or earlier
Notice Date with respect to an Acceleration
Date in the manner described herein, upon the
notice described herein to the Purchase
Contract Agent. Upon such early settlement, (a)
the holder will pay to the Company through the
Purchase Contract Agent in immediately
available funds a U.S. dollar amount equal to
the Stated Amount per Security and deliver the
Securities to the Purchase Contract Agent, (b)
the Treasury Notes underlying such Securities
will, within three Business Days of the Early
Settlement Date (defined herein), be
transferred to the holder free and clear of the
Company's security interest therein, and (c)
the Company will, within three Business Days of
the Early Settlement Date, deliver newly issued
securities ("Prepaid Securities") to the holder
under the Prepaid Securities Indenture (defined
herein). After any notice of Acceleration is
given with respect to a holder's Securities,
the holder's right to elect Early Settlement
with respect to such Securities will terminate
but the holders will continue to have the right
to the return of the underlying Treasury Notes
as described above under "Acceleration of
Securities--Holders' Right to Receive Treasury
Notes Upon Acceleration." HOLDERS MAY MAKE THE
ELECTION REFERRED TO IN THIS PARAGRAPH OR IN
INTEGRAL MULTIPLES OF SECURITIES. See
"Description of the Purchase Contracts--
Acceleration of the Securities--Certain
Provisions Applicable to Acceleration" and "--
Holder's Early Settlement of Securities."
Prepaid Securities.......... The Prepaid Securities will be issued under the
Prepaid Securities Indenture to holders
electing Early Settlement. All outstanding
Prepaid Securities will entitle the holders
thereof to receive Common Stock on the Final
Settlement Date or an earlier Acceleration
Date, and amounts in respect of Contract Fees
and Deferred Contract Fees, in the same amounts
and at the same times as the outstanding
Securities. No Treasury Notes will underlie the
Prepaid Securities; accordingly, unlike the
Securities, the Prepaid Securities will not
entitle the holders thereof to receive any
amounts in respect of interest on the Treasury
Notes nor, in the event of any Acceleration,
any amounts in respect of premium (if any) on
the sale by the Purchase Contract Agent of the
Treasury Notes. The Prepaid
S-11
<PAGE>
Securities will be accelerated upon the
occurrence of a Bankruptcy Event but, unlike
holders of Securities, who will receive their
underlying Treasury Notes in such events,
holders of Prepaid Securities will have only a
claim against the Company for delivery of
Common Stock (which claim may have the status
of a general unsecured claim or an equity
claim) and a general unsecured claim for
amounts in respect of accrued Contract Fees,
including Deferred Contract Fees, if any. Upon
a Sale of Assets, each Prepaid Security will
automatically convert into the right to receive
in cash the Stated Amount plus accrued Contract
Fees and Deferred Contract Fees, if any,
through the date of Board of Director approval
of such Sale of Assets, payable on the tenth
Business Day following such date of approval.
Like the Securities, the Prepaid Securities
will not entitle the holders thereof to any
rights with respect to the Common Stock,
including voting rights. The Company does not
plan to list the Prepaid Securities on any
securities exchange, and there can be no
assurance as to whether a trading market will
develop for Prepaid Securities. See
"Description of Prepaid Securities."
United States Federal
Income Tax
Considerations.............
Holders of Securities will include interest on
the Treasury Notes in income when received or
accrued, in accordance with the holder's method
of accounting. The Company intends to report
the Contract Fees (and Initial Premium Payment
and Deferred Contract Fees, if any) as income
to holders, but holders should consult their
tax advisors concerning the possibility that
the Contract Fees (and Initial Premium Payment
and Deferred Contract Fees, if any) may be
treated as a reduction in the holders' basis in
the Securities rather than included in income
on a current basis. Holders will not recognize
gain or loss with respect to the receipt of
Common Stock upon settlement of the Purchase
Contract. Holders may recognize gain or loss
upon sale of the Treasury Notes in the event of
an Acceleration. See "Certain United States
Federal Income Tax Considerations."
The net proceeds from the sale of the
Use of Proceeds............. Securities offered hereby will be used by the
Underwriters to purchase, at the direction of
the Company for the benefit of the holders, the
underlying Treasury Notes, which are being
transferred to holders pursuant to the terms of
the Securities, and the Company will receive no
proceeds from such sale. Amounts received by
the Company upon settlement of Purchase
Contracts, whether on the Final Settlement
Date, an earlier Acceleration Date or an Early
Settlement Date, are expected to be used for
general corporate purposes, including the
repayment or redemption of outstanding debt or
preferred stock, the possible acquisition of
financial services businesses or assets
thereof, investments in portfolio assets and
working capital needs. The Company routinely
reviews opportunities to acquire financial
services businesses or the assets thereof. See
"Use of Proceeds."
S-12
<PAGE>
RISK FACTORS
Prospective purchasers of Securities should consider, in addition to the
other information contained or incorporated by reference in this Prospectus
Supplement or the accompanying Prospectus, the following characteristics of
the Securities.
INVESTMENT IN THE SECURITIES WILL BECOME INVESTMENT IN COMMON STOCK
Although holders of the Securities will be the beneficial owners of the
underlying Treasury Notes, principal of the Treasury Notes, when paid at
maturity or sold upon Acceleration, will automatically be applied to the
purchase of a specified number of shares of Common Stock on behalf of such
holders, unless holders elect Early Settlement of the Purchase Contracts or
unless the Purchase Contracts are terminated (upon the occurrence of a
Bankruptcy Event or a Sale of Assets). Thus, following the Final Settlement
Date or Acceleration Date, holders generally will own shares of Common Stock
rather than a beneficial interest in Treasury Notes. See "Description of the
Securities--General."
LIMITATIONS ON OPPORTUNITY FOR EQUITY APPRECIATION
The opportunity for equity appreciation afforded by an investment in the
Securities is limited because of the Company's right to accelerate the
Securities at any time prior to the Final Settlement Date. Although not
obligated to do so, the Company may be expected to accelerate the Securities
prior to the Final Settlement Date (or any earlier Mandatory Acceleration
Date) if the market price for the Common Stock exceeds the Company
Acceleration Price for five consecutive Business Days. If the Company elects
to accelerate the Securities, in whole or in part, the equity appreciation,
exclusive of accrued and unpaid PERCS Payments payable with respect to the
Securities, realized on an investment in the Securities will, for any owner of
Securities accelerated by the Company, be limited to the excess, if any, of
(i) the value of the Common Stock received in payment of such Company
Acceleration Price (such Company Acceleration Price being initially $ and
declining thereafter to $ ), over (ii) the price paid by such owner for such
Securities (the initial price being the Price to Public for each Security
shown on the cover page of this Prospectus Supplement and the price thereafter
being subject to market fluctuations). Because the number of shares of Common
Stock to be delivered to holders of Securities in payment of such Company
Acceleration Price will be determined on the basis of the market price of the
Common Stock prior to the Notice Date, the value of the shares of Common Stock
on the date of delivery thereof to such holders may be more or less than the
Company Acceleration Price on a Company Acceleration Date. A recent closing
sale price of the Common Stock on the NYSE is set forth on the cover page of
this Prospectus Supplement.
FACTORS AFFECTING TRADING PRICES
The trading prices of the Securities in the secondary market will be
primarily affected by the trading prices of the Common Stock in the secondary
market. It is impossible to predict whether the price of Common Stock will
rise or fall. Trading prices of Common Stock will be influenced by the
Company's operating results and prospects and by economic, financial and other
factors and market conditions that can affect the capital markets generally,
including the level of, and fluctuations in, the trading prices of stocks
generally and sales of substantial amounts of Common Stock in the market
subsequent to the offering of the Securities or the perception that such sales
could occur.
NO SHAREHOLDER RIGHTS
The Securities will not entitle holders to any rights with respect to the
Common Stock (including, without limitation, voting rights and rights to
receive any dividends or other distributions in respect thereof) unless and
until such time as the Company shall have delivered shares of Common Stock for
such Securities, whether on the Final Settlement Date or any earlier
Acceleration Date and unless the applicable record date, if any, for the
exercise of such rights occurs after such date.
DILUTION OF COMMON STOCK
The number of shares of Common Stock that holders of the Securities are
entitled to receive on the Final Settlement Date or an earlier Acceleration
Date is subject to adjustment for certain events arising from stock
S-13
<PAGE>
splits and combinations, stock dividends and certain other actions of the
Company that modify its capital structure. See "Description of the Purchase
Contracts--General." Such number of shares of Common Stock to be received by
such holders on the Final Settlement Date or an earlier Acceleration Date will
not be adjusted for other events, such as offerings of Common Stock for cash
or in connection with acquisitions. The Company is not restricted from issuing
additional Common Stock during the term of the Securities. Additional
issuances may materially and adversely affect the price of the Common Stock
and, because of the relationship of the number of shares to be received on the
Final Settlement Date or any Acceleration Date to the price of the Common
Stock, such other events may adversely affect the trading price of the
Securities.
POSSIBLE ILLIQUIDITY OF THE SECONDARY MARKET
It is not possible to predict how the Securities will trade in the secondary
market or whether such market will be liquid or illiquid. The Securities are
novel securities and there is currently no secondary market for the
Securities. The Securities have been approved for listing on the NYSE, subject
to official notice of issuance. However, no assurance can be given that an
active trading market for the Securities will develop or that the listing of
the Securities will provide the holders of the Securities with liquidity of
investment.
TREASURY NOTES ENCUMBERED
Although holders of Securities will be the beneficial owners of the
underlying Treasury Notes, those Treasury Notes will be pledged with the
Collateral Agent to secure the obligations of the holders under the Purchase
Contracts. Thus, rights of the holders to their Treasury Notes will be subject
to the Company's security interest and no holder will be permitted to withdraw
Treasury Notes except in connection with an Early Settlement by such holder or
termination of the related Purchase Contracts or a holder's election to pay
the Stated Amount in cash upon an Acceleration. Additionally, upon the
automatic termination of the Purchase Contracts in the event that the Company
becomes the subject of a case under the United States Bankruptcy Code (the
"Bankruptcy Code"), the delivery of the Treasury Notes to holders of the
Securities may be delayed by the imposition of the automatic stay of Section
362 of the Bankruptcy Code. During the period of any such delay, the Treasury
Notes will continue to accrue interest, payable by the United States
Government, until their maturity.
RIGHT TO DEFER CONTRACT FEES
The Company may, at its option, defer in whole or in part the payment of
Contract Fees on the Purchase Contracts until no later than the Final
Settlement Date or an earlier Acceleration Date. However, deferred
installments of Contract Fees will bear additional Contract Fees at the rate
of % per annum (compounding on each succeeding Payment Date) until paid
(such deferred installments of Contract Fees together with the additional
Contract Fees are referred to herein as the "Deferred Contract Fees"). If the
Purchase Contracts are terminated upon the occurrence of a Bankruptcy Event,
the right to receive Contract Fees and Deferred Contract Fees will terminate.
In the event that the Company elects to defer the payment of Contract Fees
on the Purchase Contracts until the Final Settlement Date, a succeeding
Payment Date or any earlier Acceleration Date, each holder will receive on the
Final Settlement Date, succeeding Payment Date or such Acceleration Date, as
applicable, a cash payment equal to the aggregate amount of Deferred Contract
Fees payable on such holder's Securities. See "Description of the Purchase
Contracts--Contract Fees."
PURCHASE CONTRACT AGREEMENT NOT QUALIFIED UNDER TRUST INDENTURE ACT; LIMITED
OBLIGATIONS OF PURCHASE CONTRACT AGENT
The Purchase Contract Agreement will not be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the Purchase Contract Agent will not be required to qualify as a trustee
thereunder. Accordingly, holders of the Securities will not have the benefits
of the protections of the Trust Indenture Act. Under the terms of the Purchase
Contract Agreement, the Purchase Contract Agent will
S-14
<PAGE>
have only limited obligations to the holders of the Securities. See "Certain
Provisions of the Purchase Contract Agreement and the Pledge Agreement--
Information Concerning the Purchase Contract Agent."
HOLDERS' EARLY SETTLEMENT; PREPAID SECURITIES
The Risk Factors summarized above also apply, except as modified by the
following, to the Prepaid Securities, which will be issued under an indenture
qualified under the Trust Indenture Act. The Prepaid Securities will be issued
to any holder who elects Early Settlement and thereby removes the Treasury
Notes underlying his Securities by settling the underlying Purchase Contract
in cash prior to the Final Settlement Date or any Notice Date with respect to
an Acceleration Date. A holder of a Prepaid Security will have the same right
to receive Common Stock on the Final Settlement Date or earlier Acceleration
Date, and amounts in respect of Contract Fees and Deferred Contract Fees, in
the same amounts and at the same times as the outstanding Securities. If such
holder purchased the original Security in the offering at the Price to Public
set forth on the cover page of this Prospectus, such holder will have made the
same investment (equal to the Stated Amount) in the Securities and in the
Prepaid Securities. However, the cash yield on the Securities (equal to the
PERCS Payments, which include both the Contract Fee payments and the cash
yield on the underlying Treasury Notes) will be substantially higher than the
cash yield on the corresponding Prepaid Securities (equal to only amounts in
respect of the Contract Fee payments). Further, while the Purchase Contracts
underlying the Securities will terminate upon a Bankruptcy Event or a Sale of
Assets, resulting in distribution of the underlying Treasury Notes to holders,
if a Bankruptcy Event occurs, a holder of a Prepaid Security will have only a
claim against the Company for delivery of Common Stock (which claim may have
the status of a general unsecured claim or an equity claim) and a general
unsecured claim for amounts in respect of Contract Fee and Deferred Contract
Fee payments, if any. Upon a Sale of Assets, each Prepaid Security will
automatically convert into the right to receive in cash the Stated Amount plus
all accrued Contract Fees and Deferred Contract Fees, if any, through the date
of Board of Director approval of such Sale of Assets, payable on the tenth
Business Day following such date of approval. The Company does not plan to
list the Prepaid Securities on any securities exchange, and there can be no
assurance as to whether a trading market will develop for Prepaid Securities.
See "Description of Purchase Contracts--Termination."
A holder might wish to elect Early Settlement if interest rates are at a
relatively low level and the Treasury Notes are trading at a substantial
premium to the Stated Amount, in which case the holder could receive the
premium in cash by selling the Treasury Notes. However, given that the holder
will thereafter receive only amounts equal to Contract Fee Payments, and no
amounts in respect of Treasury interest, on the Stated Amount, a holder would
only be likely to elect Early Settlement if his individual economic
circumstances warranted foregoing such additional Treasury interest.
USE OF PROCEEDS
The net proceeds from the sale of the Securities offered hereby will be used
by the Underwriters to purchase, at the direction of the Company for the
benefit of the holders, the underlying Treasury Notes, which are being
transferred to holders pursuant to the terms of the Securities, and the
Company will receive no proceeds from the sale of the Securities. The proceeds
to be received by the Company upon settlement of the Purchase Contracts,
whether on the Final Settlement Date, an earlier Acceleration Date or an Early
Settlement Date, are expected to be used for general corporate purposes,
including the repayment or redemption of outstanding debt or preferred stock,
the possible acquisition of financial services businesses or assets thereof,
investments in portfolio assets and working capital needs. The Company
routinely reviews opportunities to acquire financial services businesses or
the assets thereof. The Company currently has no commitments or understandings
to acquire any specific business or other material assets. The Company is
considering the acquisition of approximately $4.5 billion of fixed annuity
assets for a total consideration of between $200 million to $300 million. The
Company has been advised that other persons have submitted acquisition
proposals. Discussions with the seller are ongoing regarding the acquisition
and possible terms, but there can be no assurance that the Company will be
successful in pursuing this or any other acquisition opportunity.
S-15
<PAGE>
COMMON STOCK PRICE RANGES AND DIVIDENDS
The Common Stock sale prices (as quoted on the NYSE Composite Tape) and per
share dividend data for each full quarter during fiscal years ended September
30, 1995 and 1996 and for the first fiscal quarter of fiscal 1997 through
October 30, 1996 are set forth below. The payment of future dividends on the
Common Stock and the amounts thereof will depend on business conditions,
earnings and financial requirements of the Company and other relevant factors.
The sale prices and dividend amounts set forth below have been restated to
reflect a three-for-two stock split paid in the form of a stock dividend on
November 10, 1995 and a two-for-one stock split paid in the form of a stock
dividend on August 30, 1996.
The Company's Common Stock trades under the symbol SAI.
<TABLE>
<CAPTION>
COMMON STOCK
PRICES DIVIDENDS PAID
------------------ -----------------------
COMMON NONTRANSFERABLE
FISCAL YEAR HIGH LOW STOCK CLASS B STOCK(1)
- ----------- ------ ------ ------ ----------------
<S> <C> <C> <C> <C>
1995
First Quarter................. $13 45/64 $ 11 1/2 $0.050 $0.045
Second Quarter................ 14 35/64 12 3/64 0.050 0.045
Third Quarter................. 17 7/8 14 1/4 0.050 0.045
Fourth Quarter................ 20 61/64 16 53/64 0.050 0.045
1996
First Quarter................. $ 24 5/8 $ 20 5/8 $0.075 $0.068
Second Quarter................ 28 3/16 22 9/16 0.075 0.068
Third Quarter................. 29 5/16 22 7/8 0.075 0.068
Fourth Quarter................ 36 1/4 26 7/8 0.075 0.068
1997
First Quarter (through October
30, 1996).................... $ 39 1/8 $ 36 1/4 -- --
</TABLE>
- --------
(1) Holders of Nontransferable Class B Stock are entitled to receive cash
dividends equal to 90% of any cash dividends paid to holders of the Common
Stock. For a description of the rights of holders of Nontransferable Class
B Stock, see "Description of Capital Stock--Common Stock and Class B
Stock" in the accompanying Prospectus.
S-16
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company at June 30, 1996. The table should be read in conjunction with the
Company's consolidated financial statements and notes thereto included in the
documents incorporated by reference herein. See "Incorporation of Certain
Documents by Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
JUNE 30,
1996
--------------
(IN THOUSANDS)
<S> <C>
Indebtedness (interest rates are as of June 30, 1996):
Medium-term notes due 1998 through 2025 (5 3/8% to 7 3/8%).. $ 248,335
8.125% debentures due April 28, 2023........................ 100,000
9.95% debentures due February 1, 2012....................... 100,000
9% notes due January 15, 1999............................... 125,000
----------
Total indebtedness............................................ 573,335
----------
Company-obligated mandatorily redeemable preferred securities
of subsidiary grantor trusts................................. 237,631(1)
----------
Shareholders' equity:
Preferred Stock............................................. 384,549
Nontransferable Class B Stock............................... 10,848
Common Stock................................................ 108,493
Additional paid-in capital.................................. 298,621
Retained earnings........................................... 812,363
Net unrealized losses on debt and equity securities
available for sale......................................... (88,669)
----------
Total shareholders' equity.................................. 1,526,205
----------
Total capitalization.......................................... $2,337,171
==========
</TABLE>
- --------
(1) Represents the Company-obligated mandatorily redeemable preferred
securities of (1) SunAmerica Capital Trust I, the sole asset of which is
$54.26 million principal amount of 9.95% Junior Subordinated Debentures
due 2044 of the Company and (2) SunAmerica Capital Trust II, the sole
asset of which is $191.22 million principal amount of 8.35% Junior
Subordinated Debentures due 2044 of the Company.
S-17
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
Reference is made to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 (the "Form 10-K"), which is incorporated by
reference herein and which contains the Company's audited consolidated
financial statements, including the consolidated income statement for the
Company's three fiscal years in the period ended September 30, 1995,
consolidated balance sheets as of September 30, 1994 and 1995, and the related
notes. Selected unaudited financial information as of and for the nine months
ended June 30, 1995 and 1996 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 the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, which
report is also incorporated by reference herein. Such unaudited information
reflects, in the opinion of management, all adjustments, consisting of only
normal accruals, necessary for a consistent presentation with the audited
financial information. Results of operations for the nine months ended June
30, 1996 may not necessarily be indicative of the results to be expected for
the full fiscal year. Per share amounts and dividends have been restated to
reflect a three-for-two stock split paid in the form of a stock dividend on
November 10, 1995 and a two-for-one stock split paid in the form of a stock
dividend on August 30, 1996.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED SEPTEMBER 30, ENDED JUNE 30,
----------------------------------------------------- -------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- --------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net investment income... $ 162,412 $ 219,384 $ 263,791 $ 294,454 $ 365,555 $ 259,529 $342,953
Net realized investment
losses................. (46,060) (56,364) (21,287) (21,124) (33,012) (24,550) (14,814)
Fee income.............. 92,689 112,831 134,305 150,736 179,288 130,030 161,812
General and
administrative
expenses............... (120,475) (133,058) (135,790) (132,743) (166,540) (118,582) (148,632)
Provision for future
guaranty fund
assessments............ -- -- (22,000) -- -- -- --
Amortization of deferred
acquisition costs...... (40,088) (48,375) (51,860) (66,925) (80,829) (59,197) (67,597)
Other income, net....... 24,903 16,673 16,852 15,603 15,144 12,423 15,762
--------- --------- --------- --------- --------- --------- --------
Pretax income........... 73,381 111,091 184,011 240,001 279,606 199,653 289,484
Income tax expense...... (25,900) (34,300) (57,000) (74,700) (85,400) (58,900) (86,800)
--------- --------- --------- --------- --------- --------- --------
Income before cumulative
effect of change in
accounting for income
taxes.................. 47,481 76,791 127,011 165,301 194,206 140,753 202,684
Cumulative effect of
change in accounting
for income taxes....... -- -- -- (33,500) -- -- --
--------- --------- --------- --------- --------- --------- --------
Net income.............. $ 47,481 $ 76,791 $ 127,011 $ 131,801 $ 194,206 $ 140,753 $202,684
========= ========= ========= ========= ========= ========= ========
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME
TAXES.................. $ 0.44 $ 0.60 $ 0.92 $ 1.19 $ 1.42 $ 1.02 $ 1.44
Cumulative effect of
change in accounting
for income taxes....... -- -- -- (0.27) -- -- --
--------- --------- --------- --------- --------- --------- --------
Net income.............. $ 0.44 $ 0.60 $ 0.92 $ 0.92 $ 1.42 $ 1.02 $ 1.44
========= ========= ========= ========= ========= ========= ========
CASH DIVIDENDS PER SHARE
PAID TO COMMON
SHAREHOLDERS:
Nontransferable Class B
Stock(1)............... $ 0.060 $ 0.060 $ 0.084 $ 0.120 $ 0.180 $ 0.135 $ 0.203
========= ========= ========= ========= ========= ========= ========
Common Stock............ $ 0.067 $ 0.067 $ 0.093 $ 0.134 $ 0.200 $ 0.150 $ 0.225
========= ========= ========= ========= ========= ========= ========
</TABLE>
- --------
(1) Holders of Nontransferable Class B Stock are entitled to receive cash
dividends equal to 90% of any cash dividends paid to holders of the Common
Stock. For a description of the rights of holders of Nontransferable Class
B Stock, see "Description of Capital Stock--Common Stock and Class B
Stock" in the accompanying Prospectus.
S-18
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT JUNE 30,
----------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL POSITION
Investments............. $ 7,596,275 $ 9,428,266 $10,364,952 $ 9,280,390 $10,808,959 $10,472,755 $16,152,767
Variable annuity
assets................. 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,893,894 6,083,369
Deferred acquisition
costs.................. 392,278 436,209 475,917 581,874 526,415 523,620 781,612
Other assets............ 279,007 245,833 231,582 280,868 245,787 305,279 382,359
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets............ $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $16,195,548 $23,400,107
=========== =========== =========== =========== =========== =========== ===========
Reserves for fixed
annuity contracts...... $ 5,359,757 $ 5,143,339 $ 4,934,871 $ 4,519,623 $ 4,862,250 $ 4,887,635 $ 9,622,137
Reserves for guaranteed
investment contracts... 1,598,963 2,023,048 2,216,104 2,783,522 3,607,192 3,276,686 4,102,787
Trust deposits.......... -- 367,458 378,986 442,320 426,595 430,868 423,790
Variable annuity
liabilities............ 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,893,894 6,083,369
Other payables and
accrued liabilities.... 344,789 1,372,010 1,828,153 860,763 747,733 879,437 798,974
Long-term notes and
debentures............. -- 225,000 380,560 472,835 524,835 472,835 573,335
Collateralized mortgage
obligations and reverse
repurchase agreements.. 299,343 182,784 112,032 28,662 -- -- --
Other senior
indebtedness........... 38,035 25,919 15,119 -- -- -- --
Subordinated notes...... 117,985 -- -- -- -- -- --
Deferred income taxes... 58,779 40,682 96,599 74,319 146,847 136,585 31,879
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary grantor
trusts(1).............. -- -- -- -- 52,631 52,631 237,631
Shareholders' equity.... 449,909 730,068 1,110,027 961,088 1,213,078 1,164,977 1,526,205
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity... $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $16,195,548 $23,400,107
=========== =========== =========== =========== =========== =========== ===========
Book value per share.... $ 4.08 $ 4.85 $ 7.55 $ 6.30 $ 8.89 $ 8.31 $ 10.58
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
- --------
(1) Represents the Company-obligated mandatorily redeemable preferred
securities, at September 30, 1995, of SunAmerica Capital Trust I, the sole
asset of which is $54.26 million principal amount of 9.95% Junior
Subordinated Debentures due 2044 of the Company and, at June 30, 1996, of
(1) SunAmerica Capital Trust I and (2) SunAmerica Capital Trust II, the
sole asset of which is $191.22 million principal amount of 8.35% Junior
Subordinated Debentures due 2044 of the Company.
S-19
<PAGE>
DESCRIPTION OF THE SECURITIES
The descriptions set forth below and under the captions "Description of the
Purchase Contracts" and "Certain Provisions of the Purchase Contract Agreement
and the Pledge Agreement," of certain terms of the Premium Equity Redemption
Cumulative Security Units, % PERCS Units (the "Securities") offered hereby
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Securities set forth in
the accompanying Prospectus, to which reference is hereby made. The summaries
of certain provisions of documents described below and under the captions
"Description of the Purchase Contracts" and "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement" do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of such documents (including the definitions therein
of certain terms), forms of which are on file with the Securities and Exchange
Commission. Wherever particular Sections of, or terms defined in, such
documents are referred to herein, such Sections or defined terms are
incorporated by reference herein. Capitalized terms not defined herein have
the meanings assigned to such terms in the accompanying Prospectus.
GENERAL
Each Security will have a Stated Amount of $ and will be issued under the
Purchase Contract Agreement between the Company and the Purchase Contract
Agent. Each Security will consist of (a) a Purchase Contract under which (i)
the holder will purchase from the Company on the Final Settlement Date or
earlier Acceleration Date for an amount in U.S. dollars equal to the Stated
Amount, initially one share of Common Stock, subject to adjustment as
described herein, if such purchase occurs on the Final Settlement Date or
Mandatory Acceleration Date, or such lesser number of shares of Common Stock
if such purchase occurs on a Company Acceleration Date and (ii) the Company
will pay Contract Fees to the holder, and (b) Treasury Notes having a
principal amount equal to the Stated Amount and maturing on the Final
Settlement Date. The aggregate fair market value of the Treasury Notes at the
time of purchase may exceed their aggregate principal amount, in which case,
the Company shall, for the benefit of the Securityholders, provide the amount
of such excess as additional purchase price for the Treasury Notes (such
amount, the "Initial Premium Payment"). Holders will not directly receive any
cash as a result of any Initial Premium Payment. The Treasury Notes will be
pledged with the Collateral Agent to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. Unless (i) a holder of
Securities elects Early Settlement through the early delivery of cash in the
Stated Amount and the Securities to the Purchase Contract Agent in exchange
for the Treasury Notes and Prepaid Securities (see "Description of Prepaid
Securities"), (ii) an Acceleration occurs or (iii) the Purchase Contracts are
terminated (upon a Bankruptcy Event or a Sale of Assets), principal of the
Treasury Notes underlying such Securities, when paid at maturity, will
automatically be applied to satisfy in full the holder's obligation to
purchase Common Stock under the Purchase Contract. In the event of an
Acceleration, if the holder of Securities elects not to pay the Stated Amount
in cash as provided herein, the Treasury Notes underlying the Securities will
be sold by the Purchase Contract Agent as described herein and the proceeds
from such sale (exclusive of accrued interest and premium, if any) in an
amount equal to the Stated Amount will automatically be applied to satisfy in
full the holder's obligation to purchase Common Stock under the Purchase
Contract. For so long as a Purchase Contract remains in effect, such Purchase
Contract and the Treasury Notes securing it will not be separable and may be
transferred only as an integrated Security.
The semi-annual payments on the Securities set forth on the cover page of
this Prospectus Supplement will consist of interest on the Treasury Notes
payable by the United States Government at the rate of % of the Stated Amount
per annum and unsecured, unsubordinated Contract Fees payable semi-annually on
each Payment Date by the Company at the rate of % of the Stated Amount per
annum (the "PERCS Payments"). Semi-annual interest payments on the Treasury
Notes will be remitted by the Collateral Agent to the Purchase Contract Agent
for payment to holders of the Securities. The Contract Fees payable on the
first Payment Date will be adjusted so that the aggregate of the Contract Fees
and interest on Treasury Notes payable on such date will be the equivalent of
% of the Stated Amount per annum accruing from the date of issue of the
Securities.
The Company may, at its option, defer in whole or in part the payment of
Contract Fees on the Purchase Contracts until the Final Settlement Date, a
succeeding Payment Date or any earlier Acceleration Date. However,
S-20
<PAGE>
deferred installments of Contract Fees will bear additional Contract Fees at
the rate of % per annum (compounding on each succeeding Payment Date) until
paid. If the Purchase Contracts are terminated upon the occurrence of a
Bankruptcy Event, the right to receive Contract Fees and Deferred Contract
Fees will terminate. In the event of Early Settlement of the Purchase Contract
(see "Description of the Purchase Contracts--Holders' Early Settlement of
Securities"), accrued Contract Fees and Deferred Contract Fees will be carried
over to the Prepaid Securities. In the event that the Company elects to defer
the payment of Contract Fees on the Purchase Contracts until the Final
Settlement Date, a succeeding Payment Date or any earlier Acceleration Date,
each holder will receive on the Final Settlement Date, succeeding Payment Date
or Acceleration Date, as applicable, a cash payment equal to the aggregate
amount of Deferred Contract Fees payable to a holder of Securities. Except
with respect to the Final Settlement Date or any earlier Acceleration Date,
the Company may pay Deferred Contract Fees in whole or in part on any Payment
Date. See "Description of the Purchase Contracts--Contract Fees."
DESCRIPTION OF THE PURCHASE CONTRACTS
GENERAL
On the Final Settlement Date, the Stated Amount will automatically be
applied pursuant to the terms of the Purchase Contract to purchase shares of
Common Stock of the Company at the Settlement Rate (as described below) in
effect on the Final Settlement Date.
Unless an event described below under "Termination" or "Acceleration of the
Securities" occurs or unless a holder exercises the rights described under
"Holder's Early Settlement of Securities," principal of the Treasury Notes
underlying such Securities, when paid at maturity, will automatically be
transferred to the Company to satisfy in full the holder's obligation to
purchase Common Stock under the Purchase Contracts on the Final Settlement
Date. Such Common Stock will then be issued and delivered to such holder or
such holder's designee, upon presentation and surrender of the certificate
evidencing such Securities (a "Security Certificate") and payment by the
holder of any transfer or similar taxes payable in connection with the
issuance of the stock to any person other than such holder.
Prior to the date on which shares of Common Stock are issued in settlement
of a Purchase Contract, the Common Stock underlying the related Security will
not be deemed to be outstanding for any purpose and the holder thereof will
not have any voting rights, rights to dividends or other distributions or
other rights or privileges of a stockholder by virtue of holding such
Security.
Each holder of Securities, by acceptance thereof, will under the terms of
the Purchase Contract Agreement and the Securities be deemed to have (a)
irrevocably agreed to be bound by the terms of the related Purchase Contracts
for so long as such holder remains a holder of such Securities and (b) newly
appointed the Purchase Contract Agent as such holder's attorney-in-fact to
enter into and perform the related Purchase Contracts on behalf of and in the
name of such holder.
The Settlement Rate is initially one share of Common Stock. The Settlement
Rate is subject to adjustment if the Company shall (i) pay a dividend or make
a distribution with respect to Common Stock in shares of such stock, (ii)
subdivide or split its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, (iv) issue
by reclassification of its shares of Common Stock any shares of common stock
of the Company, (v) issue certain rights or warrants to all holders of its
Common Stock, (vi) pay a dividend or make a distribution to all holders of its
Common Stock of evidences of its indebtedness or other assets (including
capital stock of the Company but excluding any cash dividends or distributions
and dividends referred to in clause (i) above), (vii) make a distribution
consisting of cash, excluding any quarterly cash dividend on the Common Stock
to the extent that the aggregate cash dividend per share of Common Stock in
any quarter does not exceed the greater of (x) the amount per share of Common
Stock of the next preceding quarterly cash dividend on the Common Stock to the
extent that such preceding quarterly dividend did not require an adjustment of
the conversion price pursuant to this clause (as adjusted to reflect
subdivisions or combinations
S-21
<PAGE>
of the Common Stock), and (y) 3.75% of the average of the last reported sales
price of the Common Stock during the ten consecutive trading days immediately
prior to the date of declaration of such dividend, and excluding any dividend
or distribution in connection with the liquidation, dissolution or winding up
of the Company (if an adjustment is required to be made as set forth in this
clause (vii) as a result of a distribution (A) that is a quarterly dividend,
such adjustment would be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be excluded
pursuant to this clause and (B) that is not a quarterly dividend, such
adjustment would be based upon the full amount of the distribution); or (viii)
make a payment in respect of a tender offer or exchange offer by a person
other than the Company or any subsidiary of the Company in which, as of the
closing date of the offer, the board of directors of the Company is
recommending acceptance of the offer (the adjustment referred to in this
clause (viii)(A) will only be made if the tender offer or exchange offer is
for an amount which increases the offeror's ownership of Common Stock to more
than 25% of the total shares of Common Stock outstanding and if the cash and
value of any other consideration included in such payment per share of Common
Stock exceeds the average of the daily closing prices of the Common Stock on
the NYSE on the trading day after the expiration of the tender or exchange
offer and the next two succeeding trading days and (B) will generally not be
made, however, if, as of the closing of the offer, the offering documents with
respect to such offer disclose a plan or an intention to cause the Company to
engage in a consolidation or merger of the Company or a sale of all or
substantially all of the assets of the Company). In addition, the Company will
also be entitled to make upward adjustments in the Settlement Rate, as it in
its discretion shall determine to be advisable, in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock (or any transaction which could be treated as any of the foregoing
transactions pursuant to Section 305 of the Internal Revenue Code of 1986, as
amended) hereafter made by the Company to its shareholders will not be
taxable. All adjustments to the Settlement Rate will be calculated to the
nearest 1/100th of a share of Common Stock (with 5/1000 of a share being
rounded to the next lower 1/100 of a share).
CONTRACT FEES
Contract Fees will be payable semi-annually on each Payment Date to the
persons in whose names the related Securities are registered at the close of
business on the Business Day (defined below) immediately preceding such
Payment Date (the "Record Date"). Contract Fees will be computed on the basis
of actual days elapsed in a year of 365 or 366 days, as the case may be. If a
Payment Date falls on a day that is not a Business Day, the Contract Fee may
be paid on the next succeeding Business Day with the same force and effect as
if made on such Payment Date, and no additional amounts will accrue as a
result of such delayed payment. "Business Day" means any day that is not a
Saturday, a Sunday or a day on which the New York Stock Exchange or banking
institutions or trust companies in The City of New York are authorized or
obligated by law or executive order to be closed.
The Company may, at its option and upon prior written notice to the holders
of Securities and the Purchase Contract Agent, defer in whole or in part the
payment of Contract Fees on the Purchase Contracts until the Final Settlement
Date, a succeeding Payment Date or any earlier Acceleration Date. However,
deferred installments of Contract Fees will bear additional Contract Fees at
the rate of % per annum (compounding on each succeeding Payment Date) until
paid. If the Purchase Contracts are terminated upon the occurrence of a
Bankruptcy Event, the right to receive Contract Fees and Deferred Contract
Fees will terminate.
In the event that the Company elects to defer the payment of Contract Fees
on the Purchase Contracts until the Final Settlement Date, a succeeding
Payment Date or any earlier Acceleration Date, each holder will receive on the
Final Settlement Date, succeeding Payment Date or Acceleration Date, as
applicable, a cash payment equal to the aggregate amount of Deferred Contract
Fees payable to a holder of Securities. Except with respect to the Final
Settlement Date or any earlier Acceleration Date, the Company may pay Deferred
Contract Fees in whole or in part on any Payment Date.
In the event the Company exercises its option to defer the payment of
Contract Fees, then, until the Deferred Contract Fees have been paid in full,
the Company shall not declare or pay dividends on, make distributions
S-22
<PAGE>
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of Common Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plans now or
hereafter in effect or the satisfaction by the Company of its obligations
pursuant to any contract or security now or hereafter outstanding requiring
the Company to purchase shares of Common Stock, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (iii) the purchase of fractional shares
in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) the payment of accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any shares of preferred stock of the
Company as may be outstanding from time to time, in accordance with the terms
of such stock or (v) dividends on its capital stock paid in shares of capital
stock) or make any guarantee payments with respect to the foregoing.
ACCELERATION OF THE SECURITIES
Company Acceleration
At any time or from time to time prior to the Final Settlement Date, the
Company may elect to accelerate (a "Company Acceleration") the outstanding
Securities, in whole or in part. On the effective date of any such
acceleration (a "Company Acceleration Date"), the Company will have the
obligation to deliver a number of shares of Common Stock equal to the
applicable Company Acceleration Price divided by the Current Market Price on
the second Business Day prior to the Notice Date, plus an amount in cash equal
to accrued and unpaid PERCS Payments (except as provided in the second
paragraph under "General Provisions Applicable to Acceleration" below) payable
with respect to such Securities, to and including the Company Acceleration
Date. The Company Acceleration Price per Security is initially equal to $ ,
declining by $. on each day following the date of issue (computed on the
basis of a 360-day year of twelve 30 day months) to $ on , 1999, and
equal to $ thereafter. Notice of a Company Acceleration shall be made not
less than 30 nor more than 60 days prior to the Company Acceleration Date. See
"Notice to Holder of Securities." Notwithstanding the foregoing, the Company
may not exercise its right to accelerate the Securities unless the Current
Market Price of a share of Common Stock on the second Business Day prior to
the Notice Date is equal to or exceeds the Company Acceleration Price
applicable to such Notice Date.
For illustrative purposes only, the following chart shows (i) the number of
shares of Common Stock that a holder would receive for each Security on the
Final Settlement Date, assuming no adjustment of the Settlement Rate under the
Purchase Contracts by reason of the occurrence of any of the events described
under "Description of the Purchase Contracts--General" and (ii) the number of
shares of Common Stock that a holder would receive at various Current Market
Prices if a Company Acceleration occurred immediately prior to the Final
Settlement Date. Accordingly for purposes of the table the Company
Acceleration Price is assumed to be $ . There can be no assurance that the
Current Market Price of the Common Stock will be within the range set forth
below.
FINAL SETTLEMENT DATE______1 share(1)
CURRENT MARKET PRICE
<TABLE>
<S> <C>
$ ........................ 0. shares(2)
$ ........................ 0. shares(2)
$ ........................ 0. shares(2)
$ ........................ 0. shares(2)
$ ........................ 0. shares(2)
</TABLE>
- --------
(1) Since the Current Market Price is not a relevant factor in determining the
number of shares of Common Stock issued on the Final Settlement Date, such
holder will receive Common Stock having a value equal to the market price
of the Common Stock on the Final Settlement Date.
S-23
<PAGE>
(2) Since the number of shares issued per Security is determined by dividing
$ (the assumed Company Acceleration Price) by the applicable Current
Market Price, the number of shares reflected in the table always have a
value equal to such Company Acceleration Price. However, because the number
of shares of Common Stock to be delivered in payment of such Company
Acceleration Price will be determined on the basis of the market price of
the Common Stock prior to the Notice Date, the value of the shares of
Common Stock delivered to holders on the Company Acceleration Date may be
more or less than the Company Acceleration Price. See "Risk Factors--
Limitations on Opportunity for Equity Appreciation" and "Certain Provisions
Applicable to Acceleration".
Mandatory Acceleration
Immediately prior to the effectiveness of a merger or consolidation of, or
statutory share exchange involving, the Company that results in the conversion
or exchange of the Common Stock into, or the right to receive, other securities
or other property (any such merger, consolidation or exchange, a "Merger or
Consolidation"), each outstanding Security will automatically be accelerated (a
"Mandatory Acceleration") so that holders of the Security have the right to
receive from the Company shares of Common Stock at the Settlement Rate for the
Securities in effect on the Mandatory Acceleration Date, plus (i) an amount in
cash equal to the accrued and unpaid PERCS Payments (except as provided in the
second paragraph under "General Provisions Applicable to Acceleration" below)
on such Securities to but excluding the Mandatory Acceleration Date plus (ii)
an amount in cash initially equal to $ declining by $ on each day
following the date of issue of the securities computed on the basis of a 360-
day year of twelve 30-day months to $ on , 1999, and equal to zero
thereafter, determined with reference to the Mandatory Acceleration Date,
unless sooner accelerated by the Company. At the option of the Company, it may
deliver on the Mandatory Acceleration Date, in lieu of some or all of the cash
consideration described in clause (ii) of the preceding sentence, shares of
Common Stock. The number of shares of Common Stock to be delivered in lieu of
any consideration described in such clause (ii) will be determined by dividing
the amount of cash consideration that the Company has elected to pay in Common
Stock by the Current Market Price of the Common Stock determined as of the
second Business Day immediately preceding the Notice Date. Because the Current
Market Price is determined as of a date different from the date of the delivery
of the Common Stock, the value of such Common Stock when delivered may be more
or less than its market value on the date of such determination. The automatic
acceleration of the Securities immediately prior to a Merger or Consolidation
is intended to ensure that the holders of the Securities will be entitled to
the benefits of ownership of Common Stock upon the occurrence of such Merger or
Consolidation and will participate in such Merger or Consolidation together
with the holders of Common Stock.
General Provisions Applicable to Acceleration
Unless a holder elects to pay the Stated Amount in immediately available
funds as described below with respect to the Securities of such holder to be
accelerated, the Purchase Contract Agent on behalf of such holder pursuant to
the Purchase Contract Agreement will sell on the second Business Day
immediately preceding the Acceleration Date the Treasury Notes underlying such
holder's Securities to be accelerated and automatically apply on the
Acceleration Date out of the proceeds of such sale an amount equal to the
Stated Amount to satisfy in full such holder's obligation to purchase the
Common Stock under the Purchase Contract on the Acceleration Date. Any excess
proceeds (in respect of premium on the sale of the Treasury Notes) will be paid
to such holder. In the event that the proceeds from the sale of such Treasury
Notes (exclusive of accrued interest on the Treasury which will be paid to the
holder as described below) is less than the Stated Amount, such proceeds
nevertheless will be considered to satisfy in full the holder's obligation to
purchase the Common Stock under the Purchase Contract on the Acceleration Date.
Amounts in respect of accrued interest on the Treasury Notes will be paid to
the holders as a component of the accrued PERCS Payment payable on such
Acceleration Date. If fewer than all outstanding Securities are to be
accelerated, the Securities to be accelerated shall be selected by the Purchase
Contract Agent by lot.
In the event of an Acceleration of Securities, holders of Securities so
accelerated may elect to pay to the Company through the Purchase Contract Agent
no later than 5:00 p.m. New York City time on the third Business
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Day immediately preceding the Acceleration Date in immediately available funds
an amount in U.S. dollars equal to the Stated Amount per Security so
accelerated, in which event each such electing holder will receive the
Treasury Notes securing such holder's obligation to purchase the Common Stock
under the Purchase Contract within three Business Days of the receipt of such
amount. Because any Treasury Notes received by such holder will include
accrued interest, the Company will pay on the Acceleration Date only accrued
Contract Fees to holders who elect to settle in cash after a notice of
Acceleration with respect to such holder's Securities has been given. HOLDERS
MAY MAKE THE ELECTION REFERRED TO IN THIS PARAGRAPH ONLY IN INTEGRAL MULTIPLES
OF SECURITIES. If an electing holder fails to deliver the Stated Amount by
such close of business on the third Business Day preceding the Acceleration
Date, then the Treasury Notes will be sold as provided in the preceding
paragraph.
The opportunity for equity appreciation afforded by an investment in the
Securities is limited because of the Company's right to accelerate the
Securities at any time prior to the Final Settlement Date. Although not
obligated to do so, the Company may be expected to accelerate the Securities
prior to the Final Settlement Date (or any earlier Mandatory Acceleration
Date) if the aggregate market price of the Common Stock exceeds such Company
Acceleration Price for five consecutive Business Days. If the Company elects
to accelerate the Securities, in whole or in part, the equity appreciation,
exclusive of accrued and unpaid PERCS Payments payable with respect to the
Securities, realized on an investment in the Securities will, for any owner of
Securities accelerated by the Company, be limited to the excess, if any, of
(i) the value of the Common Stock received in payment of such Company
Acceleration Price (such Company Acceleration Price being initially $ and
declining thereafter to $ ), over (ii) the price paid by such owner for such
Securities (the initial price being the Price to Public for each Security
shown on the cover page of this Prospectus Supplement and the price thereafter
being subject to market fluctuations). Because the number of shares of Common
Stock to be delivered to holders of Securities in payment of such Company
Acceleration Price will be determined on the basis of the market price of the
Common Stock prior to the Notice Date, the value of the shares of Common Stock
on the date of delivery thereof to such holders may be more or less than the
Company Acceleration Price on the Company Acceleration Date. A recent closing
sale price of the Common Stock on the NYSE is set forth on the cover page of
this Prospectus Supplement.
Because the price of the Common Stock is subject to market fluctuations, the
value of the Common Stock received by a holder of Securities upon the Final
Settlement Date or upon the effectiveness of a Merger or Consolidation of the
Company may be more or less than the amount paid for the Securities upon
issuance, exclusive of any Common Stock paid for accrued and unpaid Contract
Fees payable with respect to the Securities.
Holders of Securities have no right to Common Stock prior to the Final
Settlement Date or Acceleration Date.
Certain Definitions
"Mandatory Acceleration Date" means the effective time on the date of any
Merger or Consolidation.
The "Notice Date" with respect to any notice given by the Company in
connection with an Acceleration of the Securities means the earlier of the
commencement of the mailing of such notice to the holders of Securities or the
date such notice is first published in accordance with "Notices to Holders of
Securities" below.
The "Current Market Price" per share of Common Stock on any date of
determination means the average of the daily closing prices on the NYSE for
the five consecutive trading days ending on and including such date of
determination; provided, however, that if the closing price of the Common
Stock on the NYSE on the trading day next following such five-day period (the
"next-day closing price") is less than 95% of said average closing price, then
the Current Market Price per share of Common Stock on such date of
determination will be the next-day closing price; and provided, further, that
if any adjustment of the Settlement Rate becomes effective as of any date
during the period beginning on the first day of such five-day period and
ending on the date on which Securities are to be accelerated, then the Current
Market Price as determined pursuant to the foregoing
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will be appropriately adjusted to reflect such adjustment. Because the price
of Common Stock is subject to market fluctuations, it is possible that the
next-day closing price could be significantly less than such five-day average.
HOLDER'S EARLY SETTLEMENT OF SECURITIES
A holder of Securities may settle the underlying Purchase Contracts prior to
the Final Settlement Date ("Early Settlement") in the manner herein described.
So long as the Securities are evidenced by one or more global security
certificates deposited with the Depositary (as defined herein), procedures for
Early Settlement will also be governed by standing arrangements between the
Depositary and the Purchase Contract Agent. HOLDERS MAY SETTLE SECURITIES
EARLY ONLY IN INTEGRAL MULTIPLES OF SECURITIES.
Upon Early Settlement of Purchase Contracts underlying any Securities, (a)
the holder will pay to the Company (in the form of a certified or cashier's
check payable to the order of the Company in immediately available funds)
through the Purchase Contract Agent a U.S. dollar amount equal to the Stated
Amount per such Security and deliver such Securities to the Purchase Contract
Agent with the form of "Election to Settle Early" on the reverse side of the
certificate completed and executed as indicated, (b) the Treasury Notes
underlying such Securities will within three Business Days following the Early
Settlement Date (defined below) be transferred to the holder free and clear of
the Company's security interest therein and (c) the Company will deliver
Prepaid Securities with an equal aggregate Stated Amount to the holder under
the Prepaid Securities Indenture within such three Business Day period. After
any notice of Acceleration is given with respect to a holder's Securities, the
holder's right to elect Early Settlement with respect to such Securities will
terminate, but such holder will retain the right to receive the underlying
Treasury Notes in connection with an Acceleration of Securities as described
under "Acceleration of the Securities--General Provisions Applicable to
Acceleration."
Upon Early Settlement of Purchase Contracts in the manner described above,
presentation and surrender of the Security Certificate evidencing the related
Securities and cash equal to the Stated Amount per Security and payment of any
transfer or similar taxes payable by the holder in connection with the
issuance of the Prepaid Securities to any person other than the holder of such
Securities, the Company will cause the Prepaid Securities to be issued, and
the Treasury Notes securing such Purchase Contracts to be released from the
pledge under the Pledge Agreement described below and transferred, within
three Business Days following the Early Settlement Date, to the exchanging
holder or such holder's designee. If the Purchase Contract Agent receives the
Security Certificate, accompanied by the completed Election to Settle Early
and requisite check, from a holder of Securities by 5:00 p.m., New York City
time, on a Business Day, that day will be considered the Early Settlement
Date. If the Purchase Contract Agent receives the foregoing after 5:00 p.m.,
New York City time, on a Business Day or at any time on a day that is not a
Business Day, the next Business Day will be considered the Early Settlement
Date.
A holder might wish to elect Early Settlement if interest rates are at a
relatively low level and the Treasury Notes are trading at a substantial
premium to the Stated Amount, in which case the holder could receive the
premium in cash by selling the Treasury Notes. However, given that the Holder
will thereafter receive only amounts equal to Contract Fee Payments, and no
amounts in respect of Treasury interest, on the Stated Amount, a holder would
only be likely to elect Early Settlement if his individual economic
circumstances warranted foregoing such additional Treasury interest.
PREPAID SECURITIES
The Prepaid Securities will be issued under the Prepaid Securities Indenture
to holders electing Early Settlement. All outstanding Prepaid Securities will
entitle the holders thereof to receive Common Stock on the Final Settlement
Date or earlier Acceleration Date, and amounts in respect of Contract Fees and
Deferred Contract Fees, in the same amounts and at the same times as the
outstanding Securities. No Treasury Notes will
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underlie the Prepaid Securities; accordingly, unlike the Securities, the
Prepaid Securities will not entitle the holders thereof to receive any amounts
in respect of interest on the Treasury Notes nor, in the event of an
Acceleration, any amounts in respect of premium (if any) on the sale by the
Purchase Contract Agent of the Treasury Notes. The Prepaid Securities will be
accelerated upon a Bankruptcy Event but, unlike holders of Securities, who
will receive their underlying Treasury Notes in such events, holders of
Prepaid Securities will have only a claim against the Company for delivery of
Common Stock (which claim may have the status of a general unsecured claim or
an equity claim) and a general unsecured claim for amounts in respect of
accrued Contract Fees, including Deferred Contract Fees, if any. Upon a Sale
of Assets, each Prepaid Security will automatically convert into the right to
receive in cash an amount equal to the sum of (i) the Stated Amount and (ii)
all unpaid Contract Fees and Deferred Contract Fees to the date of the Board
of Directors approval of such Sale of Assets, payable on the tenth Business
Day following such date of approval. Like the Securities, the Prepaid
Securities will not entitle the holders thereof to any rights with respect to
the Common Stock, including voting rights. The Company does not plan to list
the Prepaid Securities on any securities exchange, and there can be no
assurance as to whether a trading market will develop for Prepaid Securities.
See "Risk Factors--Holder's Early Settlement; Prepaid Securities" and
"Description of Prepaid Securities."
TERMINATION
The Purchase Contracts, and the rights and obligations of the Company and of
the holders of the Securities thereunder (including the right to receive any
Contract Fees or Deferred Contract Fees and the obligation to purchase Common
Stock), will automatically terminate upon (i) the occurrence of certain events
of bankruptcy, insolvency or reorganization with respect to the Company (each,
a "Bankruptcy Event") or (ii) a sale, assignment, transfer, lease or
conveyance of all or substantially all of the properties and assets of the
Company to any person which results in a voluntary liquidation, dissolution or
winding up of the Company (a "Sale of Assets"). Upon any such termination, the
Collateral Agent will release the Treasury Notes held by it to the Purchase
Contract Agent for distribution to the holders. In the case of a Bankruptcy
Event, however, such release and distribution may be subject to a delay as a
result of the automatic stay under the Bankruptcy Code, which delay would
continue until such automatic stay has been lifted. During the period of any
such delay, the Treasury Notes will continue to accrue interest for the
benefit of the holders, payable by the United States Government, until their
maturity. In the case of a Sale of Assets, holders will be entitled to receive
in cash unpaid Contract Fees and Deferred Contract Fees, if any, through the
date of Board of Director approval of such Sale of Assets, payable on the
tenth Business Day following the date of such approval. In the case of a
Bankruptcy Event, holders will not be entitled to receive accrued and unpaid
Contract Fees and Deferred Contract Fees, if any.
TREASURY NOTES AND PLEDGE AGREEMENT; INTEREST ON TREASURY NOTES
The Treasury Notes underlying the Securities will be pledged to the
Collateral Agent, for the benefit of the Company, pursuant to a pledge
agreement, to be dated as of , 1996 (the "Pledge Agreement"), to secure
the obligations of the holders to purchase Common Stock under the Purchase
Contracts. The rights of holders of Securities to the underlying Treasury
Notes will be subject to the Company's security interest therein created by
the Pledge Agreement; no holder of Securities will be permitted to withdraw
the Treasury Notes underlying such Securities from the pledge arrangement
except upon the termination, Acceleration or Early Settlement of the related
Purchase Contracts. Subject to such security interest, however, holders of
Securities will have full beneficial ownership of the underlying Treasury
Notes. The Company will have no interest in the Treasury Notes other than its
security interest.
The Collateral Agent will, upon receipt of interest payments on the Treasury
Notes, distribute such payments to the Purchase Contract Agent, who will in
turn distribute those payments to the persons in whose names the related
Securities are registered at the close of business on the Record Date
immediately preceding the Payment Date. See "Description of the Purchase
Contracts--Contract Fees."
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FRACTIONAL SHARES
No fractional share of Common Stock will be issued upon the Final Settlement
Date or any Acceleration of the Securities. In lieu of any fractional share
otherwise issuable in respect of all Securities of any holder, such holder
shall be entitled to receive an amount in cash equal to the same fraction of
the Current Market Price of the Common Stock determined as of the second
Business Day immediately preceding the relevant Notice Date or Final
Settlement Date, as applicable.
NOTICES TO HOLDERS OF SECURITIES
The Company will provide notice of any Acceleration of the Securities
(including any potential acceleration upon the effectiveness of a Merger or
Consolidation) to holders of record of the Securities to be accelerated not
less than 30 nor more than 60 days prior to the date fixed for Acceleration;
provided that if the effectiveness of a Merger or Consolidation makes it
impracticable to provide at least 30 days notice, the Company shall provide
the notice as soon as practicable prior to the effectiveness. Such notice
shall specify, among other things, the Current Market Price to be used (if
necessary) to calculate the number of shares of Common Stock to be delivered,
and in the case of a Merger or Consolidation, whether the Company is
exercising any option to deliver shares of Common Stock in lieu of cash and,
in the case of a Company Acceleration, whether the Company is accelerating all
or less than all of the Securities, and if less than all, which Securities are
being accelerated. Such notice shall be provided by mailing notice thereof to
the holders of Securities to be accelerated and by publishing notice thereof
in The Wall Street Journal, The New York Times or another authorized
newspaper. Each holder of Securities to be accelerated shall be entitled to
receive, following the Acceleration Date, upon surrender of the certificates
evidencing such Securities to the Company at the place designated in such
notice, certificates for the shares of Common Stock and cash, if any, payable
in respect of such Acceleration.
THE TREASURY NOTES WILL BE OBLIGATIONS OF THE UNITED STATES GOVERNMENT AND
NOT OF THE COMPANY.
BOOK-ENTRY SYSTEM
The Depositary Trust Company (the "Depositary") will act as securities
depositary for the Securities. The Securities will be issued only as fully-
registered securities registered in the name of Cede & Co. (the Depositary's
nominee). One or more fully-registered global security certificates ("Global
Security Certificates"), representing the total aggregate number of
Securities, will be issued and will be deposited with the Depositary and will
bear a legend regarding the restrictions on exchanges and registration of
transfer thereof referred to below.
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 the Securities so long as such
Securities are represented by Global Security Certificates.
The Depositary 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 Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Depositary holds
securities that its participants ("Participants") deposit with the Depositary.
The Depositary 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"). The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, the American Stock Exchange,
Inc., and the National Association of Securities Dealers, Inc. Access to the
Depositary system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or maintain
a direct or indirect custodial relationship
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with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to the Depositary and its Participants
are on file with the Securities and Exchange Commission.
No Securities represented by Global Security Certificates may be exchanged
in whole or in part for Securities registered, and no transfer of Global
Security Certificates in whole or in part may be registered, in the name of
any person other than the Depositary or any nominee of the Depositary unless
the Depositary has notified the Company that it is unwilling or unable to
continue as depositary for such Global Security Certificates or has ceased to
be qualified to act as such as required by the Purchase Contract Agreement or
there shall have occurred and be continuing a default by the Company in
respect of its obligations under one or more Purchase Contracts. All
Securities represented by one or more Global Security Certificates or any
portion thereof will be registered in such names as the Depositary may direct.
As long as the Depositary, or its nominee, is the registered owner of the
Global Security Certificates, such Depositary or such nominee, as the case may
be, will be considered the sole owner and holder of the Global Security
Certificates and all Securities represented thereby for all purposes under the
Securities and the Purchase Contract Agreement. Except in the limited
circumstances referred to above, owners of beneficial interests in Global
Security Certificates will not be entitled to have such Global Security
Certificates or the Securities represented thereby registered in their names,
will not receive or be entitled to receive the physical delivery of Security
Certificates in exchange therefor and will not be considered to be owners or
holders of such Global Security Certificates or any Securities represented
thereby for any purpose under the Securities or the Purchase Contract
Agreement. All payments on the Securities represented by the Global Security
Certificates and all transfers and deliveries of Treasury Notes and Common
Stock with respect thereto will be made to the Depositary or its nominee, as
the case may be, as the holder thereof.
Ownership of beneficial interests in the Global Security Certificates will
be limited to Participants or persons that may hold beneficial interests
through institutions that have accounts with the Depositary or its nominee.
Ownership of beneficial interests in Global Security Certificates will be
shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by the Depositary or its nominee (with
respect to Participants' interests) or any such Participant (with respect to
interests of persons held by such Participants on their behalf). Procedures
for settlement of Purchase Contracts on the Final Settlement Date, any
applicable Acceleration Date or upon Early Settlement will be governed by
arrangements among the Depositary, Participants and persons that may hold
beneficial interests through Participants designed to permit such settlement
without the physical movement of certificates. Payments, transfers,
deliveries, exchanges and other matters relating to beneficial interests in
Global Security Certificates may be subject to various policies and procedures
adopted by the Depositary from time to time. None of the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent will
have any responsibility or liability for any aspect of the Depositary's or any
Participant's records relating to, or for payments made on account of,
beneficial interests in Global Security Certificates, or for maintaining,
supervising or reviewing any of the Depositary's records or any participants's
records relating to such beneficial ownership interests.
CERTAIN PROVISIONS OF THE PURCHASE CONTRACT
AGREEMENT AND THE PLEDGE AGREEMENT
PAYMENT OF INTEREST AND CONTRACT FEES; TRANSFER OF SECURITIES; DELIVERY OF
COMMON STOCK OF TREASURY NOTES
Interest on the Treasury Notes and Contract Fees will be payable, Purchase
Contracts (and documents related thereto) will be settled and transfers of the
Securities will be registrable at the office of the Purchase Contract Agent in
the Borough of Manhattan, The City of New York. In addition, in the event that
the Securities do not remain in book-entry form, payment of interest on the
Treasury Notes and Contract Fees may be made, at the option of the Company, by
check mailed to the address of the person entitled thereto as shown on the
Security Register.
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Payments in respect of principal of the Treasury Notes on the Final
Settlement Date, and proceeds received upon the sale of Treasury Notes in
connection with an Acceleration, will be applied in satisfaction of the
obligations of the holders of the Securities under the Purchase Contracts and
shares of Common Stock will be delivered, or, if the Purchase Contracts have
terminated or a holder elects Early Settlement, Treasury Notes will be
delivered potentially after a delay (see "Description of the Purchase
Contracts--Termination" and "--Holders' Early Settlement of Securities"), in
each case upon presentation and surrender of the Security Certificates
evidencing the related Securities at the office of the Purchase Contract
Agent.
If a holder of outstanding Securities fails to present and surrender the
Security Certificate evidencing such Securities to the Purchase Contract Agent
on the Final Settlement Date or earlier Acceleration Date, the shares of
Common Stock issuable in settlement of the applicable Purchase Contract will
be registered in the name of the Purchase Contract Agent and, together with
any distributions thereon, shall be held by the Purchase Contract Agent as
agent for the benefit of such holder, until such Security Certificate is
presented and surrendered or the holder provides satisfactory evidence that
such certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Purchase Contract Agent and the Company.
If the Purchase Contracts have terminated prior to the Final Settlement
Date, the Treasury Notes have been transferred to the Purchase Contract Agent
for distribution to the holders entitled thereto and a holder fails to present
and surrender the Security Certificate evidencing such holder's Securities to
the Purchase Contract Agent, the Treasury Notes delivered to the Purchase
Contract Agent and payments thereon shall be held by the Purchase Contract
Agent as agent for the benefit of such holder, until such Security Certificate
is presented or the holder provides the evidence and indemnity described
above.
The Purchase Contract Agent will have no obligation to invest or to pay
interest on any amounts held by the Purchase Contract Agent pending
distribution as described above.
No service charge will be made for any registration of transfer or exchange
of the Securities, except for any tax or other governmental charge that may be
imposed in connection therewith.
MODIFICATION
The Purchase Contract Agreement and the Pledge Agreement will provide that
the Company may without the consent of the holders of the Securities: (a)
evidence the assumption by a successor corporation of the obligations of the
Company, (b) add covenants for the protection of the holders of the
Securities, (c) cure any ambiguity or correct any inconsistency in the
Purchase Contract Agreement and the Pledge Agreement, provided that such cure
or correction does not adversely affect the holders of such Securities, and
(d) evidence the acceptance of appointment by successor Purchase Contract
Agents and Collateral Agents.
The Purchase Contract Agreement and the Pledge Agreement will contain
provisions permitting the Company and the Purchase Contract Agent or
Collateral Agent, as the case may be, with the consent of the holders of not
less than 66 2/3% of the Securities at the time outstanding, to modify the
terms of the Purchase Contracts, the Purchase Contract Agreement and the
Pledge Agreement, except that no such modification may, without the consent of
the holder of each outstanding Security affected thereby, (a) change any
Payment Date, (b) change the amount or type of Treasury Notes underlying a
Security, impair the right of the holder of any Security to receive interest
payments on the underlying Treasury Notes or otherwise adversely affect the
holder's rights in or to such Treasury Notes, (c) change the place or currency
of payment or reduce any Contract Fees or any Deferred Contract Fees, (d)
impair the right to institute suit for the enforcement of any Purchase
Contract, (e) reduce the amount of Common Stock purchasable under any Purchase
Contract, increase the price to purchase Common Stock on settlement of any
Purchase Contract or change the Company Acceleration Price or change the Final
Settlement or (f) reduce the above-stated percentage of outstanding
Securities, the consent of whose holders is required for the modification or
amendment of the provisions of the Purchase Contracts, the Purchase Contract
Agreement or the Pledge Agreement.
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NO CONSENT TO ASSUMPTION
Each holder of Securities, by acceptance thereof, will under the terms of
the Purchase Contract Agreement and the Securities be deemed expressly to have
withheld any consent to the assumption (i.e., affirmance) of the Purchase
Contracts by the Company or its trustee in the event that the Company becomes
the subject of a case under the Bankruptcy Code.
TITLE
The Company, the Purchase Contract Agent and the Collateral Agent may treat
the registered owner of any Security as the absolute owner thereof for the
purpose of making payment and settling the Purchase Contracts and for all
other purposes.
REPLACEMENT OF SECURITY CERTIFICATES
Any mutilated Security Certificate will be replaced by the Company at the
expense of the holder upon surrender of such certificate to the Purchase
Contract Agent. Security Certificates that become destroyed, lost or stolen
will be replaced by the Company at the expense of the holder upon delivery to
the Company and the Purchase Contract Agent of evidence of the destruction,
loss or theft satisfactory to the Company and the Purchase Contract Agent. In
the case of a destroyed, lost or stolen Security Certificate, an indemnity
satisfactory to the Purchase Contract Agent and the Company may be required at
the expense of the holder of the Securities evidenced by such certificate
before replacement will be issued.
Notwithstanding the foregoing, the Company will not be obligated to issue
any Security on or after the Final Settlement Date, an earlier Acceleration
Date, an Early Settlement Date or after the Purchase Contracts have
terminated. The Purchase Contract Agreement will provide that, in lieu of the
delivery of a replacement Security Certificate following the Final Settlement
Date or an earlier Acceleration Date, the Purchase Contract Agent, upon
delivery of the evidence and indemnity described above, will deliver the
Common Stock issuable pursuant to the Purchase Contracts included in the
Securities evidenced by such certificate, or, if the Purchase Contracts have
terminated prior to the Final Settlement Date or an Early Settlement Date has
occurred, upon delivery of the evidence and indemnity described above,
transfer the Treasury Notes included in the Securities evidenced by such
certificate.
GOVERNING LAW
The Purchase Contract Agreement, the Pledge Agreement and the Purchase
Contracts will be governed by, and construed in accordance with, the laws of
the State of New York.
INFORMATION CONCERNING THE PURCHASE CONTRACT AGENT
The Bank of New York will be the Purchase Contract Agent. The Purchase
Contract Agent will act as the agent for the holders of Securities from time
to time. The Purchase Contract Agreement will not obligate the Purchase
Contract Agent to exercise any discretionary actions in connection with a
default under the terms of the Securities or the Purchase Contract Agreement.
The Bank of New York is one of a number of banks with which the Company and
its subsidiaries maintain ordinary banking and trust relationships, is the
registrar and transfer agent for the Common Stock and is the trustee of
certain Delaware grantor trust subsidiaries of the Company.
The Purchase Contract will contain provisions limiting the liability of the
Purchase Contract Agent. The Purchase Contract Agreement will contain
provisions under which the Purchase Contract Agent may resign or be replaced.
Such resignations or replacement would be effective upon the appointment of a
successor.
INFORMATION CONCERNING THE COLLATERAL AGENT
The First National Bank of Chicago will be the Collateral Agent. The
Collateral Agent will act solely as the agent of the Company and will not
assume any obligation or relationship of agency or trust for or with any of
the holders of the Securities except for the obligations owed by a pledgee of
property to the owner thereof under the Pledge Agreement and applicable law.
The First National Bank of Chicago is one of a number of banks with
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which the Company and its subsidiaries maintain ordinary banking and trust
relationships and is also the trustee under the Company's Senior Debt
Indenture, Subordinated Debt Indenture and Junior Subordinated Debt Indenture
(each as defined in the accompanying Prospectus).
The Pledge Agreement will contain provisions limiting the liability of the
Collateral Agent. The Pledge Agreement will contain provisions under which the
Collateral Agent may resign or be replaced. Such resignation or replacement
would be effective upon the appointment of a successor.
VOTING RIGHTS
The Securities will not entitle holders to any rights with respect to the
Common Stock, including voting rights.
LISTING OF THE SECURITIES
The Securities have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, under the symbol "SIP."
However, no assurance can be given that such listing will be effected.
NYSE SYMBOL OF COMMON STOCK
The Common Stock of the Company is listed on the NYSE under the symbol
"SAI."
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DESCRIPTION OF PREPAID SECURITIES
The Company's Prepaid Premium Equity Redemption Cumulative Securities (the
"Prepaid Securities") will be issued to a holder of Securities if such holder
elects to settle the underlying Purchase Contracts prior to the Final
Settlement Date (and prior to any Notice of Acceleration with respect to such
Securities) by paying an amount in U.S. dollars equal to the Stated Amount per
Security and delivering the Securities to the Purchase Contract Agent. See
"Description of the Purchase Contracts--Holders' Early Settlement of
Securities." The Prepaid Securities will be issued under an Indenture dated as
of November 1, 1996 (as supplemented by the First Supplemental Indenture
thereto relating to the Prepaid Securities described in this Prospectus
Supplement, the "Prepaid Securities Indenture") between the Company and The
Bank of New York, as trustee (in its capacity as trustee under the Prepaid
Securities Indenture, the "Trustee"). The Prepaid Securities Indenture is
included as an exhibit to the Registration Statement of which this Prospectus
Supplement is a part. The following description summarizes the material terms
of the Prepaid Securities Indenture and the Prepaid Securities and is
qualified in its entirety by reference to the detailed provisions of the
Prepaid Securities Indenture, which contains the full text of such provisions,
including the definition of certain terms used herein, and for other
information regarding the Prepaid Securities. Wherever particular sections or
defined terms of the Prepaid Securities Indenture are referred to, such
sections or defined terms are incorporated herein by reference as part of the
statement made, and the statement is qualified in its entirety by such
reference.
GENERAL
The Prepaid Securities Indenture does not limit the amount of indebtedness
the Company or any of its subsidiaries may incur. The Prepaid Securities will
be unsecured, unsubordinated obligations of the Company. Since the Company is
a holding company, the Company's rights and the rights of its creditors,
including the holders of Prepaid Securities, to participate in the assets of
any subsidiary upon the latter's liquidation or recapitalization will be
subject to the prior claims of the subsidiary's creditors, except to the
extent that the Company may itself be a creditor with recognized claims
against the subsidiary. Claims on the Company's subsidiaries by creditors
other than the Company include substantial claims for policy benefits and debt
obligations, as well as other liabilities incurred in the ordinary course of
business. In addition, since many of the Company's subsidiaries are insurance
companies subject to regulatory control by various state insurance
departments, the ability of such subsidiaries to pay dividends or make loans
or advances to the Company without prior regulatory approval is limited by
applicable laws and regulations.
Prepaid Securities will only be issued in registered form, in denominations
equal to the Stated Amount and integral multiples thereof, and may be
presented for exchange or transfer without any service charge at the corporate
trust office of the Trustee in the City of New York, or at any other office or
agency maintained by the Company for such purpose.
The Prepaid Securities will be limited to up to $ aggregate Stated Amount
and will constitute a separate series of securities of the Company under the
Prepaid Securities Indenture.
Each Prepaid Security will bear amounts in respect of Contract Fees at the
rate of % per annum (which is the same rate as the rate for Contract Fees
payable on the Securities) payable semi-annually in arrears on the Payment
Dates, beginning with the most recent Payment Date with respect to the
Security for which such Prepaid Security is exchanged (unless the Record Date
for a subsequent Payment Date has occurred, in which case interest on such
Prepaid Security will bear interest from such subsequent Payment Date). Each
Prepaid Security will also carry the right to receive any amounts in respect
of Contract Fees and Deferred Contract Fees that have accrued but have not
been paid on the Securities at the time such Prepaid Security is issued, as
well as the right to receive interest on such Deferred Contract Fees at the
same rate as the rate at which Deferred Contract Fees on the Securities bear
Contract Fees. The Company does not intend to treat the Prepaid Securities as
indebtedness for United States federal income tax purposes.
The Prepaid Securities will mature on the Final Settlement Date. On such
date, each holder will receive initially one share of Common Stock of the
Company (subject to certain anti-dilution adjustments, which will be the same
as the anti-dilution adjustments applicable to the Securities described in
"Description of the Purchase
S-33
<PAGE>
Contracts--General") plus amounts in respect of accrued and unpaid Contract
Fees and Defined Contract Fees in cash.
The Company may, at its option, defer payments on the Prepaid Securities on
the same basis and on same terms that the Company may defer Contract Fees on
the Securities. The Company will covenant in the Prepaid Securities Indenture
that it will defer payments on the Prepaid Securities only if, and to the
extent that, it has also deferred Contract Fees on the Securities. See
"Description of the Purchase Contracts--Contract Fees".
RIGHT TO REDEEM THE PREPAID SECURITIES
At any time or from time to time prior to the Final Settlement Date, the
Company may redeem the outstanding Prepaid Securities, in whole or in part. On
the effective date of any such redemption, the Company will have the
obligation to deliver an amount of Common Stock per Prepaid Security
determined on the same basis as the calculation of the number of shares of
Common Stock deliverable in the event of a Company Acceleration of the
Securities as described under "Description of the Purchase Contracts--
Acceleration of the Securities", as well as the obligation to pay any accrued
amounts in respect of Contract Fees and Deferred Contract Fees in cash. The
Company will be permitted to accelerate the Securities in part without
effecting a proportionate concurrent redemption of the Prepaid Securities, but
will be required to redeem the Prepaid Securities in whole if it effects a
Company Acceleration of the Securities in whole.
MANDATORY CONVERSION
The Prepaid Securities are subject to mandatory conversion into Common Stock
on the same basis and on the same terms as the Securities are subject to
Mandatory Acceleration and the number of shares of Common Stock to be
delivered upon any such mandatory conversion will be determined on the same
basis as the Securities. See "Description of the Purchase Contracts--
Acceleration of the Securities."
REPAYMENT UPON SALE OF ASSETS
Upon a Sale of Assets, each Prepaid Security will automatically convert into
the right to receive in cash an amount equal to the sum of (i) the Stated
Amount and (ii) all accrued and unpaid amounts in respect of Contract Fees and
Deferred Contract Fees to the date of the Board of Directors' approval of such
Sale of Assets, payable on the tenth Business Day following such date of
approval.
BANKRUPTCY EVENTS OF DEFAULT
An Event of Default is defined under the Prepaid Securities Indenture as
being each of the events which would cause a termination of the Purchase
Contracts. See "Description of the Purchase Contracts--Termination." The
Prepaid Securities Indenture provides that if an Event of Default shall have
occurred and be continuing, the Company's obligations on the Prepaid
Securities will be accelerated. However, unlike holders of Securities, who
will receive the underlying Treasury Notes in such events, holders of Prepaid
Securities will have only a claim against the Company for delivery of Common
Stock and a general unsecured claim for amounts in respect of accrued Contract
Fees, including Deferred Contract Fees (if any). The foregoing would be
subject as to enforcement to the broad equity powers of a federal bankruptcy
court and to the determination by that court of the nature of the rights of
the holders of the Prepaid Securities, including whether such rights would
have the status of general unsecured claims or equity claims. There can be no
assurance that holders of Prepaid Securities would receive any value in
respect of their Prepaid Securities upon an Event of Default.
The Prepaid Securities Indenture does not provide for any right of
acceleration of the Prepaid Securities upon a default in the payment of
amounts in respect of Contract Fees and Deferred Contract Fees or in the
performance of any covenant or agreement in the Prepaid Securities or Prepaid
Securities Indenture. In the event of a default in the delivery of any Common
Stock then required to be issued or delivered or in payment of amounts in
respect of accrued and unpaid Contract Fees and Deferred Contract Fees (if
any) or the performance of any covenant or agreement in the Prepaid Securities
or Prepaid Securities Indenture, the Trustee may, subject to certain
limitations and conditions, seek to enforce the same or, in the case of the
failure of the Company to issue or deliver Common Stock, the payment of moneys
equal to the fair market value of the Common Stock which was to be delivered.
S-34
<PAGE>
The Prepaid Securities Indenture contains a provision entitling the Trustee,
subject to the duty of the Trustee during a default to act with the required
standard of care, to be indemnified by the holders of Prepaid Securities
issued under such Indenture requesting the Trustee to exercise any right or
power under such Indenture before proceeding to exercise any such right or
power at the request of such holders. Subject to such provisions in the
Prepaid Securities Indenture for the indemnification of the Trustee and
certain other limitations, the holders of a majority in face amount of the
outstanding Prepaid Securities may direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee.
The Prepaid Securities Indenture provides that no holder of Prepaid
Securities issued under such Indenture may institute any action against the
Company under such Indenture (except actions for payment of overdue principal,
premium, if any, or interest) unless such holder previously shall have given
to the Trustee written notice of default and continuance thereof and unless
the holders of not less than 25% in face amount of the Prepaid Securities and
then outstanding shall have requested the Trustee to institute such action and
shall have offered the Trustee reasonable indemnity, the Trustee shall not
have instituted such action within 60 days of such request and the Trustee
shall not have received direction inconsistent with such written request by
the holders of a majority in face amount of the Prepaid Securities then
outstanding.
The Prepaid Securities Indenture contains a covenant that the Company will
file annually with the Trustee a certificate of no default or a certificate
specifying any default that exists.
MODIFICATION OF THE PREPAID SECURITIES INDENTURE
The Prepaid Securities Indenture provides that the Company and the Trustee
may enter into supplemental indentures without the consent of the holders of
Prepaid Securities to: (a) evidence the assumption by a successor corporation
of the obligations of the Company, (b) add covenants for the protection of the
holders of Prepaid Securities, (c) cure any ambiguity or correct any
inconsistency in the Prepaid Securities Indenture, provided that such cure or
correction does not adversely affect the holders of such Prepaid Securities,
and (d) evidence the acceptance of appointment by a successor trustee.
The Prepaid Securities Indenture also contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than 66
2/3% in face amount of Prepaid Securities then outstanding, to modify the
terms of the Prepaid Securities Indenture, except that no such modification
may, without the consent of the holder of each outstanding Prepaid Security
affected thereby, (a) change any Payment Date, (b) change the place or
currency of payment or reduce amounts in respect of any Contract Fees or
Deferred Contract Fees, (c) impair the right to institute suit for the
enforcement of any Prepaid Security, (d) reduce the amount of Common Stock
deliverable under the Prepaid Securities, change the Stated Amount or change
the Company Acceleration Price or change the Final Settlement Date or (e)
reduce the above-stated percentage of outstanding Prepaid Securities, the
consent of whose holders is required for the modification or amendment of the
provisions of the Prepaid Securities Indenture.
CONCERNING THE TRUSTEE
The Bank of New York is one of a number of banks with which the Company and
its subsidiaries maintain ordinary banking and trust relationships, is the
registrar and transfer agent for the Company's Common Stock and is the trustee
of several grantor trust subsidiaries of the Company.
VOTING RIGHTS
The Prepaid Securities will not entitle holders to any rights with respect
to the Common Stock, including voting rights.
NO LISTING OF THE PREPAID SECURITIES
The Company does not plan to list the Prepaid Securities on any securities
exchange and there can be no assurance as to whether a trading market will
develop for the Prepaid Securities.
S-35
<PAGE>
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Davis Polk & Wardwell, tax counsel to the Company, the
following summary accurately describes the principal United States federal
income tax consequences of ownership and disposition of the Securities to
initial Holders purchasing Securities at the "Issue Price" (as defined below).
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), administrative pronouncements, judicial decisions and Treasury
Regulations to the date hereof, changes to any of which subsequent to the date
of this Prospectus Supplement may affect the tax consequences described
herein. This summary discusses only Securities held as capital assets within
the meaning of Section 1221 of the Code. It does not discuss all of the tax
consequences that may be relevant to a Holder in light of its particular
circumstances or to Holders subject to special rules, such as foreign persons,
certain financial institutions, insurance companies, dealers in securities,
persons holding the Securities as part of a hedging transaction, "straddle,"
conversion transaction, or other integrated transaction, or persons whose
functional currency (as defined in Code Section 985) is not the U.S. dollar.
Persons considering the purchase of Securities should consult their tax
advisors with regard to the application of the United States federal income
tax laws to their particular situations as well as any tax consequences
arising under the laws of any other taxing jurisdiction.
As used herein, the term "Holder" means an owner of a Security that is, for
United States federal income tax purposes, (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source. The
"Issue Price" means the price to the public per Security as indicated on the
cover hereof.
PERIODIC INCOME FROM TREASURY NOTES AND PURCHASE CONTRACT
A Holder will include interest (other than interest accrued prior to the
issuance date of the Securities) on the Treasury Notes in income when received
or accrued, in accordance with the Holder's method of accounting. For United
States federal income tax purposes, a Holder is deemed to receive interest
payments on the Treasury Notes when such payments are made to the Collateral
Agent, regardless of when such payments are distributed to the Holders. The
Treasury Notes, as purchased, may contain "market discount" or "bond premium"
(each as defined below), which will, under certain circumstances, affect the
Holders' income inclusions with respect to interest on the Treasury Notes (See
"--Gain or Loss upon Final Settlement").
Although the tax treatment of the Contract Fees, Initial Premium Payment,
and any Deferred Contract Fees is not entirely clear under current law, the
Company intends to file information returns on the basis, and the following
discussion assumes, that the Contract Fees and Deferred Contract Fees are
taxable income to a Holder when received or accrued, in accordance with the
Holder's method of accounting, and that the Initial Premium Payment is taxable
income to the Holder on the day the Treasury Notes are purchased although such
payment is used by the Underwriters to purchase the Treasury Notes on behalf
of the Holder and is not a direct cash payment to the Holder.
Holders should consult their respective tax advisors concerning the
treatment of the Contract Fees, Deferred Contract Fees and Initial Premium
Payment, including the possibility that such payments may be treated as
reductions in the Holders' basis in the Purchase Contract, rather than
inclusions in income, upon receipt (or, in the case of Initial Premium
Payment, upon the purchase of the Treasury Notes), by analogy to the treatment
of purchase price rebates or option premiums. The Company does not intend to
deduct the Contract Fees, Deferred Contract Fees and the Initial Premium
Payment for United States federal income tax purposes.
DISPOSITION OF SECURITIES AND TAX BASIS IN SECURITIES
A Holder who sells or exchanges a Security before the maturity of the
Treasury Notes (other than upon an Acceleration) will generally recognize
capital gain or loss equal to the difference between the amount realized and
its tax basis in the Security. A Holder's tax basis in the Security will equal
the sum of its tax basis in the
S-36
<PAGE>
Treasury Notes, its tax basis in the Purchase Contract, and any accrued but
unpaid Contract Fees that have been previously included in income of the
Holder. Any gain or loss will be capital, except to the extent of any non-de
minimis market discount with respect to the Treasury Notes, which, if a Holder
does not elect to amortize such discount, would be treated as ordinary
interest income (see "--Gain or Loss upon Final Settlement"). Furthermore, if
a Holder sells a Security between Payment Dates, a portion of the proceeds of
the sale will be treated as a receipt of the interest accrued on the Treasury
Notes since the last Payment Date, rather than as an amount realized from the
sale of the Security.
A Holder's tax basis in the Treasury Notes will generally equal the Issue
Price, increased by the amount of any Initial Premium Payment. The Holder's
tax basis in the Purchase Contract will initially be zero, increased by the
amount of any constructive dividends previously included in such Holder's
income as a result of an adjustment of the Settlement Rate (see "--Adjustment
of Settlement Rate").
GAIN OR LOSS UPON FINAL SETTLEMENT
If the Holder's tax basis in the Treasury Notes equals the principal amount
payable at maturity of the Treasury Notes, the Holder will not realize gain or
loss upon repayment of the Treasury Notes at maturity. If the Holder's tax
basis in the Treasury Notes is less than the principal amount payable at
maturity of the Treasury Notes, the Holder will realize gain equal to the
difference upon such payment. This gain will be treated as ordinary interest
income (i.e., market discount) unless it is "de minimis," in which case it
will generally be treated as capital gain. The gain will be "de minimis" if it
is less than 1/4 of one percent of the principal amount payable at maturity of
the Treasury Notes multiplied by the number of complete years remaining to
maturity of the Treasury Notes at the time the Securities are issued. A Holder
may instead elect to accrue market discount in income on a current basis over
the remaining life of the Treasury Notes. An election to amortize market
discount may apply to other debt instruments acquired at a market discount by
the Holder and may be revoked only with the permission of the Internal Revenue
Service. A Holder should consult its tax advisor before making such an
election.
If the Holder's tax basis in the Treasury Notes is greater than the
principal amount payable at maturity of the Treasury Notes, the excess will be
"bond premium". A Holder may either recognize the bond premium as a capital
loss upon payment of the Treasury Notes at maturity or make an election to
amortize it over the term of the Treasury Notes. If the election is made, the
bond premium will generally reduce the Holder's interest income on the
Treasury Notes over the remaining term of the Treasury Notes and will reduce
the basis of the Treasury Notes by the amount of the amortization. An election
to amortize bond premium may apply to other debt instruments acquired at a
premium by the Holder and may be revoked only with the permission of the
Internal Revenue Service. A Holder should consult its tax advisor before
making such an election.
On the Final Settlement Date, the tax basis of the Common Stock acquired by
a Holder of a Security under the Purchase Contract will equal the sum of the
Stated Amount and the Holder's basis in the Purchase Contract.
COMPANY ACCELERATION AND MANDATORY ACCELERATION
If the Company exercises its option to accelerate the Purchase Contract or
upon a Mandatory Acceleration, a Holder may elect to pay the Stated Amount in
cash to the Purchase Contract Agent and receive back the Treasury Notes free
and clear of the Company's security interests in such Notes. In the
alternative, the Treasury Notes will be sold by the Purchase Contract Agent on
behalf of the Holder; the proceeds from the sale (net of accrued interest and
premium on the Treasury Notes, which will be paid to the Holder) will first be
used to fund the Holder's obligations to purchase Common Stock under the
accelerated Purchase Contract, and any remaining proceeds will be returned to
the Holder. If the Holder elects to pay the Stated Amount in cash, the Holder
will recognize no gain or loss, either with respect to the Treasury Notes or
with respect to the Purchase Contract, and the Holder's tax basis in the
Common Stock received will generally equal the sum of its basis in the
Purchase Contract and the Stated Amount.
S-37
<PAGE>
If the Treasury Notes are sold by the Collateral Agent for an amount equal
to or in excess of the Stated Amount, the Holder will recognize capital gain
with respect to the Treasury Notes in an amount equal to the excess, in any,
of the amount realized (net of accrued interest on the Treasury Notes, which
will be paid to the Holder) on the sale (i.e., the sum of the Stated Amount
and the premium returned to the Holder) over the Holder's tax basis in such
Treasury Notes (see "--Disposition of Securities and Tax Basis in
Securities"). The Holder's tax basis in the Common Stock received will
generally equal the sum of its tax basis in the Purchase Contract and the
Stated Amount. If the amount realized is less than the Stated Amount, the
Holder's tax basis in the Common Stock may equal the sum of its tax basis in
the Purchase Contract and the amount realized on the sale of the Treasury
Notes. Prospective Holders are urged to consult their respective tax advisors
with regard to such circumstances.
HOLDER'S EARLY SETTLEMENT OF THE PURCHASE CONTRACTS
Gain or Loss
Upon Early Settlement, a Holder will not recognize gain or loss with respect
to the Purchase Contract, nor will the Holder recognize gain or loss with
respect to the Treasury Notes. The Holder's tax basis in the Prepaid
Securities immediately after Early Settlement will equal the sum of the Stated
Amount, its tax basis in the Purchase Contract, and any accrued but unpaid
Contract Fees that have been included in income prior to Early Settlement.
Tax Treatment of the Prepaid Securities
The Holder will recognize ordinary income with respect to the fee payments
on the Prepaid Security, which equal the Contract Fees and Deferred Contract
Fees. The Company also intends to file information returns on the basis that
the fee payments on the Prepaid Securities are taxable as ordinary income to
Holder. The Company does not intend to treat the Prepaid Securities as
indebtedness for United States federal income tax purposes and, therefore,
does not intend to deduct the fee payments on the Prepaid Securities.
Holder will not recognize any gain or loss upon delivery of Common Stock and
will have the same tax basis in the Common Stock as the Holder has in the
Prepaid Securities prior to the conversion.
ADJUSTMENT OF SETTLEMENT RATE
Holders of Securities or Prepaid Securities might be treated as receiving a
constructive distribution from the Company if (i) the Settlement Rate
(initially one share of Common Stock per Security) is adjusted and as a result
of such adjustment, the proportionate interest of Holders of Securities or
Prepaid Securities in the assets or earnings and profits of the Company is
increased, and (ii) the adjustment is not made pursuant to a bona fide,
reasonable antidilution formula. An adjustment in the Settlement Rate would
not be considered made pursuant to such a formula if the adjustment were made
to compensate for certain taxable distributions with respect to Common Stock.
Thus, under certain circumstances, an increase in the Settlement Rate may be
taxable to Holders of Securities or Prepaid Securities as a dividend to the
extent of the current or accumulated earnings and profits of the Company. In
such cases, Holders of Securities or Prepaid Securities would be required to
include their allocable share of such constructive dividend in gross income
but would not receive any cash related thereto.
UNITED STATES STATE AND LOCAL TAX CONSIDERATIONS
Under federal law, interest on Treasury obligations is generally exempt from
state and local income taxes imposed on individual investors. This exemption
generally should apply to an individual Holder's share of interest on the
Treasury Notes to the extent that an individual's state of residence (or other
applicable state or local taxing jurisdiction) characterizes the Security for
its income tax purposes consistently with the Security's federal income tax
characterization. There can be no assurance, however, that an individual's
state of residence (or other applicable state or local taxing jurisdiction)
would so characterize the Security, and, in any event, the exemption would not
extend to gain on sale or other disposition of a Security. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS CONCERNING STATE, LOCAL, FOREIGN
AND OTHER TAX CONSEQUENCE OF THE ACQUISITION AND HOLDING OF A SECURITY.
S-38
<PAGE>
UNDERWRITERS
Subject to the terms and conditions set forth on an Underwriting Agreement
dated the date hereof (the "Underwriting Agreement"), the Company has agreed
to sell to each of the Underwriters named below, and each of the Underwriters,
for whom Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Goldman, Sachs & Co. and Smith Barney Inc. are acting as
representatives (the "Representatives"), has severally agreed to purchase the
number of Securities set forth opposite its name below. In the Underwriting
Agreement, the several Underwriters have agreed, subject to the terms and
conditions set forth therein, to purchase all the Securities offered hereby if
any of the Securities are purchased. In the event of a default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the purchase commitments of the non-defaulting Underwriters may
be increased or the Underwriting Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SECURITIES
----------- ----------
<S> <C>
Morgan Stanley & Co. Incorporated.................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated................
Goldman, Sachs & Co. .............................................
Smith Barney Inc. ................................................
---------
Total........................................................... 7,000,000
=========
</TABLE>
The Underwriters propose to offer the Securities in part directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus Supplement, and in part to certain securities dealers at such
price less a concession not in excess of $ per Security. The Underwriters
may allow, and such dealers may reallow, a discount not in excess of $ per
share to certain brokers and dealers. After the Securities are released for
sale to the public, the offering price and other selling terms may from time
to time be varied by the Representatives.
The Company has granted the Underwriters an option for 30 days after the
date of this Prospectus Supplement to purchase up to an additional
Securities to cover over-allotments, if any, at the initial public offering
price less the underwriting discount. If Purchase Contracts underlying any
such additional Securities are entered into, the Underwriters, at the
direction of the Company, would purchase and pledge under the Pledge Agreement
the Treasury Notes underlying such Securities and the Company or the
Underwriters, as appropriate, would pay a net amount equal to the proceeds
(deficit) to the Company in respect of such Securities as set forth on the
cover page of this Prospectus Supplement. If the Underwriters exercise their
over-allotment option, each of the Underwriters has severally agreed, subject
to certain conditions, to effect the foregoing transactions with respect to
approximately the same percentage of such Securities that the respective
number of Securities set forth opposite its name in the foregoing table bears
to the Securities offered hereby. The price of the Treasury Notes underlying
Securities with respect to which an over-allotment option is exercised may be
different from that set forth on the cover page of this Prospectus Supplement.
Any such difference will be for the account of the Underwriters and will not
affect the amount of the proceeds (deficit) to the Company in respect of such
Securities as shown on the cover page of this Prospectus Supplement. The
Underwriters may enter into certain hedge transactions for their own account
to reduce or eliminate their risk in this regard.
The Company has agreed that it will not, and will cause its subsidiaries not
to, without the prior written consent of the Representatives, directly or
indirectly, for a period of 60 days after the date of this Prospectus
Supplement, sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, or enter into any
S-39
<PAGE>
agreement to sell, any Securities, Purchase Contracts or Common Stock or any
securities of the Company similar to the Securities, Purchase Contracts or
Common Stock or any securities of the Company convertible into or exchangeable
or exercisable for the Securities, Purchase Contracts or Common Stock;
provided, however, that such restrictions shall not affect the ability of the
Company or its subsidiaries to take any such action (i) as a consequence of
obligations under securities outstanding prior to the date of this Prospectus
Supplement, (ii) in connection with any employee benefit or incentive plan of
the Company or its subsidiaries, or (iii) in connection with the offering of
the Securities made hereby. Mr. Eli Broad, Chairman, President and Chief
Executive Officer of the Company, has similarly agreed, subject to certain
exceptions, not to sell, for a period of 60 days after the date of this
Prospectus Supplement, any shares of Common Stock or Class B stock owned by
him without the prior written consent of the Representatives.
The Securities have been approved for listing on The New York Stock
Exchange, subject to official notice of issuance, under the symbol "SIP."
However, there can be no assurance that an active trading market will develop
for the Securities or that the Securities will trade in the public market
subsequent to the offering at or above the initial public offering price.
The Company has agreed to indemnify the Underwriters against, or contribute
to payments that the Underwriters may be required to make in respect of,
certain liabilities, including liabilities under the Securities Act of 1933,
as amended.
Certain of the Underwriters and their respective affiliates engage in
transactions with, and, from time to time, have performed services for, the
Company and its subsidiaries in the ordinary course of business.
LEGAL MATTERS
The validity of the Purchase Contracts offered hereby will be passed upon
for the Company by Davis Polk & Wardwell, New York, New York. The validity of
the Common Stock issuable on settlement of the Purchase Contracts will be
passed upon for the Company by Piper & Marbury L.L.P., Baltimore, Maryland.
Certain other legal matters in connection with the offering will be passed
upon for the Company by Susan L. Harris, Senior Vice President and General
Counsel--Corporate Affairs, and by Davis Polk & Wardwell. Davis Polk &
Wardwell will also pass upon certain matters relating to federal income tax
considerations for the Company. Certain legal matters in connection with the
offering will be passed upon for the Underwriters by Skadden, Arps, Slate,
Meagher & Flom LLP, Los Angeles, California. Ms. Harris, Davis Polk & Wardwell
and Skadden, Arps, Slate, Meagher & Flom LLP will rely on Piper & Marbury as
to matters of Maryland law. Ms. Harris holds stock, restricted stock and
options to purchase stock granted under the Company's employee stock plans,
which in the aggregate represent less than 1% of the Company's Common Stock.
David W. Ferguson, a partner of Davis Polk & Wardwell, is a director of First
SunAmerica Life Insurance Company, a subsidiary of the Company. Skadden, Arps,
Slate, Meagher & Flom LLP from time to time provides services to the Company
and its subsidiaries.
S-40
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN 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 LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 31, 1996
PROSPECTUS
$1,750,000,000
[LOGO] SUNAMERICA
SUNAMERICA INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
----------
SUNAMERICA CAPITAL TRUST III
SUNAMERICA CAPITAL TRUST IV
SUNAMERICA CAPITAL TRUST V
SUNAMERICA CAPITAL TRUST VI
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
SUNAMERICA INC.
----------
SunAmerica Inc. (the "Company") may offer and sell from time to time (i) its
unsecured senior debt securities ("Senior Debt Securities"), unsecured
subordinated debt securities ("Subordinated Debt Securities") or unsecured
junior subordinated debt securities ("Junior Subordinated Debt Securities"),
consisting of debentures, notes or other evidences of indebtedness, (ii) shares
of its preferred stock, without par value (the "Preferred Stock"), which may be
represented by depositary shares as described herein, (iii) shares of its
common stock, par value $1.00 per share (the "Common Stock"), (iv) warrants to
purchase any of the foregoing Debt Securities, Preferred Stock and Common Stock
(the "Warrants"), (v) stock purchase contracts ("Stock Purchase Contracts") to
purchase Common Stock or (vi) stock purchase units ("Stock Purchase Units"),
each representing ownership of a Stock Purchase Contract and any of (x) Senior
Debt Securities, Subordinated Debt Securities or Junior Subordinated Debt
Securities, (y) debt obligations of third parties, including U.S. Treasury
Securities, or (z) Preferred Securities (as defined below) of a SunAmerica
Trust (as defined below), securing the holder's obligation to purchase Common
Stock under the Stock Purchase Contract. Such securities may be offered in one
or more separate classes or series, in amounts, at prices and on terms to be
determined by market conditions at the time of sale and to be set forth in a
supplement or supplements to this Prospectus (a "Prospectus Supplement"). Such
securities may be sold for U.S. dollars, foreign denominated currency or
currency units; amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units--in each case as the Company specifically designates.
SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica Capital
Trust V and SunAmerica Capital Trust VI (each, a "SunAmerica Trust"), each a
statutory business trust formed under the laws of the State of Delaware, may
offer and sell, from time to time, preferred securities representing undivided
beneficial interests in the assets of the respective SunAmerica Trust
("Preferred Securities"). The payment of periodic cash distributions
("distributions") with respect to Preferred Securities of each of the
SunAmerica Trusts out of monies held by the Property Trustee (as defined
herein) of each of the SunAmerica Trusts and payments on liquidation of each
SunAmerica Trust and on redemption of Preferred Securities of such SunAmerica
Trust, will be guaranteed by the Company as and to the extent described herein
(each, a "Preferred Securities Guarantee"). See "Description of the Preferred
Securities Guarantees." The Company's obligation under each Preferred
Securities Guarantee is an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other liabilities of the
Company, including the Senior Debt Securities, the Subordinated Debt Securities
and the Senior Junior Subordinated Debt Securities, except those made pari
passu or subordinate by their terms, and (ii) senior to all capital stock now
or hereafter issued by the Company and to any guarantee now or hereafter
entered into by the Company in respect of any of its capital stock. Junior
Subordinated Debt Securities may be issued and sold from time to time in one or
more series by the Company to a SunAmerica Trust, or a trustee of such
SunAmerica Trust, in connection with the investment of the proceeds from the
offering of Preferred Securities and Common Securities (as defined herein) of
such SunAmerica Trust. The Junior Subordinated Debt Securities purchased by a
SunAmerica Trust may be subsequently distributed pro rata to holders of
Preferred Securities and Common Securities in connection with the dissolution
of such SunAmerica Trust upon the occurrence of certain events as may be
described in an accompanying Prospectus Supplement.
(Continued on next page)
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is October , 1996.
<PAGE>
(Continued from previous page)
Specific terms of the particular Senior Debt Securities, Subordinated Debt
Securities, Junior Subordinated Debt Securities, Preferred Stock, Common
Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units, Preferred
Securities and the related Preferred Securities Guarantee, in respect of which
this Prospectus is being delivered (the "Offered Securities") will be set
forth in an accompanying Prospectus Supplement or Supplements, together with
the terms of the offering of the Offered Securities, the initial price thereof
and the net proceeds from the sale thereof. The Prospectus Supplement will set
forth with regard to the particular Offered Securities, certain terms thereof,
including, where applicable, (i) in the case of Senior Debt Securities,
Subordinated Debt Securities and Junior Subordinated Debt Securities, the
ranking as senior, subordinated or junior subordinated Debt Securities, the
specific designation, aggregate principal amount, purchase price, maturity,
interest rate (which may be fixed or variable), if any, the time and method of
calculating interest payments, if any, the right of the Company, if any, to
defer payments of interest on the Junior Subordinated Debt Securities and the
maximum length of such deferred period, time of payment of interest, if any,
listing, if any, on a securities exchange, authorized denomination, any
exchangeability, conversion, redemption, prepayment or sinking fund
provisions, the currency or currencies or currency unit or units in which
principal, premium, if any, or interest, if any, is payable, public offering
price and any other specific terms of the Debt Securities; (ii) in the case of
Preferred Stock, the specific designation, number of shares, purchase price
and the rights, preferences and privileges thereof and any qualifications or
restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other
specific terms of the Preferred Stock), listing, if any, on a securities
exchange and whether the Company has elected to offer the Preferred Stock in
the form of depositary shares; (iii) in the case of Common Stock, the number
of shares offered, the initial offering price, market price and dividend
information; (iv) in the case of Warrants, the specific designation, the
number, purchase price and terms thereof, any listing of the Warrants or the
underlying securities on a securities exchange or any other terms in
connection with the offering, sale and exercise of the Warrants, as well as
the terms on which and the securities for which such Warrants may be
exercised; (v) in the case of Stock Purchase Contracts, the designation and
number of shares of Common Stock issuable thereunder, the purchase price of
the Common Stock, the date or dates on which the Common Stock is required to
be purchased by the holders of the Stock Purchase Contracts, any periodic
payments required to be made by the Company to the holders of the Stock
Purchase Contracts or vice versa, and the terms of the offering and sale
thereof; (vi) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Debt Securities or debt obligations of third
parties or Preferred Securities of a SunAmerica Trust securing the holders'
obligation to purchase the Common Stock under the Stock Purchase Contracts,
the ability of a holder of such Stock Purchase Units to settle early the
underlying Stock Purchase Contract by delivering cash in exchange for the
underlying collateral and, if applicable, whether the Company will issue to
such holder a Prepaid Stock Purchase Contract as a result of such early
settlement and the specific terms of the Prepaid Stock Purchase Contract and
the terms of the offering and sale of such Stock Purchase Units; and (vii) in
the case of Preferred Securities of a SunAmerica Trust, the specific
designation, number of securities, liquidation amount per security, initial
public offering price, and any listing on a securities exchange, distribution
rate (or method of calculation thereof), dates on which distributions shall be
payable and dates from which distributions shall accrue, voting rights, if
any, terms for any conversion or exchange into other securities, any
redemption or sinking fund provisions, any other rights, preferences,
privileges, limitations or restrictions relating to the Preferred Securities
and the terms upon which the proceeds of the sale of the Preferred Securities
shall be used to purchase a specific series of Junior Subordinated Debt
Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
offering price to the public of the Offered Securities will be limited to
$1,750,000,000. Any Prospectus Supplement relating to any Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to the Offered Securities.
----------------
The Company and/or each SunAmerica Trust may sell the Offered Securities
directly, through agents designated from time to time or through underwriters
or dealers. See "Plan of Distribution" below. If any agents of the Company
and/or any SunAmerica Trust or any underwriters or dealers are involved in the
sale of the Offered Securities, the names of such agents, underwriters or
dealers and any applicable commissions and discounts will be set forth in the
related Prospectus Supplement. The managing underwriter or underwriters with
respect to each series sold to or through underwriters will be named in the
accompanying Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the Commission's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549, or at the public reference facilities of the
regional offices in Chicago and New York. The addresses of these regional
offices are as follows: 500 West Madison Street, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material also can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington D.C. 20549, upon payment of
the fees prescribed by the rules and regulations of the Commission. Reports,
proxy statements, and other information concerning the Company may also be
inspected at the offices of the New York Stock Exchange, Inc. at 20 Broad
Street, New York, New York 10005 and at the offices of the Pacific Stock
Exchange at 301 Pine Street, San Francisco, California 94104. The Company's
Common Stock is listed on both exchanges. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
The Company and the SunAmerica Trusts have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference." Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, are qualified in
all respects by reference to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is subject to and qualified in its entirety by such reference. For
further information with respect to the Company, the SunAmerica Trusts and the
securities offered hereby, reference is made to the Registration Statement,
including the exhibits thereto, and the documents incorporated herein by
reference.
No separate financial statements of any of the SunAmerica Trusts have been
included or incorporated by reference herein. The Company and the SunAmerica
Trusts do not consider that such financial statements would be material to
holders of the Preferred Securities because (i) all of the voting securities
of each SunAmerica Trust will be owned, directly or indirectly, by the
Company, a reporting company under the 1934 Act, (ii) each of the SunAmerica
Trusts is a special purpose entity, has no operating history, has no
independent operations and is not engaged in, and does not propose to engage
in, any activity other than issuing Trust Securities (as defined herein)
representing undivided beneficial interests in the assets of such SunAmerica
Trust and investing the proceeds thereof in Junior Subordinated Debt
Securities issued by the Company and (iii) SunAmerica's obligations described
herein and in any accompanying Prospectus Supplement under the Declaration (as
defined herein) of a SunAmerica Trust, the Preferred Securities Guarantee with
respect to the Preferred Securities issued by such SunAmerica Trust, the
Junior Subordinated Debt Securities purchased by such SunAmerica Trust and the
related Junior Subordinated Debt Indenture (as defined herein), taken
together, constitute a full and unconditional guarantee of payments due on the
Preferred Securities of such SunAmerica Trust. See "The SunAmerica Trusts",
"Description of the Preferred Securities," "Description of the Preferred
Securities Guarantees" and "Description of the Junior Subordinated Debt
Securities." The SunAmerica Trusts are statutory business trusts formed under
the laws of the State of Delaware. The Company, as of the date of this
Prospectus, owns all of the beneficial interests in each SunAmerica Trust.
Each holder of Preferred Securities of a SunAmerica Trust will be furnished
annually with unaudited financial statements of such SunAmerica Trust as soon
as available after the end of the SunAmerica Trust's fiscal year.
3
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously filed by the Company with the Commission pursuant to the
1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended September 30,
1995.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31,
1995, March 31, 1996 and June 30, 1996.
3. Current Reports on Form 8-K filed on October 6, 1995, October 19,
1995, October 31, 1995, November 9, 1995, December 12, 1995 (as amended by
Amendment No. 1 on Form 8-K/A filed December 14, 1995 and Amendment No. 2
on Form 8-K/A filed May 7, 1996), January 29, 1996, March 15, 1996 (as
amended by Amendment No. 1 on Form 8-K/A filed May 7, 1996), April 24,
1996, April 29, 1996 and July 25, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference in the Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner to whom this Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the information that has
been incorporated by reference in the Prospectus (not including exhibits to
the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such documents shall be directed to
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022,
Attention: Vice President, Investor Relations (telephone (310) 772-6000).
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY SUNAMERICA TRUST OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO
WHICH IT RELATES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY OR ANY SUNAMERICA TRUST SINCE
THE DATE HEREOF.
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
4
<PAGE>
THE COMPANY
The Company is a diversified financial services company specializing in
retirement savings products and services. At June 30, 1996, the Company held
$36.17 billion of assets throughout its businesses, including $23.40 billion
of assets on its balance sheet, $2.12 billion of assets managed in mutual
funds and private accounts and $10.65 billion of assets under custody in
retirement trust accounts. Together, the Company's life insurance companies
rank among the largest U.S. issuers of annuities. Complementing these annuity
operations are the Company's asset management operations; its three broker-
dealers, which the Company believes, based on industry data, represent the
largest network of independent registered representatives in the nation; and
its trust company, which provides administrative and custodial services to
qualified retirement plans. Through these subsidiaries, the Company
specializes in the sale of tax-deferred long-term savings products and
investments to the expanding preretirement savings market. The Company markets
fixed annuities and fee-generating variable annuities, mutual funds and trust
services, as well as guaranteed investment contracts. The Company's products
are distributed through a broad spectrum of financial services distribution
channels, including independent registered representatives of the Company's
broker-dealer subsidiaries and unaffiliated broker-dealers, independent
general insurance agents and financial institutions.
The principal executive offices of the Company are located at 1 SunAmerica
Center, Los Angeles, California 90067-6022, telephone number (310) 772-6000.
THE SUNAMERICA TRUSTS
Each of SunAmerica Capital Trust III, SunAmerica Capital Trust IV,
SunAmerica Capital Trust V and SunAmerica Capital Trust VI is a statutory
business trust formed, in the case of SunAmerica Capital Trust III and IV, on
September 6, 1995 and, in the case of SunAmerica Capital Trust V and VI, on
October 23, 1996 under the Delaware Business Trust Act (the "Business Trust
Act") pursuant to a separate declaration of trust among the Trustees (as
defined below) of such SunAmerica Trust and the Company and the filing of a
certificate of trust with the Secretary of State of the State of Delaware.
Such declaration will be amended and restated in its entirety (as so amended
and restated, the "Declaration") substantially in the form filed as an exhibit
to the Registration Statement of which this Prospectus forms a part, as of the
date the Preferred Securities of such SunAmerica Trust are initially issued.
Each Declaration is qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Upon issuance of any Preferred Securities
by a SunAmerica Trust, the holders thereof will own all of the issued and
outstanding Preferred Securities of such SunAmerica Trust. The Company will
acquire securities representing common undivided beneficial interests in the
assets of each SunAmerica Trust (the "Common Securities" and, together with
the Preferred Securities, the "Trust Securities") in an amount equal to at
least 3% of the total capital of such SunAmerica Trust and will own, directly
or indirectly, all of the issued and outstanding Common Securities of each
SunAmerica Trust. The Preferred Securities and the Common Securities of a
SunAmerica Trust will rank pari passu with each other and will have equivalent
terms; provided that (i) if a Declaration Event of Default (as defined below)
under the Declaration of a SunAmerica Trust occurs and is continuing, the
holders of Preferred Securities of such SunAmerica Trust will have a priority
over holders of the Common Securities of such SunAmerica Trust with respect to
payments in respect of distributions and payments upon liquidation, redemption
and maturity and (ii) holders of Common Securities of such SunAmerica Trust
have the exclusive right (subject to the terms of the Declaration) to appoint,
remove or replace the Trustees and to increase or decrease the number of
Trustees, subject to the right of holders of Preferred Securities to appoint
one additional Regular Trustee (as defined below) of such SunAmerica Trust (a
"Special Regular Trustee") in certain limited circumstances set forth in the
Prospectus Supplement. Each SunAmerica Trust exists for the purpose of (a)
issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the gross proceeds from the sale of the Trust
Securities in Junior Subordinated Debt Securities of the Company and (d)
engaging in such other activities as are necessary, convenient or incidental
thereto. The rights of the holders of the Trust Securities, including economic
rights, rights to information and voting rights, are set forth in the
applicable Declaration, the Business Trust Act and the Trust Indenture Act.
5
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The number of trustees (the "Trustees") of each SunAmerica Trust shall
initially be five. Three of such Trustees (the "Regular Trustees") are
individuals who are employees or officers of the Company. The fourth such
trustee is The Bank of New York, which is unaffiliated with the Company and
which will serve as the property trustee (the "Property Trustee") and act as
the indenture trustee for purposes of the Trust Indenture Act. The fifth such
trustee is an affiliate of The Bank of New York that has its principal place
of business in the State of Delaware (the "Delaware Trustee"). Pursuant to
each Declaration, legal title to the Junior Subordinated Debt Securities
purchased by a SunAmerica Trust will be held by the Property Trustee for the
benefit of the holders of the Trust Securities of such SunAmerica Trust and
the Property Trustee will have the power to exercise all rights, powers and
privileges under the Junior Subordinated Debt Indenture (as defined herein)
with respect to the Junior Subordinated Debt Securities. In addition, the
Property Trustee will maintain exclusive control of a segregated non-interest
bearing bank account (the "Property Account") to hold all payments in respect
of the Junior Subordinated Debt Securities purchased by a SunAmerica Trust for
the benefit of the holders of the Trust Securities of such SunAmerica Trust.
The Property Trustee will promptly make distributions to the holders of the
Trust Securities out of funds from the Property Account. The Preferred
Securities Guarantees are separately qualified under the Trust Indenture Act
and will be held by The Bank of New York, acting in its capacity as indenture
trustee with respect thereto, for the benefit of the holders of the applicable
Preferred Securities. As used in this Prospectus and any accompanying
Prospectus Supplement, the term "Property Trustee" with respect to a
SunAmerica Trust refers to The Bank of New York acting either in its capacity
as a Trustee under the Declaration and the holder of legal title to the Junior
Subordinated Debt Securities purchased by that Trust or in its capacity as
indenture trustee under, and the holder of, the applicable Preferred
Securities Guarantee, as the context may require. Subject to the right of
holders of Preferred Securities to appoint a Special Regular Trustee as
described above, the Company as the direct or indirect owner of all of the
Common Securities of each SunAmerica Trust, will have the exclusive right
(subject to the terms of the related Declaration) to appoint, remove or
replace Trustees and to increase or decrease the number of Trustees, provided
that the number of Trustees shall be at least three, a majority of which shall
be Regular Trustees. A Special Regular Trustee need not be an employee or
officer of, or otherwise affiliated with, the Company. The term of a
SunAmerica Trust will be set forth in the Prospectus Supplement, but may
terminate earlier as provided in such Declaration.
The duties and obligations of the Trustees of a SunAmerica Trust shall be
governed by the Declaration of such SunAmerica Trust. Under its Declaration,
each SunAmerica Trust shall not, and the Trustees shall cause such SunAmerica
Trust not to, engage in any activity other than in connection with the
purposes of such SunAmerica Trust or other than as required or authorized by
the related Declaration. In particular, each SunAmerica Trust shall not and
the Trustees shall not (a) invest any proceeds received by such SunAmerica
Trust from holding the Junior Subordinated Debt Securities purchased by such
SunAmerica Trust but shall promptly distribute from the Property Account all
such proceeds to holders of Trust Securities pursuant to the terms of the
related Declaration and of the Trust Securities; (b) acquire any assets other
than as expressly provided in the related Declaration; (c) possess Trust
property for other than a Trust purpose; (d) make any loans, other than loans
represented by the Junior Subordinated Debt Securities; (e) possess any power
or otherwise act in such a way as to vary the assets of such SunAmerica Trust
or the terms of its Trust Securities in any way whatsoever; (f) issue any
securities or other evidences of beneficial ownership of, or beneficial
interests in, such SunAmerica Trust other than its Trust Securities; (g) incur
any indebtedness for borrowed money or (h)(i) direct the time, method and
place of exercising any trust or power conferred upon the Junior Subordinated
Debt Indenture Trustee (as defined under "Description of the Junior
Subordinated Debt Securities") with respect to the Junior Subordinated Debt
Securities deposited in that SunAmerica Trust as trust assets or upon the
Property Trustee of that SunAmerica Trust with respect to its Preferred
Securities, (ii) waive any past default that is waivable under the Junior
Subordinated Debt Indenture or the Declaration, (iii) exercise any right to
rescind or annul any declaration that the principal of all of the Junior
Subordinated Debt Securities deposited in that SunAmerica Trust as trust
assets shall be due and payable or (iv) consent to any amendment, modification
or termination of the Junior Subordinated Debt Indenture or such Junior
Subordinated Debt Securities or the Declaration, in each case where such
consent shall be required, unless in the case of this clause (h) the Property
Trustee shall have received an unqualified opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that such action will not cause such SunAmerica Trust to be classified for
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<PAGE>
United States federal income tax purposes as an association taxable as a
corporation or a partnership and that such SunAmerica Trust will continue to
be classified as a grantor trust for United States federal income tax
purposes.
The books and records of each SunAmerica Trust will be maintained at the
principal office of such SunAmerica Trust and will be open for inspection by a
holder of Preferred Securities of such SunAmerica Trust or its representative
for any purpose reasonably related to its interest in such SunAmerica Trust
during normal business hours. Each holder of Preferred Securities will be
furnished annually with unaudited financial statements of the applicable
SunAmerica Trust as soon as available after the end of such SunAmerica Trust's
fiscal year.
Except as provided below or under the Business Trust Act and the Trust
Indenture Act, holders of Preferred Securities will have no voting rights. In
certain circumstances described in a Prospectus Supplement, holders of
Preferred Securities of a SunAmerica Trust shall have the right to vote, as a
single class, for the appointment of a Special Regular Trustee who need not be
an employee or officer of or otherwise affiliated with the Company. The
Special Regular Trustee shall have the same rights, powers and privileges
under the Declaration as the Regular Trustees.
The Property Trustee, for the benefit of the holders of the Trust Securities
of a SunAmerica Trust, is authorized under each Declaration to exercise all
rights under the Junior Subordinated Debt Indenture with respect to the Junior
Subordinated Debt Securities deposited in such SunAmerica Trust as trust
assets, including its rights as the holder of such Junior Subordinated Debt
Securities to enforce the Company's obligations under such Junior Subordinated
Debt Securities upon the occurrence of a Junior Subordinated Debt Indenture
Event of Default (as defined under "Description of the Junior Subordinated
Debt Securities"). The Property Trustee shall also be authorized to enforce
the rights of holders of Preferred Securities of a SunAmerica Trust under the
Preferred Securities Guarantee. If any SunAmerica Trust's failure to make
distributions on the Preferred Securities of a SunAmerica Trust is a
consequence of the Company's exercise of any right under the terms of the
Junior Subordinated Debt Securities deposited in such SunAmerica Trust as
trust assets to extend the interest payment period for such Junior
Subordinated Debt Securities, the Property Trustee will have no right to
enforce the payment of distributions on such Preferred Securities until a
Declaration Event of Default shall have occurred. Holders of at least a
majority in liquidation amount of the Preferred Securities held by a
SunAmerica Trust will have the right to direct the Property Trustee for that
SunAmerica Trust with respect to certain matters under the Declaration for
that SunAmerica Trust and the related Preferred Securities Guarantee. If the
Property Trustee fails to enforce its rights under the Indenture or fails to
enforce the Preferred Securities Guarantee, any holder of Preferred Securities
may institute a legal proceeding against the Company to enforce such rights or
the Preferred Securities Guarantee, as the case may be.
Pursuant to each Declaration, distributions on the Preferred Securities of a
SunAmerica Trust must be paid on the dates payable to the extent that the
Property Trustee for that SunAmerica Trust has cash on hand in the applicable
Property Account to permit such payment. The funds available for distribution
to the holders of the Preferred Securities of a SunAmerica Trust will be
limited to payments received by the Property Trustee in respect of the Junior
Subordinated Debt Securities that are deposited in the SunAmerica Trust as
trust assets. If the Company does not make interest payments on the Junior
Subordinated Debt Securities deposited in a SunAmerica Trust as trust assets,
the Property Trustee will not make distributions on the Preferred Securities
of such SunAmerica Trust. Under the Declaration, if and to the extent the
Company does make interest payments on the Junior Subordinated Debt Securities
deposited in a SunAmerica Trust as trust assets, the Property Trustee is
obligated to make distributions on the Trust Securities of such SunAmerica
Trust on a Pro Rata Basis (as defined below). The payment of distributions on
the Preferred Securities of a SunAmerica Trust is guaranteed by SunAmerica on
a subordinated basis as and to the extent set forth under "Description of the
Preferred Securities Guarantee." A Preferred Securities Guarantee is a full
and unconditional guarantee from the time of issuance of the applicable
Preferred Securities but the Preferred Securities Guarantee covers
distributions and other payments on the applicable Preferred Securities only
if and to the extent that the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debt Securities
deposited in the SunAmerica Trust as trust assets. As used in this Prospectus,
the term "Pro Rata Basis" shall mean pro rata to each holder of
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<PAGE>
Trust Securities of a SunAmerica Trust according to the aggregate liquidation
amount of the Trust Securities of such SunAmerica Trust held by the relevant
holder in relation to the aggregate liquidation amount of all Trust Securities
of such SunAmerica Trust outstanding unless, in relation to a payment, a
Declaration Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each holder of the Preferred Securities of such SunAmerica Trust
pro rata according to the aggregate liquidation amount of the Preferred
Securities held by the relevant holder in relation to the aggregate
liquidation amount of all the Preferred Securities of such SunAmerica Trust
outstanding, and only after satisfaction of all amounts owed to the holders of
such Preferred Securities, to each holder of Common Securities of such
SunAmerica Trust pro rata according to the aggregate liquidation amount of
such Common Securities held by the relevant holder in relation to the
aggregate liquidation amount of all Common Securities of such SunAmerica Trust
outstanding.
If a Junior Subordinated Debt Indenture Event of Default occurs and is
continuing with respect to Junior Subordinated Debt Securities deposited in a
SunAmerica Trust as trust assets, an Event of Default under the Declaration (a
"Declaration Event of Default") of such SunAmerica Trust will occur and be
continuing with respect to any outstanding Trust Securities of such SunAmerica
Trust. In such event, each Declaration provides that the holders of Common
Securities of such SunAmerica Trust will be deemed to have waived any such
Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities of such
SunAmerica Trust have been cured or waived. Until all such Declaration Events
of Default with respect to the Preferred Securities of such SunAmerica Trust
have been so cured or waived, the Property Trustee will be deemed to be acting
solely on behalf of the holders of the Preferred Securities of such SunAmerica
Trust and only the holders of such Preferred Securities will have the right to
direct the Property Trustee with respect to certain matters under such
Declaration and consequently under the Indenture. In the event that any
Declaration Event of Default with respect to the Preferred Securities of such
SunAmerica Trust is waived by the holders of the Preferred Securities of such
SunAmerica Trust as provided in the Declaration, the holders of Common
Securities pursuant to such Declaration have agreed that such waiver also
constitutes a waiver of such Declaration Event of Default with respect to the
Common Securities for all purposes under the Declaration without any further
act, vote or consent of the holders of the Common Securities.
Each Declaration provides that the Trustees of such SunAmerica Trust may
treat the person in whose name a certificate representing its Preferred
Securities is registered on the books and records of such SunAmerica Trust as
the sole holder thereof and of the Preferred Securities represented thereby
for purposes of receiving distributions and for all other purposes and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such certificate or in the Preferred Securities represented
thereby on the part of any person, whether or not such SunAmerica Trust shall
have actual or other notice thereof. Preferred Securities will be issued in
fully registered form. Unless otherwise specified in a Prospectus Supplement,
Preferred Securities will be represented by a global certificate registered on
the books and records of such SunAmerica Trust in the name of a depositary
(the "Preferred Securities Depositary") named in an accompanying Prospectus
Supplement or its nominee. Under each Declaration:
(i) such SunAmerica Trust and the Trustees thereof shall be entitled to
deal with the Preferred Securities Depositary (or any successor depositary)
for all purposes, including the payment of distributions and receiving
approvals, votes or consents under the related Declaration, and except as
set forth in the related Declaration with respect to the Property Trustee,
shall have no obligation to persons owning a beneficial interest in
Preferred Securities ("Preferred Security Beneficial Owners") registered in
the name of and held by the Preferred Securities Depositary or its nominee;
and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Preferred Securities Depositary (or any
successor depositary) and shall be limited to those established by law and
agreements between such Preferred Security Beneficial Owners and the
Preferred Securities Depositary and/or its participants. With respect to
Preferred Securities registered in the name of and held by the Preferred
Securities Depositary or its nominee, all notices and other communications
required under each Declaration shall be given to, and all distributions on
such Preferred Securities shall be given or made to, the Preferred
Securities Depositary (or its successor).
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<PAGE>
The specific terms of the depositary arrangement with respect to the Preferred
Securities will be disclosed in the applicable Prospectus Supplement.
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the applicable SunAmerica Trust, including the fees and
expenses of its Trustees and any taxes and all costs and expenses with respect
thereto, to which such SunAmerica Trust may become subject, except for United
States withholding taxes. The foregoing obligations of the Company under each
Declaration are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against any SunAmerica Trust or any
other person before proceeding against the Company. The Company has agreed in
each Declaration to execute such additional agreements as may be necessary or
desirable in order to give full effect to the foregoing.
The foregoing description summarizes the material terms of the Declaration
and is qualified in its entirety by reference to the form of Declaration which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
The business address of each SunAmerica Trust is c/o SunAmerica Inc., 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
USE OF PROCEEDS
Each SunAmerica Trust will use all proceeds received from the sale of its
Trust Securities to purchase Junior Subordinated Debt Securities of the
Company. Unless otherwise set forth in a Prospectus Supplement with respect to
the proceeds from the sale of the particular Offered Securities to which such
Prospectus Supplement relates, the net proceeds from the sale of the Offered
Securities are expected to be used by the Company for general corporate
purposes, including repayment or redemption of outstanding debt or preferred
stock, the possible acquisition of financial services businesses or assets
thereof, investments in portfolio assets and working capital needs. The
Company routinely reviews opportunities to acquire financial services
businesses or assets thereof.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends
for the Company for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED SEPTEMBER 30, JUNE 30,
----------------------------- -----------
1991 1992 1993 1994 1995 1995 1996
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(excluding interest incurred on
reserves and trust deposits)(1)... 2.7x 4.0x 6.1x 5.8x 5.8x 5.8x 5.2x
Ratio of earnings to fixed charges
(including interest incurred on
reserves and trust deposits)(2)... 1.1x 1.2x 1.4x 1.5x 1.5x 1.5x 1.5x
Ratio of earnings to combined fixed
charges and preferred stock
dividends (excluding interest
incurred on reserves and trust
deposits)(3)...................... 2.3x 2.7x 2.8x 2.8x 3.4x 3.3x 3.6x
Ratio of earnings to combined fixed
charges and preferred stock
dividends (including interest
incurred on reserves and trust
deposits)(4)...................... 1.1x 1.2x 1.3x 1.4x 1.4x 1.4x 1.5x
</TABLE>
- --------
(1) In computing the ratio of earnings to fixed charges (excluding interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness and dividends on
the preferred securities of subsidiary grantor trusts. Earnings are
computed by adding interest incurred on senior and subordinated
indebtedness and dividends paid on the preferred securities of subsidiary
grantor trusts to pretax income.
(2) In computing the ratio of earnings to fixed charges (including interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness, fixed annuity
contracts, guaranteed investment contracts and trust deposits, and
dividends on the preferred securities of subsidiary grantor trusts.
Earnings are computed by adding interest incurred on senior and
subordinated indebtedness, fixed annuity contracts, guaranteed investment
contracts and trust deposits, and dividends paid on the preferred
securities of subsidiary grantor trusts to pretax income.
(3) In computing the ratio of earnings to combined fixed charges and preferred
stock dividends (excluding interest incurred on reserves and trust
deposits), combined fixed charges and preferred stock dividends consist of
interest expense on senior and subordinated indebtedness, dividends on the
preferred securities of subsidiary grantor trusts and dividends on
preferred stock of the Company on a tax equivalent basis. Earnings are
computed by adding interest incurred on senior and subordinated
indebtedness and dividends paid on the preferred securities of subsidiary
grantor trusts to pretax income.
(4) In computing the ratio of earnings to combined fixed charges and preferred
stock dividends (including interest incurred on reserves and trust
deposits), combined fixed charges and preferred stock dividends consist of
interest expense on senior and subordinated indebtedness, fixed annuity
contracts, guaranteed investment contracts and trust deposits, dividends
on the preferred securities of subsidiary grantor trusts, and dividends on
preferred stock of the Company on a tax equivalent basis. Earnings are
computed by adding interest incurred on senior and subordinated
indebtedness, fixed annuity contracts, guaranteed investment contracts and
trust deposits and dividends paid on the preferred securities of
subsidiary grantor trusts to pretax income.
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<PAGE>
DESCRIPTION OF THE SENIOR DEBT SECURITIES
AND SUBORDINATED DEBT SECURITIES
The Company's unsecured Senior Debt Securities and Subordinated Debt
Securities (collectively, for purposes of this Section only, the "Debt
Securities"), consisting of notes, debentures or other evidences of
indebtedness, may be issued from time to time in one or more series, in the
case of Senior Debt Securities, under a Senior Indenture dated as of April 15,
1993, as amended by Supplemental Indentures dated as of June 28, 1993 and
October 28, 1996 (as so amended, the "Senior Debt Indenture") between the
Company and The First National Bank of Chicago, as Trustee, and in the case of
Subordinated Debt Securities, under a Subordinated Indenture dated as of
October 28, 1996 (the "Subordinated Debt Indenture") between the Company and
The First National Bank of Chicago, as Trustee. The Senior Debt Indenture and
the Subordinated Debt Indenture are sometimes hereinafter referred to
individually as an "Indenture" and collectively as the "Indentures." The First
National Bank of Chicago, in its capacity as trustee under either or both of
the Indentures, is referred to hereinafter as the "Trustee." The Indentures
are included as exhibits to the Registration Statement of which this
Prospectus is a part. The following description summarizes the material terms
of the Indentures and the Debt Securities and is qualified in its entirety by
reference to the detailed provisions of the applicable Indenture, which
contains the full text of such provisions, including the definition of certain
terms used herein, and other information regarding the Debt Securities.
Numerical references in parentheses below are to sections in the applicable
Indenture. Wherever particular sections or defined terms of the applicable
Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. The Indentures are substantially
identical except for provisions relating to subordination and the Company's
negative pledge and restrictions on certain dispositions. Any Debt Securities
offered by this Prospectus and the accompanying Prospectus Supplement are
referred to herein as the "Offered Debt Securities."
The Company's Junior Subordinated Debt Securities and the Junior
Subordinated Debt Indenture are separately described in this Prospectus under
the caption "Description of the Junior Subordinated Debt Securities."
GENERAL
Neither of the Indentures limits the amount of additional indebtedness the
Company or any of its subsidiaries may incur. The Debt Securities will be
unsecured senior or subordinated obligations of the Company. Since the Company
is a holding company, the Company's rights and the rights of its creditors,
including the holders of Debt Securities, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of the subsidiary's creditors, except to the extent that
the Company may itself be a creditor with recognized claims against the
subsidiary. Claims on the Company's subsidiaries by creditors other than the
Company include substantial claims for policy benefits and debt obligations,
as well as other liabilities incurred in the ordinary course of business. In
addition, since many of the Company's subsidiaries are insurance companies
subject to regulatory control by various state insurance departments, the
ability of such subsidiaries to pay dividends or make loans or advances to the
Company without prior regulatory approval is limited by applicable laws and
regulations.
The Indentures do not limit the aggregate principal amount of indebtedness
that may be issued and provide that Debt Securities may be issued from time to
time in one or more series and may be denominated and payable in foreign
currencies or units based on or related to foreign currencies, including
European Currency Units. Special United States federal income tax
considerations applicable to any Debt Securities so denominated are described
in the relevant Prospectus Supplement.
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for the following terms of and information relating
to the Offered Debt Securities offered thereby (to the extent such terms are
applicable to such Debt Securities): (i) classification as senior or
subordinated Debt Securities, the specific designation, aggregate principal
amount, purchase price and denomination; (ii) currency or units based
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<PAGE>
on or relating to currencies in which the Offered Debt Securities are
denominated and/or in which principal, premium, if any, and/or any interest
will or may be payable; (iii) any date of maturity; (iv) interest rate or
rates (or the method by which such rate will be determined), if any; (v) the
dates on which any such interest will be payable; (vi) the place or places
where the principal of, premium, if any, and interest, if any, on the Offered
Debt Securities will be payable; (vii) any redemption, repayment or sinking
fund provisions; (viii) whether such Offered Debt Securities are convertible
into Common Stock of the Company; (ix) whether the Offered Debt Securities
will be issuable in registered form ("Registered Debt Securities") or bearer
form ("Bearer Debt Securities") or both and, if Bearer Debt Securities are
issuable, any restrictions applicable to the place of payment of any principal
of, premium, if any, and interest on such Bearer Debt Securities, to the
exchange of one form for another and to the offer, sale and delivery of such
Bearer Debt Securities (except that under current United States federal income
tax law, Registered Debt Securities will not be exchangeable into Bearer Debt
Securities); (x) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay additional
amounts on Offered Debt Securities held by a person who is not a U.S. person
(as hereinafter defined) in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Company will have the
option to redeem such Debt Securities rather than pay such additional amounts;
(xi) the proposed listing, if any, of the Offered Debt Securities on any
securities exchange; and (xii) any other specific terms of the Offered Debt
Securities, including any modifications of or additions to the events of
default or covenants provided for with respect to such Debt Securities, and
any terms which may be required by or advisable under applicable laws or
regulations not inconsistent with the applicable Indenture.
Debt Securities may be presented for exchange and Registered Debt Securities
may be presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Debt Securities and the Prospectus Supplement.
Such services will be provided without charge, other than any tax or other
governmental charge payable in connection therewith, but subject to the
limitations provided in the applicable Indenture. Debt Securities in bearer
form and the coupons, if any, appertaining thereto will be transferable by
delivery.
Debt Securities will bear interest at a fixed rate or a floating rate. Debt
Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes are described in the
relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on
any interest payment date, to be determined by reference to one or more
currency exchange rates, commodity prices, equity indices or other factors.
Holders of such Debt Securities may receive a principal amount on any
principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of the
applicable currency, commodity, equity index or other factors. Information as
to the methods for determining the amount of principal or interest payable on
any date, the currencies, commodities, equity indices or other factors to
which the amount payable on such date is linked and certain additional tax
considerations will be set forth in the applicable Prospectus Supplement.
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security")
that will be deposited with a depositary (a "Depositary") or with a nominee
for a Depositary identified in the Prospectus Supplement relating to such
series and registered in the name of the Depositary or a nominee thereof. In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Debt Securities of the series to be
represented by such Registered Global Security or Securities. Unless and until
it is exchanged in whole for Debt Securities in definitive registered form, a
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<PAGE>
Registered Global Security may not be transferred except as a whole by the
Depositary for such Registered Security to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to
all depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the Debt Securities represented by such
Registered Global Security beneficially owned by such participants. The
accounts to be credited shall be designated by any dealers, underwriters or
agents participating in the distribution of such Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through,
records maintained by the Depositary for such Registered Global Security (with
respect to interests of participants) and on the records of participants (with
respect to interests of persons holding through participants). The laws of
some states may require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, transfer or pledge beneficial interests in
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Debt Securities represented by such Registered Global Security for all
purposes under the applicable Indenture. Except as set forth below, owners of
beneficial interests in a Registered Global Security will not be entitled to
have the Debt Securities represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of such Debt Securities in definitive form and will not be considered
the owners or holders thereof under the applicable Indenture. Accordingly,
each person owning a beneficial interest in a Registered Global Security must
rely on the procedures of the Depositary for such Registered Global Security
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest, to exercise any rights of a
holder under the applicable Indenture. The Company understands that under
existing industry practices, if the Company requests any action of holders or
if an owner of a beneficial interest in a Registered Global Security desires
to give or take any action which a holder is entitled to give or take under
the applicable Indenture, the Depositary for such Registered Global Security
would authorize the participants holding the relevant beneficial interests to
give or take such action, and such participants would authorize beneficial
owners owning through such participants to give or take such action or would
otherwise act upon the instructions of beneficial owners holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name
of a Depositary or its nominee will be made to such Depositary or its nominee,
as the case may be, as the registered owners of such Registered Global
Security. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Registered Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in such Registered
Global Security as shown on the records of such Depositary.
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<PAGE>
The Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants
will be governed by standing customer instructions and customary practices, as
is now the case with the securities held for the accounts of customers in
bearer form or registered in "street name", and will be the responsibility of
such participants.
If the Depositary for any Debt Securities represented by a Registered Global
Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the 1934 Act, and a successor
Depositary registered as a clearing agency under the 1934 Act is not appointed
by the Company within 90 days, the Company will issue such Debt Securities in
definitive form in exchange for such Registered Global Security. In addition,
the Company may at any time and in its sole discretion determine not to have
any of the Debt Securities of a series represented by one or more Registered
Global Securities and, in such event, will issue Debt Securities of such
series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one or
more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euro-clear and CEDEL, or with a nominee for such
depositary identified in the Prospectus Supplement relating to such series.
The specific terms and procedures, including the specific terms of the
depositary arrangement and any specific procedures for the issuance of Debt
Securities in definitive form in exchange for a Bearer Global Security, with
respect to any portion of a series of Debt Securities to be represented by a
Bearer Global Security will be described in the Prospectus Supplement relating
to such series.
SENIOR DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Debt
Securities issued under the Senior Debt Indenture will rank pari passu with
all other unsecured and unsubordinated debt of the Company.
SUBORDINATED DEBT SECURITIES
Payment of the principal of, premium, if any, and interest on Debt
Securities issued under the Subordinated Debt Indenture will be subordinate
and junior in right of payment, to the extent and in the manner set forth in
the Subordinated Debt Indenture, to all "Senior Indebtedness" of the Company.
The Subordinated Debt Indenture defines "Senior Indebtedness" as the principal
of and premium, if any, and interest on (a) all indebtedness of the Company,
whether outstanding on the date of the Subordinated Debt Indenture or
thereafter created, (i) for money borrowed by the Company, (ii) for money
borrowed by, or obligations of, others and either assumed or guaranteed,
directly or indirectly, by the Company, (iii) in respect of letters of credit
and acceptances issued or made by banks, or (iv) constituting purchase money
indebtedness, or indebtedness secured by property included in the property,
plant and equipment accounts of the Company at the time of the acquisition of
such property by the Company, for the payment of which the Company is directly
liable, and (b) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any such indebtedness. As used
in the preceding sentence the term "purchase money indebtedness" means
indebtedness evidenced by a note, debenture, bond or other instrument (whether
or not secured by any lien or other security interest) issued or assumed as
all or a part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of the Company.
Notwithstanding anything to the contrary in the Subordinated Debt Indenture or
the Subordinated Debt Securities, Senior Indebtedness shall not include, (i)
any indebtedness of the Company which, by its terms or the terms of the
instrument creating or evidencing it, is subordinate in right of payment to or
pari passu with the Subordinated Debt Securities or (ii) any indebtedness of
the Company to a subsidiary of the Company. (Subordinated Debt Indenture,
Section 1.1) The Subordinated Debt Indenture does not contain any limitation
on the amount of Senior Indebtedness that can be incurred by the Company.
Indebtedness issued or to
14
<PAGE>
be issued pursuant to the Junior Subordinated Debt Indenture between the
Company and The First National Bank of Chicago, as Trustee, providing for the
issuance of Junior Subordinated Debt Securities of the Company, is subordinate
in right of payment to the Subordinated Debt Securities. As of the date of
this Prospectus, two series of Junior Subordinated Debt Securities having an
aggregate principal amount of approximately $245.5 million are outstanding
under the Junior Subordinated Debt Indenture.
In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or its property, or (b) that Subordinated Debt
Securities of any series are declared due and payable before their expressed
maturity because of the occurrence of an Event of Default pursuant to Section
5.1 of the Subordinated Debt Indenture (under circumstances other than as set
forth in clause (a) above), then the holders of all Senior Indebtedness shall
first be entitled to receive payment of the full amount due thereon in money
or money's worth, before the holders of any of such Subordinated Debt
Securities or coupons appertaining thereto are entitled to receive a payment
on account of the principal of, premium, if any, or interest on the
indebtedness evidenced by such Subordinated Debt Securities or of such coupons
appertaining thereto. In the event and during the continuation of any default
in payment of any Senior Indebtedness or if any Event of Default shall exist
under any Senior Indebtedness, as "Event of Default" is defined therein or in
the agreement under which the same is outstanding, no payment of the principal
or interest on the Subordinated Debt Securities or coupons shall be made.
(Subordinated Debt Indenture, Article 13) If this Prospectus is being
delivered in connection with a series of Subordinated Debt Securities, the
accompanying Prospectus Supplement will set forth the approximate amount of
Senior Indebtedness outstanding as of the end of the most recent fiscal
quarter.
CONVERSION RIGHTS
The terms and conditions, if any, on which Offered Debt Securities are
convertible into Common Stock of the Company will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the conversion
price, the conversion period, provisions as to whether conversion will be at
the option of the holder or the Company, the events requiring an adjustment of
the conversion price and provisions affecting conversion in the event of the
redemption of the convertible Offered Debt Securities; and such terms may
include provisions under which the number of shares of Common Stock to be
received by the holders of the Offered Debt Securities would be calculated
according to the market price of the Common Stock as of a time stated in the
Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens. The Senior Debt Indenture provides that the Company
and its Restricted Subsidiaries (as defined below) may not issue, assume,
incur or guarantee any indebtedness for borrowed money secured by a mortgage,
pledge, lien or other encumbrance (except for certain liens specifically
permitted by the Senior Debt Indenture), directly or indirectly, upon any
shares of the Voting Stock (as defined in the Senior Debt Indenture) of a
Restricted Subsidiary which shares are owned by the Company or its Restricted
Subsidiaries without effectively providing that the Debt Securities issued
under the Senior Debt Indenture (and if the Company so elects, any other
indebtedness of the Company ranking on a parity with such Debt Securities)
shall be secured equally and ratably with, or prior to, any such secured
indebtedness so long as such indebtedness remains outstanding. The foregoing
restrictions, however, do not apply to liens upon any shares of Voting Stock
of any corporation existing at the time such corporation becomes a Restricted
Subsidiary and extensions, renewals or replacements thereof. (Senior Debt
Indenture, Section 3.9)
The term "Restricted Subsidiary" means (a) so long as they are Subsidiaries
of the Company, SunAmerica Life Insurance Company and Anchor National Life
Insurance Company; (b) any other present or future Insurance Subsidiary the
Consolidated Total Assets (as defined in the Senior Debt Indenture) of which
constitute 20% or more of the Consolidated Total Assets of the Company; and
(c) any Subsidiary which is a successor, by merger or otherwise, to
substantially all of the business or properties of any Insurance Subsidiary
referred to or described in the foregoing clauses (a) or (b). The term
"Subsidiary" means any corporation or other entity more than 50%
15
<PAGE>
of the outstanding shares of Voting Stock of which is at the time of
determination owned or controlled, directly or indirectly, by the Company. The
term "Insurance Subsidiary" means a Subsidiary registered in the state of its
domicile under the insurance laws of such state and qualified to sell
insurance products. (Senior Debt Indenture, Section 1.1)
Consolidation, Merger and Sale of Assets. Each Indenture provides that the
Company shall not consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety to any person unless the Company shall be
the continuing corporation, or the successor corporation or person to which
such assets are transferred or leased shall be organized under the laws of the
United States or any state thereof or the District of Columbia and shall
expressly assume the Company's obligations on the Debt Securities and under
such Indenture, and after giving effect to such transaction no Event of
Default (as defined in such Indenture) shall have occurred and be continuing,
and certain other conditions are met. (Senior and Subordinated Debt
Indentures, Section 9.1)
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transactions or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. Except as may be described in a Prospectus Supplement applicable to
a particular series of Debt Securities, there are no covenants or other
provisions in the Indentures providing for a put or increased interest or that
would otherwise afford holders of Debt Securities additional protection in the
event of a recapitalization transaction, a change of control of the Company or
a highly leveraged transaction.
Restrictions on Certain Dispositions. The Senior Debt Indenture provides
that as long as any of the Senior Debt Securities remain outstanding, the
Company will not, and will not permit any Restricted Subsidiary to, issue,
sell, assign, transfer or otherwise dispose of, directly or indirectly, any of
the Voting Stock of any Restricted Subsidiary, unless (a) the issuance, sale,
assignment, transfer or other disposition is required to comply with the order
of a court or regulatory authority of competent jurisdiction, other than an
order issued at the request of the Company or of one of its Restricted
Subsidiaries; (b) the shares of Voting Stock issued, sold, assigned,
transferred or otherwise disposed of constitute directors' qualifying shares;
(c) all of the Voting Stock of a Restricted Subsidiary then owned by the
Company or by its Restricted Subsidiaries is disposed of, in a single
transaction or in a series of related transactions, for a consideration
consisting of cash or other property the fair market value of which (as
determined in good faith by the Board of Directors) is at least equal to the
Fair Value (as defined below) of such Voting Stock; or (d) after giving effect
to the issuance, sale, assignment, transfer or other disposition, the Company
and its Restricted Subsidiaries would own directly or indirectly at least 80%
of the issued and outstanding Voting Stock of such Restricted Subsidiary and
such issuance, sale, assignment, transfer or other disposition is made for a
consideration consisting of cash or other property which is at least equal to
the Fair Value of such Voting Stock. (Senior Debt Indenture, Section 9.3) The
term "Fair Value" when used with respect to any Voting Stock means the fair
value as determined in good faith by the Board of Directors of the Company.
(Senior Debt Indenture, Section 1.1) The Senior Debt Indenture does not
restrict the transfer of assets from a Restricted Subsidiary to any other
person, including the Company or another subsidiary of the Company.
EVENTS OF DEFAULT
An Event of Default is defined under each Indenture with respect to Debt
Securities of any series issued under such Indenture as being: (a) default in
payment of all or any part of the principal of the Debt Securities of such
series when due, either at maturity (or upon any redemption), by declaration
or otherwise; (b) default for 30 days in payment of any interest on any Debt
Securities of such series; (c) default in payment of any sinking fund
installment when due; (d) default for 60 days after written notice as provided
in such Indenture in the observance or performance of any other covenant or
agreement in the Debt Securities of such series or such Indenture other than a
covenant included in such Indenture solely for the benefit of a series of Debt
Securities other than such series; (e) certain events of bankruptcy,
insolvency or reorganization; or (f) an Event of Default with respect to any
other indebtedness for borrowed money (other than non-recourse obligations) of
the Company
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or any of its Restricted Subsidiaries, in an aggregate principal amount
exceeding $10,000,000, if such Event of Default shall result in the
acceleration of such other indebtedness under the terms of the instrument
under which such indebtedness is issued or secured, so long as such
acceleration is not cured, waived, rescinded or annulled, or such indebtedness
is not discharged, within 10 days after written notice thereof as provided in
such Indenture; provided that if any such acceleration shall cease or be
cured, waived, rescinded or annulled, then the Event of Default by reason
thereof shall be deemed likewise to have been thereupon cured. (Senior and
Subordinated Debt Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the default
in payment of principal of, premium, if any, or interest on, any series of
Debt Securities issued under such Indenture or due to the default in the
performance or breach of any other covenant or agreement of the Company
applicable to the Debt Securities of such series but not applicable to all
outstanding Debt Securities issued under such Indenture shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of each affected series (treated as
one class) issued under such Indenture and then outstanding may then declare
the principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately; and (b) if any Event of
Default due to a default in the performance of any other of the covenant or
agreements in such Indenture applicable to all outstanding Debt Securities
issued thereunder and then outstanding or due to certain events of bankruptcy,
insolvency and reorganization of the Company shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in
principal amount of all Debt Securities issued under such Indenture and then
outstanding (treated as one class) may declare the principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal of (or
premium, if any) or interest on such Debt Securities) by the holders of a
majority in principal amount of the Debt Securities of all such affected
series then outstanding. (Senior and Subordinated Debt Indentures, Sections
5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities issued under such
Indenture requesting the Trustee to exercise any right or power under such
Indenture before proceeding to exercise any such right or power at the request
of such holders. (Senior and Subordinated Debt Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities of each affected series (treated as
one class) issued under such Indenture may direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee. (Senior and
Subordinated Debt Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under such
Indenture may institute any action against the Company under such Indenture
(except actions for payment of overdue principal, premium, if any, or
interest) unless such holder previously shall have given to the Trustee
written notice of default and continuance thereof and unless the holders of
not less than 25% in principal amount of the Debt Securities of each affected
series (treated as one class) issued under such Indenture and then outstanding
shall have requested the Trustee to institute such action and shall have
offered the Trustee reasonable indemnity, the Trustee shall not have
instituted such action within 60 days of such request and the Trustee shall
not have received direction inconsistent with such written request by the
holders of a majority in principal amount of the Debt Securities of each
affected series (treated as one class) issued under such Indenture and then
outstanding. (Senior and Subordinated Debt Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that the Company will file annually with
the Trustee a certificate of no default or a certificate specifying any
default that exists. (Senior and Subordinated Debt Indentures, Section 3.5)
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company can discharge or defease its obligations under each Indenture as
set forth below. (Senior and Subordinated Debt Indentures, Section 10.1)
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Under terms satisfactory to the Trustee, the Company may discharge certain
obligations to holders of any series of Debt Securities issued under such
Indentures which have not already been delivered to the Trustee for
cancellation and which have either become due and payable or are by their
terms due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee cash or, in the case of Debt
Securities payable only in U.S. dollars, U.S. Government Obligations (as
defined in such Indenture), as trust funds in an amount certified to be
sufficient to pay when due, whether at maturity, upon redemption or otherwise,
the principal of, premium, if any, and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders of
any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid its duty to register the transfer or
exchange of such series of Debt Securities, to replace any temporary,
mutilated, destroyed, lost or stolen series of Debt Securities or to maintain
an office or agency in respect of such series of Debt Securities. Under terms
satisfactory to the Trustee, the Company may instead be released with respect
to any outstanding series of Debt Securities issued under the relevant
Indenture from the obligations imposed by certain provisions of such Indenture
including Sections 3.9, 9.1 and 9.3, in the case of the Senior Debt Indenture,
and Section 9.1, in the case of the Subordinated Debt Indenture (which contain
the covenants described above limiting liens, consolidations, mergers,
transfers and leases and certain dispositions) and omit to comply with such
Sections without creating an Event of Default ("covenant defeasance").
Defeasance or covenant defeasance may be effected only if, among other things:
(i) the Company irrevocably deposits with the Trustee cash or, in the case of
Debt Securities payable only in U.S. dollars, U.S. Government Obligations, as
trust funds in an amount certified to be sufficient to pay at maturity (or
upon redemption) the principal of, premium, if any, and interest on all
outstanding Debt Securities of such series issued under such Indenture; (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities (in the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of such Indenture, since such a result
would not occur under current tax law); and (iii) in the case of the
Subordinated Debt Indenture no event or condition shall exist that, pursuant
to certain provisions described under "Subordinated Debt" above, would prevent
the Company from making payments of principal of, premium, if any, and
interest on the Subordinated Debt Securities at the date of the irrevocable
deposit referred to above.
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a successor
corporation of the obligations of the Company, (c) add covenants for the
protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in such Indenture, provided that such cure or
correction does not adversely affect the holders of such Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee. (Senior and Subordinated
Debt Indentures, Section 8.1)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series issued under such
Indenture then outstanding and affected (voting as one class), to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the Debt
Securities of each series so affected; provided that the Company and the
Trustee may not, without the consent of the holder of each outstanding Debt
Security affected thereby, (a) extend the stated maturity of the principal of
any Debt Security, or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or change the currency in which the principal
thereof (including any amount in respect of original issue discount), premium,
if any, or
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interest thereon is payable or reduce the amount of any original issue Debt
Security that is payable upon acceleration or provable in bankruptcy or alter
certain provisions of such Indenture relating to the Debt Securities issued
thereunder not denominated in U.S. dollars or impair the right to institute
suit for the enforcement of any payment on any Debt Security when due or (b)
reduce the aforesaid percentage in principal amount of Debt Securities of any
series issued under such Indenture, the consent of the holders of which is
required for any such modification. (Senior and Subordinated Debt Indentures,
Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Senior and Subordinated
Debt Indentures, Section 11.8)
CONCERNING THE TRUSTEE
The First National Bank of Chicago is one of a number of banks with which
the Company and its subsidiaries maintain ordinary banking and trust
relationships and is also the Trustee under the Junior Subordinated Debt
Indenture.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
The Company's unsecured Junior Subordinated Debt Securities, consisting of
notes, debentures or other evidences of indebtedness, may be issued from time
to time in one or more series under an Indenture dated March 15, 1995, as
amended by a Supplemental Indenture dated as of October 28, 1996 (as so
amended, the "Junior Subordinated Debt Indenture") between the Company and The
First National Bank of Chicago, as trustee (the "Junior Subordinated Debt
Indenture Trustee"). The Junior Subordinated Debt Indenture has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a
part. The following description summarizes the material terms of the Junior
Subordinated Debt Indenture and the Junior Subordinated Debt Securities, and
is qualified in its entirety by reference to the detailed provisions of the
Junior Subordinated Debt Indenture, which contains the full text of such
provisions, including the definition of certain terms used herein, and other
information regarding the Junior Subordinated Debt Securities. Numerical
references in parentheses below are to sections in the Junior Subordinated
Debt Indenture. Whenever particular sections or defined terms in the Junior
Subordinated Debt Indenture are referred to, such sections or defined terms
are incorporated herein by reference as part of the statement made, and the
statement is qualified in its entirety by such reference.
GENERAL
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Junior Subordinated Debt
Indenture does not limit the amount of additional indebtedness the Company or
any of its subsidiaries may incur. Since the Company is a holding company, the
Company's rights and the rights of its creditors, including the holders of
Junior Subordinated Debt Securities, to participate in the assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject
to the prior claims of the subsidiary's creditors, except to the extent that
the Company may itself be a creditor with recognized claims against the
subsidiary. Claims on the Company's subsidiaries by creditors other than the
Company include substantial claims for policy benefits and debt obligations,
as well as other liabilities incurred in the ordinary course of business. In
addition, since many of the Company's subsidiaries are insurance companies
subject to regulatory control by various state insurance departments, the
ability of such subsidiaries to pay dividends or make loans or advances to the
Company without prior regulatory approval is limited by applicable laws and
regulations.
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The Junior Subordinated Debt Indenture does not limit the aggregate
principal amount of indebtedness which may be issued thereunder and provides
that Junior Subordinated Debt Securities may be issued thereunder from time to
time in one or more series. The Junior Subordinated Debt Securities are
issuable in one or more series pursuant to an indenture supplemental to the
Junior Subordinated Debt Indenture. As of the date of this Prospectus, two
series of Junior Subordinated Debt Securities having an aggregate principal
amount of approximately $245.5 million are outstanding.
In the event Junior Subordinated Debt Securities are issued to a SunAmerica
Trust or a Trustee of such Trust in connection with the issuance of Trust
Securities by such SunAmerica Trust, such Junior Subordinated Debt Securities
subsequently may be distributed pro rata to the holders of such Trust
Securities in connection with the dissolution of such SunAmerica Trust upon
the occurrence of certain events described in the Prospectus Supplement
relating to such Trust Securities. Only one series of Junior Subordinated Debt
Securities will be issued to a SunAmerica Trust or a Trustee of such Trust in
connection with the issuance of Trust Securities by such SunAmerica Trust.
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus for the following terms of the series of Junior
Subordinated Debt Securities being offered thereby (to the extent such terms
are applicable to the Junior Subordinated Debt Securities): (i) the specific
designation of such Junior Subordinated Debt Securities, aggregate principal
amount and purchase price; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Debt Securities; (iii) the date or dates on which the
principal of such Junior Subordinated Debt Securities is payable and the
right, if any, to extend such date or dates; (iv) the rate or rates at which
such Junior Subordinated Debt Securities will bear interest or the method of
calculating such rate or rates; (v) the date or dates from which such interest
shall accrue, the interest payment dates on which such interest will be
payable or the manner of determination of such interest payment dates and the
record dates for the determination of holders to whom interest is payable on
any such interest payment dates; (vi) the right, if any, to extend the
interest payment periods and the duration of such extension; (vii) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which, such Junior Subordinated Debt Securities may be
redeemed, in whole or in part, at the option of the Company; (viii) the right
and/or obligation, if any, of the Company to redeem or purchase such Junior
Subordinated Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or periods
for which, the price or prices at which, and the terms and conditions upon
which, such Junior Subordinated Debt Securities shall be redeemed or
purchased, in whole or part, pursuant to such right and/or obligation; (ix)
any applicable United States federal income tax consequences, including
whether and under what circumstances the Company will pay additional amounts
on the Junior Subordinated Debt Securities held by a person who is not a U.S.
person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Company will have the option to redeem such
Junior Subordinated Debt Securities rather than pay such additional amounts;
(x) the form of such Junior Subordinated Debt Securities; (xi) if other than
denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debt Securities shall be issuable;
(xii) whether such Junior Subordinated Debt Securities are convertible into
Common Stock of the Company; (xiii) any and all other terms with respect to
such series, including any modification of or additions to the events of
default or covenants provided for with respect to the Junior Subordinated Debt
Securities, and any terms which may be required by or advisable under
applicable laws or regulations not inconsistent with the Junior Subordinated
Debt Indenture; and (xiv) whether such Junior Subordinated Debt Securities are
issuable as a global security, and in such case, the identity of the
depositary.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Junior Subordinated Debentures will be issued in United States dollars in
fully registered form without coupons in denominations of $25 or integral
multiples thereof. Junior Subordinated Debt Securities may be presented for
exchange and Junior Subordinated Debt Securities in registered form may be
presented for transfer in the manner, at the places and subject to the
restrictions set forth in the Junior Subordinated Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the Junior Subordinated Debt Indenture.
Junior
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Subordinated Debt Securities in bearer form and the coupons, if any,
appertaining thereto will be transferable by delivery.
Junior Subordinated Debt Securities may bear interest at a fixed rate or a
floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States federal income tax considerations applicable to any such
discounted Junior Subordinated Debt Securities or to certain Junior
Subordinated Debt Securities issued at par which are treated as having been
issued at a discount for United States federal income tax purposes are
described in the relevant Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
If Junior Subordinated Debt Securities are issued to a SunAmerica Trust in
connection with the issuance of Trust Securities by such SunAmerica Trust, the
Company will covenant in the Junior Subordinated Debt Indenture that, so long
as the Preferred Securities issued by the applicable SunAmerica Trust remain
outstanding, the Company will not (a) declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock or make any guarantee
payment with respect thereto if at such time (i) the Company shall be in
default with respect to its Guarantee Payments (as defined under "Description
of the Preferred Securities Guarantees") or other payment obligations under
the related Preferred Securities Guarantee, (ii) there shall have occurred any
Junior Subordinated Debt Indenture Event of Default with respect to the Junior
Subordinated Debt Securities or (iii) the Company shall have given notice of
its election to defer payments of interest on such Junior Subordinated Debt
Securities by extending the interest payment period as provided in the terms
of such Junior Subordinated Debt Securities and such period, or any extension
thereof, is continuing; provided that (x) the Company will be permitted to pay
accrued dividends (and cash in lieu of fractional shares) upon the conversion
of any of its Series E Preferred Shares (as defined under "Description of
Capital Stock-Series E Preferred Shares") or upon the conversion of any other
Preferred Stock of the Company as may be outstanding from time to time, in
each case in accordance with the terms of such stock and (y) the foregoing
will not apply to any stock dividends paid by the Company. In addition, if
Junior Subordinated Debt Securities are issued to a SunAmerica Trust in
connection with the issuance of Trust Securities by such SunAmerica Trust, for
so long as the Preferred Securities issued by the applicable SunAmerica Trust
remain outstanding, the Company has agreed (i) to remain the sole direct or
indirect owner of all of the outstanding Common Securities issued by the
applicable SunAmerica Trust and shall not cause or permit the Common
Securities to be transferred except to the extent permitted by the related
Declaration; provided that any permitted successor of the Company under the
Junior Subordinated Debt Indenture may succeed to the Company's ownership of
the Common Securities issued by the applicable SunAmerica Trust, (ii) to
comply fully with all of its obligations and agreements contained in the
related Declaration and (iii) not to take any action which would cause the
applicable SunAmerica Trust to cease to be treated as a grantor trust for
United States federal income tax purposes except in connection with a
distribution of Junior Subordinated Debt Securities.
SUBORDINATION
The Junior Subordinated Debt Indenture provides that the Junior Subordinated
Debt Securities are subordinate and junior in right of payment to all Senior
Indebtedness (as defined in the Junior Subordinated Debt Indenture) of the
Company. In the event (a) of any insolvency or bankruptcy proceedings, or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Company or its property or any proceeding for voluntary
liquidation, dissolution or other winding up of the Company, or (b) that
Junior Subordinated Debt Securities of any series are declared due and payable
before their expressed maturity because of the occurrence of a Junior
Subordinated Debt Indenture Event of Default pursuant to Section 6.01 of the
Junior Subordinated Debt Indenture (under circumstances other than as set
forth in clause (a) above), then the holders of all Senior Indebtedness shall
first be entitled to receive payment of the full amount due thereon in money,
before the holders of any of the Junior Subordinated Debt Securities are
entitled to receive payment on account
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of the principal of, premium, if any, or interest on the indebtedness
evidenced by such Junior Subordinated Debt Securities. In the event and during
the continuation of any default in payment of any Senior Indebtedness or if
any event of default shall exist under any Senior Indebtedness, as "event of
default" is defined therein or in the agreement under which the same is
outstanding, no payment of the principal or, premium, if any, or interest on
the Junior Subordinated Debt Securities shall be made. (Section 14.02 and
14.03). If this Prospectus is being delivered in connection with a series of
Junior Subordinated Debt Securities, the accompanying Prospectus Supplement
will set forth the approximate amount of Senior Indebtedness outstanding as of
the end of the most recent fiscal quarter.
The Junior Subordinated Debt Indenture defines "Senior Indebtedness" as the
principal of and premium, if any, and interest on (a) all indebtedness of the
Company, whether outstanding on the date of the Junior Subordinated Debt
Indenture or thereafter created, (i) for money borrowed by the Company
(including, without limitation, indebtedness issued or to be issued pursuant
to the Subordinated Debt Indenture), (ii) for money borrowed by, or
obligations of, others and either assumed or guaranteed, directly or
indirectly, by the Company, (iii) in respect of letters of credit and
acceptances issued or made by banks, or (iv) constituting purchase money
indebtedness, or indebtedness secured by property included in the property,
plant and equipment accounts of the Company at the time of the acquisition of
such property by the Company for the payment of which the Company is directly
liable and (b) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any such indebtedness. As used
in the preceding sentence the term "purchase money indebtedness" means
indebtedness evidenced by a note, debenture, bond or other instrument (whether
or not secured by any lien or other security interest) issued or assumed as
all or a part of the consideration for the acquisition of property, whether by
purchase, merger, consolidation or otherwise, unless by its terms such
indebtedness is subordinate to other indebtedness of the Company.
Notwithstanding anything to the contrary in the Junior Subordinated Debt
Indenture or the Junior Subordinated Debt Securities, Senior Indebtedness
shall not include (i) any indebtedness of the Company which, by its terms or
the terms of the instrument creating or evidencing it, is subordinate in right
of payment to or pari passu with the Junior Subordinated Debt Securities, as
the case may be, and in particular, the Junior Subordinated Debt Securities
shall rank pari passu with respect to all other debt securities and guarantees
in respect thereof issued to any other trusts, partnerships or other entity
affiliated with the Company which is a financing vehicle of the Company in
connection with the issuance of preferred securities by such financing
vehicle, or (ii) any indebtedness of the Company to a subsidiary of the
Company. (Section 1.01). The Junior Subordinated Debt Indenture does not
contain any limitation on the amount of Senior Indebtedness that can be
incurred by the Company.
CONVERSION RIGHTS
The terms and conditions, if any, on which Junior Subordinated Debt
Securities are convertible into Common Stock of the Company will be set forth
in the Prospectus Supplement relating thereto. Such terms will include the
conversion price, the conversion period, provisions as to whether conversion
will be at the option of the holder or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of the convertible Junior Subordinated Debt
Securities; and such terms may include provisions under which the number of
shares of Common Stock to be received by the holders of the Junior
Subordinated Debt Securities would be calculated according to the market price
of the Common Stock as of a time stated in the Prospectus Supplement.
JUNIOR SUBORDINATED DEBT INDENTURE EVENTS OF DEFAULT
The Junior Subordinated Debt Indenture provides that any one or more of the
following described events, which has occurred and is continuing, constitutes
a "Junior Subordinated Debt Indenture Event of Default" with respect to each
series of Junior Subordinated Debt Securities: (a) failure for 30 days to pay
interest on the Junior Subordinated Debt Securities of such series when due;
provided that a valid extension of the interest payment period by the Company
shall not constitute a default in the payment of interest for this purpose; or
(b) failure to pay principal of or premium, if any, on the Junior Subordinated
Debt Securities of such series when due whether
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at maturity, upon redemption, by declaration or otherwise; or (c) failure to
observe or perform any other covenant contained in the Indenture with respect
to such series for 90 days after written notice to the Company from the
Indenture Trustee or the holders of at least 25% in principal amount of the
outstanding Junior Subordinated Debt Securities of such series; or (d) certain
events in bankruptcy, insolvency or reorganization of the Company. (Section
6.01).
In each and every such case, unless the principal of all the Junior
Subordinated Debt Securities of that series shall have already become due and
payable, either the Junior Subordinated Debt Indenture Trustee or the holders
of not less than 25% in aggregate principal amount of the Junior Subordinated
Debt Securities of that series then outstanding, by notice in writing to the
Company (and to the Junior Subordinated Debt Indenture Trustee if given by
such holders), may declare the principal of all the Junior Subordinated Debt
Securities of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable.
(Section 6.01).
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of that series have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Junior Subordinated Debt Indenture Trustee. (Section 6.06).
The Junior Subordinated Debt Indenture Trustee or the holders of not less than
25% in aggregate outstanding principal amount of the Junior Subordinated Debt
Securities of that series may declare the principal due and payable
immediately upon a Junior Subordinated Debt Indenture Event of Default with
respect to such series, but the holders of a majority in aggregate outstanding
principal amount of Junior Subordinated Debt Securities of such series may
annul such declaration and waive the default if the default has been cured and
a sum sufficient to pay all matured installments of interest and principal
otherwise than by acceleration and any premium has been deposited with the
Junior Subordinated Debt Indenture Trustee. (Sections 6.01 and 6.06).
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of that series may, on behalf of the
holders of all the Junior Subordinated Debt Securities of that series, waive
any past default, except a default in the payment of principal, premium, if
any, or interest on the Junior Subordinated Debt Securities of that series as
and when the same shall become due by the terms of such Junior Subordinated
Debt Securities 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 Junior Subordinated Debt
Indenture Trustee) or a call for redemption of Junior Subordinated Debt
Securities. (Section 6.06). The Company is required to file annually with the
Junior Subordinated Debt Indenture Trustee a certificate as to whether or not
the Company is in compliance with all the conditions and covenants under the
Indenture.
If the Junior Subordinated Debt Securities are issued to a SunAmerica Trust
in connection with the issuance of Trust Securities of such SunAmerica Trust,
then under the applicable Declaration a Junior Subordinated Debt Indenture
Event of Default with respect to such series of Junior Subordinated Debt
Securities will constitute a Declaration Event of Default.
MODIFICATION OF THE JUNIOR SUBORDINATED DEBT INDENTURE
The Junior Subordinated Debt Indenture contains provisions permitting the
Company and the Junior Subordinated Debt Indenture Trustee, with the consent
of the holders of not less than a majority in principal amount of the
outstanding Junior Subordinated Debt Securities of each series affected, to
modify the Junior Subordinated Debt Indenture or any supplemental indenture
affecting the rights of the holders of such Junior Subordinated Debt
Securities; provided that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debt Security affected thereby,
(i) extend the fixed maturity of any Junior Subordinated Debt Securities of
any series, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the holder of each Junior
Subordinated Debt Security so affected or (ii) reduce the percentage of Junior
Subordinated Debt Securities, the holders of which are required to consent to
any such modification,
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without the consent of the holders of each Junior Subordinated Debt Security
then outstanding and affected thereby. (Section 9.02).
BOOK-ENTRY AND SETTLEMENT
Unless otherwise specified in the applicable Prospectus Supplement, if the
Junior Subordinated Debt Securities of a series are issued in the form of one
or more fully registered global securities (each, a "Global Security"), the
descriptions contained under "Description of the Senior Debt Securities and
Subordinated Debt Securities-Global Debt Securities" will also be applicable
to such series of Junior Subordinated Securities. The Company anticipates that
the provisions described under such caption will also apply to all depositary
arrangements relating to Junior Subordinated Debt Securities. The specific
terms of the depositary arrangement with respect to any portion of a series of
Junior Subordinated Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement relating to such
series.
CONSOLIDATION, MERGER AND SALE
The Junior Subordinated Debt Indenture provides that the Company may not
consolidate with or merge into any other person or transfer or lease its
properties and assets substantially as an entirety to any person and may not
permit any person to merge into or consolidate with the Company unless (i)
either the Company will be the resulting or surviving entity or any successor
or purchaser is a corporation organized under the laws of the United States of
America, any State or the District of Columbia, and any such successor or
purchaser expressly assumes the Company's obligations under the Junior
Subordinated Debt Indenture and (ii) immediately after giving effect to the
transaction no Junior Subordinated Debt Indenture Event of Default shall have
occurred and be continuing.
DEFEASANCE AND DISCHARGE
Under the terms of the Junior Subordinated Debt Indenture, the Company will
be discharged from any and all obligations in respect of the Junior
Subordinated Debt Securities of a series (except in each case for certain
obligations to register the transfer or exchange of such Junior Subordinated
Debt Securities, replace stolen, lost or mutilated Junior Subordinated Debt
Securities of that series, maintain paying agencies and hold moneys for
payment in trust) if (i) the Company irrevocably deposits with the Junior
Subordinated Debt Indenture Trustee cash or U.S. Government Obligations, as
trust funds in an amount certified to be sufficient to pay at maturity (or
upon redemption) the principal of, premium, if any, and interest on all
outstanding Junior Subordinated Debt Securities of such series; (ii) the
Company delivers to the Junior Subordinated Debt Indenture Trustee an opinion
of counsel to the effect that the holders of the Junior Subordinated Debt
Securities of such series will not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance and that
defeasance will not otherwise alter holders' United States federal income tax
treatment of principal, premium and interest payments on such Junior
Subordinated Debt Securities of such series (such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of such Indenture, since such a result
would not occur under current tax law); and (iii) no event or condition shall
exist that, pursuant to the subordination provisions applicable to such
series, would prevent the Company from making payments of principal of,
premium, if any, and interest on the Junior Subordinated Debt Securities of
such series at the date of the irrevocable deposit referred to above. (Section
11.01).
GOVERNING LAW
The Junior Subordinated Debt Indenture and the Junior Subordinated Debt
Securities will be governed by, and construed in accordance with, the laws of
the State of New York. (Section 13.05).
INFORMATION CONCERNING THE JUNIOR SUBORDINATED DEBT INDENTURE TRUSTEE
The Junior Subordinated Debt Indenture Trustee, prior to default, undertakes
to perform only such duties as are specifically set forth in the Junior
Subordinated Debt 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).
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Subject to such provision, the Junior Subordinated Debt Indenture Trustee is
under no obligation to exercise any of the powers vested in it by the Junior
Subordinated Debt Indenture at the request of any holder of Junior
Subordinated Debt Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities that might be incurred
thereby. (Section 7.02). The Junior Subordinated Debt 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 Junior Subordinated Debt
Indenture Trustee reasonably believes that repayment or adequate indemnity is
not reasonably assured to it. (Section 7.01). The Junior Subordinated Debt
Indenture Trustee is one of a number of banks with which the Company and its
subsidiaries maintain ordinary banking and trust relationships and is also the
Trustee under the Senior Debt Indenture and the Subordinated Debt Indenture.
MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Junior Subordinated Debt Indenture to a direct or
indirect wholly-owned subsidiary of the Company; provided that, in the event
of any such assignment, the Company will remain jointly and severally liable
for all such obligations. Subject to the foregoing, the Junior Subordinated
Debt Indenture will be binding upon and inure to the benefit of the parties
thereto and their respective successors and assigns. The Junior Subordinated
Debt Indenture provides that it may not otherwise be assigned by the parties
thereto other than by the Company to a successor or purchaser pursuant to a
consolidation, merger or sale permitted by the Junior Subordinated Debt
Indenture. (Section 13.11).
DESCRIPTION OF CAPITAL STOCK
Under the Articles of Incorporation of the Company, as amended and restated
and including any Articles Supplementary (the "Articles of Incorporation"),
the Company has authority to issue 175,000,000 shares of Common Stock, par
value $1.00 per share ("Common Stock"), 25,000,000 shares of Nontransferable
Class B Stock, par value $1.00 per share (the "Nontransferable Class B
Stock"), 15,000,000 shares of Transferable Class B Stock, par value $1.00 per
share (the "Transferable Class B Stock," and, together with the
Nontransferable Class B Stock, the "Class B Stock") and 20,000,000 shares of
Preferred Stock, without par value ("Preferred Stock"). Preferred Stock may be
issued from time to time in one or more classes with such full, specific,
limited or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications and
limitations or restrictions thereof, as shall be stated and expressed in the
Articles of Incorporation or any amendment thereof or in Articles
Supplementary approved by the Board of Directors of the Company for the
purpose of establishing any class of Preferred Stock. The dividend, voting,
conversion, exchange, repurchase and redemption rights, if applicable, the
liquidation preference, and other specific terms of each series of the
Preferred Stock will be set forth in the applicable Prospectus Supplement. At
September 30, 1996, there were outstanding (i) 108,604,194 shares of Common
Stock (and 31,149,786 shares of Common Stock reserved for issuance upon
conversion of the outstanding Series E Preferred Shares (as defined below) and
the outstanding Nontransferable Class B Stock and in connection with
outstanding employee stock options and 450,000 shares of Common Stock deferred
under the Long- Term Performance-Based Incentive Plan for the Chief Executive
Officer); (ii) 10,848,468 shares of Nontransferable Class B Stock (excluding
shares of such stock held by a wholly-owned subsidiary of the Company which
are not considered outstanding and are not entitled to vote at any general or
special meeting of stockholders); (iii) 3,514,765 shares of a series of
Preferred Stock designated the 9 1/4% Preferred Stock, Series B ("Series B
Preferred Shares"); (iv) 486,800 shares of a series of Preferred Stock
designated the Adjustable Rate Cumulative Preferred Stock, Series C which were
redeemed in full on October 4, 1996; and (v) 80,000 shares of a series of
Preferred Stock designated the Series E Mandatory Conversion Premium Dividend
Preferred Stock ("Series E Preferred Shares"), represented by 4,000,000
Depositary Shares ("Series E Depositary Shares") (each representing one-
fiftieth of a Series E Preferred Share). There are no shares of Transferable
Class B Stock outstanding. The Series B Preferred Shares and the Series E
Preferred Shares rank pari passu with each other and senior to the Common
Stock and Class B Stock. For further information regarding the Common Stock
and Class B Stock, see "Common Stock and
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Class B Stock" below. For a description of the series of Preferred Stock of
the Company currently outstanding, see "Series B Preferred Shares" and "Series
E Preferred Shares" below.
The Prospectus Supplement relating to an offering of Common Stock will
describe terms relevant thereto, including the number of shares offered, the
initial offering price, market price and dividend information.
The applicable Prospectus Supplement will describe the following terms of
any Preferred Stock in respect of which this Prospectus is being delivered (to
the extent applicable to such Preferred Stock): (i) the specific designation,
number of shares, seniority and purchase price; (ii) any liquidation
preference per share; (iii) any date of maturity; (iv) any redemption,
repayment or sinking fund provisions; (v) any dividend rate or rates and the
dates on which any such dividends will be payable (or the method by which such
rates or dates will be determined); (vi) any voting rights; (vii) if other
than the currency of the United States of America, the currency or currencies
including composite currencies in which such Preferred Stock is denominated
and/or in which payments will or may be payable; (viii) the method by which
amounts in respect of such Preferred Stock may be calculated and any
commodities, currencies or indices, or value, rate or price, relevant to such
calculation; (ix) whether the Preferred Stock is convertible or exchangeable
and, if so, the securities or rights into which such Preferred Stock is
convertible or exchangeable (which may include other Preferred Stock, Senior
Debt Securities, Subordinated Debt Securities, Junior Subordinated Debt
Securities, Common Stock or other securities or rights of the Company
(including rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies or indices) or
securities of other issuers or a combination of the foregoing), and the terms
and conditions upon which such conversions or exchanges will be effected
including the initial conversion or exchange prices or rates, the conversion
or exchange period and any other related provisions; (x) the place or places
where dividends and other payments on the Preferred Stock will be payable; and
(xi) any additional voting, dividend, liquidation, redemption and other
rights, preferences, privileges, limitations and restrictions.
As described under "Description of Depositary Shares", the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced
by depositary receipts ("Depositary Receipts"), each representing an interest
(to be specified in the Prospectus Supplement relating to the particular
series of the Preferred Stock) in a share of the particular series of the
Preferred Stock issued and deposited with a Preferred Stock Depositary (as
defined herein).
All shares of Preferred Stock offered hereby, or issuable upon conversion,
exchange or exercise of Offered Securities, will, when issued, be fully paid
and non-assessable.
The following are summaries of the material terms of the Common Stock, Class
B Stock, the Series B Preferred Shares and the Series E Preferred Shares. Each
summary is qualified by reference to the provisions of the Company's Articles
of Incorporation, the Articles Supplementary for the Series B Preferred Shares
and the Articles Supplementary for the Series E Preferred Shares, copies of
which have been filed as exhibits to Registrations Statement of which this
Prospectus is a part.
COMMON STOCK AND CLASS B STOCK
Dividends. Except as provided below, holders of Common Stock and Class B
Stock are entitled to receive dividends and other distributions in cash, stock
or property of the Company, when, as and if declared by the Board of Directors
out of assets or funds of the Company legally available therefor and shall
share equally on a per share basis in all such dividends and other
distributions (subject to the rights of holders of Preferred Stock). If a cash
dividend is paid on any of the Common Stock, the Nontransferable Class B Stock
or the Transferable Class B Stock, a cash dividend also will be paid on the
Common Stock, the Nontransferable Class B Stock and the Transferable Class B
Stock, as the case may be. The amount of the cash dividend paid on each share
of Class B Stock will be equal to 90% of the amount of the cash dividend paid
on each share of Common Stock. In addition if holders of Common Stock receive
shares of Common Stock in connection with stock dividends or
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stock splits, holders of Transferable Class B Stock will receive a
proportionate number of shares of Transferable Class B Stock and holders of
Nontransferable Class B Stock will receive a proportionate number of shares of
Nontransferable Class B Stock.
Voting Rights. At every meeting of shareholders, every holder of Common
Stock is entitled to one vote per share and every holder of Class B Stock is
entitled to 10 votes per share. All actions submitted to a vote of
shareholders are voted upon by holders of Common Stock and Class B Stock
voting together as a single class (subject to any voting rights which may be
granted to holders of Preferred Stock) and a majority of the votes cast by
such holders is required to approve any such action, except where other
provision is made by law.
In addition to any vote required by law, the holders of Common Stock and
Class B Stock each vote separately as a class (i) on any merger or
consolidation of the Company with or into any other corporation, or any sale,
lease, exchange or other disposition of all or substantially all of the
Company's assets to or with any other person or any dissolution of the Company
(unless the other party to such merger or other transaction is a majority-
owned subsidiary of the Company) and (ii) on any additional issuances of Class
B Stock other than in connection with stock splits and stock dividends and
exchanges of Nontransferable Class B Stock for Transferable Class B Stock. A
majority of votes cast by the Common Stock and Class B Stock, each voting
separately as a class, is required to approve any matters described above as
to which holders of such shares have a separate class vote, unless, in the
case of the events described in clause (i) above, a greater vote is required
by law. In addition to any vote required by law, the affirmative vote of the
holders of a majority of the shares of the Common Stock and the
Nontransferable Class B Stock, each voting separately as a class, is required
to approve any amendments to the Articles of Incorporation.
Liquidation Rights. In the event of any dissolution, liquidation or winding
up of the affairs of the company, whether voluntary or involuntary, the
holders of Common Stock and Class B Stock are entitled to share equally in the
assets available for distribution after payment of all liabilities and
provision for the liquidation preference of any shares of Preferred Stock then
outstanding.
Class B Stock Conversion Rights. Each share of Class B Stock is convertible
into one share of Common Stock at any time at the option of the holder. In
addition, any transfer of shares of Nontransferable Class B Stock not
permitted under the Articles of Incorporation will result in the conversion of
such shares into shares of Common Stock.
The Articles of Incorporation provide that if at any time the number of
outstanding shares of Nontransferable Class B Stock represents less than 5% of
the aggregate number of issued and outstanding shares of Common Stock and
Nontransferable Class B Stock, all of the outstanding shares of
Nontransferable Class B Stock will immediately convert into shares of Common
Stock.
Exchange of Nontransferable Class B Stock. The Nontransferable Class B Stock
is exchangeable in whole at the option of the Company at any time for
Transferable Class B Stock. Holders of Nontransferable Class B Stock will
receive one share of Transferable Class B Stock for each share of
Nontransferable Class B Stock held by them at the time of the exchange.
Miscellaneous. The holders of Common Stock and Class B Stock have no
preemptive rights, cumulative voting rights or subscriptions rights. Except as
described above, the Common Stock and Class B Stock have no conversion rights
and are not subject to redemption.
The transfer agent and registrar with respect to the Common Stock is The
Bank of New York.
All shares of Common Stock offered hereby, or issuable upon conversion,
exchange or exercise of Offered Securities, will, when issued, be fully paid
and non-assessable.
Mr. Eli Broad is the Chairman, Chief Executive Officer and President of the
Company. At September 30, 1996, Mr. Broad beneficially owned an aggregate of
19,568,610 shares of Common Stock and Nontransferable
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Class B Stock and controlled 60.4% of the total number of votes entitled to be
cast by holders of Common Stock and Class B Stock, voting together as a single
class, at a general meeting of shareholders. Of the shares beneficially owned
by Mr. Broad, 2,865,468 represent shares of Common Stock that Mr. Broad has
the right to purchase at prices ranging from $2.16 per share to $22.46 per
share pursuant to vested stock options. In addition, 1,012,500 represent
shares of Common Stock and 1,687,500 represent shares of Nontransferable Class
B Stock, in each case held by a trust formed by Mr. Broad of which his estate
is a beneficiary.
SERIES B PREFERRED SHARES
Dividends. Subject to the rights of holders of other classes of stock
ranking on a parity with or senior to the Series B Preferred Shares which may
from time to time be issued by the Company, the holders of Series B Preferred
Shares are entitled to receive, when, as and if the Board of Directors
declares a dividend on the Series B Preferred Shares, out of assets legally
available for dividends, cumulative preferential cash dividends from the issue
date of the Series B Preferred Shares (June 29, 1992), accruing at the rate
per Series B Preferred Share of $2.3125 per annum or $.5781 per quarter,
payable quarterly in arrears on the 15th day of each March, June, September
and December or, if any such date is not a business day, on the next
succeeding business day.
Dividends on the Series B Preferred Shares accrue whether or not the Company
has earnings, whether or not there are funds legally available for the payment
of such dividends and whether nor not such dividends are declared and will
accumulate to the extent they are not paid on the dividend payment date for
the quarter for which they accrue. Accumulated unpaid dividends do not bear
interest.
Liquidation Rights. Subject to the rights of holders of other classes of
stock ranking on a parity with or senior to Series B Preferred Shares, in the
event of any liquidation, dissolution or winding-up of the business of the
Company, whether voluntary or involuntary (any such event, a "Liquidation"),
the holders of the Series B Preferred Shares, after payment or provision for
payment of the debts and other liabilities of the Company, will be entitled to
receive for each Series B Preferred Share, an amount equal to the sum of
$25.00 and all accrued and unpaid dividends thereon, and no more. If, upon any
Liquidation, there are insufficient assets to permit full payment of holders
of Series B Preferred Shares and shares of any other class of outstanding
Preferred Stock, the holders of Series B Preferred Shares and such other
shares shall be paid ratably in proportion to the full distributable amounts
to which holders of Series B Preferred Shares and such other shares are
respectively entitled upon Liquidation.
Redemption. The Series B Preferred Shares are not redeemable prior to June
15, 1997. On and after such date, the Series B Preferred Shares are redeemable
in cash at the option of the Company, in whole or in part, from time to time,
at a redemption price of $25.00 per share plus accrued and unpaid dividends to
the date fixed for redemption.
The Series B Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. The Series B Preferred Shares do not entitle holders thereof
to voting rights, except (i) the Company may not alter any of the provisions
of the Articles of Incorporation or the Articles Supplementary relating to the
Series B Preferred Shares which would materially and adversely affect any
right, preference or privilege of the Series B Preferred Shares without the
affirmative vote of the holders of at least two-thirds of the Series B
Preferred Shares outstanding at the time (voting separately as a class);
provided, however, that any such alteration that would authorize, create or
issue additional shares of Preferred Stock or any other shares of stock
(whether or not already authorized) ranking senior to, on a parity with or
junior to the Series B Preferred Shares as to dividends or on the distribution
of assets upon Liquidation shall be deemed not to materially and adversely
affect such rights, preferences or privileges, (ii) in the event dividends
payable on the Series B Preferred Shares shall be in arrears in an aggregate
amount equivalent to six full quarterly dividends (a "Series B Preferred Share
Dividend Default") or (iii) as required by law. In the event of a Series B
Preferred Share Dividend Default, the holders of the outstanding Series B
Preferred Shares will be entitled to elect together with holders of all other
outstanding classes of Preferred Stock ranking on a parity with the Series B
Preferred Shares and entitled to
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participate in such election, voting as a single class, two directors at a
special meeting called by the Board of Directors for such purpose. Such two
directors shall serve until the full dividends accumulated on all outstanding
Series B Preferred Shares and all other outstanding classes of Preferred Stock
ranking on a parity with the Series B Preferred Shares are paid.
SERIES E PREFERRED SHARES
Dividends. Subject to the rights of holders of other classes of stock
ranking on a parity with or senior to the Series E Preferred Shares which may
from time to time be issued by the Company, the holders of Series E Preferred
Shares are entitled to receive, when, as and if the Board of Directors
declares a dividend on the Series E Preferred Shares, out of assets legally
available for dividends, cumulative preferential cash dividends from the date
of issue of the Series E Preferred Shares (November 1, 1995), accruing at the
rate per Series E Preferred Share of $155 per annum or $38.75 per quarter
(equivalent to $3.10 per annum or $.775 per quarter for each Series E
Depositary Share), payable quarterly in arrears.
Dividends on the Series E Preferred Shares accrue whether or not the Company
has earnings, whether or not there are funds legally available for the payment
of such dividends and whether or not such dividends are declared and will
accumulate to the extent they are not paid on the dividend payment date for
the quarter for which they accrue. Accumulated unpaid dividends do not bear
interest.
Mandatory Conversion of Series E Preferred Shares. On November 1, 1998 (the
"Series E Mandatory Conversion Date"), each outstanding Series E Preferred
Share will convert automatically into shares of Common Stock at the Series E
Common Stock Equivalent Rate (as described below) in effect on the Series E
Mandatory Conversion Date and the right to receive an amount in cash (subject
to the Company's option to deliver Common Stock as described below) equal to
all accrued and unpaid dividends on such Series E Preferred Share to and
including the Series E Mandatory Conversion Date (the "Series E Mandatory
Conversion"), subject to the rights of the Company to call Series E Preferred
Shares prior to the Series E Mandatory Conversion Date (as described below).
At the option of the Company, it may deliver Common Stock in respect of all or
a portion of the amount of accrued and unpaid dividends in lieu of cash, the
number of shares of Common Stock to be delivered in respect of such accrued
and unpaid dividends to be determined by dividing the amount of accrued and
unpaid dividends that the Company has elected to pay in Common Stock by the
current market price (as defined) of the Common Stock determined on the second
trading day immediately preceding the Series E Mandatory Conversion Date. The
Series E Common Equivalent Rate is currently 150 shares of Common Stock for
each Series E Preferred Share (equivalent to 3 shares of Common Stock for each
Series E Depositary Share), subject to adjustment in the event of stock
dividends, distribution of assets or certain other events.
Immediately prior to the effectiveness of a merger or consolidation of, or
statutory share exchange involving, the Company that results in the conversion
or exchange of the Common Stock into, or the right to receive, other
securities or other property (any such merger, consolidation or exchange, a
"Merger or Consolidation"), each outstanding Series E Preferred Share will
convert automatically into (i) shares of Common Stock at the Series E Common
Equivalent Rate in effect on the effective date of the Merger or
Consolidation, plus (ii) the right to receive an amount in cash equal to the
accrued and unpaid dividends on such Series E Preferred Share to and including
such effective date, plus (iii) the right to receive an amount in cash
initially equal to $330 (equivalent to $6.60 for each Series E Depositary
Share), declining by $.305550 (equivalent to $.006111 for each Series E
Depositary Share) on each day following the date of issue of the Series E
Preferred Shares (November 1, 1995) to $18.35 (equivalent to $.367 for each
Series E Depositary Share) on September 1, 1998, and equal to zero thereafter,
determined with reference to such effective date, unless sooner redeemed. At
the option of the Company, it may deliver on such effective date, in lieu of
some or all of the cash consideration described in clauses (ii) and (iii) of
the preceding sentence, shares of Common Stock, the number of shares of Common
Stock to be delivered in lieu of any consideration described in such clauses
(ii) and (iii) to be determined by dividing the amount of cash consideration
that the Company had elected to pay in Common Stock by the current market
price (as defined) of the Common Stock on the second trading day preceding the
earlier of
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the commencement of the mailing of such election to the holders of Series E
Preferred Shares or the date such notice is first published in accordance with
the terms of the Series E Preferred Shares.
Series E Preferred Shares are not convertible into Common Stock at the
option of the holders thereof.
Right to Call Series E Preferred Shares. Except as provided below, at any
time or from time to time prior to the Series E Mandatory Conversation Date,
the Company has the right to call the outstanding Series E Preferred Shares
for redemption, in whole or in part, and to deliver to the holders thereof in
exchange for each such Series E Preferred Share a number of shares of Common
Stock equal to the Series E Call Price (as described below) on the redemption
date divided by the current market price (as defined) of the Common Stock on
the second trading day preceding the earlier of the commencement of the
mailing of notice of such redemption to holders of the Series E Preferred
Shares or the date such notice is published in accordance with the terms of
the Series E Preferred Shares (the "Series E Notice Date") plus an amount in
cash (subject to the Company's option to deliver Common Stock as described
below) equal to accrued and unpaid dividends to but excluding the date of
redemption. At the option of the Company, it may deliver Common Stock in
respect of all or a portion of the amount of accrued and unpaid dividends in
lieu of cash, the number of shares of Common Stock to be delivered in respect
of such accrued and unpaid dividends to be determined by dividing the amount
of accrued and unpaid dividends that the Company has elected to pay in Common
Stock by the current market price (as defined) of the Common Stock determined
on the second trading day immediately preceding the redemption date. The
Series E Call Price of each Series E Preferred Share is equal to fifty times
the sum of (i) an amount initially equal to $81.00, declining by $.006111 on
each day following the date of issue of the Series E Preferred Shares
(November 1, 1995) to $74.767 on September 1, 1998, and equal to $74.40
thereafter, and (ii) 50% of the excess, if any, of (a) the current market
price (as defined) of the Common Stock on the second trading day preceding the
Series E Notice Date relating to such redemption multiplied by one-fiftieth of
the Series E Common Equivalent Rate then in effect for the Common Stock, over
(b) $74.40.
Liquidation Rights. Subject to the rights of holders of other classes of
stock ranking on a parity with or senior to the Series E Preferred Shares, in
the event of any Liquidation, the holders of Series E Preferred Shares, after
payment or provisions for payment of the debts and other liabilities of the
Company, will be entitled to receive, for each Series E Preferred Share, an
amount equal to the sum of (i) $3,100 (equivalent to $62.00 for each Series E
Depositary Share) and (ii) all accrued and unpaid dividends thereon, and no
more. If, upon any such liquidation, there are insufficient assets to permit
full payment to holders of Series E Preferred Shares and shares of any class
of outstanding Preferred Stock, the holders of Series E Preferred Shares and
such other shares shall be paid ratably in proportion to the full
distributable amounts to which holders of Series E Preferred Shares and such
other shares are respectively entitled.
The Series E Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. The Series E Preferred Shares do not entitle holders thereof
to voting rights, except (i) the Company may not alter any of the provisions
of the Articles of Incorporation or the Articles Supplementary relating to the
Series E Preferred Shares which would materially and adversely affect any
right, preference or privilege of the Series E Preferred Shares without the
affirmative vote of the holders of at least two-thirds of the shares of Series
E Preferred Shares outstanding at the time (voting separately as a class);
provided, however, that any such alteration that would authorize, create or
issue any additional shares of Preferred Stock or any other shares of stock
(whether or not already authorized) ranking senior to, on a parity with or
junior to the Series E Preferred Shares as to dividends or on the distribution
of assets upon Liquidation shall be deemed not to materially and adversely
affect such rights, preferences or privileges, (ii) in the event dividends
payable on the Series E Preferred Shares shall be in arrears in an aggregate
amount equivalent to six full quarterly dividends (a "Series E Preferred Share
Dividend Default") or (iii) as required by law. In the event of a Series E
Preferred Share Dividend Default, the holders of the outstanding Series E
Preferred Shares will be entitled to elect together with holders of all other
outstanding classes of Preferred Stock ranking on a parity with Series E
Preferred Shares and entitled to participate in such election, voting as a
single class, two directors at a special meeting called by
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the Board of Directors for such purpose. Such two directors shall serve until
the full dividends accumulated on all outstanding Series E Preferred Shares
and all other outstanding classes of Preferred Stock ranking on a parity with
the Series E Preferred Shares are paid.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts summarizes the material terms of the Deposit
Agreement and of the Depositary Shares and Depositary Receipts, and is
qualified in its entirety by reference to, the form of Deposit Agreement and
form of Depositary Receipts relating to each series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to have shares of Preferred Stock be
represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") between the Company and a bank or
trust company selected by the Company (the "Preferred Stock Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Preferred Stock Depositary. Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share will be entitled,
proportionately, to all the rights, preferences and privileges of the
Preferred Stock represented thereby (including dividend, voting, redemption,
conversion, exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
A holder of Depositary Shares will be entitled to receive the shares of
Preferred Stock (but only in whole shares of Preferred Stock) underlying such
Depositary Shares. If the Depositary Receipts delivered by the holder evidence
a number of Depositary Shares in excess of the whole number of shares of
Preferred Stock to be withdrawn, the Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions in respect to the Preferred Stock to the record holders of
Depositary Receipts in proportion, insofar as possible, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to
make such distribution, in which case the Preferred Stock Depositary may, with
the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including sale (at
public or private sale) of such property and distribution of the net proceeds
from such sale to such holders.
The amount so distributed in any of the foregoing cases will be reduced by
any amount required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes.
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CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the
Prospectus Supplement relating thereto, each record holder of Depositary
Shares will have the right or obligation to convert or exchange such
Depositary Shares pursuant to the terms thereof.
REDEMPTION OF DEPOSITARY SHARES
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Preferred Stock Depositary resulting from the redemption, in whole or
in part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate
redemption price payable with respect to the number of shares of Preferred
Stock underlying the Depositary Shares. Whenever the Company redeems Preferred
Stock from the Preferred Stock Depositary, the Preferred Stock Depositary will
redeem as of the same redemption date a proportionate number of Depositary
Shares representing the shares of Preferred Stock that were redeemed. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of two
years from the date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice
to the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depositary as to the exercise of the voting rights pertaining
to the number of shares of Preferred Stock underlying such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable,
to vote the number of shares of Preferred Stock underlying such Depositary
Shares in accordance with such instructions, and the Company will agree to
take all reasonable action which may be deemed necessary by the Preferred
Stock Depositary in order to enable the Preferred Stock Depositary to do so.
The Preferred Stock Depositary will abstain from voting the Preferred Stock to
the extent it does not receive specific written instructions from holders of
Depositary Receipts representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred
Stock, or (ii) the Preferred Stock Depositary shall receive notice of any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice, or of the mandatory
conversion of or any election on the part of the Company to call for the
redemption of any Preferred Stock, the Preferred Stock Depositary shall in
each such instance fix a record date (which shall be the same as the record
date for the Preferred Stock) for the determination of the holders of
Depositary Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the
sale thereof or (y) who shall be entitled to give instructions for the
exercise of voting rights at any such meeting or to receive notice of such
meeting or of such redemption or conversion, subject to the provisions of the
Deposit Agreement.
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AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Preferred
Stock Depositary. However, any amendment which imposes or increases any fees,
taxes or other charges payable by the holders of Depositary Receipts (other
than taxes and other governmental charges, fees and other expenses payable by
such holders as stated under "Charges of Preferred Stock Depositary"), or
which otherwise prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding Depositary
Receipts until the expiration of 90 days after notice of such amendment has
been mailed to the record holders of outstanding Depositary Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time
45 days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of its election to resign and a
successor depositary shall not have been appointed and accepted its
appointment. If any Depositary Receipts remain outstanding after the date of
termination, the Preferred Stock Depositary thereafter will discontinue the
transfer of Depositary Receipts, will suspend the distribution of dividends to
the holders thereof, and will not give any further notices (other than notice
of such termination) or perform any further acts under the Deposit Agreement
except as provided below and except that the Preferred Stock Depositary will
continue (i) to collect dividends on the Preferred Stock and any other
distributions with respect thereto and (ii) to deliver the Preferred Stock
together with such dividends and distributions and the net proceeds of any
sales of rights, preferences, privileges or other property, without liability
for interest thereon, in exchange for Depositary Receipts surrendered. At any
time after the expiration of two years from the date of termination, the
Preferred Stock Depositary may sell the Preferred Stock then held by it at
public or private sales, at such place or places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property then held by it, without liability
for interest thereon, for the pro rata benefit of the holders of Depositary
Receipts which have not been surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary including
charges in connection with the initial deposit of the Preferred Stock, the
initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which
Preferred Stock is entitled to vote, withdrawals of the Preferred Stock by the
holders of Depositary Receipts or redemption or conversion of the Preferred
Stock, except for taxes (including transfer taxes, if any) and other
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be at the expense of holders of Depositary Receipts or
persons depositing Preferred Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by holders
of Depositary Receipts at its corporate office and its New York office, all
reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Preferred Stock Depositary under the Deposit Agreement are limited to
performing its duties thereunder without negligence or bad faith. The
obligations of the Company under the Deposit Agreement are limited to
performing its duties thereunder in good faith. Neither the Company nor the
Preferred Stock Depositary is obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary are entitled to rely upon advice of or information from counsel,
accountants or other persons believed to be competent and on documents
believed to be genuine.
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The Preferred Stock Depositary may resign at any time or be removed by the
Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been
appointed or accepted such appointment within 45 days after the Preferred
Stock Depositary has delivered a notice of election to resign to the Company,
the Preferred Stock Depositary may terminate the Deposit Agreement. See
"Amendment and Termination of Deposit Agreement" above.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants to purchase Senior Debt Securities,
Subordinated Debt Securities or Junior Subordinated Debt Securities, Preferred
Stock (or Depositary Shares representing Preferred Stock) or Common Stock
(collectively, the "Underlying Warrant Securities"), and such Warrants may be
issued independently or together with any such Underlying Warrant Securities
and may be attached to or separate from such Underlying Warrant Securities.
Each series of Warrants will be issued under a separate warrant agreement
(each a "Warrant Agreement") to be entered into between the Company and a
warrant agent ("Warrant Agent"). The Warrant Agent will act solely as an agent
of the Company in connection with the Warrants of such series and will not
assume any obligation or relationship of agency for or with holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants
and the applicable Warrant Agreement are set forth in the applicable
Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any Warrants
in respect of which this Prospectus is being delivered, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued;
(iv) the currency or currencies, including composite currencies, in which the
price of such Warrants may be payable; (v) the designation and terms of the
Underlying Warrant Securities purchasable upon exercise of such Warrants; (vi)
the price at which and the currency or currencies, including composite
currencies, in which the Underlying Warrant Securities purchasable upon
exercise of such Warrants may be purchased; (vii) the date on which the right
to exercise such Warrants shall commence and the date on which such right
shall expire; (viii) whether such Warrants will be issued in registered form
or bearer form; (ix) if applicable, the minimum or maximum amount of such
Warrants which may be exercised at any one time; (x) if applicable, the
designation and terms of the Underlying Warrant Securities with which such
Warrants are issued and the number of such Warrants issued with each such
Underlying Warrant Security; (xi) if applicable, the date on and after which
such Warrants and the related Underlying Warrant Securities will be separately
transferable; (xii) information with respect to book-entry procedures, if any;
(xiii) if applicable, a discussion of certain United States federal income tax
considerations; and (xiv) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants.
DESCRIPTION OF THE PREFERRED SECURITIES
Each SunAmerica Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each SunAmerica Trust authorizes the
Regular Trustees of such SunAmerica Trust to issue on behalf of such
SunAmerica Trust one series of Preferred Securities. Each Declaration will be
qualified as an indenture under the Trust Indenture Act. The Preferred
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights
or such restrictions as shall be set forth in the related Declaration or made
part of such Declaration by the Trust Indenture Act or the Business Trust Act.
Reference is made to any Prospectus Supplement relating to the Preferred
Securities of a SunAmerica Trust for specific terms, including (i) the
specific designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such SunAmerica Trust, (iii) the annual
distribution rate (or method of calculation thereof) for Preferred Securities
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issued by such SunAmerica Trust, the date or dates upon which such
distributions shall be payable and the record date or dates for the payment of
such distributions, (iv) whether distributions on Preferred Securities issued
by such SunAmerica Trust shall be cumulative, and, in the case of Preferred
Securities having such cumulative distribution rights, the date or dates or
method of determining the date or dates from which distributions on Preferred
Securities issued by such SunAmerica Trust shall be cumulative, (v) the amount
or amounts which shall be paid out of the assets of such SunAmerica Trust to
the holders of Preferred Securities of such SunAmerica Trust upon voluntary or
involuntary dissolution, winding-up or termination of such SunAmerica Trust,
(vi) the obligation or right, if any, of such SunAmerica Trust to purchase or
redeem Preferred Securities issued by such SunAmerica Trust and the price or
prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities issued by such SunAmerica Trust
shall or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right, (vii) the voting rights, if any, of Preferred Securities
issued by such SunAmerica Trust in addition to those required by law,
including the number of votes per Preferred Security and any requirement for
the approval by the holders of Preferred Securities, or of Preferred
Securities issued by one or more SunAmerica Trusts, or of both, as a condition
to specified actions or amendments to the Declaration of such SunAmerica
Trust, (viii) the terms and conditions, if any, upon which Preferred
Securities issued by such SunAmerica Trust may be converted into Common Stock
of the Company, including the conversion price per share and the
circumstances, if any, under which such conversion right will expire, (ix) the
terms and conditions, if any, upon which the Junior Subordinated Debt
Securities may be distributed to holders of Trust Preferred Securities, (x) if
applicable, any securities exchange upon which the Preferred Securities shall
be listed, and (xi) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such SunAmerica
Trust consistent with the Declaration of such SunAmerica Trust or with
applicable law. All Preferred Securities offered hereby will be guaranteed by
the Company as and to the extent set forth below under "Description of the
Preferred Securities Guarantees." Certain United States federal income tax
considerations applicable to any offering of Preferred Securities will be
described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each SunAmerica
Trust will issue one series of Common Securities. The Declaration of each
SunAmerica Trust authorizes the Regular Trustees of such trust to issue on
behalf of such SunAmerica Trust one series of Common Securities having such
terms including distributions, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. The terms of the Common Securities
issued by a SunAmerica Trust will be substantially identical to the terms of
the Preferred Securities issued by such SunAmerica Trust and the Common
Securities will rank pari passu, and payments will be made thereon on a Pro
Rata Basis with the Preferred Securities except that if a Declaration Event of
Default occurs and is continuing, the rights of the holders of such Common
Securities to payments in respect of distributions and payments upon
liquidation, redemption and maturity will be subordinated to the rights of the
holders of such Preferred Securities. Except in certain limited circumstances,
the Common Securities issued by a SunAmerica Trust will also carry the right
to vote and to appoint, remove or replace any of the Trustees of that
SunAmerica Trust. All of the Common Securities of a SunAmerica Trust will be
directly or indirectly owned by the Company.
PROPOSED TAX LEGISLATION
On March 19, 1996, as a part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") that, among other things, would (i) treat as equity for United
States federal income tax purposes certain debt instruments with a maximum
term of more than 20 years and (ii) disallow interest deductions on certain
convertible debt instruments or defer interest deductions on certain debt
instruments issued with original issue discount. The Proposed Legislation is
proposed to be effective for debt instruments issued on or after December 7,
1995.
On March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr.
and House Ways and Means Committee Chairman Bill Archer issued a joint
statement (the "Joint Statement") indicating their intent that the Proposed
Legislation, if adopted by either of the tax-writing committees of Congress,
would have an effective
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date that is no earlier than the date of "appropriate Congressional action."
However, there can be no assurances that the effective date guidance contained
in the Joint Statement will be incorporated in the Proposed Legislation, if
enacted, or that other legislation enacted after the date hereof will not
otherwise adversely affect the tax treatment of the Junior Subordinated Debt
Securities. In addition, there can be no assurances as to whether or in what
form the Proposed Legislation may be enacted into law or whether other
legislation will be enacted that otherwise adversely affects the tax treatment
of the Junior Subordinated Debt Securities and the Preferred Securities.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company for
the benefit of the holders from time to time of Preferred Securities. Each
Preferred Security Guarantee will be separately qualified under the Trust
Indenture Act and will be held by the Bank of New York, acting in its capacity
as indenture trustee with respect thereto, for the benefit of holders of the
Preferred Securities of the applicable SunAmerica Trust. The terms of each
Preferred Securities Guarantee will be those set forth in such Preferred
Securities Guarantee and those made part of such Guarantee by the Trust
Indenture Act. This description summarizes the material terms of the Preferred
Securities Guarantees and is qualified in its entirety by reference to, the
form of Preferred Securities Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by a SunAmerica
Trust, the Guarantee Payments (as defined below) (without duplication of
amounts theretofore paid by such SunAmerica Trust), to the extent not paid by
such SunAmerica Trust, regardless of any defense, right of set-off or
counterclaim that such SunAmerica Trust may have or assert. The following
payments or distributions with respect to Preferred Securities issued by a
SunAmerica Trust to the extent not paid or made by such SunAmerica Trust (the
"Guarantee Payments"), will be subject to the Preferred Securities Guarantee
(without duplication): (i) any accrued and unpaid distributions on such
Preferred Securities, and the redemption price, including all accrued and
unpaid distributions to the date of redemption, with respect to any Preferred
Securities called for redemption by such SunAmerica Trust but only if and to
the extent that in each case the Company has made a payment to the related
Property Trustee of interest or principal on the Junior Subordinated Debt
Securities deposited in such SunAmerica Trust as trust assets and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of such
SunAmerica Trust (other than in connection with the distribution of such
Junior Subordinated Debt Securities to the holders of Preferred Securities or
the redemption of all of the Preferred Securities upon the maturity or
redemption of such Junior Subordinated Debt Securities) the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid distributions
on such Preferred Securities to the date of payment, to the extent such
SunAmerica Trust has funds available therefor or (b) the amount of assets of
such SunAmerica Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of such SunAmerica Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Company to the holders of Preferred Securities or
by causing the applicable SunAmerica Trust to pay such amount to such holders.
The Preferred Securities Guarantee is a full and unconditional guarantee
from the time of issuance of the applicable Preferred Securities but the
Preferred Securities Guarantee covers distributions and other payments on such
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the applicable SunAmerica Trust as
trust assets. If the Company does not make interest or principal payments on
the Junior Subordinated Debt Securities deposited in the applicable SunAmerica
Trust as trust assets, the Property Trust will not make
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distributions of the Preferred Securities of such SunAmerica Trust and the
SunAmerica Trust will not have funds available therefor.
The Company's obligations under the Declaration for each Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by that Trust, the Junior Subordinated Debt Securities purchased by
that Trust and the Junior Subordinated Debt Indenture in the aggregate will
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities issued by that Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the applicable SunAmerica Trust
remain outstanding, the Company will not (A) declare or pay any dividends on,
or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
guarantee payment with respect thereto, or (B) make any payment of interest,
premium (if any) or principal on any debt securities issued by the Company
which rank pari passu with or junior to the Junior Subordinated Debt
Securities, if at such time (i) the Company shall be in default with respect
to its Guarantee Payments or other payment obligations under the Preferred
Securities Guarantee, (ii) there shall have occurred any Declaration Event of
Default under the related Declaration or (iii) the Company shall have given
notice of its election to defer payments of interest on the Junior
Subordinated Debt Securities held by such SunAmerica Trust as trust assets by
extending the interest payment period as provided in the terms of the Junior
Subordinated Debt Securities and such period, or any extension thereof, is
continuing; provided that (a) the Company will be permitted to pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion of any
of its Series E Preferred Shares or upon the conversion of any other Preferred
Stock of the Company as may be outstanding from time to time, in each case in
accordance with the terms of such stock and (b) the foregoing will not apply
to any stock dividends paid by the Company. In addition, so long as any
Preferred Securities remain outstanding, the Company has agreed (i) to remain
the sole direct or indirect owner of all of the outstanding Common Securities
issued by the applicable SunAmerica Trust and shall not cause or permit the
Common Securities to be transferred except to the extent permitted by the
related Declaration; provided that any permitted successor of the Company
under the Indenture may succeed to the Company's ownership of the Common
Securities issued by the applicable SunAmerica Trust and (ii) to use
reasonable efforts to cause such SunAmerica Trust to continue to be treated as
a grantor trust for United States federal income tax purposes except in
connection with a distribution of Junior Subordinated Debt Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent will be
required), each Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount
of the outstanding Preferred Securities issued by the applicable SunAmerica
Trust. The manner of obtaining any such approval of holders of such Preferred
Securities will be set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Preferred Securities Guarantee shall
bind the successors, assignees, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Preferred
Securities of the applicable SunAmerica Trust then outstanding. Except in
connection with a consolidation, merger or sale involving the Company that is
permitted under the Indenture, the Company may not assign its obligations
under any Preferred Securities Guarantee.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable
SunAmerica Trust upon full payment of the redemption price of all Preferred
Securities of such SunAmerica Trust, or upon distribution of the Junior
Subordinated Debt Securities to the holders of the Preferred Securities of
such SunAmerica Trust in exchange for all of the Preferred Securities
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issued by such SunAmerica Trust, or upon full payment of the amounts payable
upon liquidation of such SunAmerica Trust. Notwithstanding the foregoing, each
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by the applicable SunAmerica Trust must restore payment of
any sums paid under such Preferred Securities or such Guarantee.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Company's obligations under each Preferred Securities Guarantee to make
the Guarantee Payments will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, including the Junior Subordinated Debt Securities,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by the Company and to any guarantee
now or hereafter entered into by the Company in respect of any of its capital
stock. The Company's obligations under each Preferred Securities Guarantee
will rank pari passu with each other Preferred Securities Guarantee. Because
the Company is a holding company, the Company's obligations under each
Preferred Securities Guarantee are also effectively subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries, except to the extent that the Company is a creditor of the
subsidiaries recognized as such. Each Declaration provides that each holder of
Preferred Securities issued by the applicable SunAmerica Trust by acceptance
thereof agrees to the subordination provisions and other terms of the related
Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
guarantee without first instituting a legal proceeding against any other
person or entity). Each Preferred Securities Guarantee will be deposited with
The Bank of New York, as indenture trustee, to be held for the benefit of the
holders of the Preferred Securities issued by the applicable SunAmerica Trust.
The Bank of New York shall enforce the Preferred Securities Guarantee on
behalf of the holders of the Preferred Securities issued by the applicable
SunAmerica Trust. The holders of not less than a majority in aggregate
liquidation amount of the Preferred Securities issued by the applicable
SunAmerica Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the related
Preferred Securities Guarantee, including the giving of directions to The Bank
of New York. If The Bank of New York fails to enforce such Preferred
Securities Guarantee as above provided, any holder of Preferred Securities
issued by the applicable SunAmerica Trust may institute a legal proceeding
directly against the Company to enforce its rights under such Preferred
Securities Guarantee, without first instituting a legal proceeding against the
applicable SunAmerica Trust or any other person or entity.
MISCELLANEOUS
The Company will be required to provide annually to The Bank of New York a
statement as to the performance by the Company of certain of its obligations
under the Preferred Securities Guarantees and as to any default in such
performance. The Company is required to file annually with The Bank of New
York an officer's certificate as to the Company's compliance with all
conditions under Preferred Securities Guarantees.
The Bank of New York, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the applicable
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise in the conduct of his or her own affairs. Subject to
such provision, The Bank of New York is under no obligation to exercise any of
the powers vested in it by a Preferred Securities Guarantee at the request of
any holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by, and construed in
accordance with, the laws of the State of New York.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to
the holders, a specified number of shares of Common Stock at a future date or
dates. The price per share of Common Stock may be fixed at the time the Stock
Purchase Contracts are issued or may be determined by reference to a specific
formula set forth in the Stock Purchase Contracts. The Stock Purchase
Contracts may be issued separately or as a part of units ("Stock Purchase
Units") consisting of a Stock Purchase Contract and either (x) Senior Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt
Securities, (y) debt obligations of third parties, including U.S. Treasury
securities, or (z) Preferred Securities of a SunAmerica Trust, securing the
holder's obligations to purchase the Common Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make
periodic payments to the holders of the Stock Purchase Units or vice versa,
and such payments may be unsecured or prefunded on some basis. The Stock
Purchase Contracts may require holders to secure their obligations thereunder
in a specified manner and in certain circumstances the Company may deliver
newly issued prepaid stock purchase contracts ("Prepaid Securities") upon
release to a holder of any collateral securing such holder's obligations under
the original Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to
be complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements,
if applicable, relating to such Stock Purchase Contracts or Stock Purchase
Units and, if applicable, the Prepaid Securities and the document pursuant to
which such Prepaid Securities will be issued.
PLAN OF DISTRIBUTION
The Company and/or a SunAmerica Trust may sell the Securities directly or
through agents, underwriters or dealers.
Offers to purchase Offered Securities may be solicited by agents designated
by the Company and/or a SunAmerica Trust from time to time. Any such agent,
who may be deemed to be an underwriter as that term is defined in the
Securities Act, involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any
commissions payable by the Company and/or a SunAmerica Trust to such agent set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment. The Company and/or a SunAmerica Trust may
also sell Offered Securities to an agent as principal. Agents may be entitled
to, under agreements which may be entered into with the Company and/or a
SunAmerica Trust, indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and may be customers of,
engage in transactions with or perform services for the Company in the
ordinary course of business.
If any underwriters are utilized in the sale of Offered Securities in
respect of which this Prospectus is delivered, the Company and/or a SunAmerica
Trust will enter into an underwriting agreement with such underwriters and the
names of the underwriters and the terms of the transaction will be set forth
in the Prospectus Supplement, which will be used by the underwriters to make
resales of the Offered Securities in respect of which this Prospectus is
delivered to the public. Underwriters may offer and sell the Offered
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. The underwriters may be
entitled, under the relevant underwriting agreement, to indemnification by the
Company against certain liabilities, including liabilities under the
Securities Act, and may be customers of, engage in transactions with or
perform services for the Company in the ordinary course of business.
39
<PAGE>
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Company and/or a SunAmerica Trust will
sell such Offered Securities to the dealer, as principal. The dealer may then
resell such Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary course
of business.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment pursuant to their terms, or
otherwise, by one or more firms ("marketing firms"), acting as principals for
their own accounts or as agents for the Company and/or a SunAmerica Trust. Any
remarketing firm will be identified and the terms of its agreement, if any,
with the Company and/or a SunAmerica Trust and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Offered Securities remarketing thereby.
Remarketing firms may be entitled under agreements which may be entered into
with the Company and/or a SunAmerica Trust to indemnification by the Company
against certain liabilities, including liabilities under the Securities Act,
and may be customers of, engage in transactions with or perform services for
the Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company and/or a
SunAmerica Trust will authorize agents and underwriters or dealers to solicit
offers by certain purchasers to purchase Offered Securities from the Company
at the public offering price set forth in the Prospectus Supplement pursuant
to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject to only those
conditions set forth in the Prospectus Supplement, and the Prospectus
Supplement will set forth the commission payable for solicitation of such
offers.
LEGAL MATTERS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Offered Securities of SunAmerica will be passed upon for the
Company by Susan L. Harris, Senior Vice President and General Counsel--
Corporate Affairs of the Company, and by Davis Polk & Wardwell, New York, New
York, special counsel to the Company and the SunAmerica Trusts. Ms. Harris and
Davis Polk & Wardwell will rely as to matters of Maryland law on Piper &
Marbury L.L.P., Baltimore, Maryland. Unless otherwise indicated in a
Prospectus Supplement certain matters of Delaware law relating to the validity
of the Preferred Securities of a SunAmerica Trust will be passed upon for the
SunAmerica Trusts by Richards, Layton & Finger, Wilmington, Delaware, special
Delaware counsel to the SunAmerica Trusts. Ms. Harris holds stock, restricted
stock and options to purchase stock granted under the Company's employee stock
plans, which in the aggregate represent less than 1% of the Company's Common
Stock. David W. Ferguson, a partner of Davis Polk & Wardwell, is a director of
First SunAmerica Life Insurance Company, a subsidiary of the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended September 30,
1995, 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.
The financial statements of Ford Life Insurance Company as of and for the
years ended December 31, 1995, 1994 and 1993 incorporated by reference in this
Prospectus, have been so incorporated in reliance on the reports of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of said firm
as experts in auditing and accounting.
40
<PAGE>
ERISA MATTERS
The Company and certain affiliates of the Company, including SunAmerica Life
Insurance Company and Anchor National Life Insurance Company, may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a "disqualified person"
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code") with respect to many employee benefit plans. Prohibited transactions
within the meaning of ERISA or the Code may arise, for example, if the Offered
Securities are acquired by a pension or other employee benefit plan with
respect to which the Company or any of its affiliates is a service provider
(or otherwise is a "party in interest" or a "disqualified person"), unless
such Offered Securities are acquired pursuant to an exemption for transactions
effected on behalf of such plan by a "qualified professional asset manager" or
pursuant to any other available exemption. Any such pension or employee
benefit plan proposing to invest in the Offered Securities should consult with
its legal counsel.
41
<PAGE>
[LOGO]SUNAMERICA
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered, other than underwriting
discounts and commissions. All of the amounts shown are estimates, except the
SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee............................................... $373,182
Printing and engraving............................................. 100,000
Legal fees and expenses............................................ 150,000
Fees of accountants................................................ 80,000
Fees of trustee.................................................... 50,000
Blue sky fees and expenses......................................... 60,000
Rating agency fees................................................. 10,000
Miscellaneous...................................................... 26,818
--------
Total............................................................ $850,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 2-418 of the Maryland General Corporation law permits the
indemnification of directors, officers, employees and agents of Maryland
corporations. Article Eighth of the Company's Restated Articles of
Incorporation, as amended and restated (the "Articles") authorizes the
indemnification of directors and officers to the full extent required or
permitted by the General Laws of the State of Maryland, now or hereafter in
force, whether such persons are serving the Company, or, at its request, any
other entity, which indemnification shall include the advance of expenses
under the procedures and to the full extent permitted by law. Article Eighth
of the Articles of Incorporation, as amended and restated, further provides
that the foregoing rights of indemnification shall not be exclusive of any
other rights to which those seeking indemnification may be entitled and that
no amendment or repeal of Article Eighth shall apply to or have any effect on
any right to indemnification provided thereunder with respect to acts or
omissions occurring prior to such amendment or repeal. In addition, the
Company's officers and directors are covered by certain directors' and
officers' liability insurance policies maintained by the Company. Reference is
made to section 2-418 of the Maryland General Corporation Law and Article
Eighth of the Articles, which are incorporated herein by reference.
Each Amended and Restated Declaration of Trust (a "Declaration") of a
SunAmerica Trust provides that no Trustee, affiliate of any Trustee or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of such
SunAmerica Trust or its affiliates (each, an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any employee or
agent of such SunAmerica Trust or its affiliates, or any officers, directors,
shareholders, employees, representatives or agents of the Company or its
affiliates or to any holders of Trust Securities of such SunAmerica Trust for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of such
SunAmerica Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person
by the Declaration of such SunAmerica Trust or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence (or, in the case of
the Property Trustee of such SunAmerica Trust, negligence) or willful
misconduct with respect to such acts or omissions. Each Declaration also
provides that, to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of such SunAmerica Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such
II-1
<PAGE>
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee of such SunAmerica Trust, negligence) or willful misconduct
with respect to such acts or omissions. Each Declaration further provides that
to the fullest extent permitted by applicable law, expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or the final disposition of such claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Company prior to the
final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Company of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified pursuant to such Declaration.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1.1+ Form of Underwriting Agreement (Debt)
1.2+ Form of Underwriting Agreement (Equity)
1.3+ Form of Underwriting Agreement (Preferred Securities)
1.4+ Form of Underwriting Agreement (Stock Purchase Contracts)
1.5+ Form of Underwriting Agreement (Stock Purchase Units)
3.1 Restated Charter of the Company, dated October 2, 1991 (incorporated
herein by reference to Exhibit 3(a) to the Company's Form 8, dated
and filed October 4, 1991, amending the Company's Annual Report on
Form 10-K for the year ended September 30, 1990).
3.2 Articles Supplementary, dated June 24, 1992 (incorporated herein by
reference to Exhibit 3(c) to the Company's 1992 Annual Report on
Form 10-K, filed November 30, 1992)
3.3 Amendment to the Company's Restated Articles of Incorporation, dated
February 1, 1993 (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K, filed February 3, 1993)
3.4 Articles of Merger, dated July 30, 1993, between the Company and
SunAmerica Corporation (incorporated herein by reference to Exhibit
3(g) to the Company's 1993 Annual Report on Form 10-K, filed
December 16, 1993)
3.5 Articles Supplementary, dated October 30, 1995 (incorporated by
reference to Exhibit 3(h) to the Company's 1995 Annual Report on
Form 10-K, filed November 29, 1995)
3.6 Articles of Amendment dated October 30, 1995 (incorporated by
reference to Exhibit 3(i) to the Company's 1995 Annual Report on
Form 10-K, filed November 29, 1995)
3.7 Bylaws of the Company as revised on October 23, 1987 (incorporated
herein by reference to Exhibit 3(b) to the Company's 1987 Annual
Report on Form 10-K, filed February 26, 1988)
4.1 Senior Indenture dated as of April 15, 1993 between the Company and
The First National Bank of Chicago (incorporated herein by reference
to Exhibit 4(h) to the Company's Annual Report on Form 10-K, filed
December 16, 1993)
4.2** Supplemental Indenture dated as of June 28, 1993 supplementing the
Senior Indenture
4.3** Form of Subordinated Indenture between the Company and The First
National Bank of Chicago
4.4 Junior Subordinated Indenture dated as of March 15, 1995 between the
Company and The First National Bank of Chicago (incorporated by
reference to Exhibit 4.3 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.5 Declaration of Trust of SunAmerica Capital Trust III (incorporated by
reference to Exhibit 4.6 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.6 Certificate of Trust of SunAmerica Capital Trust III (incorporated by
reference to Exhibit 4.7 to the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.7 Declaration of Trust of SunAmerica Capital Trust IV (incorporated by
reference to Exhibit 4.8 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
4.8 Certificate of Trust of SunAmerica Capital Trust IV (incorporated by
reference to Exhibit 4.9 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.9** Declaration of Trust of SunAmerica Capital Trust V
4.10** Certificate of Trust of SunAmerica Capital Trust V
4.11** Declaration of Trust of SunAmerica Capital Trust VI
4.12** Certificate of Trust of SunAmerica Capital Trust VI
4.13* Form of Amended and Restated Declaration of Trust for a SunAmerica
Trust to be used in connection with Non-convertible Preferred
Securities
4.14* Form of Non-convertible Preferred Security (included in Exhibit 4.13)
4.15+ Form of convertible Preferred Security
4.16* Form of Supplemental Indenture to be used in connection with issuance
of Junior Subordinated Debt Securities and Preferred Securities
4.17 Form of Non-convertible Junior Subordinated Debt Security (included in
Exhibit 4.16) (incorporated by reference to Exhibit 4.13 of the
Company's Registration Statement No. 33-62405 on Form S-3, declared
effective September 29, 1995)
4.18+ Form of convertible Junior Subordinated Debt Security
4.19* Form of Preferred Securities Guarantee with respect to Preferred
Securities
4.20 Form of Deposit Agreement (incorporated by reference to Exhibit 4.15
of the Company's Registration Statement No. 33-62405 on Form S-3,
declared effective September 29, 1995)
4.21 Form of SunAmerica Common Stock Share Certificate (incorporated by
reference to Exhibit 4.16 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.22* Form of Purchase Contract Agreement between SunAmerica Inc. and The
Bank of New York, as Purchase Contract Agent (including as Exhibit A
the Form of Security Certificate)
4.23* Form of Pledge Agreement among SunAmerica Inc., The First National
Bank of Chicago, as Collateral Agent, and The Bank of New York, as
Purchase Contract Agent
4.24** Form of Supplemental Indenture to the Senior Indenture providing for
the issuance for convertible debt securities thereunder
4.25** Form of Supplemental Indenture to the Junior Subordinated Indenture
providing for the issuance of convertible debt securities thereunder
4.26** Form of Prepaid Securities Indenture between the Company and The Bank
of New York, as Trustee
5.1* Opinion of Davis Polk & Wardwell
5.2* Opinion of Piper & Marbury L.L.P.
5.3* Opinion of Richards, Layton & Finger
8.1* Tax Opinion of Davis Polk & Wardwell
12.1** Statement re: Computation of ratio of earnings to fixed charges
12.2** Statement re: Computation of ratio of earnings to combined fixed
charges and preferred stock dividends
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Susan L. Harris
23.3* Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4* Consent of Piper & Marbury L.L.P. (included in Exhibit 5.2)
23.5* Consent of Richards, Layton & Finger (included in Exhibit 5.3)
23.6* Consent of Coopers & Lybrand L.L.P.
24.1** Powers of Attorney for the Company (included in signature pages)
24.2** Powers of Attorney for SunAmerica, as sponsor, to sign the
Registration Statement on behalf of SunAmerica Capital Trust III,
SunAmerica Capital Trust IV, SunAmerica Capital Trust V and
SunAmerica Capital Trust VI (included in Exhibits 4.5, 4.7, 4.9 and
4.11, respectively)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
25.1** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Senior Indenture
25.2** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Subordinated Indenture
25.3** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Junior Subordinated Indenture
25.4* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of Trust of SunAmerica Capital Trust
III
25.5* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of Trust of SunAmerica Capital Trust
IV
25.6* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of SunAmerica Capital Trust V
25.7* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of SunAmerica Capital Trust VI
25.8* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust III
25.9* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust IV
25.10* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust V
25.11* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust VI
25.12* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee under the Prepaid
Securities Indenture
</TABLE>
- --------
+ To be filed under subsequent Form 8-K
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
II-4
<PAGE>
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered thereby,
and for the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the provisions referred
to in Item 15 of this registration statement, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer or controlling person of the registrants in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(d) (1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430(A) and
contained in a form of prospectus filed by the Registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 2
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON
OCTOBER 31, 1996.
SunAmerica Inc.
/s/ James R. Belardi
By: _________________________________
NAME: JAMES R. BELARDI
TITLE: EXECUTIVE VICE PRESIDENT
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
* Chairman, President
- ------------------------------------- and Chief Executive October 31,
ELI BROAD Officer (Principal 1996
Executive Officer)
* Executive Vice
- ------------------------------------- President October 31,
JAMES R. BELARDI (Principal 1996
Financial Officer)
* Senior Vice
- ------------------------------------- President and October 31,
SCOTT L. ROBINSON Controller 1996
(Principal
Accounting Officer)
* Director
- ------------------------------------- October 31,
RONALD J. ARNAULT 1996
* Director
- ------------------------------------- October 31,
KAREN HASTIE-WILLIAMS 1996
* Director
- ------------------------------------- October 31,
DAVID O. MAXWELL 1996
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<PAGE>
SIGNATURE TITLE DATE
* Director
- ------------------------------------- October 31,
BARRY MUNITZ 1996
* Director
- ------------------------------------- October 31,
LESTER POLLACK 1996
* Director
- ------------------------------------- October 31,
CARL E. REICHARDT 1996
* Director
- ------------------------------------- October 31,
RICHARD D. ROHR 1996
Director
- ------------------------------------- October ,
SANFORD C. SIGOLOFF 1996
* Director
- ------------------------------------- October 31,
HAROLD M. WILLIAMS 1996
/s/ Susan L. Harris
* By: _______________________________
Attorney-in-Fact
II-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, SUNAMERICA
CAPITAL TRUST III, SUNAMERICA CAPITAL TRUST IV, SUNAMERICA CAPITAL TRUST V AND
SUNAMERICA CAPITAL TRUST VI, EACH CERTIFIES THAT IT HAS REASONABLE GROUNDS TO
BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS
DULY CAUSED THIS AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS
ANGELES, STATE OF CALIFORNIA, ON OCTOBER 31, 1996.
SunAmerica Capital Trust III
By: SunAmerica Inc., as Sponsor
/s/ James R. Belardi
By: _________________________________
NAME: JAMES R. BELARDI
TITLE: EXECUTIVE VICE PRESIDENT
SunAmerica Capital Trust IV
By: SunAmerica Inc., as Sponsor
/s/ James R. Belardi
By: _________________________________
NAME: JAMES R. BELARDI
TITLE: EXECUTIVE VICE PRESIDENT
SunAmerica Capital Trust V
By: SunAmerica Inc., as Sponsor
/s/ James R. Belardi
By: _________________________________
NAME: JAMES R. BELARDI
TITLE: EXECUTIVE VICE PRESIDENT
SunAmerica Capital Trust VI
By: SunAmerica Inc., as Sponsor
/s/ James R. Belardi
By: _________________________________
NAME: JAMES R. BELARDI
TITLE: EXECUTIVE VICE PRESIDENT
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1.1+ Form of Underwriting Agreement (Debt)
1.2+ Form of Underwriting Agreement (Equity)
1.3+ Form of Underwriting Agreement (Preferred Securities)
1.4+ Form of Underwriting Agreement (Stock Purchase Contracts)
1.5+ Form of Underwriting Agreement (Stock Purchase Units)
3.1 Restated Charter of the Company, dated October 2, 1991 (incorporated
herein by reference to Exhibit 3(a) to the Company's Form 8, dated
and filed October 4, 1991, amending the Company's Annual Report on
Form 10-K for the year ended September 30, 1990)
3.2 Articles Supplementary, dated June 24, 1992 (incorporated herein by
reference to Exhibit 3(c) to the Company's 1992 Annual Report on
Form 10-K, filed November 30, 1992)
3.3 Amendment to the Company's Restated Articles of Incorporation, dated
February 1, 1993 (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K, filed February 3, 1993)
3.4 Articles of Merger, dated July 30, 1993, between the Company and
SunAmerica Corporation (incorporated herein by reference to Exhibit
3(g) to the Company's 1993 Annual Report on Form 10-K, filed
December 16, 1993)
3.5 Articles Supplementary, dated October 30, 1995 (incorporated by
reference to Exhibit 3(h) to the Company's 1995 Annual Report on
Form 10-K, filed November 29, 1995)
3.6 Articles of Amendment dated October 30, 1995 (incorporated by
reference to Exhibit 3(i) to the Company's 1995 Annual Report on
Form 10-K, filed November 29, 1995)
3.7 Bylaws of the Company as revised on October 23, 1987 (incorporated
herein by reference to Exhibit 3(b) to the Company's 1987 Annual
Report on Form 10-K, filed February 26, 1988)
4.1 Senior Indenture dated as of April 15, 1993 between the Company and
The First National Bank of Chicago (incorporated herein by reference
to Exhibit 4(h) to the Company's Annual Report on Form 10-K, filed
December 16, 1993)
4.2** Supplemental Indenture dated as of June 28, 1993 supplementing the
Senior Indenture
4.3** Form of Subordinated Indenture between the Company and The First
National Bank of Chicago
4.4 Junior Subordinated Indenture dated as of March 15, 1995 between the
Company and The First National Bank of Chicago (incorporated by
reference to Exhibit 4.3 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.5 Declaration of Trust of SunAmerica Capital Trust III (incorporated by
reference to Exhibit 4.6 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.6 Certificate of Trust of SunAmerica Capital Trust III (incorporated by
reference to Exhibit 4.7 to the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.7 Declaration of Trust of SunAmerica Capital Trust IV (incorporated by
reference to Exhibit 4.8 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.8 Certificate of Trust of SunAmerica Capital Trust IV (incorporated by
reference to Exhibit 4.9 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.9** Declaration of Trust of SunAmerica Capital Trust V
4.10** Certificate of Trust of SunAmerica Capital Trust V
4.11** Declaration of Trust of SunAmerica Capital Trust VI
4.12** Certificate of Trust of SunAmerica Capital Trust VI
4.13* Form of Amended and Restated Declaration of Trust for a SunAmerica
Trust
4.14* Form of Non-convertible Preferred Security (included in Exhibit 4.13)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
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<C> <S>
4.15+ Form of Convertible Preferred Security
4.16* Form of Supplemental Indenture to be used in connection with issuance
of Junior Subordinated Debt Securities and Preferred Securities
4.17 Form of Non-convertible Junior Subordinated Debt Security (included in
Exhibit 4.16) (incorporated by reference to Exhibit 4.13 of the
Company's Registration Statement No. 33-62405 on Form S-3, declared
effective September 29, 1995)
4.18+ Form of convertible Junior Subordinated Debt Security
4.19* Form of Preferred Securities Guarantee with respect to Preferred
Securities
4.20 Form of Deposit Agreement (incorporated by reference to Exhibit 4.15
of the Company's Registration Statement No. 33-62405 on Form S-3,
declared effective September 29, 1995)
4.21 Form of SunAmerica Common Stock Share Certificate (incorporated by
reference to Exhibit 4.16 of the Company's Registration Statement No.
33-62405 on Form S-3, declared effective September 29, 1995)
4.22* Form of Purchase Contract Agreement between SunAmerica Inc. and The
Bank of New York, as Purchase Contract Agent (including as Exhibit A
the Form of Security Certificate)
4.23* Form of Pledge Agreement among SunAmerica Inc., The First National
Bank of Chicago, as Collateral Agent, and The Bank of New York, as
Purchase Contract Agent
4.24** Form of Supplemental Indenture to the Senior Indenture providing for
the issuance for convertible debt securities thereunder
4.25** Form of Supplemental Indenture to the Junior Subordinated Indenture
providing for the issuance of convertible debt securities thereunder
4.26** Form of Prepaid Securities Indenture between the Company and The Bank
of New York, as Trustee
5.1* Opinion of Davis Polk & Wardwell
5.2* Opinion of Piper & Marbury L.L.P.
5.3* Opinion of Richards, Layton & Finger
8.1* Tax opinion of Davis Polk & Wardwell
12.1** Statement re: Computation of ratio of earnings to fixed charges
12.2** Statement re: Computation of ratio of earnings to combined fixed
charges and preferred stock dividends
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Susan L. Harris
23.3* Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4* Consent of Piper & Marbury L.L.P. (included in Exhibit 5.2)
23.5* Consent of Richards, Layton & Finger (included in Exhibit 5.3)
23.6* Consent of Coopers & Lybrand L.L.P.
24.1** Powers of Attorney for the Company (included in signature pages)
24.2** Powers of Attorney for SunAmerica, as sponsor, to sign the
Registration Statement on behalf of SunAmerica Capital Trust III,
SunAmerica Capital Trust IV, SunAmerica Capital Trust V and
SunAmerica Capital Trust VI (included in Exhibits 4.5, 4.7, 4.9 and
4.11, respectively)
25.1** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Senior Indenture
25.2** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Subordinated Indenture
25.3** Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee, under the
Junior Subordinated Indenture
25.4* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of Trust of SunAmerica Capital Trust
III
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
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<C> <S>
25.5* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of Trust of SunAmerica Capital Trust
IV
25.6* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of SunAmerica Capital Trust V
25.7* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, with respect to the
Amended and Restated Declaration of SunAmerica Capital Trust VI
25.8* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust III
25.9* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust IV
25.10* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust V
25.11* Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The Bank of New York, as Trustee, under the Preferred
Securities Guarantee of the Company with respect to the Preferred
Securities of SunAmerica Capital Trust VI
25.12* Statement of Eligibility under the Trust Indenture Act, as amended, of
The Bank of New York, as Trustee under the Prepaid Securities
Indenture
</TABLE>
- --------
+ To be filed under subsequent Form 8-K
* Filed herewith
** Previously filed
<PAGE>
Exhibit 4.13
AMENDED AND RESTATED DECLARATION OF TRUST
OF
SUNAMERICA CAPITAL TRUST [____]
Dated as of [________ __], 19[__]
TABLE OF CONTENTS(*)
Page
PARTIES.................................................. 1
RECITALS:
Recitals................................................. 1
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain terms defined; other terms
defined in the Trust Indenture Act
of 1939, as amended, or by reference
therein in the Securities Act of 1933,
as amended, to have the meanings
assigned therein....................... 2
Affiliate.............................. 2
Appointment Event...................... 2
Book Entry Interest.................... 3
Business Day........................... 3
Business Trust Act..................... 3
- ------------------
(*) This Table of Contents does not constitute part of the
Amended and Restated Declaration of Trust and should not
have any bearing upon the interpretation of any of its
terms or provisions.
<PAGE>
Certificate............................ 3
Certificate of Trust................... 3
Clearing Agency........................ 3
Clearing Agency Participant............ 3
Closing Date........................... 3
Code................................... 3
Commission............................. 3
Common Security........................ 4
Common Security Certificate............ 4
Covered Person......................... 4
Debenture Trustee...................... 4
Debentures............................. 4
Definitive Preferred Security
Certificates........................... 4
Delaware Trustee....................... 4
Depositary Agreement................... 4
Distribution........................... 4
DTC.................................... 4
Event of Default....................... 4
Exchange Act........................... 4
Fiscal Year............................ 4
Global Certificate..................... 5
Holder................................. 5
Indemnified Person..................... 5
Indenture.............................. 5
Indenture Event of Default............. 5
Investment Company..................... 5
Investment Company Act................. 5
Legal Action........................... 5
Liquidation Distribution............... 5
Majority in liquidation amount
of the Securities.................... 5
Ministerial Action..................... 6
Option Closing Date.................... 6
Original Declaration................... 6
Paying Agent........................... 6
Person................................. 6
Preferred Guarantee.................... 6
Preferred Security..................... 6
Preferred Security Beneficial
Owner.................................. 6
Preferred Security
Certificate............................ 6
Property Trustee....................... 6
Property Account....................... 6
Quorum................................. 7
Regular Trustee........................ 7
Related Party.......................... 7
Resignation Request.................... 7
Responsible Officer.................... 7
Rule 3a-7.............................. 7
Securities............................. 7
Securities Act......................... 7
<PAGE>
66-2/3% in liquidation amount
of the Securities...................... 7
Special Event.......................... 8
Special Regular Trustee................ 8
Sponsor or SunAmerica.................. 8
Successor Delaware Trustee............. 8
Successor Property Trustee............. 8
10% in liquidation amount of
the Securities......................... 8
Treasury Regulations................... 8
Trustee or Trustees.................... 8
Trust Indenture Act.................... 9
Underwriting Agreement................. 9
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act;
Application............................ 9
SECTION 2.2 List of Holders of Preferred
Securities............................. 9
SECTION 2.3 Reports by the Property Trustee........ 10
SECTION 2.4 Periodic Reports to the Property
Trustee................................ 10
SECTION 2.5 Evidence of Compliance with
Conditions Precedent................... 10
SECTION 2.6 Events of Default; Waiver.............. 10
SECTION 2.7 Disclosure of Information.............. 13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name................................... 13
SECTION 3.2 Office................................. 13
SECTION 3.3 Insurance of the Trust Securities...... 13
SECTION 3.4 Purchase of Debentures................. 14
SECTION 3.5 Purpose................................ 15
SECTION 3.6 Authority.............................. 15
SECTION 3.7 Title to Property of the Trust......... 16
SECTION 3.8 Powers and Duties of the Regular
Trustees............................... 16
<PAGE>
SECTION 3.9 Prohibition of Actions by Trust and
Trustees............................... 19
SECTION 3.10 Powers and Duties of the Property
Trustee................................ 20
SECTION 3.11 Delaware Trustee....................... 23
SECTION 3.12 Certain Rights and Duties of the
Property Trustee....................... 23
SECTION 3.13 Registration Statement and Related
Matters................................ 26
SECTION 3.14 Filing of Amendments to Certificate
of Trust............................... 27
SECTION 3.15 Execution of Documents by Regular
Trustees............................... 28
SECTION 3.16 Trustees Not Responsible for Recitals
or Issuance of Securities.............. 28
SECTION 3.17 Duration of Trust...................... 28
ARTICLE IV
SPONSOR
SECTION 4.1 Purchase of Common Securities by
Sponsor................................ 28
SECTION 4.2 Expenses............................... 28
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Qualifications..... 29
SECTION 5.2 Appointment, Removal and Resignation
of Trustees............................ 32
SECTION 5.3 Vacancies Among Trustees............... 35
SECTION 5.4 Effect of Vacancies.................... 35
SECTION 5.5 Meetings............................... 35
SECTION 5.6 Delegation of Power.................... 36
<PAGE>
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.......................... 36
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding
Securities............................. 37
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust................... 39
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................. 39
SECTION 9.2 Transfer of Certificates............... 40
SECTION 9.3 Deemed Security Holders................ 40
SECTION 9.4 Book Entry Interests................... 41
SECTION 9.5 Notices to Holders of
Certificates........................... 42
SECTION 9.6 Appointment of Successor
Clearing Agency........................ 42
SECTION 9.7 Definitive Preferred Securities
Certificates........................... 42
SECTION 9.8 Mutilated, Destroyed, Lost or
Stolen Certificates.................... 43
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.1 Exculpation.......................... 43
SECTION 10.2 Indemnification...................... 44
<PAGE>
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.......................... 45
SECTION 11.2 Certain Accounting Matters........... 45
SECTION 11.3 Banking.............................. 46
SECTION 11.4 Withholding.......................... 46
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments........................... 47
SECTION 12.2 Meetings of the Holders of
Securities; Action by Written
Consent.............................. 48
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties
of Property Trustee.................. 50
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.............................. 51
SECTION 14.2 Undertaking for Costs................ 52
SECTION 14.3 Governing Law........................ 53
SECTION 14.4 Headings............................. 53
SECTION 14.5 Partial Enforceability............... 53
SECTION 14.6 Counterparts......................... 53
SECTION 14.7 Intention of the Parties............. 53
SECTION 14.8 Successors and Assigns............... 54
SIGNATURES AND SEALS..................................... 55
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
<PAGE>
EXHIBIT C: TERMS OF THE COMMON SECURITIES
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SunAmerica Capital Trust [___]
[_________ __], 19[__]
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of ______________ __, 199_ by the undersigned trustees
(together with all other Persons from time to time duly appointed and serving
as trustees in accordance with the provisions of this Declaration, the
"Trustees"), SunAmerica Inc., a Maryland corporation, as trust sponsor
("SunAmerica" or the "Sponsor"), and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Sponsor and the Trustees entered into a
Declaration of Trust dated as of August 31, 1995 (the "Original Declaration")
in order to establish a statutory business trust (the "Trust") under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust")
of the Trust was filed with the office of the Secretary of State of the State
of Delaware on _________ __, 199_;
WHEREAS, the Trustees and the Sponsor desire to continue the
Trust pursuant to the Business Trust Act for the purpose of, as described more
fully in Sections 3.3 and 3.4 hereof, (i) issuing and selling Preferred
Securities (as defined herein) representing undivided beneficial interests in
the assets of the Trust for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of SunAmerica issued under the Indenture
(as hereinafter defined) to be held as assets of the Trust and (ii) issuing
and selling Common Securities (as defined herein) representing undivided
beneficial interests in the assets of the Trust to SunAmerica in exchange for
cash and investing the proceeds thereof in additional Debentures issued under
the Indenture to be held as assets of the Trust; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of
such business trust, the Trustees declare that all assets referred to in
clauses (i) and (ii) of the previous Whereas clause purchased by the Trust
will be held in trust for the benefit of the Holders (as defined herein)
from time to time, of the Certificates (as defined herein) representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Amended and Restated Declaration of Trust (including Exhibits A, B
and C hereto (the "Exhibits")) as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration 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 or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the
Preferred Securities set forth in Exhibit B which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a
Special Regular Trustee.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth in the second
Whereas clause above.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting
<PAGE>
as depository for the Preferred Securities and in whose name or in the name of
a nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the Closing Date as specified in the
Underwriting Agreement, which date is also the date of execution and delivery
of this Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific section
((Sec.)) of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1(b).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or its
Affiliates, (ii) any officer, director, shareholder, employees,
representatives or agents of SunAmerica or its Affiliates and (iii) the
Holders from time to time of the Securities.
"Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Indenture until a successor is appointed thereunder and
thereafter means such successor trustee.
"Debentures" means the series of Junior Subordinated Debentures
issued by SunAmerica under the Indenture to the Property Trustee and entitled
the "[__]% Junior Subordinated Debentures due 20[__]".
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section
5.1(a)(3).
"Depositary Agreement" means the agreement among the Trust, the
Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of
<PAGE>
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Indenture" means the Indenture dated as of March 15, 1995
between SunAmerica and the Debenture Trustee as supplemented by the
[__________] Supplemental Indenture thereto dated as of [_____________ __],
199_, pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an event or condition
defined as an "Event of Default" with respect to the Debentures under Section
6.01(a) of the Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"Legal Action" has the meaning specified in Section 3.8(g).
"Liquidation Distribution" has the meaning set forth in
Exhibits B and C hereto establishing the terms of the Securities.
"Majority in liquidation amount of the Securities" means,
except as otherwise required by the Trust Indenture Act and except as provided
in the penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of outstanding Preferred Securities or Common
Securities voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount that would be paid on redemption, 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
<PAGE>
outstanding Securities of such class.
"Ministerial Action" has the meaning set forth in the terms of
the Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as
specified in the Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first
WHEREAS clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement to be dated
as of [___________ __], 199[_] of SunAmerica in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section
7.1(b).
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate
in fully registered form representing a Preferred Security substantially in
the form of Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.1(c) and having the duties set forth for
the Property Trustee herein.
"Property Account" has the meaning specified in Section
3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned
subsidiary of SunAmerica or any other Person which owns, directly or
indirectly, 100% of the outstanding voting securities of SunAmerica.
"Resignation Request" has the meaning specified in Section
<PAGE>
5.2(d).
"Responsible Officer" means, with respect to the Property
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 Property 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.
["Rule 3a-5" or "Rule 3a-7" means Rule 3a-5 or Rule 3a-7,
respectively,] under the Investment Company Act or any successor rule
thereunder.(**)
- --------------
(**)Use only Rule 3a-5 if convertible Preferred Securities are issued.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"66-2/3% in liquidation amount of the Securities" means, except
as otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of outstanding Preferred Securities or Common
Securities, voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 66-2/3% or more of the liquidation amount of all
outstanding Securities of such class.
"Special Event" has the meaning set forth in the terms of the
Securities as set forth in Exhibits B and C hereto.
"Special Regular Trustee" means a Regular Trustee appointed by
the Holders of a Majority in liquidation amount of the Preferred Securities in
accordance with Section 5.2(a)(ii)(B).
"Sponsor" or "SunAmerica" means SunAmerica Inc., a Maryland
corporation, or any successor entity in a merger, in its capacity as sponsor
of the Trust.
"Successor Delaware Trustee" has the meaning specified in
Section 5.2(b)(ii).
"Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under Section 5.1(c).
<PAGE>
"10% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of outstanding Preferred Securities or Common
Securities, voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents 10% or more of the liquidation amount of all
outstanding Securities of such class.
"Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Underwriting Agreement" means the Underwriting Agreement
dated as of [__________ __], 199[_] among the Trust, the Sponsor and
[______________], as representatives of the several underwriters named
therein.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the
Trust Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Section
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control;
(c) the Property Trustee, to the extent permitted by
applicable law and/or the rules and regulations of the Commission, shall be
the only Trustee which is a trustee for the purposes of the Trust Indenture
Act; and
(d) the application of the Trust Indenture Act to this
<PAGE>
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property 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 Property Trustee shall comply with its obligations
under Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, the Property Trustee
shall provide to the Holders of the 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
Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee, the Commission and the Holders of
the 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).
SECTION 2.5 Evidence of Compliance with
Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration 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(c), Holders of Preferred Securities
may, by vote of at least a Majority in liquidation amount of the Preferred
Securities (A) in accordance with the terms of the Preferred Securities,
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, or (B) on behalf of the Holders of all Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences; provided that if the Event of Default arises
<PAGE>
out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, the Event of
Default under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures, or (2) each holder of
Debentures, the Event of Default under this Declaration may only be
waived by, in the case of clause (1) above, the vote of 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 Preferred Securities.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default
with respect to the Preferred Securities or impair any right consequent
thereon.
(b) Subject to Section 2.6(c), Holders of Common Securities
may by vote of at least a Majority in liquidation amount of the Common
Securities, (A) in accordance with the terms of the Common Securities, 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 or (B) on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default arises
out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below, the Event
of Default under this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of
Debentures, except where the holders of the Common Securities are
deemed to have waived such Event of Default under this Declaration as
provided below, the Event of Default under this Declaration may only
be waived by, in the case of clause (1) above, the vote of Holders of
Common Securities representing such specified percentage of the
aggregate liquidation amount of the Common Securities or, in the case
of clause (2) above, each holder of Common Securities; and
provided, further, that each Holder of Common Securities will be deemed to
have waived any Event of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured, waived by the Holders of Preferred Securities as
provided in this Declaration or otherwise eliminated and until all Events of
Default with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders of
<PAGE>
the Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of this Declaration or the Securities. In the event
that any Event of Default with respect to the Preferred Securities is waived
by the Holders of Preferred Securities as provided in this Declaration, the
Holders of Common Securities agree that such waiver shall also constitute the
waiver of such Event of Default with respect to the Common Securities for
all purposes under this Declaration without any further act, vote or
consent of the Holders of the Common Securities. Subject to the foregoing
provisions of this Section 2.6(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) The right of any Holder of Securities to receive payment
of Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the
respective payment dates therefor, or to institute suit for the enforcement of
any such payment on or after such payment dates, shall not be impaired without
the consent of such Holder.
(d) As provided in the terms of the Securities set forth in
Exhibits B and C hereto, a waiver of an Indenture Event of Default by the
Property Trustee at the written direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under
this Declaration in respect of the Securities.
SECTION 2.7 Disclosure of Information.
The disclosure of information as to the names and addresses of
the Holders of the 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 Property Trustee be held accountable by
reason of mailing any material pursuant to a request made under Section
312(b) of the Trust Indenture Act.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust continued by this Declaration is named "SunAmerica
Capital Trust [__]" as such name may be modified from time to time by the
Regular Trustees following written notice to the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
<PAGE>
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022.
Upon ten days' written notice to the Holders, the Regular Trustees may
change the location of the Trust's principal office. The name of the
registered agent and office of the Trust in the State of Delaware is [The
Prentice-Hall Corporation System, Inc., 32 Loockerman Square, Suite L-100,
Dover, Kent County, Delaware 19904.] At any time, the Regular Trustees may
designate another registered agent and/or registered office.
SECTION 3.3 Issuance of the Trust Securities.
On [____________ __], 199_ the Sponsor, on behalf of the Trust
and pursuant to the Original Declaration, executed and delivered the
Underwriting Agreement. On the Closing Date and contemporaneously with the
execution and delivery of this Declaration, the Regular Trustees, on behalf of
the Trust, shall execute and deliver to (i) the underwriters named in the
Underwriting Agreement, a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.4, in an
aggregate amount of [____________] Preferred Securities having an aggregate
liquidation amount of $[_____________], against receipt of the aggregate
purchase price of such Preferred Securities of $[___________], and (ii) the
Sponsor, Common Securities Certificates, registered in the name of the
Sponsor, in an aggregate amount of [____________] Common Securities having an
aggregate liquidation amount of $[_____________], against receipt of the
aggregate purchase price of such Common Securities of $[_____________]. In
the event and to the extent the overallotment option granted by the Trust
pursuant to the Underwriting Agreement is exercised by such underwriters, on
the Option Closing Date the Regular Trustees, on behalf of the Trust, shall
execute and deliver to such underwriters a Global Certificate, registered in
the name of the nominee of the initial Clearing Agency as specified in Section
9.4, in an aggregate amount of up to [_____________] Preferred Securities
having an aggregate liquidation amount of up to $[______________], against
receipt of the aggregate purchase price of such Preferred Securities of up to
$[_____________].
SECTION 3.4 Purchase of Debentures.
On the Closing Date and contemporaneously with the execution
and delivery of this Declaration, the Regular Trustees, on behalf of the
Trust, shall purchase from the Sponsor with the proceeds received by the Trust
from the sale of the Securities on such date pursuant to Section 3.3, at a
purchase price of 100% of the principal amount thereof, Debentures, registered
in the name of the Property Trustee and having an aggregate principal amount
equal to $[___________], and, in satisfaction of the purchase price for such
Debentures, the Regular Trustee, on behalf of the Trust, shall deliver or
cause to be delivered to the Sponsor the sum of $[____________]. In the event
the overallotment option granted by the Trust with respect to the Preferred
Securities pursuant to the Underwriting Agreement is exercised by the
underwriters named therein, on the Option Closing Date the Regular Trustees,
on behalf of the Trust, shall purchase from the Sponsor with the proceeds
received by the Trust from the sale of the Preferred Securities on such date
pursuant to Section 3.3, at a purchase price of 100% of the principal amount
thereof, additional Debentures, registered in the name of the Property Trustee
and having an aggregate principal amount of up to $[___________], and, in
satisfaction of the purchase price for such Debentures, the Regular Trustees,
<PAGE>
on behalf of the Trust, shall deliver or cause to be delivered to the Sponsor
an amount equal to the aggregate principal amount of the Debentures being
purchased.
SECTION 3.5 Purpose.
The exclusive purposes and functions of the Trust are: (a)(i)
to issue and sell Preferred Securities for cash and use the proceeds of such
sales to acquire from SunAmerica Debentures issued under the Indenture having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities so issued and sold; (ii) to enter into such agreements
and arrangements as may be necessary in connection with the sale of Preferred
Securities to the initial purchasers thereof (including the Underwriting
Agreement) and to take all action, and exercise such discretion, as may be
necessary or desirable in connection therewith and to file such registration
statements or make such other filings under the Securities Act, the Exchange
Act or state securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and (iii)
to issue and sell Common Securities to SunAmerica for cash and use the
proceeds of such sale to purchase as trust assets an equal aggregate principal
amount of Debentures issued under the Indenture; and (b) except as otherwise
limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets or at any time
while the Securities are outstanding, otherwise undertake (or permit to be
undertaken) any activity that would result in or cause the Trust to be treated
as anything other than a grantor trust for United States federal income tax
purposes.
SECTION 3.6 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.7 Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the
Debentures and the Property Account or unless otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of
the Trust, but shall have an individual undivided beneficial interest in the
assets of the Trust.
SECTION 3.8 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority
<PAGE>
and duty to cause the Trust, and shall cause the Trust, to engage in the
following activities:
(a) to issue and sell Preferred Securities and Common
Securities, in each case in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and, provided
further, that there shall be no interests in the Trust other than the
Securities and the issuance of Securities shall be limited to (x) a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on
the Closing Date and (y) any subsequent issuance of Preferred Securities on
the Option Closing Date pursuant to an exercise of the over-allotment
option granted to underwriters in the Underwriting Agreement.
(b) in connection with the issuance of the Preferred
Securities, at the direction of the Sponsor, to effect or cause to be effected
the filings, and to execute or cause to be executed, the documents, set forth
in Section 3.13 and to execute, deliver and perform on behalf of the Trust the
Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of
the sale of the Preferred Securities and Common Securities; provided, however,
that the Regular Trustees shall cause legal title to all of the Debentures to
be vested in, and the Debentures to be held of record in the name of, the
Property Trustee for the benefit of the Holders of the Preferred Securities
and the Common Securities;
(d) to cause the Trust to enter into the Underwriting
Agreement and such other agreements and arrangements as may be necessary or
desirable in connection with the sale of Preferred Securities to the initial
purchasers thereof and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection with
the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event; provided, that the
Regular Trustees shall consult with the Sponsor and the Property Trustee
before taking or refraining to take any Ministerial Action in relation to a
Special Event;
(f) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including for
the purposes of Section 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to Holders of the Preferred Securities and Common Securities
as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.10(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
<PAGE>
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required
by Section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to
carrying out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be
required of the Regular Trustee pursuant to the terms of the Securities set
forth in Exhibits B and C hereto;
(n) to execute all documents or instruments, perform all
duties and powers and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of the
Securities or to enable the Trust to effect the purposes for which the Trust
has been created;
(p) to take all action, not inconsistent with this
Declaration or with applicable law, which the Regular Trustees determine in
their discretion to be reasonable and necessary or desirable in carrying out
the activities of the Trust as set out in this Section 3.8, in order that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States
federal income tax purposes as an association taxable as a
corporation or a partnership and will be treated as a grantor trust
for United States federal income tax purposes; and
(iii) the Trust will comply with any requirements imposed by
any taxing authority on holders of instruments treated as
indebtedness for United States federal income tax purposes;
provided that such action does not adversely affect the interests of Holders;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
<PAGE>
(r) subject to the requirements of Rule 3a-7 and Section
317(b) of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee.
The Regular Trustees must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes and functions of
the Trust set out in Section 3.5 and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.5.
Subject to this Section 3.8, the Regular Trustees shall have
none of the powers nor any of the authority of the Property Trustee set forth
in Section 3.10.
SECTION 3.9 Prohibition of Actions by Trust and Trustees.
The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall
not and the Trustees (including the Property Trustee) shall not:
(a) invest any proceeds received by the Trust from holding
the Debentures but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the
Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h) (i) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures or the Property Trustee with respect to the Preferred Securities,
(ii) waive any past default that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul any declaration that
the principal of all of the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, unless in the case of this
clause (h) the Property Trustee shall have received an unqualified opinion of
nationally recognized independent tax counsel recognized as expert in such
matters to the effect that such action will not cause the Trust to be
classified for United States federal income tax purposes as an association
taxable as a corporation or partnership and that the Trust will continue to be
classified as a grantor trust for United States federal income tax purposes.
<PAGE>
SECTION 3.10 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Article V. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or, if the Property
Trustee does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
bank account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and, on the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Account and, without any further acts of the
Property Trustee or the Regular Trustees, promptly make payments to
the Holders of the Preferred Securities and Common Securities from
the Property Account in accordance with Section 6.1. Funds in the
Property Account shall be held uninvested, and without liability for
interest thereon, until disbursed in accordance with this
Declaration. The Property Account shall be an account which is
maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, at least equal to (but in no event less
than "A" or the equivalent) the rating assigned to the Preferred
Securities by a nationally recognized statistical rating
organization;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature;
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and
the Common Securities, engage in such ministerial activities as shall
be necessary or appropriate to effect promptly the distribution
pursuant to terms of the Securities of Debentures to Holders of
Securities upon the occurrence of a Special Event; and
(iv) have the legal power to exercise all of the rights,
powers and privileges of a holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee, subject to Section 2.6(b), shall for the benefit of
the Holders of the Securities, enforce its rights as holder of the
Debentures under the Indenture, subject to the rights of the Holders
<PAGE>
of the Preferred Securities pursuant to the terms of this
Declaration, the Business Trust Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant
to the terms of the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration, the Business Trust
Act or the Trust Indenture Act.
(f) All moneys deposited in the Property Account, and all
Debentures held by the Property Trustee for the benefit of the Holders of the
Securities will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of, or for the benefit of the Property Trustee
or its agents or their creditors.
(g) The Property Trustee shall, within 90 days after the
occurrence of a default with respect to the Securities, transmit by mail,
first class postage prepaid, to the holders of the Securities, as their names
and addresses appear upon the register, notice of all defaults with respect to
the Securities known to the Property Trustee, unless such defaults shall have
been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 3.10(g) being hereby defined to be an Indenture Event
of Default, not including any periods of grace provided for in the
Indenture and irrespective of the giving of any notice provided therein);
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, the
Property 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 Property Trustee
in good faith determine that the withholding of such notice is in the
interests of the Holders of the Securities. The Property Trustee shall not
be deemed to have knowledge of any default, except (i) a default in the
payment of principal, premium or interest on the Debentures or (ii) any
default as to which the Property Trustee shall have received written notice
or a Responsible Officer charged with the administration of this
Declaration shall have obtained written notice.
(h) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the
proceeds thereof distributed to the Holders of
Securities pursuant to the terms of the Securities;
or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with
Article V.
(i) The Property Trustee shall act as paying agent in respect
of the Common Securities and, if the Preferred Securities are not in book
entry only form, the Preferred Securities and, subject to Section 3.8(r), may
<PAGE>
authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with
respect to the Preferred Securities. Any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Property Trustee, after consultation with the Regular Trustees, at any
time and a successor Paying Agent or additional Paying Agents may be appointed
at any time by the Property Trustee, subject to Section 3.8(r).
(j) The Property Trustee shall give prompt written notice to
the Holders of the Securities of any notice received by it from SunAmerica of
its election to defer payments of interest on the Debentures by extending the
interest payment period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall
have none of the powers or the authority of the Regular Trustees set forth in
Section 3.8.
(l) The Property Trustee shall exercise the powers, duties
and rights set forth in this Section 3.10 and Section 3.12 in a manner
which is consistent with the purposes and functions of the Trust set out in
Section 3.5, and the Property Trustee shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in
Section 3.5.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.1(a)(3), the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees and the Property Trustee described in
this Declaration. Except as set forth in Section 5.1(a)(3), the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act. No implied covenants
or obligations shall be read into this Declaration against the Delaware
Trustee.
SECTION 3.12 Certain Rights and Duties of the
Property Trustee.
(a) The Property 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 Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
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 Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
<PAGE>
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this
Declaration, and the Property Trustee shall not be liable
except for the performance of such duties and obligations
as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property 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 Property Trustee and conforming
to the requirements of this Declaration; but in the case
of any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders as provided herein
relating to the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee hereunder or under
the Indenture, or exercising any trust or power conferred upon the
Property Trustee under this Declaration; and
(iv) no provision of this Declaration shall require the Property
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 Declaration or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part
[and, if the Trust is excluded from the definition of Investment
Company solely by means of Rule 3a-7, subject to the requirements of
<PAGE>
Rule 3a-7,] request and rely upon a certificate, which shall comply
with the provisions of Section 314(e) of the Trust Indenture Act,
signed by any two of the Regular Trustees or by an authorized officer
of the Sponsor, as the case may be;
(ii) The Property Trustee (A) may consult with counsel (which
may be counsel to the Sponsor 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 Declaration from any court of competent
jurisdiction;
(iii) The Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Property Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it in good faith and with due care;
(iv) The Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holders, unless such Holders shall
have offered to the Property 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 Property 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 Declaration, 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 Property Trustee or its agents
hereunder shall bind the Holders of the Securities and the signature
of the Property 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 Property Trustee to so
act, or as to its compliance with any of the terms and provisions of
this Declaration, both of which shall be conclusively evidenced by
the Property Trustee's or its agent's taking such action.
SECTION 3.13 Registration Statement and Related Matters.
In accordance with the Original Declaration, SunAmerica and the
Trustees have authorized and directed, and hereby confirm the authorization
of, SunAmerica, as the sponsor of the Trust, (i) to file with the Commission
and execute, in each case on behalf of the Trust, (a) the Registration
<PAGE>
Statement on Form S-3 (File No. [____________] and [_____________] (the "1933
Act Registration Statement") including Amendment Nos. [___] thereto and any
further pre-effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities Act of the
Preferred Securities of the Trust and (b) a Registration Statement on Form 8-A
or other appropriate form (the "1934 Act Registration Statement") (including
all pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of
the Exchange Act; (ii) to file with the New York Stock Exchange and execute on
behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed on the
New York Stock Exchange; (iii) to file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as SunAmerica on behalf of
the Trust, may deem necessary or desirable and (iv) to execute on behalf of
the Trust the Underwriting Agreement. In the event that any filing referred
to in clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, the Regular Trustees,
in their capacities as Trustees of the Trust, are hereby authorized and
directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing, it being understood that the Property Trustee
and the Delaware Trustee, in their capacities as Trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of
the Commission, the New York Stock Exchange or state securities or blue sky
laws. In connection with all of the foregoing, SunAmerica and each
Trustee, solely in its capacity as Trustee of the Trust, have constituted
and appointed, and hereby confirm the appointment of, [_____________,
______________, ______________ and _____________] and each of them, as his,
her or its, as the case may be, true and lawful attorneys-in-fact, and
agents, with full power of substitution and resubstitution, for SunAmerica
or such Trustee or in SunAmerica's or such Trustee's name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as SunAmerica or
such Trustee might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
or her substitute or substitutes, shall do or cause to be done by virtue
hereof.
SECTION 3.14 Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State
of the State of Delaware on September 6, 1995 is attached hereto as Exhibit
A. On or after the date of execution of this Declaration, the Trustees
shall cause the filing with the Secretary of State of the State of Delaware
of such amendments to the Certificate of Trust as the Trustees shall deem
necessary or desirable.
<PAGE>
SECTION 3.15 Execution of Documents by Regular Trustees.
Unless otherwise determined by the Regular Trustees and except
as otherwise required by the Business Trust Act with respect to the
Certificate of Trust or otherwise, a majority of, or if there are only two,
both of, the Regular Trustees are authorized to execute and deliver on behalf
of the Trust any documents which the Regular Trustees have the power and
authority to execute or deliver pursuant to this Declaration.
SECTION 3.16 Trustees Not Responsible for Recitals or
Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor and the Trustees do not assume
any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.
SECTION 3.17 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Article VIII hereof, shall have existence until [___________ __,], 20[__].
ARTICLE IV
SPONSOR
SECTION 4.1 Purchase of Common Securities by Sponsor.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred Securities to
be issued on such date are issued, such purchase to be in an amount equal to
3% of the total capital of the Trust (including for this purpose the maximum
amount of Preferred Securities, if any, which may be issued on the Option
Closing Date pursuant to the exercise of the overallotment option set forth in
the Underwriting Agreement).
SECTION 4.2 Expenses.
(a) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, shall be
responsible for and shall pay for all debts and obligations (other than with
respect to the Securities) and all costs and expenses of the Trust (including,
but not limited to, costs and expenses relating to the organization of the
Trust, the issuance of the Preferred Securities to initial purchasers thereof,
the fees and expenses (including reasonable counsel fees and expenses) of the
Trustees (including any amounts payable under Article X), the costs and
expenses relating to the operation of the Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the disposition of Trust assets).
<PAGE>
(b) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, will pay
any and all taxes (other than United States withholding taxes attributable to
the Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.2 shall be
for the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether
or not such Creditor has received notice hereof. Any such Creditor may
enforce the Sponsor's obligations under this Section 4.2 directly against the
Sponsor and the Sponsor irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to
the provisions of this Section 4.2.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At
any time (i) before the issuance of the Securities, the Sponsor may, by
written instrument, increase or decrease the number of, and appoint, remove
and replace the, Trustees, and (ii) after the issuance of the Securities and
except as provided in clause (5) below and Section 5.2(a)(ii)(B) with respect
to the Special Regular Trustee, the number of Trustees may be increased or
decreased solely by, and Trustees may be appointed, removed or replaced solely
by, vote of Holders of Common Securities representing a Majority in
liquidation amount of the Common Securities voting as a class; provided that
in any case:
(1) the number of Trustees shall be at least five (5)
unless the Trustee that acts as the Property Trustee also acts
as the Delaware Trustee, in which cases the number of Trustees
shall be at least three (3);
(2) unless a Special Regular Trustee has been appointed
(which appointment shall not impair the right of the Holders of
Common Securities to increase or decrease the number of, or to
appoint, remove or replace, Trustees (other than the Special
Regular Trustee) as provided above), at least a majority of the
Trustees shall at all times be officers, directors or employees
of SunAmerica;
(3) if required by the Business Trust Act, one Trustee
(the "Delaware Trustee") shall be either a natural person who
is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in
the State of Delaware and otherwise is permitted to act as a
Trustee hereunder under the laws of the State of Delaware,
except that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise is permitted to
<PAGE>
act as a Trustee hereunder under the laws of the State of
Delaware, then the Property Trustee shall also be the Delaware
Trustee and Section 3.9 shall have no application;
(4) there shall at all times be a Property Trustee
hereunder which shall satisfy the requirements of Section
5.1(c); and
(5) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred
and is continuing and the Holders of a Majority in liquidation
amount of the Preferred Securities appoint a Special Regular
Trustee in accordance with Section 5.2(a)(ii)(B) and the terms
of the Preferred Securities.
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed
representatives.
(b) The initial Regular Trustees shall be:
James R. Belardi
Scott H. Richland
Scott L. Robinson
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
(c) There shall at all times be one Trustee which shall act as
Property Trustee. In order to act as Property Trustee hereunder, such Trustee
shall:
(i) not be an Affiliate of the Sponsor;
(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 5.1(c)(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; and
[(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent
Rule 3a-7 requires a trustee having certain qualifications to hold
title to the "eligible assets" (as defined in Rule 3a-7) of the
Trust, the Property Trustee shall possess those qualifications.]
<PAGE>
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall
immediately resign in the manner and with the effect set out in Section
5.2(d). If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holders of the Common Securities (as if such
Holders were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act. The Preferred Guarantee shall be deemed to be
specifically described in this Declaration for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee
is The Bank of New York, whose address is as set forth in Section 14.1(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is The Bank of New York (Delaware), whose address is as set forth in
Section 14.1(c).
(e) Any action taken by (i) Holders of Common Securities
pursuant to this Article V or (ii) Holders of Preferred Securities pursuant to
this Article V to appoint or remove a Special Regular Trustee upon the
occurrence of an Appointment Event, shall be taken at a meeting of Holders of
Common Securities or Preferred Securities, as the case may be, convened for
such purpose or by written consent as provided in Section 12.2.
(f) No amendment may be made to this Section 5.1 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees (other than any Special Regular Trustee), except with the
consent of each Holder of Common Securities.
(g) No amendment may be made to this Section 5.1 or Section
5.2(a)(ii)(B), which would change the rights of Holders of Preferred
Securities to appoint, remove or replace a Special Regular Trustee except with
the consent of each Holder of Preferred Securities.
SECTION 5.2 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.2(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities,
(A) other than with respect to the Special Regular Trustee,
by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class; and
(B) if an Appointment Event has occurred and is continuing,
one (1) additional Regular Trustee (the "Special
Regular Trustee") may be appointed, who need not be an
<PAGE>
Affiliate of the Sponsor, by vote of the Holders of a
Majority in liquidation amount of the Preferred
Securities, voting as a class and such Special Regular
Trustee may only be removed (otherwise than by the
operation of Section 5.2(c)), by vote of the Holders of
a Majority in liquidation amount of the Preferred
Securities voting as a class.
(b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.2(a) until a Successor Property
Trustee possessing the qualifications to act as Property
Trustee under Section 5.1(c) has been appointed and has accepted
such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Regular
Trustees, the Sponsor and the Property Trustee being removed;
and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.2(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under
Section 5.1(a)(3) (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written
instrument executed by such Successor Delaware Trustee and
delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation;
provided that a Special Regular Trustee shall only hold office while
an Appointment Event is continuing and shall cease to hold office
immediately after the Appointment Event pursuant to which the Special
Regular Trustee was appointed and all other Appointment Events cease
to be continuing.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee possessing the
qualifications to act as Property Trustee
under Section 5.1(c) has been appointed and
has accepted such appointment by instrument
executed by such Successor Property Trustee
and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
[(B) if the Trust is excluded from the definition
of an Investment Company solely by reason of
Rule 3a-7, until the assets of the Trust have
been completely liquidated and the proceeds
<PAGE>
thereof distributed to the Holders of the
Securities;]
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall
be effective until the 60th day following delivery of
the Resignation Request to the Sponsor and the Trust or
such later date specified in the Resignation Request
during which period the Holders of the Preferred
Securities shall have the right to appoint a successor
Special Regular Trustee as provided in this Article V.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this
Section 5.2 within 60 days after delivery to the Sponsor and the
Trust of a Resignation Request, the resigning Property Trustee or
Delaware Trustee may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon after such notice, if any, as it
may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
SECTION 5.3 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1 or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by a majority of the
Regular Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with the requirements of this Article V.
SECTION 5.4 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of
a Trustee, or any one of them, shall not operate to annul the Trust. Whenever
a vacancy in the number of Regular Trustees shall occur until such vacancy is
filled as provided in this Article V, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees
by this Declaration.
SECTION 5.5 Meetings.
Meetings of the Regular Trustees shall be held from time to
time upon the call of any Trustee. Regular meetings of the Regular Trustees
may be held at a time and place fixed by resolution of the Regular Trustees.
Notice of any in-person meeting of the Regular Trustees shall be hand
<PAGE>
delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meeting of the Regular Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including
by facsimile, with a hard copy by overnight courier) not less than 24 hours
before such meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter; provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
SECTION 5.6 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any registration statement or
amendment thereto or other document or schedule filed with the Commission or
making any other governmental filing (including, without limitation to filings
referred to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited
by applicable law or contrary to the provisions of the Trust, as set forth
herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive periodic distributions, redemption
payments and liquidation distributions in accordance with the applicable terms
of the relevant Holder's Securities ("Distributions"). Distributions shall
be made to the Holders of Preferred Securities and Common Securities in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto. If and to the extent that SunAmerica makes a payment of interest
(including Compounded Interest (as defined in the Indenture)), premium and
principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto.
<PAGE>
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall issue on behalf of the Trust
Securities in fully registered form representing undivided beneficial
interests in the assets of the Trust in accordance with Section 7.1(b) and for
the consideration specified in Section 3.3.
(b) The Regular Trustees shall issue on behalf of the Trust
one class of preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and made
a part of, this Declaration as if specifically set forth herein, and one class
of common securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by
the Regular Trustees (or if there are more than two Regular Trustees by any
two of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Certificate. In case any Regular Trustee
of the Trust who shall have signed any of the Certificates shall cease to be
such Regular Trustee before the Certificate so signed shall be delivered by
the Trust, such Certificate nevertheless may be delivered as though the person
who signed such Certificate had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons as, at the
actual date of the execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
the Declaration any such person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage. Pending the preparation of definitive Certificates, the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each
temporary Certificate shall be executed by the Regular Trustees on behalf of
the Trust upon the same conditions and in substantially the same manner, and
with like effect, as definitive Certificates. Without unnecessary delay, the
Regular Trustees on behalf of the Trust will execute and furnish definitive
Certificates and thereupon any or all temporary Certificates may be
surrendered to the transfer agent and registrar in exchange therefor (without
charge to the Holders). Each Certificate whether in temporary or definitive
<PAGE>
form shall be countersigned by the manual or facsimile signature of an
authorized signatory of the Person acting as registrar and transfer agent for
the Securities, which shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by this Declaration.
(g) Upon issuance of the Securities as provided in this
Declaration, the Regular Trustees on behalf of the Trust shall return to
SunAmerica the $10 constituting initial trust assets as set forth in the
Original Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
This Declaration and the Trust shall terminate and be of no
further force or effect when:
(i) all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders of Securities in accordance with the
terms of the Securities; or
(ii) all of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth
in Section 3.17,
and a certificate of cancellation is filed by the Trustees with the Secretary
of State of the State of Delaware. The Trustees shall so file such a
certificate as soon as practicable after the occurrence of an event referred
to in this Section 8.1.
The provisions of Sections 3.12 and 4.2 and Article X shall
survive the termination of the Trust.
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration.
Any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, SunAmerica and any Related
Party may only transfer Common Securities to SunAmerica or a Related Party;
provided that any such transfer shall be subject to the condition that the
transferor shall have obtained (1) either a ruling from the Internal Revenue
Service or an unqualified written opinion addressed to the Trust and
delivered to the Trustees of nationally recognized independent tax counsel
experienced in such matters to the effect that such transfer will not (i)
cause the Trust to be treated as issuing a class of interests in the Trust
differing from the class of interests represented by the Common Securities
originally issued to SunAmerica, (ii) result in the Trust acquiring or
disposing of, or being deemed to have acquired or disposed of, an asset, or
(iii) result in or cause the Trust to be treated as anything other than a
grantor trust for United States federal income tax purposes and (2) an
unqualified written opinion addressed to the Trust and delivered to the
Trustees of a nationally recognized independent counsel experienced in such
matters that such transfer will not cause the Trust to be an Investment
Company or controlled by an Investment Company.
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such Certificate or in the Securities represented by such
<PAGE>
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance
(including Preferred Securities, if any, issued on the Option Closing Date
pursuant to the exercise of the overallotment option set forth in the
Underwriting Agreement), will be issued in the form of one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered
on the books and records of the Trust in the name of Cede & Co., the nominee
of DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(i) the provisions of this Section 9.4 shall be in full force
and effect;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including
the payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and[, except as set forth herein or in Rule 3a-7 with respect to the
Property Trustee,] shall have no obligation to the Preferred Security
Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such Clearing
Agency Participants.
SECTION 9.5 Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is
required to be given under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued pursuant to Section
9.7, the relevant Trustees shall give all such notices and communications,
specified herein to be given to Preferred Securities Holders, to the Clearing
Agency and, with respect to any Preferred Security Certificate registered in
the name of a Clearing Agency or the nominee of a Clearing Agency, the
<PAGE>
Trustees shall[, except as set forth herein or in Rule 3a-7 with respect to
the Property Trustee,] have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to the Preferred Securities.
SECTION 9.7 Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depository with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6 or (ii) the Regular Trustees elect after consultation
with the Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Preferred Securities, then (x) Definitive Preferred
Security Certificates shall be prepared by the Regular Trustees on behalf of
the Trust with respect to such Preferred Securities and (y) upon surrender of
the Global Certificates by the Clearing Agency, accompanied by registration
instructions, the Regular Trustees shall cause definitive Preferred Security
Certificates to be delivered to Preferred Security Beneficial Owners in
accordance with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on and shall be protected in relying
on, such instructions.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.
If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
<PAGE>
ARTICLE X
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 10.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, 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 Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of Securities, in their capacities as Holders, shall be
entitled to the same limitation of liability that is extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Indemnification.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of gross negligence (or, in the
case of the Property Trustee, 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 Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.2(a).
<PAGE>
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on
the accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States federal income tax purposes. The books
and records of the Trust, together with a copy of this Declaration and a
certified copy of the Certificate of Trust, or any amendment thereto, shall at
all times be maintained at the principal office of the Trust and shall be open
for inspection for any examination by any Holder or its duly authorized
representative for any purpose reasonably related to its interest in the Trust
during normal business hours.
(b) The Regular Trustees shall, as soon as available after the
end of each Fiscal Year of the Trust, cause to be prepared and mailed to each
Holder of Securities unaudited financial statements of the Trust for such
Fiscal Year, prepared in accordance with generally accepted accounting
principles; provided that if the Trust is required to comply with the periodic
reporting requirements of Sections 13(a) or 15(d) of the Exchange Act, such
financial statements for such Fiscal Year shall be examined and reported on by
a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be prepared and mailed
to each Holder of Securities, an annual United States federal income tax
information statement, on such form as is required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after
the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on such form as is required by the Code, and any other annual
income tax returns required to be filed by the Regular Trustees on behalf of
the Trust with any state or local taxing authority, such returns to be filed
as soon as practicable after the end of each Fiscal Year of the Trust.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Account and no other funds from the Trust shall be
deposited in the Property Account. The sole signatories for such accounts
shall be designated by the Regular Trustees; provided, however, that the
<PAGE>
Property Trustee shall designate the sole signatories for the Property
Account.
SECTION 11.4 Withholding.
The Trust and the Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust
shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Trust shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is
required to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be
deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount to be withheld was
not withheld from a Distribution, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and
only by, a written instrument executed by a majority of the Regular Trustees;
provided, however, that (i) no amendment to this Declaration shall be made
unless the Regular Trustees shall have obtained (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 Investment Company Act, (ii) at such time after the Trust has issued
any Securities which remain outstanding, any amendment which would
adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities, (iii) Section 4.2, Section
9.1(c) and this Section 12.1 shall not be amended without the consent of
all of the Holders of the Securities, (iv) no amendment which adversely
affects the rights, powers and privileges of the Property Trustee shall be
made without the consent of the Property Trustee, (v) Article IV shall not
be amended without the consent of the Sponsor, (vi) the rights of Holders
of Common Securities under Article V to increase or decrease the number of,
and to appoint, replace or remove, Trustees (other than a Special Regular
<PAGE>
Trustee) shall not be amended without the consent of each Holder of Common
Securities and (vii) the rights of Holders of Preferred Securities to
appoint or remove a Special Regular Trustee shall not be amended without
the consent of each Holder of Preferred Securities.
(b) Notwithstanding Section 12.2(a)(ii), this Declaration
may be amended without the consent of the Holders of the Securities to (i)
cure any ambiguity, (ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other provision
of this Declaration, (iii) to add to the covenants, restrictions or
obligations of the Sponsor, and (iv) to conform to any changes in Rule 3a-7
or any change in interpretation or application of Rule 3a-7 by the
Commission, which amendment does not adversely affect the rights,
preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written Consent.
(a) Meetings of the Holders of Preferred Securities and/or
Common Securities may be called at any time by the Regular Trustees (or as
provided in the terms of the Securities) to consider and act on any matter on
which Holders of such class of Securities are entitled to act under the terms
of this Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for trading.
The Regular Trustees shall call a meeting of Holders of Preferred Securities
or Common Securities, if directed to do so by Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to all
the Holders of Securities having a right to vote thereat not less
than 7 days nor more than 60 days prior to the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at
a meeting of the Holders of Securities. Any action that may be taken
at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be
<PAGE>
given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Holders of Securities for the
purpose of taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after
the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of the Security executing it. Except as
otherwise provided herein or in the terms of the Securities, all
matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if
the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy
or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee.
(a) The Trustee which acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Property Trustee represents and warrants to
the Trust and the Sponsor at the time of the Successor Property Trustee's
acceptance of its appointment as Property Trustee that:
(i) The Property Trustee is a banking corporation with
trust powers, duly organized, validly existing and in good
standing under the laws of the State of its incorporation, with
trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this
<PAGE>
Declaration.
(ii) The execution, delivery and performance by the
Property Trustee of this Declaration has been duly authorized
by all necessary corporate action on the part of the Property
Trustee. The Declaration has been duly executed and delivered
by the Property Trustee, and constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(iii) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the Charter or By-laws of the Property
Trustee.
(iv) No consent, approval or authorization of, or
registration with or notice to, any banking authority which
supervises or regulates the Property Trustee is required for
the execution, delivery or performance by the Property Trustee,
of this Declaration.
(v) The Property Trustee satisfies the qualifications
set forth in Section 5.1(c).
(b) The Trustee which acts as initial Delaware Trustee
represents and warrants to the Trust and the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to
the Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee, that it satisfies the
qualifications set forth in Section 5.1(a)(3).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Regular Trustees on behalf of the Trust may give notice of to the
Holders of the Securities):
SunAmerica Capital Trust [__]
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Attention: James R. Belardi
Scott H. Richland
Scott L. Robinson
Trustees
Facsimile No: (310) 772-6635
<PAGE>
(b) if given to the Property Trustee, at the mailing address
of the Property Trustee set forth below (or such other address as
the Property Trustee may give notice of to the Holders of the
Securities):
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Facsimile No: (212) 815-5999
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as
the Delaware Trustee may give notice of to the Holders of the
Securities):
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Trust):
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Attention: Corporate Secretary
Facsimile No: (310) 772-6635
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware
Trustee shall also be sent to the Trust. All notices shall be deemed to have
been given, when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
SECTION 14.2 Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any
Securities 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 Declaration, or in any suit against the
Property Trustee for any action taken or omitted by it as Property 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 14.2 shall not apply to any suit instituted by the Property Trustee,
to any suit instituted by any Holder of Preferred Securities, or group of
Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
instituted by any Holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest on the
Debentures, on or after the respective due dates expressed in such Debentures.
SECTION 14.3 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.6 Counterparts.
This Declaration may contain more than one counterpart of the
signature pages and this Declaration may be executed by the affixing of the
signature of the Sponsor and each of the Trustees to one of such counterpart
signature pages. All of such counterpart signature pages shall be read as
though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
SECTION 14.7 Intention of the Parties.
It is the intention of the parties hereto that the Trust not be
classified for United States federal income tax purposes as an association
taxable as a corporation or partnership but that the Trust be treated as a
grantor trust for United States federal income tax purposes. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.8 Successors and Assigns.
<PAGE>
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
SunAmerica Inc.,
as Sponsor
By:______________________________
Name: James R. Belardi
Title: Executive Vice President
and Chief Financial Officer
________________________________
James R. Belardi,
as Trustee
________________________________
Scott L. Robinson,
as Trustee
________________________________
Scott H. Richland,
as Trustee
The Bank of New York,
as Trustee
By:
-----------------------------
Name:
Title:
<PAGE>
The Bank of New York (Delaware),
as Trustee
By:
-----------------------------
Name:
Title:
There personally appeared before me James R. Belardi (on behalf
of SunAmerica Inc.) and James R. Belardi, Scott H. Richland and Scott L.
Robinson who acknowledged the foregoing instrument to be his or its free act
and deed and the free act and deed of SunAmerica Inc. and the Trustees of
SunAmerica Capital Trust [__].
Before me,
--------------------------------------
Notary Public
My Commission Expires:
--------------------------------------
There personally appeared before me __________________ (on
behalf of The Bank of New York, as Trustee) who acknowledged the foregoing
instrument to be his or its free act and deed and the free act and deed of The
Bank of New York, as Trustee.
Before me,
--------------------------------------
Notary Public
My Commission Expires:
--------------------------------------
There personally appeared before me __________________ (on
behalf of The Bank of New York (Delaware), as Trustee) who acknowledged the
foregoing instrument to be his or its free act and deed and the free act and
deed of The Bank of New York (Delaware), as Trustee.
Before me,
--------------------------------------
Notary Public
My Commission Expires:
--------------------------------------
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
SUNAMERICA CAPITAL TRUST [__]
THIS Certificate of Trust of SunAmerica Capital Trust [__] (the
"Trust"), dated [________ __], 19[__], is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby
is SunAmerica Capital Trust [__].
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Trustee
By:
-----------------------------
Name:
Title:
The Bank of New York,
as Trustee
By:
-----------------------------
Name:
Title:
James R. Belardi,
as Trustee
-----------------------------
Scott H. Richland,
as Trustee
-----------------------------
Scott L. Robinson,
as Trustee
<PAGE>
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust of SunAmerica Capital Trust [__] dated as of [_______ __], 19[__] (as
amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of
[________________] Dollars ($[___________]) (including up to
[_______________________] Dollars ($____) issuable upon exercise of the
overallotment option set forth in the Underwriting Agreement) and a
liquidation amount in the assets of the Trust of $25 per Preferred Security,
are hereby designated as "[___]% Trust Originated Preferred Securities". The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange on which
the Preferred Securities are listed. In connection with the issuance and sale
of the Preferred Securities and the Common Securities, the Trust will purchase
as trust assets Debentures of SunAmerica having an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Securities and
Common Securities so issued and bearing interest at an annual rate equal to
the annual Distribution rate on the Preferred Securities and Common Securities
and having payment and redemption provisions which correspond to the payment
and redemption provisions of the Preferred Securities and Common Securities.
2. Distributions. (a) Periodic distributions payable on each
Preferred Security will be fixed at a rate per annum of [__]% (the "Coupon
Rate") of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest at the
rate per annum of [__]% thereof (to the extent permitted by law), compounded
quarterly. The term "Distributions" as used in these terms means such
periodic cash distributions and any such interest payable unless otherwise
stated. A Distribution will be made by the Property Trustee only to the
extent that interest payments are made in respect of the Debentures held by
the Property Trustee. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of
a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed in such a 30-day month.
(b) Distributions on the Preferred Securities will be
cumulative, will accrue from [_________ __], 19[__] and will be payable
quarterly in arrears, on March 30, June 30, September 30 and December 30 of
each year, commencing on [_______________ __], 19[__], except as otherwise
described below, but only if and to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. So long as
SunAmerica shall not be in default in the payment of interest on the
Debentures, SunAmerica has the right under the Indenture for the Debentures to
defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive
quarterly interest periods (each, an "Extension Period") and, as a
consequence, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the rate of [___]%
per annum, compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, SunAmerica may further extend
such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 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.
Payments of accrued Distributions will be payable to Holders of Preferred
Securities as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
<PAGE>
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall be
one business day prior to the relevant Distribution date, and if the Preferred
Securities are no longer in book-entry only form, the relevant record dates
will be the March 15, June 15, September 15 and December 15 prior to the
relevant Distribution date, which record and payment dates correspond to the
record and interest payment dates on the Debentures. Distributions payable on
any Preferred Securities that are not punctually paid on any Distribution
payment date as a result of SunAmerica having failed to make the corresponding
interest payment on the 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 Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Preferred Securities will be
made as described paragraph 9 hereof. If any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(d) All Distributions paid with respect to the Preferred
Securities and the Common Securities will be paid Pro Rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the
date of the dissolution, winding-up or termination, as the case may be, will
be entitled to receive Pro Rata solely out of the assets of the Trust
available for distribution to Holders of Preferred Securities and Common
Securities after satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per Preferred Security
and Common Security plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, and after
satisfaction of liabilities to creditors, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
<PAGE>
Securities and Common Securities and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Preferred
Securities and Common Securities, shall be distributed Pro Rata to the Holders
of the Preferred Securities and Common Securities in exchange for such
Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and Common Securities may only be redeemed if Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities are repaid, redeemed or distributed
as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity, upon redemption at any time or from time to time on
or after [___________ __], 20[__], the proceeds of such repayment will be
promptly applied to redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed, upon not less than 30 nor more than
60 days' notice, at a redemption price of $25 per Preferred and Common
Security plus an amount equal to accrued and unpaid Distributions thereon to
the date of redemption, payable in cash (the "Redemption Price"). The date
of any such repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the repayment or redemption
date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed Pro Rata and the Preferred Securities to be
redeemed will be redeemed as described in paragraph 4(f)(ii) below. If a
partial redemption would result in the delisting of the Preferred Securities
by any national securities exchange or other organization on which the
Preferred Securities are then listed, SunAmerica pursuant to the Indenture
will only redeem Debentures in whole and, as a result, the Trust may only
redeem the Preferred Securities in whole.
(c) If, 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 Regular Trustees shall, unless the Debentures are
redeemed in the limited circumstances described below, dissolve the Trust and,
after satisfaction of creditors, cause Debentures held by the Property Trustee
having an aggregate principal amount equal to the aggregate stated liquidation
amount of and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Preferred
<PAGE>
Securities and Common Securities, to be distributed to the Holders of the
Preferred Securities and Common Securities on a Pro Rata basis in liquidation
of such Holders' interests in the Trust, within 90 days following the
occurrence of such Special Event (the "90 Day Period"; provided, however, that
in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue ruling of the Internal Revenue Service, to the
effect that the Holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and provided,
further, that, if and as long as at the time there is available to the Trust
the opportunity to eliminate, within the 90 Day Period, the Special Event by
taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure that has no adverse effect
on the Trust, SunAmerica or the Holders of the Preferred Securities
("Ministerial Action"), the Trust will pursue such measure in lieu of
dissolution.
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
Debentures for United States federal income tax purposes even if the
Debentures were distributed to the Holders of Preferred Securities and Common
Securities in liquidation of such Holder's interest in the Trust as described
in this paragraph 4(c) or (ii) the Regular Trustees shall have been informed
by such tax counsel that a No Recognition Opinion cannot be delivered to the
Trust, SunAmerica shall have the right at any time, upon not less than 30 nor
more than 60 days' notice, to redeem the Debentures in whole or in part for
cash at the Redemption Price within 90 days following the occurrence of such
Tax Event, and promptly following such redemption Preferred Securities and
Common Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed will be redeemed by the Trust
at the Redemption Price on a Pro Rata basis; provided, however, that, if at
the time there is available to SunAmerica or the Regular Trustees on behalf of
the Trust the opportunity to eliminate, within such 90 day period, the Tax
Event by taking some Ministerial Action, SunAmerica or the Regular Trustees on
behalf of the Trust will pursue such measure in lieu of redemption and;
provided, further, that SunAmerica shall have no right to redeem the
Debentures while the Regular Trustees on behalf of the Trust are pursuing
such Ministerial Action. The Common Securities will be redeemed Pro Rata
with the Preferred Securities, except that if an Event of Default under the
Indenture has occurred and is continuing, the Preferred Securities will
have a 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
[_____________ __], 19[__] 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
<PAGE>
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 [_____________ __], 19[__], there is more than
an insubstantial risk that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges or (iii) interest payable by
SunAmerica to the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible by SunAmerica for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"),
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
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after [____________ __,] 19[__].
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be
deemed to be outstanding and (ii) certificates representing Preferred
Securities will be deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the stated liquidation amount
of, and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, such Preferred Securities until such certificates are
presented to SunAmerica or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accrued and unpaid Distributions have been
paid on all Preferred Securities for all quarterly Distribution periods
terminating on or prior to the date of redemption.
(e) If Debentures are distributed to Holders of the Preferred
Securities, SunAmerica, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
(f) (i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Preferred Securities and
Common Securities (a "Redemption/Distribution Notice") will be given by the
Regular Trustees on behalf of the Trust by mail to each Holder of Preferred
<PAGE>
Securities and Common Securities to be redeemed or exchanged not less than 30
nor more than 60 days prior to the date fixed for redemption or exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this paragraph
(f)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Preferred Securities and Common Securities. Each Redemption/
Distribution Notice shall be addressed to the Holders of Preferred Securities
and Common Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred Securities to be
redeemed will be redeemed Pro Rata from each Holder of Preferred Securities,
it being understood that, in respect of Preferred Securities registered in the
name of and held of record by DTC (or successor Clearing Agency) or any other
nominee, the Preferred Securities will be redeemed from, and the distribution
of the proceeds of such redemption will be made to, each Clearing Agency
Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/ Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be irrevocable)
then (A) while the Preferred Securities are in book-entry only form, with
respect to the Preferred Securities, by 12:00 noon, New York City time, on the
redemption date, provided that SunAmerica has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Property Trustee
will deposit irrevocably with DTC (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with respect to the
Preferred Securities and will give DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, with respect to the Preferred Securities and
provided that SunAmerica has paid the Property Trustee, in immediately
available funds, a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Preferred Securities by
check mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on
the redemption date, Distributions will cease to accrue on the Preferred
Securities called for redemption, such Preferred Securities will 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
<PAGE>
Day, then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Preferred Securities is improperly withheld
or refused and not paid either by the Property Trustee or by SunAmerica
pursuant to the Preferred Securities Guarantee, Distributions on such
Preferred Securities will continue to accrue, from the original redemption
date to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to DTC or its nominee (or any
successor Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive Preferred Security Certificates have been issued, to
the Holders of the Preferred Securities.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, Preferred
Security Certificates shall be deemed to represent beneficial interests in the
Debentures so distributed, and the Preferred Securities will no longer be
deemed outstanding and may be canceled by the Regular Trustees. The
Debentures so distributed shall have an aggregate principal amount equal to
the aggregate liquidation amount of the Preferred Securities so distributed.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), SunAmerica or any
of its subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders
of the Preferred Securities will have no voting rights.
(b) If (i) the Trust fails to make Distributions in full on
the Preferred Securities for 6 consecutive quarterly Distribution periods; or
(ii) an Event of Default 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 liquidation amount of the Preferred Securities to
appoint a Special Regular Trustee in accordance with paragraph 5.2(a)(ii)(B)
of the Declaration. Any Holder of Preferred Securities (other than the
Sponsor or any Affiliate of the Sponsor) will 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
<PAGE>
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 in accordance with
Section 12.2 of the Declaration. The record date for such meeting will be
the close of business on the Business Day next preceding the day on which
notice of the meeting is sent to Holders of Preferred Securities. 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 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 the Holders of Preferred Securities representing a Majority in
liquidation amount of the Preferred Securities in accordance with Section
5.2(a)(ii)(B) of the Declaration. The Holders of 10% in liquidation amount
of the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day next preceding
the day on which notice of the meeting is sent to Holders of Preferred
Securities. Any Special Regular Trustee appointed shall cease to be a
Special Regular Trustee as provided in Section 5.2(c) of the Declaration.
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 on Debentures, and any extension for
a period not exceeding 20 quarterly interest periods will not constitute an
Event of Default under the Indenture.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of
Preferred Securities as a consequence of a redemption of Debentures, then the
Holders of outstanding Securities will be entitled to vote on such amendment
or proposal as a class and such amendment or proposal shall not be effective
except with the approval of the Holders of Securities representing 66-2/3% in
liquidation amount of such Securities; provided, however, that (A) 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, (B) the rights of
Holders of Preferred Securities under Article V of the Declaration to appoint
and remove a Special Regular Trustee shall not be amended without the consent
of each Holder of Preferred Securities, and (C) amendments to the Declaration
shall be subject to such further requirements as are set forth in Sections
12.1 and 12.2 of the Declaration.
In the event the consent of the Property Trustee, as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
<PAGE>
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of
(1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of
Debentures, the Property Trustee may only vote with respect to that amendment,
modification or termination as directed by, in the case of clause (1) above,
the vote of Holders of Securities representing such specified percentage of the
aggregate liquidation amount of the Securities, or, in the case of clause (2)
above, each Holder of Securities; and provided, further, that the Property
Trustee shall be under no obligation to take any action in accordance with the
directions of the Holders of Securities unless the Property Trustee shall have
received, at the expense of the Sponsor, 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.
Subject to Section 2.6 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Preferred Securities, voting separately as a class
shall have the right to (A) on behalf of all Holders of Preferred Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with the Declaration) and (B) 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 Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising
any trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable; provided
that where the taking of any action under the Indenture requires the consent
or vote of (1) holders of Debentures representing a specified percentage
greater than a majority in principal amount of the Debentures or (2) each
holder of Debentures, the Property Trustee may only take such action if
directed by, in the case of clause (1) above, the vote of 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 Preferred Securities. The Property Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. 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 Debenture 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 Preferred Securities unless the Property
Trustee shall have received, at the expense of the Sponsor, 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
l
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 the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the
Declaration in respect of the Securities.
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
Securities of the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of Preferred Securities
are entitled to vote, or of any matter upon which action by written consent
of such Holders is to be taken, to be mailed to each Holder of record of
Preferred Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such action is to
be taken, (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote or of such matter
upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities in
accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above,
any of the Preferred Securities at such time that are owned by SunAmerica
or by any entity directly or indirectly controlling or controlled by or
under direct or indirect common control with SunAmerica shall not be
entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
Except as provided in this paragraph 5, Holders of the
Preferred Securities will have no rights to increase or decrease the number of
Trustees or to appoint, remove or replace a Trustee, which voting rights are
vested solely in the Holders of the Common Securities.
6. Pro Rata Treatment. A reference in these terms of the
Preferred Securities to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default 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 Preferred Securities held by the relevant
<PAGE>
Holder relative 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 Common
Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
7. Ranking. The Preferred Securities rank pari passu and
payment thereon will be made Pro Rata with, the Common Securities except that
where an Event of Default occurs and is continuing, the rights of Holders of
Preferred Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise rank in priority to the rights of Holders
of the Common Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets to, any corporation or other body.
9. Transfer, Exchange, Method of Payments. 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.
10. Acceptance of Indenture and Preferred Guarantee. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Guarantee, including the subordination
provisions therein and (ii) the Indenture and the Debentures, including the
subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of Preferred Securities
shall have no preemptive rights to subscribe to any additional Preferred
Securities or Common Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
Annex I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company ("DTC") or a nominee of DTC. This Preferred Security
is exchangeable for Preferred Securities registered in the name of a person
other than DTC or its nominee only in the limited circumstances described in
the Declaration and no transfer of this Preferred Security (other than a
<PAGE>
transfer of this Preferred Security as a whole by DTC to a nominee of DTC or
by a nominee of DTC to DTC or another nominee of DTC) may be registered except
in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
Number [ ] Preferred Securities
B-
CUSIP NO. [_____________]
Certificate Evidencing Preferred Securities
of
SunAmerica Capital Trust [__]
[___]% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
SunAmerica Capital Trust [__], a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby
certifies that _________ (the "Holder") is the registered owner of _____
(______) preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the [__]% Trust Originated
Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of
[_____________ __], 19[__], as the same may be amended from time to time (the
"Declaration") including the designation of the terms of Preferred Securities
as set forth in Exhibit B thereto. The Preferred Securities and the Common
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by SunAmerica Inc., a Maryland corporation
("SunAmerica"), to the Trust pursuant to the Indenture referred to in the
Declaration. The Holder is entitled to the benefits of the Guarantee
Agreement of SunAmerica dated as of [___________ __], 19[__] (the "Guarantee")
to the extent provided therein. The Trust will furnish a copy of the
<PAGE>
Declaration, the Guarantee and the Indenture to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have (i) agreed to the terms of the Indenture and the
Debentures, including that the Debentures are subordinate and junior in
right of payment to all Senior Debt (as defined in the Indenture) as and to
the extent provided in the Indenture and (ii) agreed to the terms of the
Guarantee, including that the Guarantee is subordinate and junior in right
of payment to all other liabilities of SunAmerica, including the
Debentures, except those made pari passu or subordinate by their terms, 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.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this ____ day of __________, 199[_].
SUNAMERICA CAPITAL TRUST [__]
By:_________________________, as trustee
Name: James R. Belardi
Title: Trustee
By:_________________________, as trustee
Name: Scott L. Robinson
Title: Trustee
Dated:
Countersigned and Registered:
The Bank of New York,
Transfer Agent and Registrar
By:___________________________
Authorized Signature
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
____________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S)
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust of SunAmerica Capital Trust [__] dated as of [__________ __], 19[__]
(as amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of
[___________________] Dollars ($[______________]) and a liquidation amount in
the assets of the Trust of $25 per Common Security, are hereby designated as
"[__]% Trust Originated Common Securities". The Common Security Certificates
evidencing the Common Securities shall be substantially in the form attached
hereto as Annex I, with such changes and additions thereto or deletions
<PAGE>
therefrom as may be required by ordinary usage, custom or practice. The
Common Securities are to be issued and sold to SunAmerica Inc. ("SunAmerica")
in consideration of $[____________] in cash. In connection with the
issuance and sale of the Preferred Securities and the Common Securities,
the Trust will purchase as trust assets Debentures of SunAmerica having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities so issued, and bearing interest
at an annual rate equal to the annual Distribution rate on the Preferred
Securities and Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and Common Securities.
2. Distributions. (a) Periodic distributions payable on each
Common Security will be fixed at a rate per annum of [__]% (the "Coupon Rate")
of the stated liquidation amount of $25 per Common Security. Distributions in
arrears for more than one quarter will bear interest at the rate per annum of
[__]% thereof (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used in these terms means such
periodic cash distributions and any such interest payable unless otherwise
stated. A Distribution will be made by the Property Trustee only to the
extent that interest payments are made in respect of the Debentures held by
the Property Trustee. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of
a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed in such a 30-day month.
(b) Distributions on the Common Securities will be cumulative,
will accrue from [____________ __], 19[__] and will be payable quarterly in
arrears, on March 30, June 30, September 30 and December 30 of each year,
commencing on [____________ __,] 19[__], except as otherwise described below,
but only if and to the extent that interest payments are made in respect of
the Debentures held by the Property Trustee. So long as SunAmerica shall not
be in default in the payment of interest on the Debentures, SunAmerica has the
right under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarterly interest periods (each, an
"Extension Period") and, as a consequence, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by
applicable law) at the rate of [__]% per annum, compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, SunAmerica may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 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. Payments of accrued Distributions will be payable to Holders
of Common Securities as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates which will be one
<PAGE>
business day prior to the relevant Distribution date unless the Preferred
Securities are no longer in book-entry only form in which event the relevant
record dates will be the March 15, June 15, September 15 and December 15 prior
to the relevant Distribution date, which record and payment dates correspond
to the record and interest payment dates on the Debentures. Distributions
payable on any Common 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 Debentures will forthwith cease to be
payable to the person in whose name such Common Security is registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the person in whose name such Common 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 Debentures on such Distribution payment
date. Subject to any applicable laws and regulations and the provisions of
the Declaration, each payment in respect of the Common Securities will be made
as described in paragraph 9 hereof. If any date on which Distributions are
payable on the Common Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(d) All Distributions paid with respect to the Common
Securities and the Preferred Securities will be paid Pro Rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held
by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed Pro Rata among the Holders of the
Preferred Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the
date of the dissolution, winding-up or termination, as the case may be, will
be entitled to receive Pro Rata solely out of the assets of the Trust
available for distribution to Holders of Preferred Securities and Common
Securities, after satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per Preferred Security
and Common Security plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, and after
satisfaction of liabilities to creditors, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities and Common Securities bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Preferred
Securities and Common Securities, shall be distributed Pro Rata to the Holders
<PAGE>
of the Preferred Securities and Common Securities in exchange for such
Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and Common Securities may only be redeemed if Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities are repaid, redeemed or distributed
as set forth below:
(a) Upon the repayment of the Debentures, in whole or in
part, whether at maturity, upon redemption at any time or from time to time on
or after [____________ __], 20[__], the proceeds of such repayment will be
promptly applied to redeem Pro Rata Preferred Securities and Common Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid or redeemed, upon not less than 30 nor more than
60 days' notice, at a redemption price of $25 per Preferred and Common
Security plus an amount equal to accrued and unpaid Distributions thereon to
the date of redemption, payable in cash (the "Redemption Price"). The date of
any such repayment or redemption of Preferred Securities and Common Securities
shall be established to coincide with the repayment or redemption date of the
Debentures.
(b) If fewer than all the outstanding Preferred Securities
and Common Securities are to be so redeemed, the Preferred Securities and the
Common Securities will be redeemed Pro Rata and the Common Securities to be
redeemed will be redeemed as described in paragraph 4(e)(ii) below. If a
partial redemption would result in the delisting of the Preferred Securities
by any national securities exchange or other organization on which the
Preferred Securities are then listed, SunAmerica pursuant to the Indenture
will only redeem Debentures in whole and, as a result, the Trust may only
redeem the Common Securities in whole.
(c) If, 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 Regular Trustees shall, unless the Debentures are
redeemed in the limited circumstances described below, dissolve the Trust and,
after satisfaction of creditors, cause Debentures held by the Property Trustee
having an aggregate principal amount equal to the aggregate stated liquidation
amount of and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Preferred
Securities and Common Securities, to be distributed to the Holders of the
Preferred Securities and Common Securities on a Pro Rata basis in liquidation
of such Holders' interests in the Trust, within 90 days following the
<PAGE>
occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred Securities will not recognize any
gain or loss for United States federal income tax purposes as a result of the
dissolution of the Trust and distribution of Debentures; and provided,
further, that, if and as long as at the time there is available to the Trust
the opportunity to eliminate, within 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 that has no adverse effect
on the Trust, SunAmerica or the Holders of the Preferred Securities
("Ministerial Action") the Trust will pursue such measure in lieu of
dissolution.
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
Debentures for United States federal income tax purposes even if the
Debentures were distributed to the Holders of Preferred Securities and Common
Securities in liquidation of such Holder's interest in the Trust as described
in this paragraph 4(c) or (ii) the Regular Trustees shall have been informed
by such tax counsel that a No Recognition Opinion cannot be delivered to the
Trust, SunAmerica shall have the right at any time, upon not less than 30 nor
more than 60 days' notice, to redeem the Debentures in whole or in part for
cash at the Redemption Price within 90 days following the occurrence of such
Tax Event, and promptly following such redemption Preferred Securities and
Common Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed will be redeemed by the Trust
at the Redemption Price on a Pro Rata basis: provided, however, that, if at
the time there is available to SunAmerica or the Regular Trustees on behalf of
the Trust the opportunity to eliminate, within such 90 day period, the Tax
Event by taking some Ministerial Action, SunAmerica or the Holders of the
Preferred Securities, SunAmerica or the Regular Trustees on behalf of the
Trust will pursue such measure in lieu of redemption; and provided, further,
that SunAmerica shall have no right to redeem the Debentures while the Regular
Trustees on behalf of the Trust are pursuing such Ministerial Action. The
Common Securities will be redeemed Pro Rata with the Preferred Securities,
except that if an Event of Default under the Indenture has occurred and is
continuing, the Preferred Securities will have a 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
[_____________ __], 19[__] 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
<PAGE>
(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 [__________ __], 19[__] there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount
of taxes, duties or other governmental charges or (iii) interest payable by
SunAmerica to the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible by SunAmerica for United States federal
income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in 1940 Act Law"),
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
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after [_____________ __], 19[__].
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed
to be outstanding and (ii) any certificates representing Common Securities
will be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Common Securities until such certificates are presented to SunAmerica
or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accrued and unpaid Distributions have been paid
on all Common Securities for all quarterly Distribution periods terminating on
or prior to the date of redemption.
(e)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and Common Securities
(a "Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of
the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph (e)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and
Common Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Preferred Securities and Common Securities at the address of
each such Holder appearing in the books and
<PAGE>
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed Pro Rata from each Holder of Common Securities (subject to adjustment
to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/ Distribution Notice in
respect of a redemption of Common Securities as provided in this paragraph 4
(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 in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures,
Distributions will cease to accrue on the Common Securities called for
redemption, such Common Securities will no longer be deemed to be outstanding
and all rights of Holders of such Common Securities so called for redemption
will cease, except the right of the Holders of such Common Securities to
receive the Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or cause to
be registered the transfer of any Common Securities which have been so called
for redemption. If any date fixed for redemption of Common Securities is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Common Securities is improperly withheld or
refused and not paid by the Property Trustee, Distributions on such Common
Securities will continue to accrue, from the original redemption date to the
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common
Securities.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, Common
Security Certificates shall be deemed to represent beneficial interests in the
Debentures so distributed, and the Common Securities will no longer be deemed
outstanding and may be canceled by the Regular Trustees. The Debentures so
distributed shall have an aggregate principal amount equal to the aggregate
liquidation amount of the Common Securities so distributed.
5. Voting Rights. (a) Except as provided under paragraph
5(b) below and as otherwise required by law and the Declaration, the Holders
of the Common Securities will have no voting rights.
(b) Except as provided in the Declaration with respect to a
Special Regular Trustee, Holders of Common Securities have the sole right
under the Declaration to increase or decrease the number of Trustees, and to
<PAGE>
appoint, remove or replace a Trustee, any such increase, decrease,
appointment, removal or replacement to be approved by Holders of Common
Securities representing a Majority in liquidation amount of the Common
Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Common
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
as a class and such amendment or proposal shall not be effective except with
the approval of the Holders of Securities representing 66-2/3% in liquidation
amount of such Securities; provided, however, that (A) 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, (B) 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 (C) amendments to the Declaration shall be
subject to such further requirements as are set forth in Sections 12.1 and
12.2 of the Declaration.
In the event the consent of the Property Trustee as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of
(1) holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of
Debentures, the Property Trustee may only vote with respect to that amendment,
modification or termination as directed by, in the case of clause (1)
above, the vote of Holders of Securities representing such specified
percentage of the aggregate liquidation amount of the Securities, or, in
the case of clause (2) above, each Holder of Securities; and provided,
further, that the Property Trustee shall be under no obligation to take any
action in accordance with the directions of the Holders of the Securities
unless the Property Trustee shall have received, at the expense of the
Sponsor, an opinion of nationally recognized independent tax counsel
recognized as an 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.
<PAGE>
Subject to Section 2.6 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class
shall have the right to (A) on behalf of all Holders of Common Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with the Declaration) and (B) 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 holder of
the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising
any trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences 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 Debentures shall be due and
payable; provided that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures representing a
specified percentage greater than a majority in principal amount of the
Debentures or (e) each holder of Debentures, the Property Trustee may only
take such action if directed by, in the case of clause (1) above, the vote
of Holders of Common Securities representing such specified percentage of
the aggregate liquidation amount of the Common Securities, or, in the case
of clause (2) above, each Holder of Common Securities. Pursuant to this
paragraph, the Property Trustee shall not revoke, or take any action
inconsistent with, any action previously authorized or approved by a vote
of the Holders of the Preferred Securities, and shall not take any action
in accordance with the direction of the Holders of the Common Securities
under this paragraph if the action is prejudicial to the Holders of
Preferred Securities. 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 Debenture 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 Common Securities unless the
Properties Trustee shall have received, at the expense of the Sponsor, 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 income tax purposes following
such action.
Notwithstanding any other provision of these terms, each Holder
of Common Securities will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by
the Holders of Preferred Securities as provided in the Declaration or
otherwise eliminated, and until all Events of Default with respect to the
Preferred Securities have been so cured, waived by the Holders of Preferred
Securities or otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of Preferred Securities and only the
Holders of the Preferred Securities will have the right to direct the Property
Trustee in accordance with the terms of the Declaration or of the Securities.
In the event that any Event of Default with respect to the Preferred
Securities is waived by the Holders of Preferred Securities as provided in the
Declaration, the Holders of Common Securities agree that such waiver shall
<PAGE>
also constitute the 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.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the
Declaration in respect of the Securities.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance
with the Declaration.
6. Pro Rata Treatment. A reference in these terms of the
Common Securities to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default 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 Preferred Securities held by the
relevant Holder relative 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
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
7. Ranking. The Common Securities rank pari passu with the
Preferred Securities except that where an Event of Default occurs and is
continuing, the rights of Holders of Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders the Preferred
Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets to, any corporation or other body.
9. Transfers, Exchanges, Method of Payments. Payment of
Distributions and payments on redemption of the Common Securities will be
<PAGE>
payable, the transfer of the Common Securities will be registrable, and Common
Securities will be exchangeable for Common 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 Common Security will be made only
upon surrender of such Common Security to the Property Trustee.
Notwithstanding the foregoing, transfers of Common Securities are subject to
conditions set forth in Section 9.1(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common
Securities, by the acceptance thereof, agrees to the provisions of the
Indenture and the Debentures, including the subordination provisions thereof.
11. No Preemptive Rights. The Holders of Common Securities
shall have no preemptive rights to subscribe to any additional Common
Securities or Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
C-1 [____________]
Certificate Evidencing Common Securities
of
SunAmerica Capital Trust [__]
[___]% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
SunAmerica Capital Trust [__], a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that SunAmerica Inc. (the "Holder") is the registered owner of
[______________] ([__________]) common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the
[___]% Trust Originated Common Securities (liquidation amount $25 per Common
<PAGE>
Security) (the "Common Securities"). The Common Securities are transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer and satisfaction of the other conditions set forth in the
Declaration (as defined below) including, without limitation Section 9.1(c)
thereof. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust of the Trust dated as of [____________ __],
19[__], as the same may be amended from time to time (the "Declaration")
including the designation of the terms of Common Securities as set forth in
Exhibit C thereto. The Common Securities and the Preferred Securities issued
by the Trust pursuant to the Declaration represent undivided beneficial
interests in the assets of the Trust, including the Debentures (as defined in
the Declaration) issued by SunAmerica Inc., a Maryland corporation, to the
Trust pursuant to the Indenture referred to in the Declaration. The Trust
will furnish a copy of the Declaration and the Indenture to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment
to all Senior Debt (as defined in the Indenture) as and to the extent provided
in the Indenture.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this [__]th day of [_________], 19[__].
SUNAMERICA CAPITAL TRUST [__]
By________________________, as trustee
Name: James R. Belardi
Title: Trustee
By_________________________, as trustee
Name: Scott L. Robinson
Title: Trustee
Dated:
Countersigned and Registered:
The Bank of New York,
Transfer Agent and Registrar
By:___________________________
Authorized Signature
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert assignee's social security or tax identification number)
____________________________________________________________
____________________________________________________________
____________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
____________________________________________________________
____________________________________________________________
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
<PAGE>
Exhibit 4.16
- ------------------------------------------------------------------------------
SUNAMERICA INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
-------------------
[ ] SUPPLEMENTAL INDENTURE
Dated as of [ ], 199[ ]
TO
INDENTURE
Dated as of March 15, 1995
-------------------
[ ]% Junior Subordinated Debentures
Due 20[ ]
- ------------------------------------------------------------------------------
[ ] SUPPLEMENTAL INDENTURE, dated as of the [ ] day of
[ ] 199[ ] (the "[ ] 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"); as
set forth in Section 7.01 hereto and except as otherwise set forth herein, all
terms used and not defined herein are used as defined in the Indenture),
<PAGE>
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
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 due 20[ ] (said series
being hereinafter referred to as the "Series [ ]% Debentures"), the form and
substance of such Series [ ]% Debentures and the terms, provisions and
conditions thereof to be set forth as provided in the Indenture and this [
] Supplemental Indenture; and
WHEREAS, the Company has caused to be formed SunAmerica Capital
Trust [ ] ("SunAmerica Capital [ ]") 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 [ ], 199[ ] (the
"Original Declaration") and the filing of a certificate of trust with the
Secretary of State of the State of Delaware on [ ], 199[ ]; 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 [ ], 199[ ] (such Amended and Restated Declaration of Trust, as
amended from time to time, the "Declaration of Trust"); and
WHEREAS, SunAmerica Capital [ ] desires to issue its [ ]%
Trust Originated Preferred Securities (the "Preferred Securities") and sell
such Preferred Securities to initial purchasers; and
WHEREAS, in connection with such purchases of Preferred
Securities and the related purchase by the Company of the Common Securities
(as defined in the Declaration of Trust) of SunAmerica Capital [ ],
SunAmerica Capital [ ] will purchase as trust assets Series [ ]% Debentures;
and
WHEREAS, pursuant to the Declaration of Trust, the legal title
to the Series [ ]% 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 [ ] shall, unless the Series [ ]% Debentures
are redeemed as described herein, dissolve SunAmerica Capital [ ] 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 [ ]% 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 [ ]% Debentures (each a
<PAGE>
"Dissolution Event"); and
WHEREAS, the Company desires and has requested the Trustee to
join with it in the execution and delivery of this [ ] Supplemental
Indenture, and all requirements necessary to make this [ ] Supplemental
Indenture a valid instrument, in accordance with its terms, and to make the
Series [ ]% 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;
NOW THEREFORE, in consideration of the purchase and acceptance
of the Series [ ]% Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Series [ ]% 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 [ ]% Debentures
SECTION 1.01. There shall be and is hereby authorized a series
of Debentures designated the "[ ]% Junior Subordinated Debentures Due 20[
]", limited in aggregate principal amount to $[ ] (except as provided
in this Section 1.01 and 6.01). Upon exercise of the overallotment option set
forth in the Underwriting Agreement (as defined in the Declaration of Trust),
additional Series [ ]% Debentures in the aggregate principal amount of up to
$[ ] may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Series [ ]% Debentures to or upon the written order of the Company, which
order shall be accompanied by evidence satisfactory to the Trustee that the
overallotment option has been exercised. The Series [ ]% 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 [ ], 20[ ].
SECTION 1.02. (a) Except as provided in Section 1.02(b), the
Series [ ]% Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Series [ ]%
Debentures issued in certificated form will be payable, the transfer of such
Series [ ]% Debentures will be registrable and such Series [ ]% Debentures
will be exchangeable for Series [ ]% 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 [ ]% Debentures will only be
made upon surrender of the Series [ ]% Debentures to the Trustee.
Notwithstanding the foregoing, so long as the Property Trustee is the legal
owner and record holder of the Series [ ]% Debentures, the payment of the
principal of and interest (including Compounded Interest, if any) on the
Series [ ]% Debentures held by the Property Trustee will be made by the
Company in immediately available funds on the payment date therefor at such
<PAGE>
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.
(b) In connection with a Dissolution Event;
(i) Series [ ]% Debentures in certificated form may be
presented to the Trustee by the Property Trustee in
exchange for a Global Debenture representing the Series [
]% Debentures in an aggregate principal amount equal to
all Outstanding Series [ ]% Debentures, to be registered
in the name of the Depository, or its nominee, and
delivered by the Trustee to the Depository for crediting
to the accounts of its participants pursuant to the
instructions of the Regular Trustees (as defined in the
Declaration of Trust). The Company upon any such
presentation shall execute a Global Debenture
representing the Series [ ]% Debentures in such
aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance
with the Indenture and this [ ] Supplemental
Indenture. Payments on the Series [ ]% Debentures
issued as a Global Debenture will be made to the
Depository; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, Series [ ]% Debentures in
certificated form may be presented to the Trustee by the
Property Trustee and any Preferred Security Certificate
(as defined in the Declaration of Trust) which represents
Preferred Securities other than Preferred Securities held
by the Clearing Agency (as defined in the Declaration of
Trust) or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial
interests in Series [ ]% Debentures presented to the
Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation
amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificate are presented to the
Debenture Registrar for transfer or reissuance at which
time such Preferred Security Certificate will be
cancelled and a Series [ ]% Debenture, registered in the
name of the holder of the Preferred Security Certificate
or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate
canceled will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance
with the Indenture and this [ ] Supplemental
Indenture. On issue of such Series [ ]% Debentures,
Series [ ]% Debentures with an equivalent aggregate
amount that were presented by the Property Trustee to the
Trustee will be deemed to have been canceled.
<PAGE>
SECTION 1.03. Each Series [ ]% Debenture will bear interest
at the rate of [ ]% per annum from [ ], 199[ ] 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 [ ], 199[ ]), to the person
in whose name such Series [ ]% Debenture or any predecessor Series [ ]%
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, in
respect of any Series [ ]% Debentures of which the Property Trustee is the
registered holder of or a Global Debenture, the close of business on the
business day next preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if the Preferred Securities are no longer in book-entry
only form or if pursuant to the provisions of Section 2.11(c) of the Indenture
the Series [ ]% Debentures are not represented by a Global Debenture, the
regular record dates for such interest installment shall be the close of
business on the March 15, June 15, September 15 or December 15 next preceding
that 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 [ ]% 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 [ ]% 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 [ ]% 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 [ ]% 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 [ ]% Debentures
SECTION 2.01. Except as provided in Section 2.02, Series [ ]%
Debentures may not be redeemed by the Company prior to [ ], 20[ ].
Subject to the terms of Article Three of the Indenture, the Company shall have
the right to redeem the Series [ ]% Debentures, in whole or in part, from
<PAGE>
time to time, on or after [ ], 20[ ], 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 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 [ ]%
Debentures for United States federal income tax purposes even if the Series [
]% Debentures were distributed to the holders of Preferred Securities and
Common Securities in liquidation of such holder's interest in SunAmerica
Capital [ ] 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 [ ], the
Company shall have the right at any time, upon not less than 30 nor more than
60 days' notice, to redeem the Series [ ]% 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 [ ]
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 [ ], the Company or the
holders of the Preferred Securities, the Company or the Regular Trustees on
behalf of SunAmerica Capital [ ] will pursue such measure in lieu of
redemption and provided further that the Company shall have no right to
redeem the Series [ ]% Debentures while the Regular Trustees on behalf of
SunAmerica Capital [ ] 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 [ ], 199[ ] 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 [ ], 199[ ] there is more than an
insubstantial risk that (i) SunAmerica Capital [ ] 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 [ ]% Debentures, (ii)
SunAmerica Capital [ ] is, or will be within 90 days of the date thereof,
<PAGE>
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 [ ] on the Series [ ]% 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 [ ] and
distribution of the Series [ ]% Debentures as provided in the Declaration of
Trust.
SECTION 2.03. If the Series [ ]% Debentures are only
partially redeemed pursuant to this Article Two, the Series [ ]% Debentures
will be redeemed pro rata or by lot or by any other method utilized by the
Trustee, provided that if at the time of redemption, the Series [ ]%
Debentures are registered as a Global Debenture, the Depository shall
determine by lot the principal amount of such Series [ ]% Debentures held by
each Debenture Holder to be redeemed in accordance with its customary
procedures. Notwithstanding the foregoing, if a partial redemption of the
Series [ ]% 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 [ ]%
Debentures in whole.
ARTICLE THREE
Extension of Interest Payment Period
SECTION 3.01. So long as the Company is not in default in the
payment of interest on the Series [ ]% Debentures, the Company shall have the
right, at any time during the term of the Series [ ]% Debentures, from time
to time to extend the interest payment period of such Series [ ]%
Debentures 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 (i) the Company
may pay accrued dividends (and cash in lieu of fractional shares) upon
conversion of its Series E Mandatory Conversion Premium Dividend Preferred
Stock or upon the conversion of any other preferred stock of the Company as
may be outstanding from time to time, in each case in accordance with the
terms of such stock and (ii) the foregoing will not apply to any stock
dividends paid by the Company. 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 [ ]% Debentures on any Interest Payment
<PAGE>
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 [ ]% Debentures including any Compounded
Interest which shall be payable to the holders of the Series [ ]%
Debentures in whose names the Series [ ]% 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 [ ]% 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 [ ]
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 [ ] 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 [ ]%
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 [ ]% Debentures and
the Trustee written notice of its selection of such Extended Interest Payment
Period at least 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 [ ]% Debentures.
SECTION 3.03. The quarter in which any notice is given
pursuant to Section 3.02 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under this Article
Three.
ARTICLE FOUR
Covenants Applicable to Series [ ]% Debentures
SECTION 4.01. So long as any Preferred Securities remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
<PAGE>
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
[ ]% Debentures or (iii) the Company shall have given notice of its
election of an Extended Interest Payment Period and such Period, or any
extension thereof, is continuing; provided that (a) the Company will be
permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion of any of its Series E Mandatory Conversion Premium
Dividend Preferred Stock or upon the conversion of any other preferred
stock of the Company as may be outstanding from time to time, in each case
in accordance with the terms of such stock and (b) the foregoing will not
apply to any stock dividends paid by the Company.
SECTION 4.02. In connection with the distribution of the
Series [ ]% Debentures to the holders of the Preferred Securities upon a
Dissolution Event, the Company will use its best efforts to list such Series
[ ]% 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 [ ]%
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 [ ]% Debentures as provided in
the Declaration of Trust.
ARTICLE FIVE
Form of Series [ ]% Debentures
SECTION 5.01. The Series [ ]% 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)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depository or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository
<PAGE>
to the Depository or another nominee of the Depository) may be registered
except in limited circumstances.
Unless this Debenture is presented by an authorized
representative to The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
No. $
CUSIP NO.
SUNAMERICA INC.
[ ]% JUNIOR SUBORDINATED DEBENTURE
DUE 20[ ]
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 [ ],
20[ ], and to pay interest on said principal sum from [ ], 199[ ] 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 [ ], 199[ ]
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. 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 day next preceding such Interest Payment Date, provided if the
<PAGE>
Preferred Securities of SunAmerica Capital Trust [ ] are no longer in book-
entry only form, the regular record dates shall be the close of business on
the March 15, June 15, September 15 or December 15 next preceding such
Interest Payment Date] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c)
OF THE INDENTURE THE SERIES [ ]% DEBENTURES ARE NOT REPRESENTED BY A GLOBAL
DEBENTURE -- 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 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
<PAGE>
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.
The First National Bank of Chicago,
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
<PAGE>
national banking association, as Trustee (herein referred to as the
"Trustee"), as supplemented by the [ ] Supplemental Indenture dated as of
[ ], 199[ ] 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 designated the [ ]% Junior
Subordinated Debentures due 20[ ] and is limited in aggregate principal
amount as specified in said [ ] Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may
not be redeemed by the Company prior to [ ], 20[ ]. 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 [ ],
20[ ] (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
the Debentures are only partially redeemed by the Company pursuant to an
Optional Redemption, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee; provided if, at the time of
redemption, the Debentures are registered as a Global Debenture, the
Depository shall determine the principal amount of such Debentures held by
each holder of Debentures to be redeemed in accordance with its customary
procedures.
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 [ ]% Debentures for United States federal income
tax purposes even if the Series [ ]% Debentures were distributed to the
holders of Preferred Securities and Common Securities in liquidation of such
holder's interest in SunAmerica Capital [ ] 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 [ ], the Company shall have the right at any time, upon
not less than 30 nor more than 60 days' notice, to redeem the Series [ ]%
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 [ ] 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
[ ], the Company or the holders of the Preferred Securities, the Company or
the Regular Trustees on behalf of SunAmerica Capital [ ] will pursue such
<PAGE>
measure in lieu of redemption and provided further that the Company shall have
no right to redeem the Series [ ]% Debentures while the Regular Trustees on
behalf of SunAmerica Capital [ ] 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 [ ], 19[ ], 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 [ ], 19[ ], there is more than an
insubstantial risk that (i) SunAmerica Capital [ ] 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 [ ]% Debentures, (ii)
SunAmerica Capital [ ] 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 [ ] on the Series [ ]% 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 [ ] and
distribution of the Series [ ]% 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 [ ]% 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 [ ]% 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
<PAGE>
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.
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 13.12 of the Indenture, no reference herein
<PAGE>
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 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 (a)
the Company may pay accrued dividends (and cash in lieu of fractional shares)
upon conversion of its Series E Mandatory Conversion Premium Dividend
Preferred Stock or upon the conversion of any other preferred stock of the
Company as may be outstanding from time to time, in each case in accordance
with the terms of such stock and (b) the foregoing will not apply to any stock
dividends paid by the Company. 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 [ ]% Debentures including any Compounded
Interest which shall be payable to the holders of the Series [ ]% Debentures
in whose names the Series [ ]% 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.
<PAGE>
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
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.
[If certificated Debentures -- The Debentures of this series
are issuable only in registered form without coupons in denominations of $25
and any integral multiple thereto.] [If Global Debenture -- This Global
Debenture is exchangeable for Debentures in definitive form under certain
limited circumstances set forth in the Indenture. Debentures of this series
so issued are issuable only in registered form without coupons in
denominations of $25 or any integral multiple thereof.] As provided in the
Indenture and subject to certain limitations [If Global Debenture -- herein
and] therein set forth, Debentures of this series [If Global Debenture -- so
issued] 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 [ ]% Debentures
SECTION 6.01. Except as provided in Section 1.01 and this
Section 6.01, Series [ ]% Debentures in the aggregate principal amount equal
to $[ ] may, upon execution of this [ ] 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. Upon exercise of the overallotment option set
forth in the Underwriting Agreement, additional Series [ ]% Debentures in the
aggregate principal amount of up to $[ ] may be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Series [ ]% Debentures executed as
<PAGE>
aforesaid by the Company, to or upon the written order of the Company, which
order shall be accompanied by evidence satisfactory to the Trustee that the
overallotment option has been exercised.
ARTICLE SEVEN
Miscellaneous Provisions
SECTION 7.01. Except as otherwise expressly provided in this [
] Supplemental Indenture or in the form of Series [ ]% Debenture or
otherwise clearly required by the context hereof or thereof, all terms used
herein or in said form of Series [ ]% 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 [ ]
Supplemental Indenture, is in all respects ratified and confirmed; provided
that the words ", may after a period of 30 days has elapsed from such holder's
written request to the Property Trustee to enforce such rights," in the ninth
and tenth lines of Section 13.12 of the Indenture shall not be applicable to
the Series [ ]% Debentures. This [ ] 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 [ ] Supplemental Indenture.
SECTION 7.04. This [ ] 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 [
] Supplemental Indenture to be duly executed, and their respective corporate
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 ________________________________
Name: James R. Belardi
Title: Executive Vice President
and Chief Financial
Officer
Attest:
____________________________
<PAGE>
Name: Susan L. Harris
Title: Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By ________________________________
Name:
Title:
Attest:
____________________________
Assistant Secretary
STATE OF CALIFORNIA )
) ss.:
COUNTY OF Los Angeles ) _______ __, 199_
On the ______ day of _______, in the year one thousand nine
hundred ninety-____, before me personally came James R. Belardi to me known,
who, being by me duly sworn, did depose and say that he resides at 1242
Berkeley Street, #12, Santa Monica, California 90404; that he is Senior Vice
President and Treasurer 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.
____________________________
NOTARY PUBLIC
My Commission Expires
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK ) _______ __, 199_
On the ______ day of _______, in the year one thousand nine
hundred ninety-____, before me personally came R. D. Manella to me known, who,
being by me duly sworn, did depose and say that he resides at 211 Willow Pky.,
Buffalo Grove, Illinois, 60089 that he is a Vice President of THE FIRST
NATIONAL BANK OF CHICAGO, one of the corporations described in and which
<PAGE>
executed the above instrument; that 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 he signed his name thereto by like authority.
____________________________
NOTARY PUBLIC
My Commission Expires
<PAGE>
Exhibit 4.19
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ___________, 199_, 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 __, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ___________, 199_ 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 may issue up to $ ________ 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, of which $_______
liquidation amount of Preferred Securities are being issued as of the date
hereof. Up to the remaining $________ liquidation amount of Preferred
Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement.
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, 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 purchase by the initial
purchasers thereof of Preferred Securities, which purchase 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;
<PAGE>
(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 due 20__".
"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 only if
and 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
<PAGE>
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, as
supplemented by the _________ Supplemental Indenture thereto dated as of
__________, 199_, 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.
"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
<PAGE>
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.
"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 66-2/3% 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 Section
Section 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 Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee.
<PAGE>
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
<PAGE>
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.
<PAGE>
(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;
<PAGE>
(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
<PAGE>
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
<PAGE>
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.
<PAGE>
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.
<PAGE>
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 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.
<PAGE>
So long as any Preferred Securities remain outstanding, the
Guarantor will not (a) 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 payment with respect
thereto, or (b) make any payment of interest, premium (if any) or principal on
any debt securities issued by the Guarantor which rank pari passu with or
junior to the Debentures, 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 (a) the Guarantor will be
permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion of any of its Series E Mandatory Conversion Premium
Dividend Preferred Stock or upon the conversion of any other preferred stock
of the Guarantor as may be outstanding from time to time, in each case in
accordance with the terms of such stock and (b) the foregoing will not apply
to any stock dividends paid by the Guarantor. 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. The Guarantor's obligations under this Guarantee Agreement
will rank pari passu with respect to obligations under other guarantee
agreements which it may enter into from time to time to the extent that such
agreements shall be entered into in substantially the form hereof and provide
for comparable guarantees by the Guarantor of payment on preferred securities
issued by other SunAmerica Capital Trusts.
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
<PAGE>
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
<PAGE>
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) 772-6635
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.
<PAGE>
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.
SECTION 9.7 Counterparts.
This Guarantee Agreement may be executed in counterparts, each
of which shall be an original; but such counterparts shall together constitute
one and the same instrument.
SECTION 9.8 Exercise of Overallotment Option.
If and to the extent that Preferred Securities are issued by
the Issuer upon exercise of the overallotment option referred to the second
WHEREAS clause, the Guarantor agrees to give prompt notice thereof to the
Guarantee Trustee but the failure to give such notice shall not relieve the
Guarantor of any of its obligations hereunder.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
SUNAMERICA INC.
By: _____________________________
Name: James R. Belardi
Title: Senior Vice President
and Treasurer
THE BANK OF NEW YORK,
As Guarantee Trustee
By: _____________________________
Name:
Title:
<PAGE>
Exhibit 4.22
SUNAMERICA INC.
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
FORM OF
PURCHASE CONTRACT AGREEMENT
DATED AS OF NOVEMBER 6, 1996
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.............................................1
Section 1.02. Compliance Certificates and Opinions....................9
Section 1.03. Form of Documents Delivered to Agent...................10
Section 1.04. Acts of Holders; Record Dates..........................10
Section 1.05. Notices, Etc., to Agent and the Company................12
Section 1.06. Notice to Holders; Waiver..............................13
Section 1.07. Effect of Headings and Table of Contents...............13
Section 1.08. Successors and Assigns.................................13
Section 1.09. Separability Clause....................................13
Section 1.10. Benefits of Agreement..................................14
Section 1.11. Governing Law..........................................14
Section 1.12. Legal Holidays.........................................14
Section 1.13. Counterparts...........................................14
Section 1.14. Inspection of Agreement................................14
ARTICLE 2
<PAGE>
Security Certificate Forms
Section 2.01. Forms of Security Certificates Generally...............15
Section 2.02. Form of Agent's Certificate of Authentication..........15
ARTICLE 3
The Securities
Section 3.01. Title and Terms; Denominations.........................16
Section 3.02. Rights and Obligations Evidenced by the Security
Certificates ........................................16
Section 3.03. Execution, Authentication, Delivery and Dating.........17
Section 3.04. Temporary Security Certificates........................18
Section 3.05. Registration; Registration of Transfer and Exchange....18
Section 3.06. Mutilated, Destroyed, Lost and Stolen Security
Certificates.........................................20
Section 3.07. Persons Deemed Owners..................................21
Section 3.08. Cancellation...........................................22
Section 3.09. Securities Not Separable...............................22
Section 3.10. No Consent to Assumption...............................23
Section 3.11. Cusip Numbers..........................................23
ARTICLE 4
The Treasury Notes
Section 4.01. Payment of Interest; Interest Rights Preserved.........23
Section 4.02. Transfer of Treasury Notes upon Certain Events or
Sale of Treasury Notes...............................24
ARTICLE 5
The Purchase Contracts
Section 5.01. Purchase of Shares of Common Stock on the Final
Settlement Date......................................26
Section 5.02. Contract Fees..........................................27
Section 5.03. Deferral of Payment Dates for Contract Fees............28
Section 5.04. Payment of Purchase Price..............................29
Section 5.05. Issuance of Common Stock...............................30
Section 5.06. Adjustment of Settlement Rate for Dividends,
Distributions, Stock Splits, Etc.....................30
Section 5.07. Notice of Adjustments and Certain Other Events.........35
Section 5.08. Acceleration; Notice...................................36
Section 5.09. Bankruptcy Event or Sale of Assets; Notice.............38
Section 5.10. Holder's Early Settlement..............................39
Section 5.11. No Fractional Shares...................................40
Section 5.12. Charges and Taxes......................................41
ARTICLE 6
Remedies
Section 6.01. Unconditional Right of Holders to Receive Contract Fees
and Purchase Common Stock............................41
Section 6.02. Restoration of Rights and Remedies.....................42
Section 6.03. Rights and Remedies Cumulative.........................42
Section 6.04. Delay or Omission Not Waiver...........................42
<PAGE>
Section 6.05. Undertaking for Costs..................................42
Section 6.06. Waiver of Stay or Extension Laws.......................43
ARTICLE 7
The Agent
Section 7.01. Certain Duties and Responsibilities....................43
Section 7.02. Notice of Default......................................44
Section 7.03. Certain Rights of Agent................................45
Section 7.04. Not Responsible for Recitals or Issuance of
Securities...........................................46
Section 7.05. May Hold Securities....................................46
Section 7.06. Money Held in Custody..................................46
Section 7.07. Compensation and Reimbursement.........................46
Section 7.08. Corporate Agent Required; Eligibility..................47
Section 7.09. Resignation and Removal; Appointment of Successor......47
Section 7.10. Acceptance of Appointment by Successor.................49
Section 7.11. Preservation of Information; Communications to
Holders..............................................49
Section 7.12. No Obligations of Agent................................50
Section 7.13. Tax Compliance.........................................50
ARTICLE 8
Supplemental Agreements
Section 8.01. Supplemental Agreements Without Consent of Holders.....51
Section 8.02. Supplemental Agreements with Consent of Holders........51
Section 8.03. Execution of Supplemental Agreements...................52
Section 8.04. Effect of Supplemental Agreements......................53
Section 8.05. Reference to Supplemental Agreements...................53
ARTICLE 9
Covenants
Section 9.01. Performance under Purchase Contracts...................53
Section 9.02. Maintenance of Office or Agency........................53
Section 9.03. Company to Reserve Common Stock........................54
Section 9.04. Covenants as to Common Stock...........................54
Section 9.05. Statements of Officers of the Company as to Default....54
PURCHASE CONTRACT AGREEMENT, dated as of November 6, 1996,
between SunAmerica Inc., a Maryland corporation (the "Company"), and The Bank
of New York, a New York banking corporation, acting as purchase contract agent
for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of
this Agreement and the Security Certificates evidencing the Securities.
All things necessary to make the Company's obligations under
the Securities, when the Security Certificates are executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent,
as in this Agreement provided, the valid obligations of the Company, and to
<PAGE>
constitute these presents a valid agreement of the Company, in accordance with
its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
Section 1.01. Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular; and
(2) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.04.
"Acceleration" means either a "Company Acceleration" or a
"Mandatory Acceleration."
"Acceleration Date" means either a "Company Acceleration Date"
or a "Mandatory Acceleration Date."
"Acceleration Settlement Fund" has the meaning specified in
Section 5.05.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"Agent" shall mean the Person who is then the Agent hereunder.
<PAGE>
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or
any other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Bankruptcy Date" means the date, if any, on which a Bankruptcy
Event occurs.
"Bankruptcy Event" means the occurrence of any of the following
events (whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order rule or regulation of any administration or governmental body):
(i) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or any
substantial part of its property or ordering the winding up or liquidation of
its affairs, and such decree or order shall remain unstayed and in effect for
a period of 60 consecutive days; or
(ii) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or make
any general assignment for the benefit of creditors.
"Board of Directors" means the board of directors of the
Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board
of Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.
"Business Day" means any day that is not a Saturday, Sunday or
a day on which the NYSE or banking institutions or trust companies in The
City of New York are authorized or obligated by law or executive order to
be closed.
"Closing Price"means on any date of determination the closing
sales price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the NYSE on such date or, if the Common Stock is
not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common Stock is not so listed
<PAGE>
on a United States national or regional securities exchange, as reported by
The Nasdaq Stock Market, or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization, or, if such
bid price is not available, the market value of the Common Stock on such date
as determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company.
"Collateral Agent" means The First National Bank of Chicago, as
Collateral Agent under the Pledge Agreement until a successor Collateral Agent
shall have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Collateral Agent" shall mean the Person who is then
the Collateral Agent thereunder.
"Common Stock" means the Common Stock, par value $1.00 per
share, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Company Acceleration" has the meaning specified in Section
5.08.
"Company Acceleration Date" has the meaning specified in
Section 5.08.
"Company Acceleration Price" shall mean the per share price
(payable in shares of Common Stock) at which the Company may accelerate the
Securities, which shall be initially $_______, declining by $______ on each
day following [_______, 1996] (computed on the basis of a 360-day year of
twelve 30-day months) to $______ on [________, 1996] and equal to $______
thereafter.
"Contract Fees" means the fee payable by the Company on each
Payment Date in respect of each Purchase Contract, equal to _____% per annum
of the Stated Amount plus any Deferred Contract Fees accrued pursuant to
Section 5.03, computed on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as the case may be, except that the Contract Fees
payable on the first Payment Date will be adjusted so that the Contract Fees
payable on such date will be the equivalent of ______% of the Stated Amount
per annum accruing from the date of issuance of the Securities to [________,
1996].
"Corporate Trust Office" means the principal corporate trust
office of the Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Trustee Administrator.
"Current Market Price" has the meaning specified in Section
5.06.
"Deferred Contract Fees" has the meaning specified in Section
<PAGE>
5.03.
"Depositary" means a clearing agency registered under the
Exchange Act that is designated to act as Depositary for the Securities as
contemplated by Section 3.05.
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to time,
and the rules and regulations promulgated thereunder.
"Exchange Time" has the meaning specified in Section 5.06(f).
"Excess Treasury Notes" has the meaning specified in Section
4.02.
"Expiration Date" has the meaning specified in Section 1.04.
"Final Settlement Date" means October 31, 1999.
"Final Settlement Fund" has the meaning specified in Section
5.05.
"First Supplemental Indenture" means the First Supplemental
Indenture between the Company and The Bank of New York, as Trustee, dated
as of November 1, 1996.
"Global Security Certificate" means a Security Certificate that
evidences all or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Holder" when used with respect to a Security Certificate (or a
Security), means a Person in whose name the Security evidenced by such
Security Certificate (or the Security Certificate evidencing such Security) is
registered in the Security Register, subject to Section 3.07.
"Holder's Early Settlement" has the meaning specified in
Section 5.10(a).
"Holder's Early Settlement Amount" has the meaning specified in
Section 5.10(a).
"Holder's Early Settlement Date" has the meaning specified in
Section 5.10(a).
"Indenture" means the Prepaid Securities Indenture between the
Company and The Bank of New York, as Trustee, dated as of November 1, 1996.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by its Chairman of the Board, any
Vice Chairman, its President or a Vice President and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Agent.
"Mandatory Acceleration" has the meaning specified in Section
5.08.
<PAGE>
"Mandatory Acceleration Date" has the meaning specified in
Section 5.08.
"Merger or Consolidation" has the meaning specified in Section
5.08.
"Notice Date" has the meaning specified in Section 5.08.
"NYSE" means the New York Stock Exchange.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, any Vice Chairman of the Board, the President or any
Executive, Senior or other Vice President or the Treasurer and delivered to
the Agent.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company and who
shall be reasonably acceptable to the Agent.
"Outstanding Securities" means, as of the date of
determination, all Securities evidenced by then Outstanding Security
Certificates, except:
(i) If a Bankruptcy Event has occurred, Securities for
which the underlying Treasury Notes have been theretofore
deposited with the Agent in trust for the Holders of such
Securities; and
(ii) On and after a Company Acceleration Date, Securities
as to which the Company has elected to effect a Company
Acceleration of the related Purchase Contracts;
provided, however, that in determining whether the Holders of the requisite
number of Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Agent shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Agent knows
to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or
any Affiliate of the Company.
"Outstanding Security Certificates" means, as of the date of
determination, all Security Certificates theretofore authenticated, executed
and delivered under this Agreement, except:
(i) Security Certificates theretofore cancelled by the
Agent or delivered to the Agent for cancellation; and
(ii) Security Certificates in exchange for or in lieu of
which other Security Certificates have been authenticated, executed on behalf
<PAGE>
of the Holder and delivered pursuant to this Agreement, other than any such
Security Certificate in respect of which there shall have been presented to
the Agent proof satisfactory to it that such Security Certificate is held by a
bona fide purchaser in whose hands the Securities evidenced by such Security
Certificate are valid obligations of the Company.
"Payment Date" means each April 30 and October 31commencing
April 30, 1997.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Permitted Investments" is defined to mean securities that are
(i) direct obligations of the U.S. for the payment of which its full faith and
credit is pledged, (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the U.S., the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the
U.S. or (iii) mutual funds that invest solely in the above U.S. government
obligations.
"Pledge" means the pledge under the Pledge Agreement of the
Treasury Notes constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Security Certificate" of any particular Security
Certificate means every previous Security Certificate evidencing all or a
portion of the rights and obligations of the Holder under the Securities
evidenced thereby; and, for the purposes of this definition, any Security
Certificate authenticated and delivered under Section 3.06 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security Certificate shall
be deemed to evidence the same rights and obligations of the Holder as the
mutilated, destroyed, lost or stolen Security Certificate.
"Prepaid Securities" means the Prepaid Securities issued upon a
Holder's Early Settlement pursuant to the Indenture as supplemental by the
First Supplemental Indenture.
"Purchase Contract," when used with respect to any Security,
means the contract obligating the Company to sell and the Holder of such
Security to purchase Common Stock on the terms and subject to the conditions
set forth in Article 5 hereof.
"Purchased Shares" has the meaning specified in Section 5.06(f).
"Record Date" for the interest and Contract Fees payable on any
Payment Date means, as to any Global Security Certificate, the Business Day
next preceding such Payment Date, and as to any other Security Certificate,
the 15th day of the month preceding such Payment Date.
<PAGE>
"Responsible Officer," when used with respect to the Agent,
means any officer of the Agent assigned by the Agent to administer its
corporate trust matters.
"Sale of Assets" means a sale, assignment, transfer, lease or
conveyance of all or substantially all of the properties and assets of the
Company to any Person which results in a voluntary liquidation, dissolution or
winding up of the Company.
"Sale of Assets Date" means the date upon which a Sale of
Assets is approved by the Board of Directors.
"Security" means the collective rights and obligations of a
Holder of a Security Certificate in respect of Treasury Notes with a principal
amount equal to the Stated Amount, subject to the Pledge thereof, and a
Purchase Contract.
"Security Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Securities
specified on such certificate.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.05.
"Settlement Date" means an Acceleration Date, a Holder's Early
Settlement Date, a Sale of Assets Date or the Final Settlement Date, as
applicable.
"Settlement Rate" has the meaning specified in Section 5.01.
"Stated Amount" means $_______.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.06.
"Treasury Notes" means ______% United States Treasury Notes
due October 31, 1999.
"Underwriting Agreement" means the Purchase Agreement dated
October 31, 1996 between the Company and Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co. and
Smith Barney, Inc., as representatives of the several Underwriters named
therein.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president."
Section 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action
under any provision of this Agreement, the Company shall furnish to the Agent
<PAGE>
an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Agreement 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, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, 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
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03 Form of Documents Delivered to Agent.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary
that all such matters be certified by, or covered by the opinion of, only one
such Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
<PAGE>
consolidated and form one instrument.
Section 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Agent and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and (subject to Section 7.01) conclusive in
favor of the Agent and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security
Certificate evidencing such Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Agent or the Company
in reliance thereon, whether or not notation of such action is made upon
such Security Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Agreement to be given, made or
taken by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not
such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite number of Outstanding Securities
on such record date. Nothing in this paragraph shall be construed to prevent
the Company from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record
<PAGE>
date previously set shall automatically and with no action by any Person be
cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite number of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Agent in writing
and to each Holder of Securities in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section,
the Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.06, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
Section 1.05. Notices, Etc., to Agent and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
(a) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Agent at 101 Barclay Street, Floor 21
West, New York, New York 10286, Attention: Corporate Trust Trustee
Administrator, or at any other address previously furnished in writing by the
Agent to the Holders and the Company, or
(b) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at 1 SunAmerica Center, Los
Angeles, California 90067-6022, Attention:
, or at any other address previously furnished in writing to the Agent by the
Company.
Section 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
<PAGE>
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Agent, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Agent
shall constitute a sufficient notification for every purpose hereunder.
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
In case any provision in this Agreement or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any
way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefits or any legal or equitable
right, remedy or claim under this Agreement. The Holders from time to time
shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Securities evidenced by their Security
Certificates by their acceptance of delivery thereof.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and
construed in accordance with the laws of the State of New York without regard
to conflict of laws.
Section 1.12. Legal Holidays.
In any case where any Payment Date or any Settlement Date shall
not be a Business Day, then (notwithstanding any other provision of this
Agreement or of the Securities) payment in respect of interest on Treasury
Notes or Contract Fees or settlement of Purchase Contracts shall not be made,
Purchase Contracts shall not be performed and settlement shall not be effected
on such date, but such payments shall be made, or the Purchase Contracts shall
be performed or settlement effected, as applicable, on the next succeeding
Business Day with the same force and effect as if made on such Payment Date or
<PAGE>
Settlement Date, as the case may be; provided, that no interest shall accrue
or be payable by the Company or any Holder for the period from and after any
such Payment Date or Settlement Date, as the case may be.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times at the Corporate Trust Office for inspection by any Holder.
ARTICLE 2
Security Certificate Forms
Section 2.01. Forms of Security Certificates Generally.
The Security Certificates (including the form of Purchase
Contracts forming part of the Securities evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Securities are listed or
Depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Security Certificates, as evidenced by
their execution of the Security Certificates.
The definitive Security Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Security Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Security Certificate authenticated, executed on
behalf of the Holders and delivered hereunder shall bear a legend in
substantially the following form:
THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS SECURITY CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
<PAGE>
Section 2.02. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Securities shall be in substantially the form set forth on the form of the
Security Certificates.
ARTICLE 3
The Securities
Section 3.01. Title and Terms; Denominations.
The aggregate number of Securities evidenced by Security
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 7,000,000 (subject to increase up to a maximum of
1,050,000 to the extent the over-allotment option of the underwriters under
the Underwriting Agreement is exercised) with a Stated Amount of per
Security, except for Security Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Security Certificates pursuant to Section 3.04, 3.05, 3.06, 5.10 or
8.05.
The Security Certificates shall be issuable only in registered
form and only in denominations of a single Security and any integral multiple
thereof.
Section 3.02. Rights and Obligations Evidenced by the Security
Certificates.
Each Security Certificate shall evidence the number of
Securities specified therein, with each such Security representing the
ownership by the Holder thereof of Treasury Notes with a principal amount
equal to the Stated Amount, subject to the Pledge of such Treasury Notes by
such Holder pursuant to the Pledge Agreement, and the rights and obligations
of the Holder under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder shall pledge, pursuant to the Pledge Agreement,
dated as of the date hereof, the Treasury Notes to the Collateral Agent and
grant to the Collateral Agent a security interest in the right, title, and
interest of such Holders in the Treasury Notes, for the benefit of the
Company, to secure the obligation of the Holders under the Purchase Contracts
to purchase the Common Stock of the Company. Prior to the purchase, if any, of
shares of Common Stock under the Purchase Contracts, the Securities shall not
entitle the Holders to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as stockholders
in respect of the meetings of stockholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as
stockholders of the Company, except to the extent otherwise expressly provided
in this Agreement.
Section 3.03. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and at any
time and from time to time thereafter, the Company may deliver Security
<PAGE>
Certificates executed by the Company to the Agent for authentication,
execution on behalf of the Holders and delivery, together with its Issuer
Order for authentication of such Security Certificates, and the Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of the
Holder and made available for delivery such Security Certificates.
The Security Certificates shall be executed on behalf of the
Company by its Chairman of the Board, any Vice Chairman of the Board, its
President or any Executive, Senior or other Vice President or its Treasurer,
under its corporate seal which may, but need not, be attested. The signature
of any of these officers on the Security Certificates may be manual or
facsimile.
Security Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Security Certificates or did not hold such offices at the
date of such Security Certificates.
No Purchase Contract underlying a Security evidenced by a
Security Certificate shall be valid until such Security Certificate has been
executed on behalf of the Holder by the manual signature of an authorized
signatory of the Agent, as such Holder's attorney-in-fact. Such signature by
an authorized signatory of the Agent shall be conclusive evidence that the
Holder of such Security Certificate has entered into the Purchase Contracts
underlying the Securities evidenced by such Security Certificate.
Each Security Certificate shall be dated the date of its
authentication.
No Security Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears
on such Security Certificate a certificate of authentication substantially in
the form provided for herein executed by an authorized signatory of the Agent
by manual signature, and such certificate upon any Security Certificate shall
be conclusive evidence, and the only evidence, that such Security Certificate
has been duly authenticated and made available for delivery hereunder.
Section 3.04. Temporary Security Certificates.
Pending the preparation of definitive Security Certificates,
the Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Security Certificates, temporary Security Certificates which are in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Securities are listed, or as
may, consistently herewith, be determined by the officers of the Company
executing such Security Certificates, as evidenced by their execution of the
Security Certificates.
If temporary Security Certificates are issued, the Company will
cause definitive Security Certificates to be prepared without unreasonable
<PAGE>
delay. After the preparation of definitive Security Certificates, the
temporary Security Certificates shall be exchangeable for definitive Security
Certificates upon surrender of the temporary Security Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Security Certificates, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Security Certificates of authorized
denominations and evidencing a like number of Securities as the temporary
Security Certificate or Security Certificates so surrendered. Until so
exchanged, the temporary Security Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Securities
evidenced thereby as definitive Security Certificates.
Section 3.05. Registration; Registration of Transfer and
Exchange.
The Agent shall keep at the Corporate Trust Office a register
(the register maintained in such office being herein referred to as the
"Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Security
Certificates and of transfers of Security Certificates (the Agent, in such
capacity, the "Security Registrar").
Upon surrender for registration of transfer of any Security
Certificate at the Corporate Trust Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Security Certificates of
any authorized denominations and evidencing a like number of Securities.
At the option of the Holder, Security Certificates may be
exchanged for other Security Certificates, of any authorized denominations and
evidencing a like number of Securities, upon surrender of the Security
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Security Certificates are so surrendered for exchange, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver the Security Certificates which the Holder
making the exchange is entitled to receive.
All Security Certificates issued upon any registration of
transfer or exchange of a Security Certificate shall evidence the ownership of
the same number of Securities and be entitled to the same benefits and subject
to the same obligations, under this Agreement as the Securities evidenced by
the Security Certificate surrendered upon such registration of transfer or
exchange.
Every Security Certificate presented or surrendered for
registration of transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Agent duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of a Security Certificate, but the Company and the Agent
<PAGE>
may require payment from the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Security Certificates, other than any
exchanges pursuant to Sections 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder and deliver any
Security Certificate presented or surrendered for registration of transfer or
for exchange on or after a Bankruptcy Date or a Settlement Date.
The provisions of Clauses (a), (b), (c) and (d) below shall
apply only to Global Security Certificates:
(a) Each Global Security Certificate authenticated and
executed on behalf of the Holders under this Agreement shall be registered
in the name of the Depositary designated for such Global Security
Certificate or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security
Certificate shall constitute a single Security Certificate for all purposes
of this Agreement.
(b) Notwithstanding any other provision in this Agreement, no
Global Security Certificate may be exchanged in whole or in part for Security
Certificates registered, and no transfer of a Global Security Certificate in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security Certificate or a nominee thereof unless
(A) such Depositary (i) has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security Certificate or (ii)
has ceased to be a clearing agency registered under the Exchange Act or (B)
there shall have occurred and be continuing a default by the Company in
respect to its obligations under one or more Purchase Contracts.
(c) Subject to Clause (b) above, any exchange of a Global
Security Certificate for other Security Certificates may be made in whole
or in part, and all Security Certificates issued in exchange for a Global
Security Certificate or any portion thereof shall be registered in such
names as the Depositary for such Global Security Certificate shall direct.
(d) Every Security Certificate authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security Certificate or any portion thereof, whether pursuant to this Section,
Section 3.04, 3.06, 5.10 or 8.05 or otherwise, shall be authenticated,
executed on behalf of the Holders and delivered in the form of, and shall be,
a Global Security Certificate, unless such Security Certificate is registered
in the name of a Person other than the Depositary for such Global Security
Certificate or a nominee thereof.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Security
Certificates.
If any mutilated Security Certificate is surrendered to the
Agent, the Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and made available for delivery
in exchange therefor, a new Security Certificate, evidencing the same number
<PAGE>
of Securities and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security Certificate, and (ii) such security or indemnity as may be required
by them to save each of them and any agent of any of them harmless, then, in
the absence of notice to the Company or the Agent that such Security
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and made available for delivery to the Holder, in lieu
of any such destroyed, lost or stolen Security Certificate, a new Security
Certificate, evidencing the same number of Securities and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Security Certificate on or after a Bankruptcy Date or a Settlement
Date.
Upon the issuance of any new Security Certificate under this
Section, the Company and the Agent may require the payment by the Holder 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 Agent) connected therewith.
Every new Security Certificate issued pursuant to this section
in lieu of any destroyed, lost or stolen Security Certificate shall constitute
an original additional contractual obligation of the Company and of the
Holder, whether or not the destroyed, lost or stolen Security Certificate
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits and be subject to all the obligations of this Agreement equally and
proportionately with any and all other Security Certificates delivered
hereunder.
The provisions of this section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or settlement of mutilated, destroyed, lost or stolen Security
Certificates.
Section 3.07. Persons Deemed Owners.
Prior to due presentment of a Security Certificate for
registration of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such Security
Certificate is registered as the owner of the Securities evidenced thereby,
for the purpose of receiving payments of interest on the Treasury Notes,
receiving payments of Contract Fees, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not the payment of interest on
the Treasury Notes or any Contract Fees payable in respect of the Purchase
Contracts constituting a part of the Securities evidenced thereby shall be
overdue and notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent, shall be
affected by notice to the contrary.
<PAGE>
Notwithstanding the foregoing, with respect to any Global
Security Certificate, nothing herein shall prevent the Company, the Agent or
any agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Depositary (or
its nominee), as a Holder, with respect to such Global Security Certificate or
impair, as between such Depositary and owners of beneficial interests in such
Global Security Certificate, the operation of customary practices governing
the exercise of rights of such Depositary (or its nominee) as Holder of such
Global Security Certificate.
Section 3.08. Cancellation.
All Security Certificates surrendered for delivery of shares of
Common Stock on or after the Final Settlement Date or an earlier Acceleration
Date, transfer of Treasury Notes after the occurrence of a Bankruptcy Event or
Sale of Assets or pursuant to a Holder's Early Settlement or registration of
transfer or exchange shall, if surrendered to any Person other than the Agent,
be delivered to the Agent and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the Agent for
cancellation any Security Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Security Certificates so delivered shall, upon Issuer
Order, be promptly cancelled by the Agent. No Security Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Security Certificates cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled Security
Certificates held by the Agent shall be disposed of as directed by Issuer
Order, except the Agent shall not be required to destroy the Security
Certificates.
If the Company or any Affiliate of the Company shall acquire
any Security Certificate, such acquisition shall not operate as a cancellation
of such Security Certificate unless and until such Security Certificate is
delivered to the Agent cancelled or for cancellation.
Section 3.09. Securities Not Separable.
Notwithstanding anything contained herein or in the Security
Certificates to the contrary, for so long as the Purchase Contract comprising
a portion of a Security remains in effect, such Security shall not be
separable into its constituent parts, for purposes of transfer or exchange of
such Security, and the rights and obligations of the Holder of such Security
in respect of the Treasury Notes and Purchase Contracts comprising such
Security may be acquired, and may be transferred and exchanged, only as a
Security. Other than a Security Certificate evidencing a Security, no Holder
of a Security, or any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Treasury Notes or the rights and
obligations of the Holder and the Company under a Purchase Contract for so
long as the Purchase Contract underlying the Security remains in effect.
Section 3.10. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption under Section
365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the
<PAGE>
Company or its trustee in the event that the Company becomes the debtor under
the Bankruptcy Code.
Section 3.11. Cusip Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Agent shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of
Acceleration and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such Acceleration shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Agent of any change in the CUSIP numbers.
ARTICLE 4
The Treasury Notes
Section 4.01. Payment of Interest; Interest Rights Preserved.
Interest on any Treasury Note which is paid on any Payment Date
shall, subject to receipt thereof by the Agent from the Collateral Agent as
provided by the terms of the Pledge Agreement, be paid to the Person in whose
name the Security Certificate (or one or more Predecessor Security
Certificates) of which such Treasury Note is a part is registered at the close
of business on the Record Date next preceding such Payment Date. The Company
shall pay the accrued interest on the Treasuary Notes for the period from
November 1, 1996 to November 6, 1996 (the "Holder's Accrued Interest"). The
Holder shall receive the Holder's Accrued Interest as part of the interest
payment on the Treasury Notes upon the first Payment Date.
Each Security Certificate evidencing Treasury Notes delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Security Certificate shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by the Treasury Notes
underlying such other Security Certificate.
In the case of any Security with respect to which settlement of
the underlying Purchase Contract is effected on a Settlement Date after any
Record Date and on or prior to the next succeeding Payment Date, interest on
the Treasury Notes underlying such Security otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such settlement,
and such interest shall, subject to receipt thereof by the Agent, be paid to
the Person in whose name the Security Certificate (or one or more Predecessor
Security Certificates) is registered at the close of business on the Record
Date.
Section 4.02. Transfer of Treasury Notes upon Certain Events or
Sale of Treasury Notes.
(a) Upon the occurrence of a Bankruptcy Event or Sale of Assets
and the transfer to the Agent of the Treasury Notes underlying such Securities
pursuant to the terms of the Pledge Agreement, the Agent shall request
<PAGE>
transfer instructions with respect to such Treasury Notes from each Holder of
Securities by written request mailed to such Holder at his address as it
appears in the Security Register, in respect of the Treasury Notes underlying
the Security Certificate held by such Holder. Upon surrender to the Agent of a
Security Certificate with such transfer instructions in proper form for
transfer of the Treasury Notes by Federal Reserve Bank-Wire or other
appropriate procedure, subject to the receipt of the Treasury Notes, the Agent
shall transfer the Treasury Notes evidenced by such Security Certificate to
such Holder in accordance with such instructions within three Business Days.
If a Security Certificate is not duly surrendered to the Agent with
appropriate transfer instructions, the Agent shall hold the Treasury Notes
evidenced by such Security Certificate as custodian for the Holder of such
Security Certificate.
(b) In the event of an Acceleration of Securities, Holders so
accelerated may elect to pay to the Company through the Agent by no later than
5:00 p.m., New York City time on the third Business Day immediately preceding
the Acceleration Date in immediately available funds an amount in U.S. dollars
equal to the Stated Amount per Security so accelerated. Holders may make the
election provided in this Section only in integral multiples of
Securities. Upon Surrender to the Agent of a Security Certificate with such
transfer instructions in proper form for transfer of the Treasury Notes by
Federal Reserve Bank-Wire or other appropriate procedure, along with the
payment described in the previous sentence, the Agent shall transfer the
Treasury Notes evidenced by such Security Certificate to such Holder in
accordance with such instructions within three Business Days of such payment.
The Company will pay on the Acceleration Date only accrued Contract Fees to
holders of Securities who elect to pay the Stated Amount in cash upon an
Acceleration as provided in this Section.
(c) Treasury Notes shall be transferred only in denominations of
$ and integral multiples thereof. As promptly as practicable following the
occurrence of a Bankruptcy Event, Sale of Assets, Holder's Early Settlement or
Acceleration (in connection with which some Holders have elected to receive
the Treasury Notes in accordance with paragraph (b) of this Section), the
Company shall determine the excess of (i) the aggregate principal amount of
Treasury Notes underlying the Outstanding Securities over (ii) the
aggregate principal amount of Treasury Notes in denominations of $ and
integral multiples thereof transferrable to Holders of record on such
Bankruptcy Event Date, Sale of Assets Date, Holder's Early Settlement Date
or Acceleration Date, (such excess being herein referred to as the "Excess
Treasury Notes"). As soon as practicable after transfer to the Agent of
the Treasury Notes underlying the Outstanding Securities as provided in the
Pledge Agreement, at the instruction of the Company the Agent shall sell
the Excess Treasury Notes to or through one or more U.S. Government
securities dealers selected by the Company at then prevailing prices. The
Agent shall deduct from the proceeds of such sales all commissions and
other out-of-pocket transaction costs incurred in connection with such
sales of Excess Treasury Notes and, until the net proceeds of such sale or
sales have been distributed to Holders of the Securities (in the case of an
Acceleration, Holders who have elected to receive Treasury Notes), the
Agent shall hold such proceeds as custodian for such Holders of Securities.
Such proceeds shall be held by the Agent uninvested without liability to
any Person for interest or other compensation thereon. Each Holder shall
be entitled to receive a portion, if any, of such net proceeds in lieu of
<PAGE>
Treasury Notes with a principal amount of less than $ determined by
multiplying the aggregate amount of such net proceeds by a fraction, the
numerator of which is the fraction of $ in principal amount of Treasury
Notes to which such Holder would otherwise be entitled (after taking into
account all Securities then held by such Holder) and the denominator of
which is the aggregate principal amount of Excess Treasury Notes.
(d) In the case of an Acceleration of Securities, except with
respect to Holders that elect to pay the Stated Amount in immediately
available funds not later than 5:00 p.m., New York City time on the third
Business Day immediately preceding the Acceleration Date in accordance with
paragraph (b) of this Section, the Agent on behalf of each Holder will sell on
the second Business Day immediately preceding the Acceleration Date the
Treasury Notes underlying each such Holder's Securities to or through one or
more U.S. government securities dealers selected by the Company at the then
prevailing prices and automatically apply on the Acceleration Date, out of the
proceeds of such sale, an amount equal to the Stated Amount to satisfy in full
each such Holder's obligation to purchase the Common Stock on the Acceleration
Date. Any excess proceeds (in respect of premium on the sale of the Treasury
Notes) will be paid to such Holder. In the event that the proceeds from the
sale of such Treasury Notes (exclusive of accrued interest on the Treasury
Notes) is less than the Stated Amount, such proceeds nevertheless will be
considered to satisfy in full each such Holder's obligation to purchase the
Common Stock on the Acceleration Date. Amounts in respect of accrued interest
on the Treasury Notes will be paid to each such Holder on the Acceleration
Date. The Agent shall deduct from the proceeds of such sales all commissions
and other out-of-pocket transaction costs incurred in connection with the sale
of such Treasury Notes and, until the net proceeds of such sale or sales have
been distributed to Holders of the Securities, the Agent shall hold such
proceeds as custodian for the Holders of Securities. Such proceeds shall be
held by the Agent uninvested without liability to any Person for interest or
other compensation thereon.
ARTICLE 5
The Purchase Contracts
Section 5.01. Purchase of Shares of Common Stock on the Final
Settlement Date.
Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Final Settlement Date at
a price equal to the Stated Amount, a number of shares of Common Stock equal
to the Settlement Rate on the Final Settlement Date, unless, on or prior to
the Final Settlement Date, there shall have occurred a Bankruptcy Event , Sale
of Assets, an Acceleration or a Holder's Early Settlement with respect to the
Security of which such Purchase Contract is a part. The "Settlement Rate" is
initially equal to a share of Common Stock per Purchase Contract, subject to
adjustments as set forth in Section 5.06.
Each Holder of a Security Certificate evidencing Securities, by
his acceptance thereof, authorizes the Agent to enter into and perform the
related Purchase Contracts on his behalf as his attorney-in-fact, agrees to be
bound by the terms and provisions thereof, covenants and agrees to perform his
<PAGE>
obligations under such Purchase Contracts, consents to the provisions hereof,
authorizes the Agent as his attorney-in-fact to enter into and perform the
Pledge Agreement on his behalf as his attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Treasury Notes underlying such
Security Certificate pursuant to the Pledge Agreement. Each Holder of a
Security, by his acceptance thereof, further covenants and agrees, that, to
the extent and in the manner provided in Section 5.04 and the Pledge
Agreement, but subject to the terms thereof, payments in respect of principal
of the Treasury Notes on the Final Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Upon registration of transfer of a Security Certificate
evidencing Purchase Contracts, the transferee shall be bound (without the
necessity of any other action on the part of such transferee), under the terms
of this Agreement, the Purchase Contracts evidenced thereby and the Pledge
Agreement and the transferor shall be released from the obligations under the
Purchase Contracts evidenced by the Security Certificates so transferred. The
Company covenants and agrees, and each Holder of a Security Certificate, by
his acceptance thereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
Section 5.02. Contract Fees.
Subject to Section 5.03, the Company shall pay by 12:00 noon
New York City time to the Agent, on each Payment Date, the Contract Fees
payable in respect of each Purchase Contract for the benefit of the Person in
whose name the Security Certificate (or one or more Predecessor Security
Certificates) evidencing such Purchase Contract is registered at the close of
business on the Record Date next preceding such Payment Date. The Contract
Fees will be payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Company, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.
Each Security Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other
Security Certificate shall carry the rights to Contract Fees accrued and
unpaid, and to accrue, which were carried by the Purchase Contracts evidenced
by such other Security Certificate.
In the case of any Security with respect to which settlement of
the underlying Purchase Contract is effected on a Settlement Date after any
Record Date and on or prior to the next succeeding Payment Date, Contract Fees
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such settlement, and such Contract Fees shall be paid to the
Person in whose name the Security Certificate evidencing such Security (or one
or more Predecessor Security Certificates) is registered at the close of
business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with respect to
which settlement of the underlying Purchase Contract is effected on a
Settlement Date (other than a Holder's Early Settlement Date), Contract Fees
that would otherwise be payable after such Settlement Date with respect to the
Purchase Contract underlying such Security shall not be payable. Contract
<PAGE>
Fees shall not be paid upon a Bankruptcy Event.
The Company's obligations with respect to Contract Fees shall
rank equally and pari passu with all other senior and unsubordinated debt of
the Company.
Section 5.03. Deferral of Payment Dates for Contract Fees.
The Company shall have the right, at any time prior to the
Final Settlement Date, an Acceleration Date or Sale of Assets Date applicable
to a Holder's Securities, to defer the payment of any or all of the Contract
Fees otherwise payable on any Payment Date (on a pro rata basis among all
Outstanding Securities), but only if the Company shall give the Holders and
the Agent written notice of its election to defer such payment (specifying the
amount to be deferred) at least ten Business Days prior to the earlier of (i)
the next succeeding Payment Date or (ii) the date the Company is required to
give notice of the Record Date or Payment Date with respect to payment of such
Contract Fees to the NYSE or other applicable self-regulatory organization or
to Holders of the Securities, but in any event not less than two Business Days
prior to such Record Date. Any Contract Fees so deferred shall bear additional
Contract Fees thereon at the rate of ______% per annum (computed on the basis
of the actual number of days elapsed in a year of 365 or 366 days, as the case
may be), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Fees together with the additional Contract
Fees accrued thereon, are referred to herein as the "Deferred Contract Fees").
Deferred Contract Fees shall be due on the next succeeding Payment Date except
to the extent that payment is deferred pursuant to this Section. The Company
may pay Deferred Contract Fees in whole or in part on any Payment Date (on a
pro rata basis among all Outstanding Securities). No Contract Fees may be
deferred to a date that is after the Final Settlement Date or a Sale of Assets
Date or, with respect to any particular Purchase Contract, the Acceleration
thereof.
In the event the Company elects to defer the payment of
Contract Fees on the Purchase Contract until the Final Settlement Date, a Sale
of Assets Date, a Company Acceleration Date or a Mandatory Acceleration Date
(with respect to which the Company has not elected to make payment in shares
of Common Stock), the Company shall make a cash payment equal to the aggregate
amount of Deferred Contract Fees payable to a Holder.
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Fees on a Mandatory
Acceleration Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Fees, the Holder will be entitled
to receive an amount in cash as provided in Section 5.11.
In the event the Company exercises its option to defer the
payment of Contract Fees, then, until the Deferred Contract Fees have been
paid in full, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchase or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans now or hereafter in effect or the satisfaction by the Company of its
obligations pursuant to any contract or security now or hereafter outstanding
<PAGE>
requiring the Company to purchase shares of Common Stock, (ii) as a result of
a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) the payment of accrued dividends (and cash in
lieu of fractional shares) upon the conversion of any shares of preferred
stock of the Company as may be outstanding from time to time, in accordance
with the terms of such stock or (v) dividends on its capital stock paid in
shares of capital stock) or make any guarantee payments with respect to the
foregoing.
Section 5.04. Payment of Purchase Price.
Unless a Holder settles the underlying Purchase Contract either
through the early delivery of cash to the Agent in the manner described in
Sections 4.02(b), 5.08, 5.10 or otherwise, the purchase price for the shares
of Common Stock purchased pursuant to a Purchase Contract shall be paid by
application of payments received by the Company on the Final Settlement Date
or an earlier Acceleration Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Treasury Notes Pledged to
secure the obligations of the relevant Holder under such Purchase Contract.
Such application shall satisfy in full the obligations under such Purchase
Contract of the Holder of the Security of which such Purchase Contract is a
part. The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Section 5.05. Issuance of Common Stock.
Unless a Bankruptcy Event or Sale of Assets shall have occurred
on or prior to the Final Settlement Date or an earlier Acceleration Date, on
the Final Settlement Date or an earlier Acceleration Date, upon the Company's
receipt of payment in full of the purchase price for the shares of Common
Stock purchased by the Holders pursuant to the foregoing provisions of this
Article, and in payment of Deferred Contract Fees, if any, owed by the Company
to the Holders, the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the shares of Common Stock registered in the name of the Agent
(or its nominee) as custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "Final Settlement Fund" or
"Acceleration Settlement Fund" as applicable) to which the Holders are
entitled hereunder. Subject to the foregoing, upon surrender of a Security
Certificate to the Agent on or after the Final Settlement Date or earlier
Acceleration Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Security Certificate shall be
entitled to receive in exchange therefor a certificate representing that
number of whole shares of Common Stock which such Holder is entitled to
receive pursuant to the provisions of this Article Five (after taking into
account all Securities then held by such Holder) together with cash in lieu of
fractional shares as provided in Section 5.11 or any other cash payments and
<PAGE>
any dividends or distributions with respect to such shares constituting part
of the Final Settlement Fund or Acceleration Settlement Fund, as applicable,
but without any interest thereon, and the Security Certificate so surrendered
shall forthwith be cancelled. Such shares shall be registered in the name of
the Holder or the Holder's designee as specified in the settlement
instructions on the Security Certificate. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person
other than the Person in whose name the Security Certificate evidencing such
Purchase Contract is registered, no such registration shall be made unless the
Person requesting such registration has paid any transfer and other taxes
required by reason of such registration in a name other than that of the
registered Holder of the Security Certificate evidencing such Purchase
Contract or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.
Section 5.06. Adjustment of Settlement Rate for Dividends,
Distributions, Stock Splits, Etc.
(a) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening
of business on the day following the date fixed for such determination. For
the purposes of this paragraph (a), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not
pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(b) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders entitled
to receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of business
on the day following the date fixed for such determination shall be increased
by dividing such Settlement Rate by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
<PAGE>
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(c) In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate
in effect at the opening of business on the day following the day upon which
such subdivision or split becomes effective shall be proportionately
increased, and, conversely, in case outstanding shares of Common Stock shall
each be combined into a smaller number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision, split or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph (b) of this Section, any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in paragraph
(a) of this Section), the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution filed with the Agent)
of the portion of the assets or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive such
distribution. In any case in which this paragraph (d) is applicable, paragraph
(b) of this section shall not be applicable.
(e) In case the Company shall by dividend or otherwise, distribute
to all holders of its Common Stock cash excluding any quarterly cash dividend
on the Common Stock to the extent that the aggregate cash dividend per share
of Common Stock in any quarter does not exceed the greater of (x) the
amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require an adjustment of the conversion price pursuant to
this clause (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (y) 3.75% of the average of the last reported sales
price of the Common Stock during the ten consecutive Trading Days
immediately prior to the date of declaration of such dividend, and
excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company (if an adjustment is required to
<PAGE>
be made as set forth in this paragraph (e) as a result of a distribution,
(i) that is a quarterly dividend, such adjustment would be based upon the
amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant to this paragraph (e) and (ii)
that is not a quarterly dividend, such adjustment would be based upon the
full amount of the distribution).
(f) In case of a tender or exchange offer made by a person other
than the Company or any subsidiary of the Company for an amount which
increases the offeror's ownership of Common Stock of the Company to more than
25% of the Common Stock outstanding and shall involve the payment by such
Person of consideration per share of Common Stock having a fair market value
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a Board Resolution) at the last time
(the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds the
exchange of the daily closing prices of the Common Stock on the NYSE on the
three Trading Days next succeeding the Expiration Time, and in which, as of
the Expiration Time, the Board of Directors of the Company is recommending
acceptance of the offer, the Settlement Rate shall be reduced so that the
same shall equal the price determined by dividing the Settlement Rate in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the number of shares of Common Stock of the Company
outstanding (including any tendered or exchanged shares) on the Expiration
Time multiplied by the exchange of the daily closing prices of the Common
Stock on the NYSE on the three Trading Days next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock of the
Company outstanding (less any Purchased Shares) on the Expiration Time and
the exchange of the daily closing prices of the Common Stock on the NYSE on
the three Trading Days next succeeding the Expiration Time, such reduction
to become effective immediately prior to the opening of business on the day
following the Expiration Time. In the event that such Person is obligated
to purchase shares pursuant to any such tender or exchange offer, but such
Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Settlement Rate shall
again be adjusted to be the Settlement Rate which would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 5.06(f) shall not be
made if, as of the Expiration Time, the offering documents with respect to
such offer disclose a plan or intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or substantially
all of the assets of the Company.
(g) The reclassification of Common Stock into securities including
securities other than Common Stock shall be deemed to involve (i) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of stockholders entitled to
receive such distribution" and the "date fixed for such determination" within
<PAGE>
the meaning of paragraph (d) of this Section), and (ii) a subdivision, split
or combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes effective" within the meaning
of paragraph (c) of this Section).
(h) The "Current Market Price" per share of Common Stock on any
date of determination means the average of the daily closing prices on the
NYSE for the five consecutive Trading Days ending on and including such
date of determination; provided, however, that if the closing price of the
Common Stock on the NYSE on the Trading Day next following such five-day
period (the "next-day closing price") is less than 95% of said average
closing price, then the Current Market Price per share of Common Stock on
such date of determination will be the next-day closing price; and
provided, further, that if any adjustment of the Settlement Rate becomes
effective as of any date during the period beginning on the first day of
such five-day period and ending on the date on which Securities are to be
accelerated, then the Current Market Price as determined pursuant to the
foregoing will be appropriately adjusted to reflect such adjustment. A
"Trading Day" means a day on which the Common Stock (i) is not suspended
from trading on any national or regional securities exchange or association
or over-the-counter market at the close of business and (ii) has traded at
least once on the national or regional securities exchange or association
or over-the-counter market that is the primary market for the trading of
the Common Stock.
(i) All adjustments to the Settlement Rate shall be calculated to
the nearest 1/100th of a share of Common Stock (or if there is not a nearest
5/1000th of a share to the next lower 1/100th of a share). No adjustment in
the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this subparagraph are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.
(j) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
Section 5.07. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.06 and prepare and transmit to the Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
<PAGE>
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that permits or requires an adjustment to the Settlement Rate
pursuant to Section 5.06 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Holders and the Agent of the Securities of the
occurrence of such event and a statement in reasonable detail setting forth
the method by which the adjustment to the Settlement Rate was determined
and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any holder of Securities to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or
with respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, which may at the
time be issued or delivered with respect to any Purchase Contract; and the
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any
of the duties, responsibilities or covenants of the Company contained in this
Article.
Section 5.08. Acceleration; Notice.
(a) Unless a Mandatory Acceleration, a Bankruptcy Event or Sale of
Assets occurs prior to the Final Settlement Date, the Company shall have the
right to accelerate, in whole or in part, the outstanding Securities (a
"Company Acceleration") (subject to the notice provisions set forth in this
Section). The Company may not exercise its right to accelerate the Securities
unless the Current Market Price determined as of the second Business Day
immediately preceding the Notice Date is equal to or exceeds the Company
Acceleration Price applicable to such Notice Date. Upon the effective date of
such acceleration ( a "Company Acceleration Date"), the Company shall deliver
to the Agent for the benefit of the Holders thereof in exchange for each such
Security accelerated, (i) a number of fully paid and non-assessable shares of
Common Stock determined by dividing the Company Acceleration Price in effect
on the date established for acceleration by the Current Market Price of the
Common Stock determined as of the second Business Day immediately preceding
the Notice Date and (ii) an amount in cash equal to all accrued and unpaid
Contract Fees and Deferred Contract Fees, if any, on such Security to and
including such Company Acceleration Date (and Contract Fees and Deferred
Contract Fees, if any, shall cease to accrue on each Security accelerated as
of such date).
(b) Immediately prior to the effectiveness of a merger or
consolidation of, or a statutory share exchange involving, the Company that
results in the conversion or exchange of the Common Stock into, or the right
to receive, other securities or other property (whether of the Company or any
other entity) (any such merger, consolidation or share exchange being referred
to herein as a "Merger or Consolidation"), each outstanding Security shall
automatically convert into (a "Mandatory Acceleration"), unless sooner
accelerated:
<PAGE>
(i) fully paid and non-assessable shares of Common Stock at
the Settlement Rate in effect on the effective time on the date of any Merger
or Consolidation (the "Mandatory Acceleration Date"); plus
(ii) the right to receive an amount in cash equal to all
accrued and unpaid Contract Fees and Deferred Contract Fees, if any (except as
provided in herein) on such Securities to and including the Mandatory
Acceleration Date (and Contract Fees and Deferred Contract Fees shall cease to
accrue as of the Mandatory Acceleration Date); plus
(iii) the right to receive an amount in cash initially equal
to $____, declining by $________ on each day following [date] (computed on
the basis of a 360-day year of twelve 30-day months) to $_____ on [date]
and equal to zero thereafter, in each case determined with reference to the
Mandatory Acceleration Date.
At the option of the Company, it may deliver on the Mandatory
Acceleration Date in lieu of some or all of the cash consideration described
in clause (iii) above, fully paid and non-assessable shares of Common Stock.
The number of shares of Common Stock to be delivered in lieu of any cash
consideration described in such clause (iii) shall be determined by
dividing the amount of cash consideration that the Corporation has elected
to deliver in Common Stock by the Current Market Price of the Common Stock
determined as of the second Business Date immediately preceding the Notice
Date.
(c) The Company will provide notice of any Acceleration of
Securities (including any potential acceleration upon the effectiveness of a
Merger or Consolidation) to holders of record of the Securities to be
accelerated and the Agent not less than 30 nor more than 60 days prior to the
date fixed for such Acceleration, as the case may be; provided, however, that
if the effectiveness of a Merger or Consolidation makes it impracticable to
provide at least 30 days' notice, the Company shall provide such notice as
soon as practicable prior to such effectiveness. Such notice shall be
provided by mailing notice of such Acceleration first class postage prepaid,
to each holder of record of the Securities to be accelerated, at such holder's
address as it appears on the Security Register of the Company, and by
publishing notice thereof in The Wall Street Journal or The New York Times or,
if neither such newspaper is then being published, any other daily newspaper
of national circulation (each, an "Authorized Newspaper"). The "Notice Date"
with respect to any notice given by the Company in connection with an
Acceleration of the Securities means the earlier of the commencement of the
mailing of such notice to Holders of Securities or the date such notice is
first published in accordance with the preceding sentence. Each such
mailed or published notice shall state, as appropriate, the following:
(A) the Acceleration Date;
(B) the number of Securities to be accelerated and, if
less than all the Securities held by any Holder are to
be accelerated, the number of such Securities to be
accelerated;
(C) the Mandatory Acceleration Price or the Company
<PAGE>
Acceleration Price, as applicable, and the Current
Market Price to be used to calculate the number of
shares of Common Stock deliverable upon acceleration;
(D) whether the Company is exercising any option to
deliver shares of Common Stock in lieu of any cash (in
the case of a Mandatory Acceleration) and the Current
Market Price to be used to calculate the number of such
shares of Common Stock;
(E) the place or places where certificates for such
Securities are to be surrendered for acceleration;
(F) the amount of accrued and unpaid Contract Fees
(and Deferred Contract Fees, if any) payable per
Security to be accelerated to and including such
Acceleration Date, and that Contract Fees and Deferred
Contract Fees on Securities to be accelerated will cease
to accrue on such Acceleration Date.
(d) The Company's obligation to deliver shares of Common Stock
and provide funds in accordance with this Section shall be deemed fulfilled
if, on or before an Acceleration Date, the Company shall deposit, with a bank
or trust company having an office or agency and doing business in the Borough
of Manhattan in The City of New York and having a capital and surplus of at
least $50,000,000 such number of shares of Common Stock and funds as are
required to be delivered by the Company pursuant to this section upon the
occurrence of the related Acceleration (including the payment of fractional
share amounts), together with funds sufficient to pay all accrued and unpaid
Contract Fees and Deferred Contract Fees, if any, to be accelerated as
required by this Section, in trust for the account of the Holders of the
Securities to be accelerated (and so as to be and continue to be available
therefor), with irrevocable written instructions and authority to such bank or
trust company that such shares and funds be delivered upon at the end of six
years after such Acceleration Date shall be paid by such bank or trust company
to the Company, after which the Holder or Holders of such Securities so called
for Acceleration shall look only to the Company for delivery of such shares of
Common Stock or Funds.
Each holder of Securities to be accelerated shall surrender the
certificates evidencing such shares to the Company at the place designated in
the notice of such Acceleration and shall thereupon be entitled to receive
certificates evidencing shares of Common Stock, and cash, if any, payable
pursuant to this Section, following such surrender and following the date of
such Acceleration. In case fewer than all the Securities are accelerated, a
new certificate shall be issued at the expense of the Company representing the
unaccelerated Securities.
Section 5.09. Bankruptcy Event or Sale of Assets; Notice.
The Purchase Contracts and the obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
of the Holders to receive and the obligation of the Company to pay any
Contract Fees, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
<PAGE>
on or prior to the Final Settlement Date, a Bankruptcy Event or Sale of Assets
shall have occurred, provided that, in the event of a Sale of Assets, the
Company will pay all accrued and unpaid Contract Fees and Deferred Contract
Fees, if any, to Holders on the tenth Business Day following the Sale of
Assets Date. Upon and after the occurrence of a Bankruptcy Event or Sale of
Assets, the Securities shall thereafter represent the right to receive the
Treasury Notes forming a part of such Securities in accordance with the
provisions of Section 4.02 and the Pledge Agreement. Upon the occurrence of a
Bankruptcy Event or Sale of Assets, the Company shall promptly but in no event
after two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Security Register.
Section 5.10. Holder's Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.10, at the option of the Holder thereof, any Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to [$__,000] or
an integral multiple thereof may be settled early ("Holder's Early
Settlement") as provided herein. In order to exercise the right to effect
Holder's Early Settlement, the Holder of the Security Certificate shall
deliver such Security Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and accompanied
by payment in the form of a certified or cashier's check payable to the order
of the Company in immediately available funds in a U.S. dollar amount (the
"Holder's Early Settlement Amount") equal to the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Holder's Early Settlement. If such delivery is
made with respect to any Securities during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, the amount equal to the sum of (x) the Contract
Fees and Deferred Contract Fees, if any, payable on such Payment Date with
respect to such Purchase Contracts plus (y) the interest on the related
Treasury Notes payable on such Payment Date. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any
Securities at or prior to 5:00 p.m., New York City time, on a Business Day,
such day shall be the "Holder's Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m.,
New York City time, on a Business Day or on a day that is not a Business
Day, the "Holder's Early Settlement Date" with respect to such Securities
shall be the next succeeding Business Day.
(b) The Company shall cause the Treasury Notes deliverable upon a
Holder's Early Settlement to be released from the Pledge by the Collateral
Agent and transferred to the Agent, for delivery to the Holder thereof or its
designee, no later than the third Business Day after the applicable Holder's
Early Settlement Date.
(c) Upon Holder's Early Settlement and subject to receipt from the
Collateral Agent of the Treasury Notes, the Agent shall, in accordance with
the written instructions provided by the Holder thereof on the form (or a
writing substantially similar to the form) of Election to Settle Early on
the reverse of the Security Certificate evidencing the related Securities,
transfer the Treasury Notes forming a part of such Securities to the
<PAGE>
applicable Holder.
(d) Upon a Holder's Early Settlement, the Company shall issue and
deliver to the Agent Prepaid Securities at the Corporate Trust Office a
certificate or certificates equal to the aggregate Stated Amount of the
Securities subject to such Holder's Early Settlement, and the Agent shall
transfer such Prepaid Securities to the Holders no later than the third
Business Day after the applicable Holder's Early Settlement Date.
(e) In the event that a Holder's Early Settlement is effected with
respect to less than all the Securities evidenced by a Security Certificate
upon such Holder's Early Settlement, the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Security Certificate evidencing the Securities as to
which Holder's Early Settlement was not effected.
Section 5.11. No Fractional Shares.
No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Final
Settlement Date or upon earlier Acceleration or with respect to the payment of
any premium (if any) on a Mandatory Acceleration (if the Company elects to pay
such amounts in shares of Common Stock in lieu of cash), on the Final
Settlement Date or earlier Acceleration Date. If Security Certificates
evidencing more than one Purchase Contract shall be surrendered for settlement
at one time by the same Holder, the number of full shares of Common Stock
which shall be delivered upon settlement shall be computed on the basis of the
aggregate number of Purchase Contracts evidenced by the Security Certificates
so surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Final Settlement Date or an earlier Acceleration Date or with respect to the
payment of any premium (if any) on a Mandatory Acceleration (if the Company
elects to pay such amounts in shares of Common Stock in lieu of cash), the
Company, through the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares
at the Closing Price per share on the Business Day immediately preceding the
Final Settlement Date or the related earlier Acceleration Date, respectively.
The Company shall provide the Agent from time to time with sufficient funds to
permit the Agent to make all cash payments required by this section 5.11 in a
timely manner.
Section 5.12. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common
Stock pursuant to the Purchase Contracts and in payment of any premium (in the
case of the Company's election to pay such premium in Common Stock upon a
Mandatory Acceleration); provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Security Certificate evidencing a Purchase
Contract or any issuance of a share of Common Stock in a name other than that
of the registered Holder of a Security Certificate surrendered in respect of
the Purchase Contracts evidenced thereby, other than in the name of the Agent,
as custodian for such Holder, and the Company shall not be required to issue
or deliver such share certificates or Security Certificates unless or until
<PAGE>
the Person or Persons requesting the transfer or issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
ARTICLE 6
Remedies
Section 6.01. Unconditional Right of Holders to Receive Contract
Fees and Purchase Common Stock.
The Holder of any Security shall have the right, which is
absolute and unconditional (subject to the right of the Company to defer
payment thereof pursuant to Section 5.03), to receive payment of each
installment of the Contract Fees with respect to the Purchase Contract
constituting a part of such Security on the respective Payment Date for such
Security and to purchase Common Stock pursuant to the terms of such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
such payment and right to purchase Common Stock, and such rights shall not be
impaired without the consent of such Holder.
Section 6.02. Restoration of Rights and Remedies.
If any Holder of Securities has instituted any proceeding to
enforce any right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of such Holder shall continue as though no such proceeding had been
instituted.
Section 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement of
mutilated, destroyed, lost or stolen Security Certificates in the last
paragraph of Section 3.06, no right or remedy herein conferred upon or
reserved to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.05. Undertaking for Costs.
<PAGE>
All parties to this Agreement agree, and each Holder of any
Security by his acceptance of the Security Certificate evidencing such
Security 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
Agreement, or in any suit against the Agent for any action taken, suffered or
omitted by it as Agent, 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; provided
that the provisions of this section shall not apply to any suit instituted by
the Company, to any suit instituted by the Agent, to any suit instituted by
any Holder of Securities, or group of Holders, holding in the aggregate
more than 10% of the Outstanding Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the interest on any
Treasury Note or the Contract Fees are due on any Purchase Contract on or
after the respective Payment Date therefor constituting a part of the
Securities held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts constituting a part of
the Securities held by such Holder.
Section 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Agreement; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Agent or the Holders,
but will suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE 7
The Agent
Section 7.01. Certain Duties and Responsibilities.
(a) (i) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are
specifically set forth in this Agreement and those duties
which relate to the Agent in the Pledge Agreement, and no
implied covenants or obligations shall be read into this
Agreement against the Agent; and
(ii) in the absence of bad faith or negligence on its part,
the Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or
opinions furnished to the Agent and conforming to the
requirements of this Agreement, but in the case of any
<PAGE>
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Agent, the
Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Agreement (but need not confirm or investigate the accuracy
of mathematical calculations stated therein).
(iii) In case an Event of Default has occurred and is
continuing, the Agent shall exercise such of the rights and
powers vested in it by this 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 Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(i) this subsection shall not be construed to limit the
effect of Subsection(a) of this Section;
(ii) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall
be proved that the Agent was negligent in ascertaining the
pertinent facts; and
(iii) no provision of this Agreement shall require the Agent
to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
Section 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder, of which a Responsible Officer of the Agent has actual
knowledge, the Agent shall transmit by mail to all Holders of Securities, as
their names and addresses appear in the Security Register, notice of such
default hereunder, unless such default shall have been cured or waived.
Section 7.03. Certain Rights of Agent.
Subject to the provisions of Section 7.10:
(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
<PAGE>
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer Order
or Issuer Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate of the Company;
(d) the Agent 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, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the issuance of the
Securities and the execution, delivery and performance of the Purchase
Contracts as it may see fit, and, if the Agent shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and promises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation; and
(f) the Agent may execute any of its powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate and the Agent shall not be responsible for any
misconduct or negligence on the part of any agent or attorney or an
Affiliate appointed with due care by it hereunder.
(g) the Agent shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement at the request or
direction of any of the Holders pursuant to this Agreement, unless such
Holders shall have offered to the Agent reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(h) the Agent shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement.
Section 7.04. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Security Certificates
shall be taken as the statements of the Company and the Agent assumes no
<PAGE>
responsibility for their accuracy. The Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Securities, or
of the Pledge Agreement or the Pledge. The Agent shall not be accountable for
the use or application by the Company of the proceeds in respect of the
Purchase Contracts.
Section 7.05. May Hold Securities.
Any Security Registrar or any other agent of the Company, or
the Agent and its Affiliates, in their individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it
would have if it were not Security Registrar or such other agent, or the
Agent.
Section 7.06. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law. The
Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except pursuant to the provisions of Section 4.01 or
as otherwise agreed in writing with the Company.
Section 7.07. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder as the Company and
the Agent shall, from time to time, agree in writing (which compensation
shall be limited by any applicable provisions of law);
(b) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance with
any provision of this Agreement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or
bad faith; and
(c) to indemnify the Agent and any predecessor Agent for, and
to hold each of them harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of its duties hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
(d) The provisions of this Section shall survive the
termination of this Agreement.
Section 7.08. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States
<PAGE>
of America, any State thereof or the District of Columbia, authorized under
such laws to exercise corporate trust powers, having (or being a member of a
bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State
authority and having a Corporate Trust Office in the Borough of Manhattan, The
City of New York, if there be such a corporation in the Borough of Manhattan,
The City of New York qualified and eligible under this Article and willing to
act on reasonable terms. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said 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. If at any time the Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent required by
Section 7.10 shall not have been delivered to the Agent within 30 days after
the giving of such notice of resignation, the resigning Agent may petition any
court of competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Securities delivered to the Agent
and the Company.
(d) if at any time
(i) the Agent fails to comply with Section 310(b) of the
TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(ii) the Agent shall cease to be eligible under Section 7.08
and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or
of its property shall be appointed or any public officer shall
take charge or control of the Agent or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a
<PAGE>
Security 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 Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders of Securities as their names
and addresses appear in the Security Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers, agencies and
duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Agent all the
rights, powers and trusts of the retiring Agent and shall duly assign,
transfer and deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the
time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a Security for a period of at least six months
<PAGE>
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Agent shall, within five Business Days after the receipt
of such application, afford such applicants access to the information
preserved at the time by the Agent in accordance with Section [ ].
(c) Every Holder of Securities, by receiving and holding the
Security Certificates evidencing the same, agrees with the Company and the
Agent that none of the Company, the Agent nor any agent of any of them shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with Section 7.11(b),
regardless of the source from which such information was derived.
Section 7.12. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability under
this Agreement, the Pledge Agreement or any Purchase Contract in respect of
the obligations of the Holder of any Security thereunder. The Company
agrees, and each Holder of a Security Certificate, by his acceptance
thereof, shall be deemed to have agreed, that the Agent's execution of the
Security Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no
obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article 5 hereof.
Section 7.13. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of
all amounts required to be withheld to the appropriate taxing authority or
its designated agent.
(b) The Agent shall comply with any direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.01(a)(ii) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or to its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE 8
<PAGE>
Supplemental Agreements
Section 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent,
at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for
any of the following purposes:
(a) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the obligations of the Company
herein and in the Security Certificates; or
(b) to add covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent or Collateral Agent; or
(d) except as provided for in Section 5.06, to cure any ambiguity,
to correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such action
shall not adversely affect the interests of the Holders.
Section 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of the
Outstanding Securities, by Act of said Holders delivered to the Company and
the Agent, the Company when authorized by a Board Resolution, and the Agent
may enter into an agreement or agreements supplemental hereto for the
purpose of modifying in any manner the terms of the Securities, or the
provisions of this Agreement or the Pledge Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or type of Treasury Notes underlying a
Security, impair the right of the Holder of any Security to receive interest
payments on the underlying Treasury Notes or otherwise adversely affect the
Holder's rights in or to such Treasury Notes;
(c) reduce any Contract Fees or any Deferred Contract Fees, or
change any place where, or the coin or currency in which, any Contract Fees is
payable;
(d) impair the right to institute suit for the enforcement of any
Purchase Contract;
(e) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares of
Common Stock upon settlement of any Purchase Contract, change the Final
<PAGE>
Settlement Date or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
(f) reduce the percentage of the Outstanding Securities the
consent of whose Holders is required for any such supplemental agreement.
It shall not be necessary for any Act of Holders under this
section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by,
any supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be entitled
to receive and (subject to Section 7.10) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental agreement which
affects the Agent's own rights, duties or immunities under this Agreement or
otherwise.
Section 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Security Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder shall
be bound thereby.
Section 8.05. Reference to Supplemental Agreements.
Security Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental agreement
pursuant to this Article may, and shall if required by the Agent, bear a
notation in form approved by the Agent as to any matter provided for in such
supplemental agreement. If the Company shall so determine, new Security
Certificates so modified as to conform, in the opinion of the Agent and the
Company, to any such supplemental agreement may be prepared and executed by
the Company and authenticated, executed on behalf of the Holders and delivered
by the Agent in exchange for Outstanding Security Certificates.
ARTICLE 9
Covenants
Section 9.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders
from time to time of the Securities that it will duly and punctually perform
its obligations under the Purchase Contracts in accordance with the terms of
the Purchase Contracts and this Agreement.
<PAGE>
Section 9.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City
of New York an office or agency where Security Certificates may be
presented or surrendered for acquisition of shares of Common Stock upon
Final Settlement or earlier Acceleration and for transfer of Treasury Notes
upon occurrence of a Bankruptcy Event or Sale of Assets, where Security
Certificates may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Agent with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Security Certificates may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company will give prompt written notice to the Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for
the Securities the Corporate Trust Office and appoints the Agent at its
Corporate Trust Office as paying agent in such city.
Section 9.03. Company to Reserve Common Stock.
The Company shall at all times prior to the Final Settlement
Date or an applicable Acceleration Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock the full
number of shares of Common Stock issuable (x) against tender of payment in
respect of all Purchase Contracts constituting a part of the Securities
evidenced by Outstanding Security Certificates and (y) in payment of Deferred
Contract Fees, if any, owed by the Company to the Holders.
Section 9.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may
be issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities and in payment of any
Deferred Contract Fees will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable.
Section 9.05. Statements of Officers of the Company as to
Default.
The Company will deliver to the Agent, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
<PAGE>
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions hereof, and if the Company shall
be in default, specifying all such defaults and the nature and status thereof
of which they may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
SUNAMERICA INC.
Attested by:
By:____________________________________
_________________________________ Name:
[Title] Title:
THE BANK OF NEW YORK
Attested by:
By:____________________________________
_________________________________ Name:
[Title] Title:
EXHIBIT A
SUNAMERICA INC.
% PREMIUM EQUITY REDEMPTION
CUMULATIVE SECURITY UNITS
(STATED AMOUNT $ PER SECURITY)
No. Securities
This Security Certificate certifies that is
the registered Holder of the number of Securities set forth above. Each
Security represents (i) ownership by the Holder of % United States
Treasury Notes due October 31, 1999 ("Treasury Notes") with a principal amount
equal to the Stated Amount, subject to the Pledge of such Treasury Notes by
such Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Purchase Contract with SunAmerica Inc., a
Maryland corporation (the "Company"). The Treasury Notes represented by this
Security Certificate were acquired by the Underwriters on behalf of the
Company with the proceeds of the offering of this Security Certificate and
other funds provided by the Company and are being conveyed to the Holder of
this Security Certificate and pledged pursuant to the Pledge Agreement
simultaneously therewith.
<PAGE>
Pursuant to the Pledge Agreement, the Treasury Notes
constituting part of each Security evidenced hereby have been pledged to the
Collateral Agent to secure the obligations of the Holder under the Purchase
Contract comprising a portion of such Security.
The Pledge Agreement provides that all payments of principal
of, or interest on, any Treasury Notes comprising a portion of the Securities
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds no later than 1:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after 1:00 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:00 a.m., New York City time,
on the next succeeding Business Day) (i) in the case of (A) interest payments
and (B) any principal payments with respect to any Treasury Notes that have
been released from the Pledge pursuant to the Pledge Agreement, to the Agent
to the account designated by it for such purpose and (ii) in the case of
principal payments on any Pledged Treasury Notes (as defined in the Pledge
Agreement), at the direction of the Agent on behalf of the Holders, to the
Company, in full satisfaction of the respective obligations of the Holders of
the Securities of which such Pledged Treasury Securities are a part under the
Purchase Contracts forming a part of such Securities. Interest on any Treasury
Note forming part of a Security evidenced hereby which is paid on any ________
or __________, commencing _____________1997 (a "Payment Date"), shall, subject
to receipt thereof by the Agent from the Collateral Agent, be paid to the
Person in whose name this Security Certificate (or a Predecessor Security
Certificate) is registered at the close of business on the Record Date next
preceding such Payment Date. The Company shall pay the accrued interest on
the Treasuary Notes for the period from November 1, 1996 to November 6, 1996
(the "Holder's Accrued Interest"). The Holder shall receive the Holder's
Accrued Interest as part of the interest payment on the Treasury Notes upon
the first Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of
this Security Certificate to purchase, and the Company to sell, on October 31,
1999 (the "Final Settlement Date"), at a price equal to $ (the "Stated
Amount"), a number of shares of Common Stock, par value $1.00 per share
("Common Stock"), of the Company, equal to the Settlement Rate on the Final
Settlement Date, unless on or prior to the Final Settlement Date, there shall
have occurred a Bankruptcy Event, Sales of Assets, an Acceleration or a
Holder's Early Settlement with respect to the Security of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and
more fully described on the reverse hereof. The purchase price for the shares
of Common Stock purchased pursuant to each Purchase Contract evidenced hereby,
if not paid earlier pursuant to the terms of the Purchase Contract Agreement,
shall be paid on the Final Settlement Date by application of payment received
in respect of the principal of the Treasury Notes pledged to secure the
obligations under such Purchase Contract of the Holder of the Security of
which such Purchase Contract is a part.
The Company shall pay or accrue, on each Payment Date, in
respect of each Purchase Contract forming part of a Security evidenced hereby
an amount (the "Contract Fees") equal to % per annum of the Stated Amount,
computed on the basis of the actual number of days elapsed in a year of 365 or
366 days, as the case may be, subject to deferral at the option of the Company
<PAGE>
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof; except that the Contract Fees payable on the first Payment
Date will be adjusted so that the Contract Fees payable on such date will be
the equivalent of % of the Stated Amount per annum accruing from the
date of issuance of the Securities to April 30, 1997. Such Contract Fees shall
be payable to the Person in whose name this Security Certificate (or a
Predecessor Security Certificate) is registered at the close of business on
the Record Date next preceding such Payment Date.
Interest on the Treasury Notes and the Contract Fees will be
payable at the office of the Agent in The City of New York or, at the option
of the Company, by check mailed to the address of the Person entitled thereto
as such address appears on the Security Register.
Reference is hereby made to the further provisions set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Security Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
SUNAMERICA INC.
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
Attested:
___________________________________
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By:___________________________________
Dated:
This is one of the Securities Certificates referred to in the within
mentioned Purchase Contract Agreement.
<PAGE>
THE BANK OF NEW YORK
as Agent
By:___________________________________
(Form of Reverse of Security Certificate]
Each Purchase Contract evidenced hereby is governed by a
Purchase Contract Agreement, dated as of October __, 1996 (the "Purchase
Contract Agreement"), between the Company and The Bank of New York, as
Purchase Contract Agent (herein called the "Agent"), to which Purchase
Contract Agreement and supplemental agreements thereto reference is hereby
made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Agent, the Company,
and the Holders and of the terms upon which the Security Certificates are,
and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of
this Security Certificate to purchase, and the Company to sell, on the Final
Settlement Date at a price equal to the Stated Amount, a number of shares of
Common Stock of the Company equal to the Settlement Rate on the Final
Settlement Date, unless, on or prior to the Final Settlement Date, there shall
have occurred a Bankruptcy Event, Sale of Assets, an Acceleration or a
Holder's Early Settlement with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is initially one share of Common
Stock, in each case subject to adjustment as provided in the Purchase Contract
Agreement. No fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The purchase price for the shares of Common Stock purchased
pursuant to each Purchase Contract shall be paid by application of payments
received by the Company on the Final Settlement Date, an earlier Acceleration
Date or Holder's Early Settlement from the Collateral Agent at the direction
of the Agent on behalf of the Holders pursuant to the Pledge Agreement in
respect of the principal of the Treasury Notes pledged to secure the
obligations of the relevant Holder under such Purchase Contract subject to the
provisions of the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment in full of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner set forth in the Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company shall pay
or accrue, on each Payment Date, the Contract Fees payable in respect of each
Purchase Contract to the Person in whose name the Security Certificate
evidencing such Purchase Contract is registered at the close of business on
the Record Date next preceding such Payment Date. Contract Fees will be
payable at the office of the Agent in The City of New York or, at the option
of the Company, by check mailed to the address of the Person entitled thereto
<PAGE>
at such address as it appears on the Security Register.
The Company shall have the right, at any time prior to the
Final Settlement Date, Sale of Assets or an Acceleration Date applicable to a
Holder's Securities, to defer the payment of any or all of the Contract Fees
otherwise payable on any Payment Date, but only if the Company shall give the
Holders and the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the Purchase Contract
Agreement. Any Contract Fees so deferred shall bear additional Contract Fees
thereon at the rate of _____% per annum (computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Fees together with the additional Contract Fees
accrued thereon, are referred to herein as the "Deferred Contract Fees").
Deferred Contract Fees shall be due on the next succeeding Payment Date except
to the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Fees may be deferred to a date that is after the Final
Settlement Date, a Bankruptcy Event Date or a Sale of Assets Date or an
applicable Acceleration Date.
In the event the Company elects to defer the payment of
Contract Fees on the Purchase Contract until the Final Settlement Date, a Sale
of Assets Date or an Acceleration Date, the Company shall make a cash payment
equal to the aggregate amount of Deferred Contract Fees payable to a Holder.
In the event the Company exercises its option to defer the
payment of Contract Fees, then, until the Deferred Contract Fees have been
paid in full, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchase or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans now or hereafter in effect or the satisfaction by the Company of its
obligations pursuant to any contract or security now or hereafter outstanding
requiring the Company to purchase shares of Common Stock, (ii) as a result of
a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged (iv) the payment of accrued dividends (and cash in lieu
of fractional shares) upon the conversion of any shares of preferred stock of
the Company as may be outstanding from time to time, in accordance with the
terms of such stock or (v) dividends on its capital stock paid in shares of
capital stock) or make any guarantee payments with respect to the foregoing.
The Purchase Contracts and the obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights
of the Holders to receive and the obligation of the Company to pay any
Contract Fees or any Deferred Contract Fees, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Final Settlement Date
or an applicable Acceleration Date, a Bankruptcy Event shall have occurred.
Upon the occurrence of a Bankruptcy Event or Sale of Assets, the Company shall
promptly but in no event after two business days thereafter give written
<PAGE>
notice to the Agent, the Collateral Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the
occurrence of a Bankruptcy Event or Sale of Assets, the Collateral Agent shall
release the Treasury Notes from the Pledge in accordance with the provisions
of the Pledge Agreement. The Securities shall thereafter represent the right
to receive the Treasury Notes forming a part of such Securities in accordance
with the provisions of the Purchase Contract Agreement and the Pledge
Agreement.
Unless a Mandatory Acceleration, a Bankruptcy Event or Sale of
Assets occurs prior to the Final Settlement Date, the Company shall have the
right to accelerate, in whole or in part, the outstanding Securities (a
"Company Acceleration") (subject to the notice provisions set forth in the
Purchase Contract Agreement). The Company may not exercise its right to
accelerate the Securities unless the Current Market Price determined as of the
second Business Day immediately preceding the Notice Date is equal to or
exceeds the Company Acceleration Price applicable to such Notice Date. Upon
the effective date of such acceleration ( a "Company Acceleration Date"), the
Company shall deliver to the Holders thereof in exchange for each such
Security accelerated, (i) a number of fully paid and non-assessable shares of
Common Stock determined by dividing the Company Acceleration Price in effect
on the date established for acceleration by the Current Market Price of the
Common Stock determined as of the second Business Day immediately preceding
the Notice Date and (ii) an amount in cash equal to all accrued and unpaid
Contract Fees and Deferred Contract Fees, if any, on such Security to and
including such Company Acceleration Date (and Contract Fees and Deferred
Contract Fees, if any, shall cease to accrue on each Security accelerated as
of such date).
Immediately prior to the effectiveness of a merger or
consolidation of, or a statutory share exchange involving, the Company that
results in the conversion or exchange of the Common Stock into, or the right
to receive, other securities or other property (whether of the Company or any
other entity) (any such merger, consolidation or share exchange being referred
to herein as a "Merger or Consolidation"), each outstanding Security shall
automatically convert into (a "Mandatory Acceleration"), unless sooner
accelerated:
(i) fully paid and non-assessable shares of Common Stock at
the Settlement Rate in effect on the effective time on the date of
any Merger or Consolidation (the "Mandatory Acceleration Date");
plus
(ii) the right to receive an amount in cash equal to all accrued
and unpaid Contract Fees and Deferred Contract Fees, if any
(except as provided in herein) on such Securities to and
including the Mandatory Acceleration Date (and Contract Fees
and Deferred Contract Fees shall cease to accrue as of the
Mandatory Acceleration Date); plus
(iii) the right to receive an amount in cash initially equal
to $____, declining by $________ on each day following [date]
(computed on the basis of a 360-day year of twelve 30-day
months) to $_____ on [date] and equal to zero thereafter, in
each case determined with reference to the Mandatory
<PAGE>
Acceleration Date.
At the option of the Company, it may deliver on the Mandatory
Acceleration Date in lieu of some or all of the cash consideration
described in clauses (iii) above, fully paid and non-assessable shares of
Common Stock. The number of shares of Common Stock to be delivered in lieu
of any cash consideration described in such clauses (iii) shall be
determined by dividing the amount of cash consideration that the
Corporation has elected to deliver in Common Stock by the Current Market
Price of the Common Stock determined as of the second Business Date
immediately preceding the Notice Date. Notice shall be given for a
Mandatory Acceleration as set forth in the Purchase Contract Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement at the option of the Holder thereof, Purchase
Contracts underlying Securities may be settled early ("Holder's Early
Settlement") as provided in the Purchase Contract Agreement. In order to
exercise the right to effect Holder's Early Settlement with respect to any
Purchase Contracts evidenced by this Security Certificate, the Holder of this
Security Certificate shall deliver this Security Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly completed
and accompanied by payment in the form of a certified or cashier's check
payable to the order of the Company in immediately available funds in a U.S.
dollar amount (the "Holder's Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect a Holder's Early
Settlement. If such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next preceding
any Payment Date to the opening of business on such Payment Date, the amount
equal to the sum of (x) the Contract Fees and Deferred Contract Fees, if any,
payable on such Payment Date with respect to such Purchase Contracts plus (y)
the interest with respect to the related Treasury Notes payable on such
Payment Date. Upon a Holder's Early Settlement of Purchase Contracts by a
Holder of the related Securities, the Treasury Notes underlying such
Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled to receive Prepaid Securities on
account of each Purchase Contract forming part of a Security as to which
Holder's Early Settlement is effected in accordance with the provisions of the
Purchase Contract Agreement. Upon the Holder's Early Settlement of the
Purchase Contracts, the Holder thereof will not forfeit the right to receive
any Contract Fees or Deferred Contract Fees on such Purchase Contracts
pursuant to the terms of the Prepaid Securities.
The Security Certificates are issuable only in registered form
and only in denominations of a single Security and any integral multiple
thereof. The transfer of any Security Certificate will be registered and
Security Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. For so long as the Purchase Contract
underlying a Security remains in effect, such Security shall not be separable
<PAGE>
into its constituent parts, and the rights and obligations of the Holder of
such Security in respect of the Treasury Notes and Purchase Contract
constituting such Security may be transferred and exchanged only as a
Security.
Upon registration of transfer of this Security Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Agent pursuant to
the Purchase Contract Agreement), under the terms of the Purchase Contract
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contracts evidenced by
this Security Certificate. The Company covenants and agrees, and the Holder,
by his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Security Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Securities evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents
to the provisions of the Purchase Contract Agreement, authorizes the Agent
to enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Notes
underlying this Security Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of principal of the
Treasury Notes on the Final Settlement Date shall be paid by the Collateral
Agent to the Company in satisfaction of such Holder's obligations under
such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of at least
66 2/3% of the Outstanding Securities.
All terms used herein which are defined in the Purchase Contract
Agreement have the meanings set forth therein.
The Purchase Contracts shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Security
Certificate is registered as the owner of the Securities evidenced hereby for
the purpose of receiving payments of interest on the Treasury Notes, receiving
payments of Contract Fees and any Deferred Contract Fees, delivery of the
Treasury Notes, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
<PAGE>
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder of shares of
Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Agent.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on or after the Final Settlement Date
of the Purchase Contracts underlying the number of Securities evidenced by
this Security Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
Dated:_____________________________ ___________________________________
Signature
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please print
such Person's name and address:
Please print name and address of
Registered Holder:
____________________________________ ____________________________________
Name Name
____________________________________ ____________________________________
Address Address
Social Security or other Taxpayer
Identification Number, if any ____________________________________
HOLDER'S ELECTION TO SETTLE EARLY
The undersigned Holder of this Security Certificate hereby
irrevocably exercises the option to effect Holder's Early Settlement in
accordance with the terms of the Purchase Contract Agreement with respect to
the Purchase Contracts underlying the number of Securities evidenced by this
Security Certificate specified below. The undersigned Holder directs that a
certificate for Prepaid Securities deliverable upon such Holder's Early
Settlement be registered in the name of, and delivered with any Security
Certificate representing any Securities evidenced hereby as to which Holder's
Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
<PAGE>
have been indicated below. Treasury Notes deliverable upon such Holder's Early
Settlement will be transferred in accordance with the transfer instructions
set forth below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable
incident thereto.
_______________________________ _______________________________________
Dated: Signature
Number of Securities evidenced hereby as to which Holder's Early
Settlement of the related Purchase Contracts is being elected:
If shares or Security Certificates are to REGISTERED HOLDER
be registered in the name of and
delivered to and Treasury Notes are to
be transferred to a Person other than
the Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
_________________________________ ___________________________________
Name Name
_________________________________ ___________________________________
Address Address
Social Security or other Taxpayer
Identification Number, if any ___________________________________
Transfer Instructions for Treasury Notes Transferable Upon Holder's Early
Settlement or a Termination Event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
Exhibit 4.23
FORM OF
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of October __, 1996 (this "Agree
ment"), among SunAmerica Inc., a Maryland corporation (the "Company"), The
First National Bank of Chicago, a national banking association, not
individually but solely as collateral agent (in such capacity, together with
its successors in such capacity, the "Collateral Agent") and a depository bank
for the collateral amount, and The Bank of New York, not individually but
solely as purchase contract agent and as attorney-in-fact of the Holders (as
hereinafter defined) from time to time of the Securities (as hereinafter
defined) (in such capacity, together with its succes sors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract
Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there will be issued _____% Premium Equity
Redemption Cumulative Security Units (the "Securities").
Each Security consists of (a) one Purchase Contract (as
hereinafter defined) and (b) ______% United States Treasury Notes due _______,
1999 ("Treasury Notes") having a principal amount equal to $_____ (the
"Stated Amount") and maturing on ________ __, 1999 (the "Final Settlement
Date"), subject to the pledge of such Treasury Notes created hereby.
The Company has caused the Underwriters, on its behalf, to
purchase the Treasury Notes, to be settled on _______ __, 1996, with the
proceeds of the offering of the Securities and other funds to be provided by
the Company. The Company will convey such Treasury Notes to the Holders as
a part of the Securities.
Pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders (as defined in the Purchase Contract
Agreement) from time to time of the Securities have authorized the Purchase
Contract Agent, as attorney-in-fact of such Holders, among other things to
execute and deliver this Agreement on behalf of such Holders and to grant
the pledge provided hereby of the Treasury Notes constituting part of such
Securities as provided herein and subject to the terms hereof.
Accordingly, the Company, the Collateral Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
<PAGE>
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular; and
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Acceleration" has the meaning specified in the Purchase
Contract Agreement.
"Act" has the meaning specified in the Purchase Contract
Agreement.
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Subpart O- Book-Entry
Procedure of Title 31 of the Code of Federal Regulations (31 CFR (S) 306.115
et. seq.) and any other regulations of the United States Treasury Department
from time to time applicable to the transfer or pledge of book-entry U.S.
Treasury Securities, including, without limitation, the regulations set forth
in 31 CFR Part 357 which becomes effective January 1, 1997.
"Bankruptcy Code" means title 11 of the United States Code, or
any other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Bankruptcy Event" has the meaning specified in the Purchase
Contract Agreement.
"Board Resolution" has the meaning specified in the Purchase
Contract Agreement.
"Business Day" means any day that is not a Saturday, a Sunday
or a day on which the New York Stock Exchange or banking institutions or trust
companies in The City of New York are authorized or obligated by law or
executive order to be closed.
"Collateral Agent" has the meaning specified in the first
paragraph of this instrument.
"Collateral Account" means the account maintained at The First
National Bank of Chicago in the name "The First National Bank of Chicago as
Collateral Agent of SunAmerica Inc. as pledgee of The Bank of New York as
Purchase Contract Agent".
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Final Settlement Date" has the meaning specified in the
Recitals.
<PAGE>
"Holder" when used with respect to a Security, or a Purchase
Contract constituting a part thereof, has the meaning specified in the
Purchase Contract Agreement.
"Holder's Early Settlement" has the meaning specified in the
Purchase Contract Agreement.
"Holder's Early Settlement Amount" has the meaning specified in
the Purchase Contract Agreement.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company and who
shall be reasonably acceptable to the Collateral Agent or the Purchase
Contract Agent, as the case may be.
"Outstanding Securities" has the meaning specified in the
Purchase Contract Agreement.
"Outstanding Security Certificates" has the meaning specified
in the Purchase Contract Agreement.
"Payment Date" has the meaning specified in the Purchase
Contract Agreement.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2 hereof.
"Pledged Treasury Notes" has the meaning specified in Section 2
hereof.
"Purchase Contract" has the meaning specified in the Purchase
Contract Agreement.
"Purchase Contract Agent" has the meaning specified in the
first paragraph of this instrument.
"Sale of Assets" has the meaning specified in the Purchase
Contract Agreement.
"Security" has the meaning specified in the Recitals.
"Security Certificate" has the meaning specified in the
Purchase Contract Agreement.
"Stated Amount" has the meaning specified in the Recitals.
"Treasury Notes" has the meaning specified in the Recitals.
Section 2. The Pledge. The Holders from time to time of the
Securities acting through the Purchase Contract Agent, as their
<PAGE>
attorney-in-fact, hereby pledge and grant to the Collateral Agent for the
benefit of the Company, as collateral security for the performance when due by
such Holders of their respective obligations under the Purchase Contracts
comprising a portion of such Securities, a security interest in all of the
right, title and interest of such Holders in the Treasury Notes constituting a
part of such Securities. Concurrently with the execution and delivery of the
Securities, the initial Holders and the Purchase Contract Agent shall (i)
cause the Treasury Notes to be transferred to the Collateral Agent by
Federal Reserve Bank-Wire to the account of the Collateral Agent and (ii)
the Collateral Agent shall credit the Treasury Notes to the Collateral
Account; in each case pursuant to Applicable Treasury Regulations and to
the Uniform Commercial Code to the extent such laws are applicable. The
pledge provided in this Section 2 is herein referred to as the "Pledge" and
the Treasury Notes subject to the Pledge, excluding any Treasury Notes
released from the Pledge as provided in Section 4 hereof, are hereinafter
referred to as the "Pledged Treasury Notes." Subject to the Pledge, and to
the provisions of Article 4 of the Purchase Contract Agreement, the Holders
from time to time of the Securities shall have full beneficial ownership of
the Treasury Notes constituting a part of such Securities.
Notwithstanding any other provision of this Agreement, The
First National Bank of Chicago as depositary bank hereby agrees that (a) it
will comply with "entitlement orders" (within the meaning of Section
8-102(a)(8) of the 1994 version of the Official Text of the UCC relating to
the Collateral Account issued by the Collateral Agent without further consent
by the Purchase Contract Agent or any Holder and (b) it hereby waives any
right of set-off or recoupment that it may have with respect to the Collateral
Account. The First National Bank of Chicago hereby represents that it has not
entered into, and hereby agrees that until the termination of the Purchase
Contract Agreement it will not enter into, any agreement with any other person
relating to the Collateral Account pursuant to which it has agreed to comply
with entitlement orders made by such person.
Section 3. Distribution of Principal and Interest. All
payments of principal of, or interest on, any Treasury Notes constituting part
of the Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds no later than 1:00 p.m.,
New York City time, on the Business Day such interest payment is received by
the Collateral Agent (provided that in the event such interest payment is
received by the Collateral Agent on a day that is not a Business Day or after
1:00 p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:00 a.m., New York City time, on the next succeeding
Business Day) (i) in the case of (A) interest payments and (B) any principal
payments with respect to any Treasury Notes that have been released from the
Pledge pursuant to Section 4 hereof, to the Purchase Contract Agent to the
account designated by it for such purpose and (ii) in the case of principal
payments on any Pledged Treasury Notes, the Purchase Contract Agent on behalf
of the Holders hereby directs the Collateral Agent to make such payments to
the Company, in full satisfaction of the respective obligations of the Holders
of the Securities of which such Pledged Treasury Notes are a part under the
Purchase Contracts forming a part of such Securities. All such payments
received by the Purchase Contract Agent as provided herein shall be applied by
the Purchase Contract Agent pursuant to the provisions of the Purchase
Contract Agreement, including the provisions of Article 4 of the Purchase
Contract Agreement with regard to the semi-annual interest payment due on
<PAGE>
the Treasury Notes on _________ __, 1996. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of
principal on account of any Pledged Treasury Notes, the Purchase Contract
Agent shall hold the same as trustee of an express trust for the benefit of
the Company (and promptly deliver over to the Company) for application to
the obligations of the Holders of the Securities of which such Treasury
Notes are a part under the Purchase Contracts relating to the Securities of
which such Treasury Notes are a part, and such Holders shall acquire no
right, title or interest in any such payments of principal so received.
Section 4. Release of Pledged Treasury Notes. (a) Upon written
notice to the Collateral Agent by the Company or the Purchase Contract Agent
that there has occurred a Bankruptcy Event or Sale of Assets, resulting in the
termination of the Purchase Contracts in accordance with Section 5.09 of the
Purchase Contract Agreement, the Collateral Agent shall release all Pledged
Treasury Notes from the Pledge and shall transfer all such Treasury Notes,
free and clear of any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
If such Bankruptcy Event or Sale of Assets shall result from
the Company's becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail immediately to effectuate the
release and transfer of all Pledged Treasury Notes as provided by this Section
4(a), the Purchase Contract Agent shall, subject to Section 6(l), (i) use its
best efforts to obtain an opinion of a nationally recognized law firm
reasonably acceptable to the Collateral Agent (the reasonable expense of
which shall be reimbursed by the Company) to the effect that, as a result
of the Company's being the debtor in such a bankruptcy case, the Collateral
Agent will not be prohibited from releasing or transferring the Treasury
Notes as provided in this Section 4(a), and shall deliver such opinion to
the Collateral Agent within ten days after the occurrence of such
Bankruptcy Event or Sale of Assets, and if (y) the Purchase Contract Agent
shall be unable to obtain such opinion within ten days after the occurrence
of such Bankruptcy Event or Sale of Assets or (z) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to effectuate the
release and transfer of all Pledged Treasury Notes as provided in this
Section 4(a), then the Purchase Contract Agent shall within fifteen days
after the occurrence of such Bankruptcy Event or Sale of Assets commence an
action or proceeding in the court with jurisdiction of the Company's case
under the Bankruptcy Code seeking an order requiring the Collateral Agent
to effectuate the release and transfer of all Pledged Treasury Notes as
provided by this Section 4(a) or (ii) commence an action or proceeding like
that described in the immediately preceding subsection hereof within ten
days after the occurrence of such Bankruptcy Event or Sale of Assets.
(b) Upon written notice to the Collateral Agent by the Purchase
Contract Agent that one or more Holders of Securities have elected to effect
Holder's Early Settlement of their respective obligations under the Purchase
Contracts forming a part of such Securities in accordance with the terms of
the Purchase Contracts and the Purchase Contract Agreement (setting forth the
number of such Purchase Contracts as to which such Holders have elected to
effect Holder's Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company, the related Holder's
<PAGE>
Early Settlement Amounts pursuant to the terms of the Purchase Contracts and
the Purchase Contract Agreement and that all conditions to such Holder's
Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge and shall transfer all such Treasury Notes, free
and clear of any lien, pledge or Security interest created hereby, to the
Purchase Contract Agent with a principal amount equal to the product of (i)
the Stated Amount times (ii) the number of such Purchase Contracts as to
which such Holders have elected to effect Holder's Early Settlement.
(c) Upon written notice to the Collateral Agent by the Company
of an Acceleration in accordance with the terms of the Purchase Contracts and
the Purchase Contract Agreement (setting forth the number of Securities to be
accelerated), and that all conditions to such Acceleration have been
satisfied, then the Collateral Agent shall release from the Pledge and shall
transfer all such Treasury Notes, free and clear of any lien, pledge or
Security interest created hereby, to the Purchase Contract Agent with a
principal amount equal to the product of (i) the Stated Amount times (ii) the
number of Securities to be accelerated.
(d) Transfers of Treasury Notes pursuant to Section 4(a), (b) or
(c) shall be by Federal Reserve Bank-Wire or in another appropriate manner,
(i) if the Collateral Agent shall have received such notification at or prior
to 11:00 a.m., New York City time, on a Business Day, then no later than 2:00
p.m., New York City time, on such Business Day and (ii) if the Collateral
Agent shall have received such notification on a day that is not a Business
Day or after 11:00 a.m., New York City time, on a Business Day, then no later
than 10:00 a.m., New York City time, on the next succeeding Business Day.
Section 5. Rights and Remedies. (a) The Collateral Agent shall
have all of the rights and remedies with respect to the Pledged Treasury Notes
of a secured party under the Uniform Commercial Code as in effect in the State
of New York (the "Code") (whether or not the Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such additional
rights and remedies to which a secured party is entitled under the laws in
effect in any jurisdiction where any rights and remedies hereunder may be
asserted.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent
is unable to make payments to the Company on account of principal payments
of any Pledged Treasury Notes as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the Securities of which
such Pledged Treasury Notes are a part under the Purchase Contracts forming
a part of such Securities, the Collateral Agent shall have and may
exercise, with reference to such Pledged Treasury Notes and such
obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code after default by a debtor, and
as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of principal of
or interest on the Pledged Treasury Notes.
(d) The Purchase Contract Agent agrees that, from time to time,
upon the written request of the Collateral Agent, the Purchase Contract Agent
shall execute and deliver such further documents and do such other acts and
<PAGE>
things as the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder.
Section 6. The Collateral Agent and the Purchase Contract
Agent. It is hereby agreed as follows:
(a) Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (i) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against the Collateral
Agent, nor shall the Collateral Agent be bound by the provisions of any
agreement by any party hereto beyond the specific terms hereof; (ii) shall
not be responsible for any recitals contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Securities or the Purchase Contract
Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract Agreement or any
other document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral Agent) to
perform any of its obligations hereunder or thereunder; (iii) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 6(b)
hereof); (iv) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or instrument referred
to or provided for herein or in connection herewith or therewith, except
for its own gross negligence; and (v) shall not be required to advise any
party as to selling or retaining, or taking or refraining from taking any
action with respect to, any securities or other property deposited
hereunder. Subject to the foregoing, during the term of this Agreement,
the Collateral Agent shall take all reasonable action in connection with
the safe keeping and preservation of the Pledged Treasury Notes hereunder.
No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder. In no event
shall the Collateral Agent be liable for any amount in excess of the value
of the Pledged Treasury Notes.
(b) Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, or to direct the
taking or refraining from taking of any action authorized by this
Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 6(b) shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.
<PAGE>
(c) Reliance by Collateral Agent. The Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons (without being required to determine the correctness of any fact
stated therein), and upon advice and statements of legal counsel and other
experts selected by the Collateral Agent. As to any matters not expressly
provided for by this Agreement, the Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions given by the Company in accordance with this
Agreement.
(d) Rights in Other Capacities. The Collateral Agent and its
affiliates may (without having to account therefor to the Company) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Purchase Contract Agent and
any Holder of Securities (and any of their subsidiaries or affiliates) as if
it were not acting as the Collateral Agent, and the Collateral Agent and its
affiliates may accept fees and other consideration from the Purchase Contract
Agent and any Holder of Securities without having to account for the same to
the Company, provided that the Collateral Agent covenants and agrees with the
Company that the Collateral Agent shall not accept, receive or permit there to
be created in its favor any security interest, lien or other encumbrance of
any kind in or upon the Pledged Treasury Notes.
(e) Non-Reliance on Collateral Agent. The Collateral Agent shall
not be required to keep itself informed as to the performance or observance by
the Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Securities. The Collateral Agent
shall not have any duty or responsibility to provide the Company with any
credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of Securities (or any of
their affiliates) that may come into the possession of the Collateral Agent or
any of its affiliates.
(f) Compensation and Indemnity. The Company agrees: (i) to pay
the Collateral Agent from time to time reasonable compensation for all
services ren dered by it hereunder and (ii) to indemnify the Collateral
Agent for, and to hold it harmless against, any loss, liability or expense
incurred without gross negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of its powers and
duties under this Agreement, including the costs and expenses (including
reasonable fees and expenses of counsel) of defending itself against any
claim or liability in connection with the exercise or performance of such
powers and duties.
(g) Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by
or among the parties hereto and/or any other Person with respect to any funds
or property deposited hereunder, the Collateral Agent shall be entitled, at
its sole option, to refuse to comply with any and all claims, demands or
<PAGE>
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and the Collateral Agent shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Collateral
Agent shall be entitled to refuse to act until either (i) such conflicting or
adverse claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, satisfactory to the Collateral Agent or
(ii) the Collateral Agent shall have received security or an indemnity
satisfactory to the Collateral Agent sufficient to save the Collateral Agent
harmless from and against any and all loss, liability or expense which the
Collateral Agent may incur by reason of its acting. The Collateral Agent may
in addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Collateral Agent shall not be
required to take any action that is in its opinion contrary to law or to the
terms of this Agreement, or which would in its opinion subject it or any of
its officers, employees or directors to liability.
(h) Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided
below, (a) the Collateral Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent, (b) the Collateral
Agent may be removed at any time by the Company and (c) if the Collateral
Agent fails to perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such
failure shall be continuing, the Collateral Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify
the Company of any removal of the Collateral Agent pursuant to clause (c)
of the immediately preceding sentence. Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been so appointed and
shall have accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or such removal, then
the retiring Collateral Agent may at the expense of the Company petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent. The Collateral Agent shall be a bank which has an office
in New York, New York and a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall take all appropriate action to transfer any money
and property held by it hereunder (including the Pledged Treasury Notes) to
such successor Collateral Agent. The retiring Collateral Agent shall, upon
such succession, be discharged from its duties and obligations as
Collateral Agent hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this Section 6
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Collateral Agent.
Promptly following the removal or resignation of the Collateral
Agent the Company shall give written notice thereof to Moody's Investors
Services, Inc.
<PAGE>
(i) Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any
of its duties hereunder, and the Collateral Agent shall not be liable for
any action taken or omitted by such agents or advisors selected in good
faith.
(j) Survival. The provisions of this Section 6 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
(k) Anything in this Agreement to the contrary notwithstanding,
in no event shall the Collateral Agent or its officers, employees or agents be
liable under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever, including
lost profits, whether or not the likelihood of such loss or damage was known
to the Collateral Agent, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence on the part of the Collateral
Agent.
(l) The Purchase Contract Agent. The duties and responsibilities
of the Purchase Contract Agent under this Agreement shall in each case be
governed by Article VII of the Purchase Contract Agreement.
Section 7. Amendment..
(a) Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
(i) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the
covenants of the Company; or
(ii) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(iii) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent or
Purchase Contract Agent; or
(iv) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other
such provisions herein, or to make any other provisions with
respect to such matters or questions arising under this
Agreement, provided such action shall not adversely affect
the interests of the Holders.
(b) Amendment with Consent of Holders. With the consent of the
Holders of not less than 66 2/3% of the Outstanding Securities, by Act of said
Holders delivered to the Company, the Purchase Contract Agent and the
Collateral Agent, the Company when authorized by a Board Resolution, the
<PAGE>
Purchase Contract Agent and the Collateral Agent may amend this Agreement for
the purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided, however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(i) change the amount or type of Treasury Notes
underlying a Security, impair the right of the Holder of any
Security to receive interest payments on the underlying
Treasury Notes or otherwise adversely affect the Holder's
rights in or to such Treasury Notes; or
(ii) change any Payment Date;
(iii) impair the right to institute suit for the enforcement
of any Purchase contract.
(iv) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security affected
thereby pursuant to the Purchase Contract Agreement if such
action were effected by an agreement supplemental thereto; or
(v) reduce the percentage of Outstanding Securities the
consent of whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such Act shall approve the substance thereof.
(c) Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract
Agent shall be entitled to receive and (subject to Section 6(a) hereof, with
respect to the Collateral Agent, and Section 7.0 of the Purchase Contract
Agreement, with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution
of such amendment is authorized or permitted by this Agreement and that all
conditions precedent to such execution and delivery have been satisfied.
(d) Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Security Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered under the Purchase Contract
Agreement shall be bound thereby.
(e) Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if
required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company
shall so determine, new Security Certificates so modified as to conform, in
the opinion of the Collateral Agent, the Purchase Contract Agent and the
Company, to any such amendment may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
<PAGE>
Purchase Contract Agent in accordance with the Purchase Contract Agreement
in exchange for Outstanding Security Certificates.
Section 8. Miscellaneous.
(a) No Waiver. No failure on the part of the Collateral Agent or
any of its agents to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise by the Collateral
Agent or any of its agents of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right,
power or remedy. The remedies herein are cumulative and are not exclusive of
any remedies provided by law.
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Company,
the Collateral Agent and the Holders from time to time of the Securities,
acting through the Purchase Contract Agent as their attorney-in-fact, hereby
submit to the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York state court sitting
in New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Company, the Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(c) Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name
on the signature pages hereof or, as to any party, at such other address as
shall be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
(d) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have
ratified the agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
(e) Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
<PAGE>
(f) Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other
jurisdiction.
(g) Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses
of the Collateral Agent (including, without limitation, the reasonable fees
and expenses of counsel to the Collateral Agent), in connection with (i)
the negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the
terms of this Agreement; (b) all reasonable costs and expenses of the
Collateral Agent (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of Securities
to satisfy its obligations under the Purchase Contracts forming a part of
the Securities and (ii) the enforcement of this Section 8(g); and (c) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated hereby.
(h) Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders
from time to time of the Securities hereunder, shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities or any
other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of,
or any other term of, or any increase in the amount of, all
or any of the obligations of Holders of Securities under the
related Purchase Contracts, or any other amendment or waiver
of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any
Purchase Contract or any other agreement or instrument
relating thereto; or
(iii) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
SunAmerica Inc.
By: ______________________________________
Name:
Title:
Address for Notices:
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, CA 90067-6022
Attention: Treasurer
Telecopy: (310) 772-6635
__________________________________________
as Purchase Contract Agent and as
attorney-in-fact of the Holders from time
to time of the Securities
By: ______________________________________
Name:
Title:
Address for Notices:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust
Administration Department
Telecopy: (212) 815-5915
__________________________________________
as Collateral Agent and Depository Bank
for the Collateral Amount
By: _____________________________________
Name:
Title:
Address for Notices:
The First National Bank of Chicago
One First National Plaza
Mail Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust
Administration Department
Telecopy: (312) 407-1708
<PAGE>
Exhibit 5.1
[LETTERHEAD OF DAVIS POLK & WARDWELL]
October 31, 1996
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Ladies and Gentlemen:
We have acted as special counsel for SunAmerica Inc., a Maryland
corporation ("SunAmerica"), and SunAmerica Capital Trust III, SunAmerica
Capital Trust IV, SunAmerica Capital Trust V and SunAmerica Capital Trust VI,
each a statutory business trust created under the Business Trust Act of the
State of Delaware (each a "Trust" and collectively, the "Trusts"), in
connection with the preparation and filing with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended
(the "Act"), of a Registration Statement on Form S-3 (Registration Nos.
333-14201, 333-14201-01, 333-14201-02, 333-14201-03 and 333-14201-04), as
amended (the "Registration Statement"), relating to registration under the
Act of (i) unsecured senior debt securities, subordinated debt securities
and junior subordinated debt securities of SunAmerica (the "Debt
Securities"), which may be issued pursuant to a Senior Indenture dated as
of April 15, 1993 between SunAmerica and The First National Bank of
Chicago, as trustee (as amended or supplemented, the "Senior Indenture"), a
Subordinated Indenture dated as of October 28, 1996 to be entered into
between SunAmerica and The First National Bank of Chicago, as trustee (as
amended or supplemented, the "Subordinated Indenture") or a Junior
Subordinated Indenture dated as of March 15, 1996 between SunAmerica and
The First National Bank of Chicago, as trustee (the "Indenture Trustee")
(as amended or supplemented, the "Junior Subordinated Indenture" and,
together with the Senior Indenture and the Subordinated Indenture, the
"Indentures"), (ii) shares of preferred stock, without par value (the
"Preferred Stock"), of SunAmerica, which may be represented by depositary
shares (the "Depositary Shares") evidenced by depositary receipts (the
"Receipts"); (iii) shares of Common Stock, $1.00 par value per share, of
SunAmerica (the "Common Stock"); (iv) warrants of SunAmerica to purchase
Debt Securities, Preferred Stock, Common Stock or other securities or
rights (the "Warrants"); (v) stock purchase contracts of SunAmerica
("Purchase Contracts") to purchase Common Stock; (vi) stock purchase units
of SunAmerica ("Stock Purchase Units"), each representing ownership of a
Purchase Contract and any of Debt Securities, debt obligations of third
parties, including U.S. Treasury securities, or Preferred Securities (as
defined below) of a Trust, securing a holder's obligation to purchase
<PAGE>
Common Stock under the Purchase Contact, and (vii) guarantees (the
"Guarantees") of Preferred Securities to be issued by the Trusts, as
described below.
We will also act as special counsel to SunAmerica and the
Trusts in connection with offerings from time to time of Preferred Securities
of the Trusts (the "Preferred Securities") which are being registered under
the Registration Statement. The Preferred Securities are to be issued by each
Trust pursuant to an Amended and Restated Declaration of Trust (the "Amended
Declaration") to be filed with the Secretary of State of the State of Delaware
by the Trustees of the relevant Trust. The Preferred Securities are to be
guaranteed by SunAmerica pursuant to Guarantees issued under a Guarantee
Agreement (the "Guarantee Agreement") to be entered into by SunAmerica in
respect of the Preferred Securities. The forms of Preferred Securities,
Amended Declaration and Guarantee Agreement are filed or incorporated by
reference as exhibits to the Registration Statement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary or advisable for the purpose of rendering this opinion.
Based on the foregoing, we are of the opinion that:
1. Assuming that the Indentures, any Debt Securities and any
supplemental indenture to be entered into in connection with the issuance of
such Debt Securities have been duly authorized, when (i) the Registration
Statement has become effective under the Act, (ii) a supplemental indenture in
respect of the Debt Securities has been duly executed and delivered, (iii) the
terms of the Debt Securities have been duly established in accordance with the
applicable Indenture and the applicable supplemental indenture relating to
such Debt Securities so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon SunAmerica
and so as to comply with any requirement or restriction imposed by any court
or governmental or regulatory body having jurisdiction over SunAmerica, and
(iv) the Debt Securities have been duly executed and authenticated in
accordance with the applicable Indenture and the applicable supplemental
indenture relating to such Debt Securities and duly issued and delivered by
SunAmerica in the manner contemplated on the Registration Statement and any
prospectus supplement relating thereto, the Debt Securities (including any
Debt Securities duly issued (x) upon exchange or conversion of any shares of
Preferred Stock that are exchangeable or convertible into Debt Securities, (y)
upon the exercise of any Warrants exercisable for Debt Securities or (z) as
part of Stock Purchase Units) will constitute valid and binding obligations of
SunAmerica, enforceable in accordance with their terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now or
hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally and (b) the availability of equitable remedies may be limited
by equitable principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
2. Assuming that the Guarantees have been duly authorized, when
(i) the Registration Statement has become effective under the Act, (ii) the
applicable Guarantee Agreement has been duly executed and delivered so as not
<PAGE>
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon SunAmerica and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over SunAmerica, and (iii) the Preferred Securities
have been duly issued and delivered by the applicable Trust as contemplated by
the Registration Statement and any prospectus supplement relating thereto, the
Guarantees will constitute valid and binding obligations of SunAmerica,
enforceable in accordance with their terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or similar laws now or hereinafter in effect relating to
or affecting the enforcement of creditors' rights generally and (b) the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a proceeding at law
or in equity).
3. Assuming that a Warrant Agreement relating to the Warrants
(the "Warrant Agreement") has been duly authorized, when (i) the Registration
Statement has become effective under the Act, (ii) the Warrant Agreement has
been duly executed and delivered, (iii) the terms of the Warrants and of their
issuance and sale have been duly established in conformity with the Warrant
Agreement relating to such Warrants so as not to violate any applicable law or
result in a default under or breach of any agreement or instrument binding
upon SunAmerica and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having jurisdiction
over SunAmerica, and (iv) the Warrants have been duly executed and
countersigned in accordance with the Warrant Agreement relating to such
Warrants, and issued and sold in the form and in the manner contemplated in
the Registration Statement and any prospectus supplement relating thereto,
such Warrants will constitute valid and binding obligations of SunAmerica,
enforceable in accordance with their terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors' rights
generally, and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
4. Assuming that a Deposit Agreement relating to the
Depositary Shares (the "Deposit Agreement") has been duly authorized, when (i)
the Registration Statement has become effective under the Act, (ii) the
Deposit Agreement has been duly executed and delivered, (iii) the terms of the
Depositary Shares and of their issuance and sale have been duly established in
conformity with the Deposit Agreement relating to such Depositary Shares so as
not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon SunAmerica and so as to comply with
any requirement or restriction imposed by any court or governmental or
regulatory body having jurisdiction over SunAmerica, (iv) the terms of the
Preferred Stock have been duly and properly authorized for issuance and
Articles Supplementary to the Charter of SunAmerica classifying the Preferred
Stock and setting forth the terms thereof have been duly filed, (v) such
shares of Preferred Stock have been duly issued and paid for in the manner
contemplated in the Registration Statement and any prospectus supplement
relating thereto, and (vi) the Receipts evidencing the Depositary Shares are
duly issued against the deposit of the Preferred Stock in accordance with the
Deposit Agreement, such Receipts will be validly issued and will entitle the
<PAGE>
holders thereof to the rights specified therein and in the Deposit Agreement.
5. Assuming that a Purchase Contract Agreement relating to the
Purchase Contracts (the "Purchase Contract Agreement") and such Purchase
Contracts has been duly authorized, when (i) the Registration Statement has
become effective under the Act, (ii) the Purchase Contract Agreement has been
duly executed and delivered, (iii) the terms of the Purchase Contracts and of
their issuance and sale have been duly established in conformity with the
Purchase Contract Agreement so as not to violate any applicable law or result
in a default under or breach of any agreement or instrument binding upon
SunAmerica and so as to comply with any requirement or restriction imposed by
any court or governmental or regulatory body having jurisdiction over
SunAmerica and (iv) the Purchase Contracts have been duly executed and issued
in accordance with the Purchase Contract Agreement relating to such Purchase
Contracts, and issued and sold in the form and in the manner contemplated in
the Registration Statement and any prospectus supplement relating thereto,
such Purchase Contracts will constitute valid and binding obligations of
SunAmerica, enforceable in accordance with their terms, except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, and
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether considered in a
proceeding at law or in equity).
6. Assuming that the Stock Purchase Units, a Purchase Contract
Agreement relating to the Purchase Contracts comprising a part of the Stock
Purchase Units and such Purchase Contracts has been duly authorized, when (i)
the Registration Statement has become effective under the Act, (ii) the
Purchase Contract Agreement has been duly executed and delivered, (iii) the
terms of the Purchase Contracts and of their issuance and sale have been duly
established in conformity with the Purchase Contract Agreement so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon SunAmerica and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over SunAmerica, (iv) the terms of the collateral
arrangements relating to such Stock Purchase Units have been duly established
and the agreement(s) relating thereto has been duly executed and delivered, in
each case so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon SunAmerica and so as to
comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over SunAmerica, and the
collateral has been deposited with the collateral agent in accordance with
such arrangements, and (v) the Purchase Contracts have been duly executed and
issued in accordance with the Purchase Contract Agreement relating to such
Purchase Contracts, and issued and sold in the form and in the manner
contemplated in the Registration Statement and any prospectus supplement
relating thereto, such Stock Purchase Units will constitute valid and binding
obligations of SunAmerica, enforceable in accordance with their terms, except
as (a) the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, and
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether considered in a
proceeding at law or in equity).
<PAGE>
We are members of the Bar of the State of New York and our
opinion is limited to the Federal laws of the United States and the laws of
the State of New York.
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 headings
"Legal Matters" in the Prospectus and Prospectus Supplement forming a part of
the Registration Statement. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Davis Polk & Wardwell
<PAGE>
Exhibit 5.2
Letterhead of
PIPER & MARBURY L.L.P.
October 31, 1996
SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Ladies and Gentlemen:
We have acted as counsel to SunAmerica Inc., a Maryland corporation
(the "Company"), in connection with the preparation of the Registration
Statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the contemplated issuance
by the Company from time to time of (i) unsecured senior debt securities,
subordinated debt securities and junior subordinated debt securities (the
"Debt Securities"), which may be issued pursuant to a Senior Indenture dated
as of April 15, 1993 between the Company and First National Bank of Chicago,
as Trustee (as amended or supplemented, the "Senior Indenture"), a
Subordinated Indenture dated as of October 28, 1996 between the Company and
First National Bank of Chicago, as Trustee (as amended or supplemented, the
"Subordinated Indenture"), or a Junior Subordinated Indenture dated as of
March 15, 1995 between the Company and First National Bank of Chicago, as
Trustee (as amended or supplemented, the "Junior Subordinated Indenture" and,
together with the Senior Indenture and the Subordinated Indenture, the
"Indentures"); (ii) shares of preferred stock, without par value (the
"Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares") evidenced by depositary receipts (the "Receipts"); (iii)
shares of common stock of the Company, $1.00 par value per share (the "Common
Stock"); (iv) warrants to purchase Debt Securities, Preferred Stock,
Depositary Shares, Common Stock or other securities or rights (the
"Warrants"); (v) stock purchase contracts ("Purchase Contracts") which may be
issued either alone or as part of units ("Stock Purchase Units") consisting of
a Stock Purchase Contract and either (x) Debt Securities, (y) debt obligations
of third parties or (z) Preferred Securities of SunAmerica Capital Trust III,
SunAmerica Capital Trust IV, SunAmerica Capital Trust V or SunAmerica Capital
Trust VI; and (vi) guarantees of the Company of Preferred Securities of
SunAmerica Capital Trust III, SunAmerica Capital Trust IV, SunAmerica Capital
Trust V and SunAmerica Capital Trust VI (each a "Trust" and collectively, the
"Trusts") which may be issued pursuant to Guarantee Agreements (the "Guarantee
Agreements") to be executed by the Company.
l
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purpose of rendering this opinion. In addition, this
opinion is based upon the assumption that the Registration Statement and any
required post-effective amendments thereto have become effective under the
Securities Act.
On the basis of the foregoing we are of the opinion that:
1. Assuming that the Indentures, any Debt Securities and any
supplemental indenture to be entered into in connection with the issuance of
such Debt Securities have been duly authorized, when (i) the Registration
Statement has become effective under the Act; (ii) a supplemental indenture in
respect of the Debt Securities has been duly authorized, executed and
delivered; (iii) the terms of the Debt Securities and of their issuance and
sale have been duly established in conformity with the applicable Indenture
the applicable supplemental indenture relating to such Debt Securities so as
not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental or
regulatory body having jurisdiction over the Company; and (iv) the Debt
Securities have been duly executed and authenticated in accordance with the
applicable Indenture and the applicable supplemental indenture relating to
such Debt Securities, and duly issued and sold as contemplated by the
Registration Statement and any prospectus supplement relating thereto, the
Debt Securities (including any Debt Securities duly issued (x) upon the
exchange or conversion of any shares of Preferred Stock that are exchangeable
or convertible into Debt Securities, (y) upon exercise of any Warrants
exercisable for Debt Securities or (z) as part of Stock Purchase Units ) will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors rights generally, and
(b) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
2. Assuming that a Deposit Agreement relating to the Depositary
Shares (the "Deposit Agreement") has been duly authorized, when (i) the
Registration Statement has become effective under the Act; (ii) the Deposit
Agreement has been duly executed and delivered; (iii) the terms of the
Depositary Shares and of their issuance and sale have been duly established in
conformity with the Deposit Agreement relating to such Depositary Shares so as
not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental or
regulatory body having jurisdiction over the Company; (iv) the Preferred Stock
has been duly and properly authorized for issuance and Articles Supplementary
to the Charter of the Company classifying the Preferred Stock and setting
forth the terms thereof have been filed and accepted for record; (v) such
shares of Preferred Stock have been duly issued and paid for in the manner
contemplated in the Registration Statement and any prospectus supplement
relating thereto; and (vi) the Receipts evidencing the Depositary Shares are
duly issued against the deposit of the Preferred Stock in accordance with the
Deposit Agreement, such Receipts will be validly issued and will entitle the
<PAGE>
holders thereof to the rights specified therein and in the Deposit Agreement.
3. Assuming that a Warrant Agreement relating to the Warrants (the
"Warrant Agreement") has been duly authorized, when (i) the Registration
Statement has become effective under the Act; (ii) the Warrant Agreement has
been duly executed and delivered; (iii) the terms of the Warrants and of their
issuance and sale have been duly established in conformity with the Warrant
Agreement relating to such Warrants so as not to violate any applicable law or
result in a default under or breach of any agreement or instrument binding
upon the Company and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having jurisdiction
over the Company; and (iv) the Warrants have been duly executed and
countersigned in accordance with the Warrant Agreement relating to such
Warrants, and issued and sold in the form and in the manner contemplated in
the Registration Statement and any prospectus supplement relating thereto,
such Warrants will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, and (b) general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
4. When (i) the Registration Statement has become effective under
the Act; (ii) the terms of the Preferred Stock have been duly and properly
authorized for issuance and Articles Supplementary to the Charter of the
Company classifying the Preferred Stock and setting forth the terms thereof
have been filed; and (iii) such shares of Preferred Stock have been duly
issued and paid for in the manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, such shares of Preferred Stock
will be validly issued, fully paid and nonassessable.
5. When (i) the Registration Statement has become effective under
the Act; (ii) the shares of Common Stock have been duly and properly
authorized for issuance; and (iii) the shares of Common Stock have been duly
issued, sold and delivered as contemplated in the Registration Statement and
any prospectus supplement relating thereto, the shares of Common Stock
(including any Common Stock duly issued (w) upon the exchange or conversion of
any shares of Preferred Stock that are exchangeable or convertible into Common
Stock, (x) upon the exercise of any Warrants exercisable for Common Stock, (y)
upon the conversion or exchange of any Debt Securities that are convertible or
exchangeable into Common Stock or (z) pursuant to Stock Purchase Contracts),
will be validly issued, fully paid and nonassessable.
6. Assuming that a Purchase Contract Agreement relating to the
Purchase Contracts (the "Purchase Contract Agreement") and such Purchase
Contracts have been duly authorized, when (i) the Registration Statement has
become effective under the Act; (ii) the Purchase Contract Agreement has been
duly executed and delivered; (iii) the terms of the Purchase Contracts have
been duly established so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental or regulatory body having jurisdiction over the Company;
(iv) the Purchase Contracts have been duly executed and issued in accordance
with the Purchase Contract Agreement relating to such Purchase Contracts, and
issued and sold in the form and in the manner contemplated in the Registration
<PAGE>
Statement and any prospectus supplement relating thereto, such Purchase
Contracts will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, and (b) general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
7. Assuming that the Stock Purchase Units, a Purchase Contract
Agreement relating to the Purchase Contracts comprising a part of the Stock
Purchase Units and such Purchase Contracts have been duly authorized, when (i)
the Registration Statement has become effective under the Act; (ii) the
Purchase Contract Agreement has been duly executed and delivered; (iii) the
terms of the Purchase Contracts and of their issuance and sale have been duly
established in conformity with the Purchase Contract Agreement so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company; (iv) the terms of the collateral
arrangements relating to such Stock Purchase Units have been duly established
and the agreement(s) relating thereto has been duly executed and delivered, in
each case so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company, and the
collateral has been deposited with the collateral agent in accordance with
such arrangements; and (v) the Purchase Contracts have been duly executed and
issued in accordance with the Purchase Contract Agreement relating to such
Purchase Contracts, and issued and sold in the form and in the manner
contemplated in the Registration Statement and any prospectus supplement
relating thereto, such Stock Purchase Units will constitute valid and binding
obligations of the Company, enforceable in accordance with their terms,
subject to (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, and (b) general principles of equity
(regardless of whether considered in a proceeding at law or in equity).
8. Assuming that the Guarantees have been duly authorized, when
(i) the Registration Statement has become effective under the Act; (ii) the
applicable Guarantee Agreement has been duly executed and delivered, so as not
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company; and (iii) the Preferred Securities
have been duly issued and delivered by the applicable Trust as contemplated by
the Registration Statement and any prospectus supplement relating thereto, the
Guarantees will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to (a)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (b) general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
<PAGE>
The foregoing opinion is limited to the laws of the States of
Maryland and the federal laws of the United States of America. We hereby
consent to the filing of this opinion as Exhibit 5 to the Registration
Statement and to the reference to our firm in the Registration Statement and
the related Prospectus.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE>
Exhibit 5.3
[Letterhead of Richards, Layton & Finger]
October 31, 1996
SunAmerica Capital Trust III
SunAmerica Capital Trust IV
SunAmerica Capital Trust V
SunAmerica Capital Trust VI
c/o SunAmerica Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Re: SunAmerica Capital Trust III,
SunAmerica Capital Trust IV,
SunAmerica Capital Trust V and
SunAmerica Capital Trust VI
Ladies and Gentlemen:
We have acted as special Delaware counsel for SunAmerica Inc., a
Maryland corporation ("SunAmerica"), SunAmerica Capital Trust III, a Delaware
business trust ("Trust III"), SunAmerica Capital Trust IV, a Delaware business
trust ("Trust IV"), SunAmerica Capital Trust V, a Delaware business trust
("Trust V"), and SunAmerica Capital Trust VI, a Delaware business trust
("Trust VI") (Trust III, Trust IV, Trust V and Trust VI are hereinafter
collectively referred to as the "Trusts" and sometimes hereinafter
individually referred to as a "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of Trust III, dated as of August
31, 1995, as filed in the office of the Secretary of the State of
Delaware (the "Secretary of State") on September 6, 1995;
(b) The Certificate of Trust of Trust IV, dated as of August
31, 1995, as filed with the Secretary of State on September 6, 1995;
(c) The Certificate of Trust of Trust V, dated as of October
17, 1996, as filed with the Secretary of State on October 23, 1996;
(d) The Certificate of Trust of Trust VI, dated as of October
<PAGE>
17, 1996, as filed with the Secretary of State on October 23, 1996
(the Certificates of Trust described in items (a)-(d) are hereinafter
collectively referred to as the "Certificates of Trust");
(e) The Declaration of Trust of Trust III, dated as of August
31, 1995, between SunAmerica and the trustees of Trust III named
therein;
(f) The Declaration of Trust of Trust IV, dated as of August
31, 1995, between SunAmerica and the trustees of Trust IV named
therein;
(g) The Declaration of Trust of Trust V, dated as of October
17, 1996, between SunAmerica and the trustees of Trust V named
therein;
(h) The Declaration of Trust of Trust VI, dated as of October
17, 1996, between SunAmerica and the trustees of Trust VI named
therein;
(i) Amendment No. 1 to the Registration Statement (the
"Registration Statement") on Form S-3, including a preliminary
prospectus (the "Prospectus"), relating to the Preferred Securities
of the Trusts representing preferred undivided beneficial interests
in the assets of the Trusts (each, a "Preferred Security" and
collectively, the "Preferred Securities"), filed by SunAmerica and
the Trusts with the Securities and Exchange Commission on October 25,
1996;
(j) A form of Amended and Restated Declaration of Trust for
each of the Trusts, to be entered into between SunAmerica, the
trustees of the Trust named therein, and the holders, from time to
time, of the undivided beneficial interests in the assets of such
Trust (including the exhibits thereto) (collectively, the
"Declarations" and individually, a "Declaration"), attached as an
exhibit to the Registration Statement; and
(k) A Certificate of Good Standing for each of the Trusts,
dated October 31, 1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declarations.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (k) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (k) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there
exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no
independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth therein
and the additional matters recited or assumed herein, all of which we have
assumed to be true, complete and accurate in all material respects.
<PAGE>
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that each of the
Declarations constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the applicable Trust, and that the Declarations
and the Certificates of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its organization or formation, (iii) the legal capacity
of natural persons who are parties to the documents examined by us, (iv) that
each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to
whom a Preferred Security is to be issued by the Trusts (collectively, the
"Preferred Security Holders") of a Preferred Security Certificate for such
Trust and the payment for such Preferred Security, in accordance with the
Declarations and the Registration Statement, and (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Declarations and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware was we have considered necessary
or appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:
1. Each of the Trusts has been duly created and is validly existing
in good standing as a business trust under the Business Trust Act.
2. The Preferred Securities of each Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the applicable
Trust.
3. The Preferred Security Holders, as beneficial owners of the
applicable Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware. We note
that the Preferred Security Holders may be obligated pursuant to the
applicable Declaration, to (i) provide indemnity and security in connection
with and pay taxes or governmental charges arising from transfers of Preferred
<PAGE>
Security Certificates and the issuance of replacement Preferred Security
Certificates, (ii) provide security and indemnity in connection with requests
of or directions to the Property Trustee to exercise its rights and remedies
under the applicable Declaration, and (iii) undertake as a party litigant to
pay costs in any suit for the enforcement of any right or remedy under the
applicable Declaration or against the Property Trustee, to the extent provided
in the applicable Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above,
without our prior written consent, this opinion may not be furnished or quoted
to, or relied upon by, any other person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
Exhibit 8.1
[LETTERHEAD OF DAVIS POLK & WARDWELL]
October 31, 1996
SunAmerica, Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Re: SunAmerica, Inc. -- 7,000,000 PERCS Units
Dear Sirs:
We have acted as tax counsel for SunAmerica, Inc. (the
"Company") in connection with the issuance of the Company's 7,000,000 PERCS
Units (the "Units"). We hereby confirm our opinion (the "Opinion") set forth
under the caption "Certain United States Federal Income Tax Considerations"
in the prospectus supplement dated October 31, 1996, subject to completion,
(the "Prospectus Supplement") to the prospectus (the "Prospectus") that is
part of the Registration Statement to be filed by the Company with the
Securities Exchange Commission.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement relating to the offering of the Units and the
use of our name under the caption "Certain United States Federal Income Tax
Considerations" in the Prospectus Supplement. 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
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituitng part of this Registration Statement on Form S-3 of our report
dated November 6, 1995 appearing on page F-2 of SunAmerica Inc.'s Annual
Report on Form 10-K for the year ended September 30, 1995. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedules, which appears on page S-2 of such Annual Report on Form 10-K. We
also consent to the reference to us under the heading "Experts".
PRICE WATERHOUSE LLP
Los Angeles California
October 31, 1996
<PAGE>
Exhibit 23.2
[Letterhead of SunAmerica, Inc.]
October 31, 1996
SunAmerica, Inc.
1 SunAmerica Center
Los Angeles, California 90067-6022
Re: Letter of Consent
Ladies and Gentlemen:
I hereby consent to the use of my name under the heading "Legal
Matters" in the Prospectus and Prospectus Supplement forming a part of the
Registration Statement. In giving such consent, I do not thereby concede
that I am within the category of persons whose consent is required under
Section 7 of the Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Susan L. Harris
Susan L. Harris
Senior Vice President and
General Counsel-Corporate Affairs
<PAGE>
Exhibit 23.6
[Letterhead of Coopers & Lybrand]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
SunAmerica Inc. on Form S-3 (File No. 333-14201) of our reports dated January
26, 1996 and January 27, 1995, on our audits of the financial statements of
Ford Life Insurance Company as of December 31, 1995, 1994 and 1993, and for the
years ended December 31, 1995, 1994 and 1993, which reports are included in
SunAmerica Inc.'s Amendment No. 1 on Form 8-K/A and Form 8-K dated May 7, 1996
and December 12, 1995, respectively. We also consent to the reference to our
firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
October 31, 1996
<PAGE>
Exhibit 25.4
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
______________________
SUNAMERICA CAPITAL TRUST III
(Exact name of obligor as specified in its charter)
Delaware 95-6994850
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Stephen J. Giurlando
--------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
<PAGE>
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.5
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA CAPITAL TRUST IV
(Exact name of obligor as specified in its charter)
Delaware 95-6994851
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of
1939 (the "Act") and Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
<PAGE>
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Stephen J. Giurlando
--------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
<PAGE>
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.6
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
____________________________
SUNAMERICA CAPITAL TRUST V
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
<PAGE>
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Stephen J. Giurlando
--------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic of-
fices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
<PAGE>
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.7
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
____________________________
SUNAMERICA CAPITAL TRUST VI
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
<PAGE>
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Stephen J. Giurlando
--------------------------------
Name: Stephen J. Giurlando
Title: Assistant Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
<PAGE>
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.8
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA INC.
(Exact name of obligor as specified in its charter)
Maryland 86-0176061
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
SunAmerica Capital Trust III
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule
24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration Statement
No. 33-29637.)
<PAGE>
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an amendment
to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
-----------------------
Name: Walter N. Gitlin
Title: Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
<PAGE>
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
- ------ ---------------
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
<PAGE>
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances exe-
cuted and outstanding .............. 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.9
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA INC.
(Exact name of obligor as specified in its charter)
Maryland 86-0176061
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
SunAmerica Capital Trust IV
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
______________________________
Name: Walter N. Gitlin
Title: Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to
repurchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
<PAGE>
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.10
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA INC.
(Exact name of obligor as specified in its charter)
Maryland 86-0176061
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
SunAmerica Capital Trust V
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and Rule 24 of
the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
-------------------------------
Name: Walter N. Gitlin
Title: Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
<PAGE>
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.11
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA INC.
(Exact name of obligor as specified in its charter)
Maryland 86-0176061
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of
SunAmerica Capital Trust VI
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a
corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
______________________________
Name: Walter N. Gitlin
Title: Vice President
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,224,886
<PAGE>
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
<PAGE>
Exhibit 25.12
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SUNAMERICA INC.
(Exact name of obligor as specified in its charter)
Maryland 86-0176061
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1 SunAmerica Center
Los Angeles, California 90067-6022
(Address of principal executive offices) (Zip code)
______________________
Prepaid Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant
to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and
Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
<PAGE>
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 23rd day of October, 1996.
THE BANK OF NEW YORK
By: /s/ Byron Merino
-------------------------
Name: Byron Merino
Title: Assistant Treasurer
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<PAGE>
Dollar Amounts
ASSETS in Thousands
- ------ --------------
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,461,550
Interest-bearing balances .......... 835,563
Securities:
Held-to-maturity securities ........ 802,064
Available-for-sale securities ...... 2,051,263
Federal funds sold in domestic
offices of the bank:
Federal funds sold ................... 3,885,475
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................27,820,159
LESS: Allowance for loan and
lease losses ..............509,817
LESS: Allocated transfer risk
reserve......................1,000
Loans and leases, net of unearned
income, allowance, and reserve 27,309,342
Assets held in trading accounts ...... 837,118
Premises and fixed assets (including
capitalized leases) ................ 614,567
Other real estate owned .............. 51,631
Investments in unconsolidated
subsidiaries and associated
companies .......................... 225,158
Customers' liability to this bank on
acceptances outstanding ............ 800,375
Intangible assets .................... 436,668
Other assets ......................... 1,247,908
-----------
Total assets ......................... $41,558,682
===========
LIABILITIES
Deposits:
In domestic offices ................ $18,851,327
Noninterest-bearing .......7,102,645
Interest-bearing .........11,748,682
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 10,965,604
Noninterest-bearing ..........37,855
Interest-bearing .........10,927,749
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
<PAGE>
Federal funds purchased ............ 1,224,886
Securities sold under agreements
to repurchase .................... 29,728
Demand notes issued to the U.S.
Treasury ........................... 118,870
Trading liabilities .................. 673,944
Other borrowed money:
With original maturity of one year
or less .......................... 2,713,248
With original maturity of more than
one year ......................... 20,780
Bank's liability on acceptances
executed and outstanding ........... 803,292
Subordinated notes and debentures .... 1,022,860
Other liabilities .................... 1,590,564
-----------
Total liabilities .................... $38,015,103
===========
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,078,197
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 3,197
Cumulative foreign currency
translation adjustments ........... ( 5,765)
Total equity capital ................ 3,543,579
----------
Total liabilities and equity
capital ........................... $41,558,682
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
