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PROSPECTUS
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SunAmerica Inc.
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$50,000,000 Deferred Compensation Obligations
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Registered Representatives' Deferred Compensation Plan
This prospectus relates to deferred compensation obligations of
SunAmerica Inc. under the Registered Representatives' Deferred Compensation
Plan (the "Plan"). Participation in the Plan is limited to eligible persons
under contract [as a securities licensed representative] to a subsidiary of
SunAmerica Inc. (the "Company"). The interests under the Plan will be
general unsecured debt obligations which will rank pari passu with other
unsecured and unsubordinated indebtedness of the Company.
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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.
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No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offer contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to
sell or the solicitation of an offer to buy any of the securities offered
hereby in any state to or from any person to whom it is unlawful to make or
solicit such offer in such state. Neither the delivery of this Prospectus
nor any sales made hereunder shall under any circumstances create any
implication that there has been no change in the information herein since the
date hereof.
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.
The date of this Prospectus is September 9, 1996.
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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. The Company has filed with the Commission a Registration
Statement on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered by this Prospectus.
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto. In addition, certain documents
filed by the Company with the Commission have been incorporated in this
Prospectus by reference. See "Incorporation of Certain Documents by
Reference." Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, are qualified
in all respects by reference to the copy of such document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission. Each
such statement is subject to and qualified in its entirety by such reference.
For further information with respect to the Company and the securities
offered hereby, reference is made to the Registration Statement, including
the exhibits thereto, and the documents incorporated herein by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the
following documents previously filed by the Company with the Commission
pursuant to the 1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended
September 30, 1995.
2. Quarterly Report 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. 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 27, 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
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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 to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the information that has been incorporated by
reference in the Prospectus (not including exhibits to the information that
is incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Requests for such document shall be directed to SunAmerica
Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022, Attention:
Vice President, Investor Relations (telephone) (310) 772-6000.
THE COMPANY
The Company is a diversified financial services company specializing
in retirement savings products and services. At March 31, 1996, the Company
held $34.37 billion of assets throughout its businesses, including $22.01
billion of assets on its balance sheet, $2.14 billion of assets managed in
mutual funds and private accounts and $10.22 billion under custody in
retirement trust accounts. Together, the Company's life insurance
subsidiaries rank among the largest U.S. issuers of annuities. Complementing
these annuity operations are the Company's asset management operations; its
three broker/dealer subsidiaries, 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, other
unaffiliated broker/dealers, independent general insurance agents and other
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 $645 million in annuity
reserves. On February 29, 1996, the Company acquired Ford Life Insurance
Company, which had annuity reserves of approximately $3.06 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 approximately 6,600.
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The principal executive offices of the Company are located at 1
SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310)
772-6000.
USE OF PROCEEDS
The Company will not receive any proceeds from the deferred
compensation obligations registered hereby. The deferred compensation
obligations are unsecured obligations of the Company to pay deferred
compensation in the future in accordance with the terms of the Registered
Representatives' Deferred Compensation Plan.
<TABLE>
<CAPTION> CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Nine Nine
months months
Years ended September 30, ended ended
------------------------------------------------------- June 30, June 30,
1991 1992 1993 1994 1995 1995 1996
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(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to 2.7x 4.0x 6.1x 5.8x 5.8x 5.8x 5.2x
fixed charges
(which include
dividends paid on
preferred securities
of grantor trusts
and interest
incurred on senior
debt, but exclude
interest incurred
on fixed annuities,
guaranteed investment
contracts and trust
deposits)
Ratio of earnings to 1.1x 1.2x 1.4x 1.5x 1.5x 1.5x 1.5x
fixed charges
(which include
dividends paid on
preferred securities
of grantor trusts
and interest
incurred on senior
debt, fixed
annuities,
guaranteed investment
contracts and trust
deposits)
</TABLE>
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DESCRIPTION OF THE DEFERRED COMPENSATION PLAN
The Company has adopted the Registered Representatives' Deferred
Compensation Plan (the "Plan") which will be offered to eligible independent
contractor registered representatives of the Company's broker/dealer
subsidiaries, which currently include Advantage Capital Corporation, Royal
Alliance Associates, Inc. and SunAmerica Securities, Inc. (each a
"Broker/Dealer Subsidiary" and collectively, the "Broker/Dealer
Subsidiaries"). The purpose of the Plan is to (1) attract and retain
individuals to become licensed with the Broker/Dealer Subsidiaries to market
the financial products offered for sale by the Broker/Dealer Subsidiaries,
and (2) assist in the Representatives' long range financial planning by
offering an alternative for investing monthly commission and fee payments
(collectively, the "Earnings") on a tax-deferred basis.
Participation
Enrollment in the Plan is on a voluntary basis once a registered
representative of a Broker/Dealer Subsidiary becomes eligible.
Representatives will be eligible to participate in the Plan on the first day
of any month after the representative has been licensed with a Broker/Dealer
Subsidiary for three full months unless determined to be eligible sooner by
the President of the Broker/Dealer Subsidiary. Once a representative becomes
eligible to participate, he or she will remain eligible to participate in the
Plan until it is amended or terminated or until such representative is no
longer affiliated with a Broker/Dealer Subsidiary.
The Deferred Earnings
Under the Plan, each Broker/Dealer Subsidiary will offer its
respective representatives an opportunity to enter into agreements for the
deferral of a specified percentage of such representatives' Earnings. Each
representative participating in the Plan (a "Participant") will execute a
Deferred Compensation Agreement (the "Agreement") and an Enrollment/Change
Form which, collectively, will set forth the obligations of the Participant
and the Company with respect to the Plan.
The Company shall have the sole obligation to pay to the Participant
the Earnings deferred under the Plan. The Company's obligation will be a
general unsecured obligation to pay to the Participants the deferred
Earnings, with the adjustments provided for by the Plan, in the future in
accordance with the terms of the Plan. Such obligation will rank pari passu
with other unsecured and unsubordinated indebtedness of the Company from the
time outstanding.
The amount of Earnings to be deferred by each Participant will be
determined in accordance with the Plan, based on the election by each
Participant. Participants may elect to defer from 1% to 100% of his or her
respective Earnings. Each Participant may change the amount of Earnings to
be deferred one time per calendar year, which will be effective the following
calendar year. However, a Participant may reduce his or her deferral amount
to zero at any time during the year, which change will become effective as
soon as is administratively possible but thereafter Participant may not defer
any Earnings under the Plan for 12 full months.
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The Company will create a deferral account (the "Account") for each
Participant. The Account is solely for purposes of determining the value of
the deferred Earnings. A Participant's deferred Earnings will be credited to
that Participant's Account within three business days of the date the
Earnings otherwise would have been paid. Earnings in the Account will be
indexed to one or more investment options individually selected by each
Participant from a list of available investment media (the "Valuation
Funds"). The value of each Participant's Account will be adjusted to reflect
the investment experience, whether positive or negative, of the Valuation
Fund(s) selected by the Participant. Participants may change the Valuation
Fund(s) used to measure the value of the Account four times per year.
Because the value of the Account and therefore the deferred Earnings will
vary with the investment experience of the Valuation Fund(s) selected by
Participant, participation in the Plan entails investment risk which will be
borne solely by Participant. The Company does not guarantee the investment
performance of the Valuation Fund(s).
As for any Participant who participated in the Royal Alliance
Deferred Compensation Plan, the value of all monies deferred thereunder
("Prior Deferrals") will be transferred to Participant's Deferral Account
under the Plan. All elections made by Participant at the time of enrollment
in the Plan will apply to such Prior Deferrals and all Prior Deferrals will
be subject to the terms and conditions of the Plan.
The currently available Valuation Funds are the following retail
mutual funds: the SunAmerica Money Market Fund, the SunAmerica U.S.
Government Securities Fund, the SunAmerica Balanced Assets Fund and the
SunAmerica Small Company Growth Fund. Each Valuation Fund's investment
objective is stated below:
1. The SunAmerica Money Market Fund seeks high current income
consistent with liquidity and stability by investing
primarily in high quality money market instruments.
2. The SunAmerica U.S. Government Securities Fund seeks high
current income by investing primarily in fixed income
securities.
3. The SunAmerica Balanced Assets Fund seeks to conserve principal by
maintaining a balanced portfolio of stocks and bonds.
4. The SunAmerica Small Company Growth Fund seeks capital
appreciation by investing primarily in equity securities.
The Company reserves the right to terminate the availability of any
Valuation Fund and add additional Valuation Funds at any time.
Participants do not have any right, title or interest in or to any
funds in the Account. All funds in the Account shall continue to be part of
the general funds of the Company and Participants shall have no property
interest therein or in any Valuation Funds or in any specific assets of the
Company. Participant's right or the right of any other person to receive the
value of the Account cannot be alienated, sold, assigned, pledged, encumbered
or otherwise hypothecated, except by the laws of descent or as otherwise
permitted by the terms of the Plan.
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All Earnings deferred under the Plan will be on a tax deferred
basis. Participant will have taxable ordinary income for Federal income tax
purposes equal to any amount received.
The obligation of the Company to pay to each Participant the value
of the Account is not convertible into any other security of the Company.
The obligation will not have the benefit of a negative pledge or any other
affirmative or negative covenant on the part of the Company.
Payment of Deferred Earnings
The Account is not subject to redemption, in whole or in part, prior
to the payment date selected by Participant, except upon termination of the
independent contractor relationship with the Broker/Dealer Subsidiary, upon
the death, disability or retirement of Participant, or at the option of the
Company or the Broker/Dealer Subsidiaries. The Account will be paid out in
ten annual installments unless Participant selects an optional payment
schedule. If (1) Participant's independent contractor relationship with the
Broker/Dealer Subsidiaries is terminated; (2) Participant dies; or (3) the
value of the Deferral Account is $3500 or less at the time an event giving
rise to the right of distribution occurs, then the Account will be paid out
in a lump sum. Each Participant may designate a beneficiary to receive
distributions from the Account in the event of Participant's death.
The Company shall have the full right to set-off any obligation of
a Participant owing to the Company or any Broker/Dealer Subsidiary against
amounts owing to Participant under the Plan.
Amendment and Termination
The Company reserves the right to amend or terminate the Plan at any
time, with or without notice. No amendment or termination will adversely
affect the right of a Participant to receive the value of his or her Account
as of such amendment or termination.
Administration
A management committee (the "Committee") will be created to
administer the Plan to Participants. The Committee will be comprised of any
five (5) officers of the Company as selected or any Vice Chairman of the
Company. The Committee shall interpret and administer the Plan and the
Agreement. The Committee's interpretations and constructions shall be
binding and conclusive on all persons for all purposes.
PLAN OF DISTRIBUTION
The securities registered hereby will be offered by each of the
Broker/Dealer Subsidiaries directly to its respective Participants. Such
securities will not be offered through agents, underwriters or dealers.
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Legal Matters
The validity of the Company's obligation under the Plan will be
passed upon by Piper & Marbury L.L.P., Baltimore, Maryland.
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.
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