============================================================================
As filed with the Securities and Exchange Commission on October 16, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<S> <C> <C>
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 Registrant as (State or other jurisdiction of (I.R.S. employer
specified in its charter) incorporation or organization) identification number)
</TABLE>
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.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
CALCULATION OF REGISTRATION FEE
<TABLE>
<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 to purchase
Debt Securities................................
Warrants of SunAmerica to purchase
preferred stock or depositary shares...........
Warrants of SunAmerica 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
Preferred Securities of SunAmerica
Capital Trust III..............................
Preferred Securities of SunAmerica
Capital Trust IV...............................
Preferred Securities of SunAmerica
Capital Trust V ...............................
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).........................
<FN>
- -----------
(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) 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.
</TABLE>
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 No. 33-62405
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 No. 33-62405 represents the maximum amount of
Securities which are expected to be offered for sale.
===============================================================================
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 16, 1996
[LOGO]
PROSPECTUS
$1,750,000,000
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 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 (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] [each SunAmerica Trust] 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 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.
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 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; (vi) 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; and (vii) 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, and the terms of the offering and sale thereof.
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.
------------------
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.
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, beneficially owns all of the beneficial interests in each
SunAmerica Trust. Each holder of Preferred Securities of a SunAmerica Trust
will be furnished annually with unaudited financial statements of such Trust
as soon as available after the end of the Trust's fiscal year.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously filed by the Company with the Commission pursuant to the
1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended September 30, 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.$").
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 two broker-dealers, which
the Company believes, based on industry data, represent the largest network of
independent registered representatives in the nation; and its trust company,
which provides administrative and custodial services to qualified retirement
plans. Through these subsidiaries, the Company specializes in the sale of
tax-deferred long-term savings products and investments to the expanding
preretirement savings market. The Company markets fixed annuities and
fee-generating variable annuities, mutual funds and trust services, as well as
guaranteed investment contracts. The Company's products are distributed
through a broad spectrum of financial services distribution channels,
including independent registered representatives of the Company's
broker-dealer subsidiaries and unaffiliated broker-dealers, independent
general insurance agents and financial institutions.
The principal executive offices of the Company are located at 1 SunAmerica
Center, Los Angeles, California 90067-6022, telephone number (310) 772-6000.
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
August 31, 1995 and, in the case of SunAmerica Capital Trust V and VI, on
October __, 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 or
incidental thereto. The rights of the holders of the Preferred Securities,
including economic rights, rights to information and voting rights, are set
forth in the applicable Declaration, the Business Trust Act and the Trust
Indenture Act.
The number of trustees (the "Trustees") of each SunAmerica Trust shall
initially be five. Three of such Trustees (the " Regular Trustees") are
individuals who are employees or officers of the Company. The fourth such
trustee will be The Bank of New York, which is unaffiliated with the Company
and which will serve as the property trustee (the "Property Trustee") and act
as the indenture trustee for purposes of the Trust Indenture Act. The fifth
such trustee is an affiliate of The Bank of new York that has its principal
place of business in the State of Delaware (the "Delaware Trustee"). Pursuant
to each Declaration, legal title to the Junior Subordinated Debt Securities
purchased by a SunAmerica Trust will be held by the Property Trustee for the
benefit of the holders of the Trust Securities of such SunAmerica Trust and
the Property Trustee will have the power to exercise all rights, powers and
privileges under the Junior Subordinated Debt Indenture (as defined under
"Description of the Junior Subordinated Debt Securities") with respect to the
Junior Subordinated Debt Securities. In addition, the Property Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments in respect of the Junior
Subordinated Debt Securities purchased by a SunAmerica Trust for the benefit
of the holders of 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
United States federal income tax purposes as an association taxable as a
corporation or a partnership and that such SunAmerica Trust will continue
to be classified as a grantor trust for United States federal income tax
purposes.
The books and records of each SunAmerica Trust will be maintained at the
principal office of such SunAmerica Trust and will be open for inspection by a
holder of Preferred Securities of such SunAmerica Trust or his representative
for any purpose reasonably related to its interest in such SunAmerica Trust
during normal business hours. Each holder of Preferred Securities will be
furnished annually with unaudited financial statements of the applicable
SunAmerica Trust as soon as available after the end of such SunAmerica Trust's
fiscal year.
Except as provided below or under the Business Trust Act and the Trust
Indenture Act, holders of Preferred Securities will have no voting rights. In
certain circumstances set forth in a Prospectus Supplement, holders of
Preferred Securities of a SunAmerica Trust shall have the right to vote, as a
single class, for the appointment of a Special Regular Trustee who need not be
an employee or officer of or otherwise affiliated with the Company. The
Special Regular Trustee shall have the same rights, powers and privileges
under the Declaration as the Regular Trustees.
The Property Trustee, for the benefit of the holders of the Trust
Securities of a SunAmerica Trust, is authorized under each Declaration to
exercise all rights under the 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 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 "Depositary") named
in an accompanying Prospectus Supplement or its nominee. Under each
Declaration:
(i) such SunAmerica Trust and the Trustees thereof shall be entitled to
deal with the Depositary (or any successor depositary) for all purposes,
including the payment of distributions and receiving approvals, votes or
consents under the related Declaration, and except as set forth in the
related Declaration with respect to the Property Trustee, shall have no
obligation to persons owning a beneficial interest in Preferred Securities
("Preferred Security Beneficial Owners") registered in the name of and held
by the Depositary or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary (or any successor depositary) and
shall be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Depositary and/or its
participants. With respect to Preferred Securities registered in the name
of and held by the Depositary or its nominee, all notices and other
communications required under each Declaration shall be given to, and all
distributions on such Preferred Securities shall be given or made to, the
Depositary (or its successor).
The specific terms of the depositary arrangement with respect to the Preferred
Securities will be disclosed in the applicable Prospectus Supplement.
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs
and expenses of the applicable SunAmerica Trust, including the fees and
expenses of its Trustees and any taxes and all costs and expenses with respect
thereto, to which such SunAmerica Trust may become subject, except for United
States withholding taxes. The foregoing obligations of the Company under each
Declaration are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any
such Creditor may enforce such obligations of the Company directly against the
Company and the Company has irrevocably waived any right or remedy to require
that any such Creditor take any action against any SunAmerica Trust or any
other person before proceeding against the Company. The Company has agreed in
each Declaration to execute such additional agreements as may be necessary or
desirable in order to give full effect to the foregoing.
The foregoing description summarizes the material terms of the 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.
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
<FN>
- -------------------
(1) In computing the ratio of earnings to fixed charges (excluding interest
incurred on reserves and trust deposits), fixed charges consist of
interest expense on senior and subordinated indebtedness and dividends
on the preferred securities of 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.
</TABLE>
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 tine 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 a Supplemental Indenture dated as of June 28, 1993 (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 April 15, 1993 (the
"Subordinated Debt Indenture") between the Company and The First National Bank
of Chicago, as Trustee. The Senior Debt Indenture and the Subordinated Debt
Indenture are sometimes hereinafter referred to individually as an "Indenture"
and collectively as the "Indentures". The First National Bank of Chicago, in
its capacity as trustee under either or both of the Indentures, is referred to
hereinafter as the "Trustee". The Indentures are included as exhibits to the
Registration Statement of which this Prospectus is a part. The following
description summarizes the material terms of the Indentures and the Debt
Securities and is qualified in its entirety by reference to the detailed
provisions of the applicable Indenture, which contains the full text of such
provisions, including the definition of certain terms used herein, and for
other information regarding the Debt Securities. Numerical references in
parentheses below are to sections in the applicable Indenture. Wherever
particular sections or defined terms of the applicable Indenture are referred
to, such sections or defined terms are incorporated herein by reference as
part of the statement made, and the statement is qualified in its entirety by
such reference. The Indentures are substantially identical except for
provisions relating to subordination and the Company's negative pledge and
restrictions on certain dispositions. Any Debt Securities offered by this
Prospectus and the accompanying Prospectus Supplement are referred to herein
as the "Offered Debt Securities".
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 on or
relating to currencies in which the Offered Debt Securities are denominated
and/or in which principal, premium, if any, and/or any interest will or may be
payable; (iii) any date of maturity; (iv) interest rate or rates (or the
method by which such rate will be determined), if any; (v) the dates on which
any such interest will be payable; (vi) the place or places where the
principal of, premium, if any, and interest, if any, on the Offered Debt
Securities will be payable; (vii) any redemption, repayment or sinking fund
provisions; (viii) whether, in the case of Subordinated Debt Securities, such
Offered Debt Securities are convertible into Common Stock of the Company; (ix)
whether the Offered Debt Securities will be issuable in registered form
("Registered Debt Securities") or bearer form ("Bearer Debt Securities") or
both and, if Bearer Debt Securities are issuable, any restrictions applicable
to the place of payment of any principal of, premium, if any, and interest on
such Bearer Debt Securities, to the exchange of one form for another and to
the offer, sale and delivery of such Bearer Debt Securities (except that under
current United States federal income tax law, Registered Debt Securities will
not be exchangeable into Bearer Debt Securities); (x) any applicable United
States federal income tax consequences, including whether and under what
circumstances the Company will pay additional amounts on Offered Debt
Securities held by a person who is not a U.S. person (as hereinafter defined)
in respect of any tax, assessment or governmental charge withheld or deducted
and, if so, whether the Company will have the option to redeem such Debt
Securities rather than pay such additional amounts; (xi) the proposed listing,
if any, of the Offered Debt Securities on any securities exchange; and (xii)
any other specific terms of the Offered Debt Securities, including any
modifications of or additions to the events of default or covenants provided
for with respect to such Debt Securities, and any terms which may be required
by or advisable under applicable laws or regulations not inconsistent with the
applicable Indenture.
Debt Securities may be presented for exchange and Registered Debt
Securities may be presented for transfer in the manner, at the places and
subject to the restrictions set forth in the Debt Securities and the
Prospectus Supplement. Such services will be provided without charge, other
than any tax or other governmental charge payable in connection therewith, but
subject to the limitations provided in the applicable Indenture. Debt
Securities in bearer form and the coupons, if any, appertaining thereto will
be transferable by delivery.
Debt Securities will bear interest at a fixed rate or a floating rate.
Debt Securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a discount below
their stated principal amount. Special United States federal income tax
considerations applicable to any such discounted Debt Securities or to certain
Debt Securities issued at par which are treated as having been issued at a
discount for United States federal income tax purposes are described in the
relevant Prospectus Supplement.
Debt Securities may be issued, from time to time, with the principal
amount payable on any principal payment date, or the amount of interest
payable on any interest payment date, to be determined by reference to one or
more currency exchange rates, commodity prices, equity indices or other
factors. Holders of such Debt Securities may receive a principal amount on
any principal payment date, or a payment of interest on any interest payment
date, that is greater than or less than the amount of principal or interest
otherwise payable on such dates, depending upon the value on such dates of the
applicable currency, commodity, equity index or other 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 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. The Company also
expects that payments by participants to owners of beneficial interests in
such Registered Global Security held through such participants will be
governed by standing customer instructions and customary practices, as is
now the case with the securities held for the accounts of customers in
bearer form or registered in "street name", and will be the responsibility
of such participants.
If the Depositary for any Debt Securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary
or ceases to be a clearing agency registered under the 1934 Act, and a
successor Depositary registered as a clearing agency under the 1934 Act is not
appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received
by the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one
or more global Securities (a "Bearer Global Security") that will be deposited
with a common depositary for Euro-clear and CEDEL, or with a nominee for such
depositary identified in the Prospectus Supplement relating to such series.
The specific terms and procedures, including the specific terms of the
depositary arrangement and any specific procedures for the issuance of Debt
Securities in definitive form in exchange for a Bearer Global Security, with
respect to any portion of a series of Debt Securities to be represented by a
Bearer Global Security will be described in the Prospectus Supplement relating
to such series.
Senior Debt
Payment of the principal of, premium, if any, and interest on Debt
Securities issued under the Senior Debt Indenture will rank pari passu with
all other unsecured and unsubordinated debt of the Company.
Subordinated Debt
Subordination. Payment of the principal of, premium, if any, and
interest on Debt Securities issued under the Subordinated Debt Indenture will
be subordinate and junior in right of payment, to the extent and in the manner
set forth in the Subordinated Debt Indenture, to all "Senior Indebtedness" of
the Company. The Subordinated Debt Indenture defines "Senior Indebtedness" as
the principal of and premium, if any, and interest on (a) all indebtedness of
the Company, whether outstanding on the date of the Subordinated Debt
Indenture or thereafter created, (i) for money borrowed by the Company, (ii)
for money borrowed by, or obligations of, others and either assumed or
guaranteed, directly or indirectly, by the Company, (iii) in respect of
letters of credit and acceptances issued or made by banks, or (iv)
constituting purchase money indebtedness, or indebtedness secured by property
included in the property, plant and equipment accounts of the Company at the
time of the acquisition of such property by the Company, for the payment of
which the Company is directly liable, and (b) all deferrals, renewals,
extensions and refundings of, and amendments, modifications and supplements
to, any such indebtedness. As used in the preceding sentence the term
"purchase money indebtedness" means indebtedness evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or
other security interest) issued or assumed as all or a part of the
consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, unless by its terms such indebtedness is
subordinate to other indebtedness of the Company. Notwithstanding anything to
the contrary in the Subordinated Debt Indenture or the Subordinated Debt
Securities, Senior Indebtedness shall not include, (i) any indebtedness of the
Company which, by its terms or the terms of the instrument creating or
evidencing it, is subordinate in right of payment to or pari passu with the
Subordinated Debt Securities or (ii) any indebtedness of the Company to a
subsidiary of the Company. (Subordinated Debt Indenture, Section 1.1) The
Subordinated Debt Indenture does not contain any limitation on the amount of
Senior Indebtedness that can be incurred by the Company. Indebtedness issued
or to be issued pursuant to the Indenture dated March 15, 1995 (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 and payable before their expressed
maturity because of the occurrence of an Event of Default pursuant to
Section 5.1 of the Subordinated Debt Indenture (under circumstances other
than as set forth in clause (a) above), then the holders of all Senior
Indebtedness shall first be entitled to receive payment of the full amount
due thereon in money or money's worth, before the holders of any of such
Subordinated Debt Securities or coupons appertaining thereto are entitled
to receive a payment on account of the principal of, premium, if any, or
interest on the indebtedness evidenced by such Subordinated Debt Securities
or of such coupons appertaining thereto. In the event and during the
continuation of any default in payment of any Senior Indebtedness or if any
Event of Default shall exist under any Senior Indebtedness, as "Event of
Default" is defined therein or in the agreement under which the same is
outstanding, no payment of the principal or interest on the Subordinated
Debt Securities or coupons shall be made. (Subordinated Debt Indenture,
Article 13) If this Prospectus is being delivered in connection with a
series of Subordinated Debt Securities, the accompanying Prospectus
Supplement will set forth the approximate amount of Senior Indebtedness
outstanding as of the end of the most recent fiscal quarter.
Conversion Rights. The terms and conditions, if any, on which
Subordinated Debt Securities are convertible into Common Stock of the Company
will be set forth in the prospectus supplement relating thereto. Such terms
will include the conversion price, the conversion period, provisions as to
whether conversion will be at the option of the holder or the Company, the
events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of the convertible
Subordinated Debt Securities; and such terms may include provisions under
which the number of shares of Common Stock to be received by the holders of
the Subordinated Debt Securities would be calculated according to the market
price of the Common Stock as of a time stated in the prospectus supplement.
Certain Covenants of the Company
Limitations on Liens. The Senior Debt Indenture provides that the
Company and its Restricted Subsidiaries (as defined below) may not issue,
assume, incur or guarantee any indebtedness for borrowed money secured by a
mortgage, pledge, lien or other encumbrance (except for certain liens
specifically permitted by the Senior Debt Indenture), directly or indirectly,
upon any shares of the Voting Stock (as defined in the Senior Debt Indenture)
of a Restricted Subsidiary which shares are owned by the Company or its
Restricted Subsidiaries without effectively providing that the Debt Securities
issued under the Senior Debt Indenture (and if the Company so elects, any
other indebtedness of the Company ranking on a parity with such Debt
Securities) shall be secured equally and ratably with, or prior to, any such
secured indebtedness so long as such indebtedness remains outstanding. The
foregoing restrictions, however, do not apply to liens upon any shares of
Voting Stock of any corporation existing at the time such corporation becomes
a Restricted Subsidiary and extensions, renewals or replacements thereof.
(Senior Debt Indenture, Section 3.9)
The term "Restricted Subsidiary" means (a) so long as they are
Subsidiaries of the Company, SunAmerica Life Insurance Company 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% of the
outstanding shares of Voting Stock of which is at the time of determination
owned or controlled, directly or indirectly, by the Company. The term
"Insurance Subsidiary" means a Subsidiary registered in the state of its
domicile under the insurance laws of such state and qualified to sell
insurance products. (Senior Debt Indenture, Section 1.1)
Consolidation, Merger and Sale of Assets. Each Indenture provides that
the Company shall not consolidate or merge with or into, or transfer or lease
its assets substantially as an entirety to any person unless the Company shall
be the continuing corporation, or the successor corporation or person to which
such assets are transferred or leased shall be organized under the laws of the
United States or any state thereof or the District of Columbia and shall
expressly assume the Company's obligations on the Debt Securities and under
such Indenture, and after giving effect to such transaction no Event of
Default (as defined in such Indenture) shall have occurred and be continuing,
and certain other conditions are met. (Senior and Subordinated Debt
Indentures, Section 9.1)
This covenant would not apply to any recapitalization transaction, a
change of control of the Company or a highly leveraged transaction unless such
transactions or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. Except as may be described in a Prospectus Supplement applicable to
a particular series of Debt Securities, there are no covenants or other
provisions in the Indentures providing for a put or increased interest or that
would otherwise afford holders of Debt Securities additional protection in the
event of a recapitalization transaction, a change of control of the Company or
a highly leveraged transaction.
Restrictions on Certain Dispositions. The Senior Debt Indenture
provides that as long as any of the Senior Debt Securities remain outstanding,
the Company will not, and will not permit any Restricted Subsidiary to, issue,
sell, assign, transfer or otherwise dispose of, directly or indirectly, any of
the Voting Stock of any Restricted Subsidiary, unless (a) the issuance, sale,
assignment, transfer or other disposition is required to comply with the order
of a court or regulatory authority of competent jurisdiction, other than an
order issued at the request of the Company or of one of its Restricted
Subsidiaries; (b) the shares of Voting Stock issued, sold, assigned,
transferred or otherwise disposed of constitute directors' qualifying shares;
(c) all of the Voting Stock of a Restricted Subsidiary then owned by the
Company or by its Restricted Subsidiaries is disposed of, in a single
transaction or in a series of related transactions, for a consideration
consisting of cash or other property the fair market value of which (as
determined in good faith by the Board of Directors) is at least equal to the
Fair Value (as defined below) of such Voting Stock; or (d) after giving effect
to the issuance, sale, assignment, transfer or other disposition, the Company
and its Restricted Subsidiaries would own directly or indirectly at least 80%
of the issued and outstanding Voting Stock of such Restricted Subsidiary and
such issuance, sale, assignment, transfer or other disposition is made for a
consideration consisting of cash or other property which is at least equal to
the Fair Value of such Voting Stock. (Senior Debt Indenture, Section 9.3)
The term "Fair Value" when used with respect to any Voting Stock means the
fair value as determined in good faith by the Board of Directors of the
Company. (Senior Debt Indenture, Section 1.1) The Senior Debt Indenture does
not restrict the transfer of assets from a Restricted Subsidiary to any other
person, including the Company or another subsidiary of the Company.
Events of Default
An Event of Default is defined under each Indenture with respect to
Debt Securities of any series issued under such Indenture as being: (a)
default in payment of all or any part of the principal of the Debt
Securities of such series when due, either at maturity (or upon any
redemption), by declaration or otherwise; (b) default for 30 days in
payment of any interest on any Debt Securities of such series; (c) default
in payment of any sinking fund installment when due; (d) default for 60
days after written notice as provided in such Indenture in the observance
or performance of any other covenant or agreement in the Debt Securities of
such series or such Indenture other than a covenant included in such
Indenture solely for the benefit of a series of Debt Securities other than
such series; (e) certain events of bankruptcy, insolvency or
reorganization; or (f) an Event of Default with respect to any other
indebtedness for borrowed money (other than non-recourse obligations) of
the Company or any of its Restricted Subsidiaries, in an aggregate
principal amount exceeding $10,000,000, if such Event of Default shall
result in the acceleration of such other indebtedness under the terms of
the instrument under which such indebtedness is issued or secured, so long
as such acceleration is not cured, waived, rescinded or annulled, or such
indebtedness is not discharged, within 10 days after written notice thereof
as provided in such Indenture; provided that if any such acceleration shall
cease or be cured, waived, rescinded or annulled, then the Event of Default
by reason thereof shall be deemed likewise to have been thereupon cured.
(Senior and Subordinated Debt Indentures, Section 5.1)
Each Indenture provides that (a) if an Event of Default due to the
default in payment of principal of, premium, if any, or interest on, any
series of Debt Securities issued under such Indenture or due to the default in
the performance or breach of any other covenant or agreement of the Company
applicable to the Debt Securities of such series but not applicable to all
outstanding Debt Securities issued under such Indenture shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of each affected series (treated as
one class) issued under such Indenture and then outstanding may then declare
the principal of all Debt Securities of each such affected series and interest
accrued thereon to be due and payable immediately; and (b) if any Event of
Default due to a default in the performance of any other of the covenant or
agreements in such Indenture applicable to all outstanding Debt Securities
issued thereunder and then outstanding or due to certain events of bankruptcy,
insolvency and reorganization of the Company shall have occurred and be
continuing, either the trustee or the holders of not less than 25% in
principal amount of all Debt Securities issued under such Indenture and then
outstanding (treated as one class) may declare the principal of all such Debt
Securities and interest accrued thereon to be due and payable immediately, but
upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal of (or
premium, if any) or interest on such Debt Securities) by the holders of a
majority in principal amount of the Debt Securities of all such affected
series then outstanding. (Senior and Subordinated Debt Indentures, Sections
5.1 and 5.10)
Each Indenture contains a provision entitling the Trustee, subject to
the duty of the Trustee during a default to act with the required standard of
care, to be indemnified by the holders of Debt Securities issued under such
Indenture requesting the Trustee to exercise any right or power under such
Indenture before proceeding to exercise any such right or power at the request
of such holders. (Senior and Subordinated Debt Indentures, Section 6.2)
Subject to such provisions in each Indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in principal
amount of the outstanding Debt Securities of each affected series (treated as
one class) issued under such Indenture may direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee. (Senior and
Subordinated Debt Indentures, Section 5.9)
Each Indenture provides that no holder of Debt Securities issued under
such Indenture may institute any action against the Company under such
Indenture (except actions for payment of overdue principal, premium, if any,
or interest) unless such holder previously shall have given to the Trustee
written notice of default and continuance thereof and unless the holders of
not less than 25% in principal amount of the Debt Securities of each affected
series (treated as one class) issued under such Indenture and then outstanding
shall have requested the Trustee to institute such action and shall have
offered the Trustee reasonable indemnity, the Trustee shall not have
instituted such action within 60 days of such request and the Trustee shall
not have received direction inconsistent with such written request by the
holders of a majority in principal amount of the Debt Securities of each
affected series (treated as one class) issued under such Indenture and then
outstanding. (Senior and Subordinated Debt Indentures, Sections 5.6 and 5.9)
Each Indenture contains a covenant that the Company will file annually
with the Trustee a certificate of no default or a certificate specifying any
default that exists. (Senior and Subordinated Debt Indentures, Section 3.5)
Discharge, Defeasance and Covenant Defeasance
The Company can discharge or defease its obligations under each
Indenture as set forth below. (Senior and Subordinated Debt Indentures,
Section 10.1)
Under terms satisfactory to the Trustee, the Company may discharge
certain obligations to holders of any series of Debt Securities issued under
such Indentures which have not already been delivered to the Trustee for
cancellation and which have either become due and payable or are by their
terms due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee cash or, in the case of Debt
Securities payable only in U.S. dollars, U.S. Government Obligations (as
defined in such Indenture), as trust funds in an amount certified to be
sufficient to pay when due, whether at maturity, upon redemption or otherwise,
the principal of, premium, if any, and interest on such Debt Securities.
The Company may also discharge any and all of its obligations to holders
of any series of Debt Securities issued under an Indenture at any time
("defeasance"), but may not thereby avoid its duty to register the transfer or
exchange of such series of Debt Securities, to replace any temporary,
mutilated, destroyed, lost or stolen series of Debt Securities or to maintain
an office or agency in respect of such series of Debt Securities. Under terms
satisfactory to the Trustee, the Company may instead be released with respect
to any outstanding series of Debt Securities issued under the relevant
Indenture from the obligations imposed by certain provisions of such Indenture
including Sections 3.9, 9.1 and 9.3, in the case of the Senior Debt Indenture,
and Section 9.1, in the case of the Subordinated Debt Indenture (which contain
the covenants described above limiting liens, consolidations, mergers,
transfers and leases and certain dispositions) and omit to comply with such
Sections without creating an Event of Default ("covenant defeasance").
Defeasance or covenant defeasance may be effected only if, among other things:
(i) the Company irrevocably deposits with the Trustee cash or, in the case of
Debt Securities payable only in U.S. dollars, U.S. Government Obligations, as
trust funds in an amount certified to be sufficient to pay at maturity (or
upon redemption) the principal of, premium, if any, and interest on all
outstanding Debt Securities of such series issued under such Indenture; (ii)
the Company delivers to the Trustee an opinion of counsel to the effect that
the holders of such series of Debt Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and that defeasance or covenant defeasance
will not otherwise alter such holders' United States federal income tax
treatment of principal, premium and interest payments on such series of Debt
Securities (in the case of a defeasance, such opinion must be based on a
ruling of the Internal Revenue Service or a change in United States federal
income tax law occurring after the date of such Indenture, since such a result
would not occur under current tax law); and (iii) in the case of the
Subordinated Debt Indenture no event or condition shall exist that, pursuant
to certain provisions described under "Subordinated Debt" above, would prevent
the Company from making payments of principal of, premium, if any, and
interest on the Subordinated Debt Securities at the date of the irrevocable
deposit referred to above.
Modification of the Indentures
Each Indenture provides that the Company and the Trustee may enter into
supplemental indentures without the consent of the holders of Debt Securities
to: (a) secure any Debt Securities, (b) evidence the assumption by a
successor corporation of the obligations of the Company, (c) add covenants for
the protection of the holders of Debt Securities, (d) cure any ambiguity or
correct any inconsistency in such Indenture, provided that such cure or
correction does not adversely affect the holders of such Debt Securities, (e)
establish the forms or terms of Debt Securities of any series and (f) evidence
the acceptance of appointment by a successor trustee. (Senior and
Subordinated Debt Indentures, Section 8.1)
Each Indenture also contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of Debt Securities of all series issued under such
Indenture then outstanding and affected (voting as one class), to add any
provisions to, or change in any manner or eliminate any of the provisions of,
such Indenture or modify in any manner the rights of the holders of the Debt
Securities of each series so affected; provided that the Company and the
Trustee may not, without the consent of the holder of each outstanding Debt
Security affected thereby, (a) extend the stated maturity of the principal of
any Debt Security, or reduce the principal amount thereof or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or change the currency in which the principal
thereof (including any amount in respect of original issue discount), premium,
if any, or interest thereon is payable or reduce the amount of any original
issue Debt Security that is payable upon acceleration or provable in
bankruptcy or alter certain provisions of such Indenture relating to the Debt
Securities issued thereunder not denominated in U.S. dollars or impair the
right to institute suit for the enforcement of any payment on any Debt
Security when due or (b) reduce the aforesaid percentage in principal
amount of Debt Securities of any series issued under such Indenture, the
consent of the holders of which is required for any such modification.
(Senior and Subordinated Debt Indentures, Section 8.2)
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness then outstanding that would be
adversely affected thereby. (Subordinated Debt Indenture, Section 8.6)
Concerning the Trustee
The First National Bank of Chicago is one of a number of banks with
which the Company and its subsidiaries maintain ordinary banking and trust
relationships.
DESCRIPTION OF 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
(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 for
other information regarding the Junior Subordinated Debt Securities. Whenever
particular sections or defined terms in the Junior Subordinated Debt Indenture
are referred to herein, 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. Section and Article references used herein
are references to provisions of the Junior Subordinated Debt Indenture.
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.
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 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) in the event that
Junior Subordinated Debt Securities are issued to a SunAmerica Trust in
connection with the issuance of Trust Securities by such SunAmerica Trust, the
Company shall have given notice of its election to defer payments of interest
on such Junior Subordinated Debt Securities by extending the interest payment
period as provided in the terms of such Junior Subordinated Debt Securities
and such period, or any extension thereof, is continuing; provided that (x)
the Company will be permitted to pay accrued dividends (and cash in lieu of
fractional shares) upon the conversion of any of its Series 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 of
all Senior Indebtedness of the Company. In the event (a) of any insolvency or
bankruptcy proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in respect of the Company or its property or any
proceeding for voluntary liquidation, dissolution or other winding up of the
Company, or (b) that Junior Subordinated Debt Securities of any series are
declared due and payable before their expressed maturity because of the
occurrence of 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 on money, before the holders of any of the Junior Subordinated Debt
Securities are entitled to receive payment on account of the principal of,
premium, if any, or interest on the indebtedness evidenced by such Junior
Subordinated Debt Securities. In the event and during the continuation of any
default in payment of any Senior Indebtedness or if any event of default shall
exist under any Senior Indebtedness, as "event of default" is defined therein
or in the agreement under which the same is outstanding, no payment of the
principal or, premium, if any, or interest on the Junior Subordinated Debt
Securities shall be made. (Section 14.02 and 14.03). If this Prospectus is
being delivered in connection with a series of Junior Subordinated Debt
Securities, the accompanying Prospectus Supplement will set forth the
approximate amount of Senior Indebtedness outstanding as of the end of the
most recent fiscal quarter.
The 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 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 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 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 (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the 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, without the consent of the holders of each Junior
Subordinated Debt Security then outstanding and affected thereby. (Section
9.02).
Book-Entry and Settlement
If any Junior Subordinated Debt Securities of a series are represented
by one or more global securities (each, a "Global Security"), the applicable
Prospectus Supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of and any premium and interest on a Global Security will be payable in the
manner described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented
by a Global Security will be described in the applicable Prospectus Supplement.
Consolidation, Merger and Sale
The 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). 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.
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, including a description of
the rights attached thereto, see "Common Stock and Class B Stock" below.
For a description of the series of Preferred Stock of the Company currently
outstanding, see "Series B Preferred Shares" 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.
Common Stock and Class B Stock
Dividends. Except as provided below, holders of Common Stock and Class
B Stock are entitled to receive dividends and other distributions in cash,
stock or property of the Company, when, as and if declared by the Board of
Directors out of assets or funds of the Company legally available therefor and
shall share equally on a per share basis in all such dividends and other
distributions (subject to the rights of holders of Preferred Stock). If a
cash dividend is paid on any of the Common Stock, the Nontransferable Class B
Stock or the Transferable Class B Stock, a cash dividend also will be paid on
the Common Stock, the Nontransferable Class B Stock and the Transferable Class
B Stock, as the case may be. The amount of the cash dividend paid on each
share of Class B Stock will be equal to 90% of the amount of the cash dividend
paid on each share of Common Stock. In addition if holders of Common Stock
receive shares of Common Stock in connection with stock dividends or stock
splits, holders of Transferable Class B Stock will receive a proportionate
number of shares of Transferable Class B Stock and holders of Nontransferable
Class B Stock will receive a proportionate number of shares of Nontransferable
Class B Stock.
Voting Rights. At every meeting of shareholders, every holder of Common
Stock is entitled to one vote per share and every holder of Class B 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 Liquidation, the holders of
Common Stock and Class B Stock are entitled to share equally in the assets
available for distribution after payment of all liabilities and provision for
the liquidation preference of any shares of Preferred Stock then outstanding.
Class B Stock Conversion Rights. Each share of Class B Stock is
convertible into one share of Common Stock at any time at the option of the
holder. In addition, any transfer of shares of Nontransferable Class B Stock
not permitted under the Articles of Incorporation will result in the
conversion of such shares into shares of Common Stock.
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 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 these shares, 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
and all accrued and unpaid dividends thereon, and no more. If, upon any
Liquidation, there are insufficient assets to permit full payment of holders
of Series B Preferred Shares and shares of any other class of outstanding
Preferred Stock, the holders of Series B Preferred Shares and such other
shares shall be paid ratably in proportion to the full distributable amounts
to which holders of Series B Preferred Shares and such other shares are
respectively entitled upon Liquidation.
Redemption. The Series B Preferred Shares are not redeemable prior to
June 15, 1997. On and after such date, the Series B Preferred Shares are
redeemable in cash at the option of the Company, in whole or in part, from
time to time, at a redemption price of $25.00 per share plus accrued and
unpaid dividends to the date fixed for redemption.
The Series B Preferred Shares are not entitled to the benefits of any
sinking fund.
Voting Rights. The Series B Preferred Shares do not entitle holders
thereof to voting rights, except (i) the Company may not alter any of the
provisions of the Articles of Incorporation or the Articles Supplementary
relating to the Series B Preferred Shares which would materially and adversely
affect any right, preference or privilege of the Series B Preferred Shares
without the affirmative vote of the holders of at least two-thirds of the
Series B Preferred Shares outstanding at the time (voting separately as a
class); provided, however, that any such alteration that would authorize,
create or issue additional shares of Preferred Stock or any other shares of
stock (whether or not already authorized) ranking senior to, on a parity with
or junior to the Series B Preferred Shares as to dividends or on the
distribution of assets upon Liquidation shall be deemed not to materially and
adversely affect such rights, preferences or privileges, (ii) in the event
dividends payable on the Series B Preferred Shares shall be in arrears in an
aggregate amount equivalent to six full quarterly dividends (a "Series B
Preferred Share Dividend Default") or (iii) as required by law. In the event
of a Series B Preferred Share Dividend Default, the holders of the outstanding
Series B Preferred Shares will be entitled to elect together with holders of
all other outstanding classes of Preferred Stock ranking on a parity with the
Series B Preferred Shares and entitled to participate in such election, voting
as a single class, two directors at a special meeting called by the Board of
Directors for such purpose. Such two directors shall serve until the full
dividends accumulated on all outstanding Series B Preferred Shares and all
other outstanding classes of Preferred Stock ranking on a parity with the
Series B Preferred Shares are paid.
Series 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 will 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 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 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.
Conversion and Exchange
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the
Prospectus Supplement relating thereto, each record holder of Depositary
Shares will have the right or obligation to convert or exchange such
Depositary Shares pursuant to the terms thereof.
Redemption of Depositary Shares
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Preferred Stock Depositary resulting from the redemption, in whole or
in part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate
redemption price payable with respect to the number of shares of Preferred
Stock underlying the Depositary Shares. Whenever the Company redeems
Preferred Stock from the Preferred Stock Depositary, the Preferred Stock
Depositary will redeem as of the same redemption date a proportionate number
of Depositary Shares representing the shares of Preferred Stock that were
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Company.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of
two years from the date such funds are so deposited.
Voting
Upon receipt of notice of any meeting at which the holders of any shares
of Preferred Stock underlying the Depositary Shares are entitled to vote, the
Preferred Stock Depositary will mail the information contained in such notice
to the record holders of the Depositary Receipts. Each record holder of such
Depositary Receipts on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depositary as to the exercise of the voting rights pertaining
to the number of shares of Preferred Stock underlying such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable,
to vote the number of shares of Preferred Stock underlying such Depositary
Shares in accordance with such instructions, and the Company will agree to
take all reasonable action which may be deemed necessary by the Preferred
Stock Depositary in order to enable the Preferred Stock Depositary to do
so. The Preferred Stock Depositary will abstain from voting the Preferred
Stock to the extent it does not receive specific written instructions from
holders of Depositary Receipts representing such Preferred Stock.
Record Date
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred
Stock, or (ii) the Preferred Stock Depositary shall receive notice of any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice, or of the mandatory
conversion of or any election on the part of the Company to call for the
redemption of any Preferred Stock, the Preferred Stock Depositary shall in
each such instance fix a record date (which shall be the same as the record
date for the Preferred Stock) for the determination of the holders of
Depositary Receipts (x) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the
sale thereof or (y) who shall be entitled to give instructions for the
exercise of voting rights at any such meeting or to receive notice of such
meeting or of such redemption or conversion, subject to the provisions of the
Deposit Agreement.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt and any provision of the Deposit
Agreement may at any time be amended by agreement between the Company and the
Preferred Stock Depositary. However, any amendment which imposes or increases
any fees, taxes or other charges payable by the holders of Depositary Receipts
(other than taxes and other governmental charges, fees and other expenses
payable by such holders as stated under "Charges of Preferred Stock
Depositary"), or which otherwise prejudices any substantial existing right of
holders of Depositary Receipts, will not take effect as to outstanding
Depositary Receipts until the expiration of 90 days after notice of such
amendment has been mailed to the record holders of outstanding Depositary
Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary will
terminate the Deposit Agreement by mailing notice of such termination to the
record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred
Stock Depositary may likewise terminate the Deposit Agreement if at any time
45 days shall have expired after the Preferred Stock Depositary shall have
delivered to the Company a written notice of 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.
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. Reference is made to any
Prospectus Supplement relating to the Preferred Securities of a SunAmerica
Trust for specific terms, including (i) the specific designation of such
Preferred Securities, (ii) the number of Preferred Securities issued by such
SunAmerica Trust, (iii) the annual distribution rate (or method of calculation
thereof) for Preferred Securities issued by such SunAmerica Trust, the date or
dates upon which such distributions shall be payable and the record date or
dates for the payment of such distributions, (iv) whether distributions on
Preferred Securities issued by such SunAmerica Trust shall be cumulative, and,
in the case of Preferred Securities having such cumulative distribution
rights, the date or dates or method of determining the date or dates from
which distributions on Preferred Securities issued by such SunAmerica Trust
shall be cumulative, (v) the amount or amounts which shall be paid out of the
assets of such SunAmerica Trust to the holders of Preferred Securities of such
SunAmerica Trust upon voluntary or involuntary dissolution, winding-up or
termination of such SunAmerica Trust, (vi) the obligation or right, if any, of
such SunAmerica Trust to purchase or redeem Preferred Securities issued by
such SunAmerica Trust and the price or prices at which, the period or periods
within which and the terms and conditions upon which Preferred Securities
issued by such SunAmerica Trust shall or may be purchased or redeemed, in
whole or in part, pursuant to such obligation or right, (vii) the voting
rights, if any, of Preferred Securities issued by such SunAmerica Trust in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities, or of Preferred Securities issued by one or more SunAmerica
Trusts, or of both, as a condition to specified actions or amendments to the
Declaration of such SunAmerica Trust, (viii) the terms and conditions, if any,
upon which Preferred Securities issued by such SunAmerica Trust may be
converted into Common Stock [or Preferred 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 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 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) in the event that Junior
Subordinated Debt Securities are issued to a SunAmerica Trust in connection
with the issuance of Trust Securities by such SunAmerica Trust, the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period
as provided in the terms of the Junior Subordinated Debt Securities and such
period, or any extension thereof, is continuing; provided that (a) the Company
will be permitted to pay accrued dividends (and cash in lieu of fractional
shares) upon the conversion of any of its Series 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 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.
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
holders 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.
The applicable Prospectus Supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units. 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, and, if applicable,
collateral arrangements and depositary arrangements, relating to such Stock
Purchase Contracts or Stock Purchase Units.
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.
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 LLP, 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.
ERISA MATTERS
The Company and certain affiliates of the Company may each be considered
a "party in interest" within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a "disqualified person" within
the meaning of the Internal Revenue Code of 1986, as amended (the "Code") with
respect to many employee benefit plans. Prohibited transactions within the
meaning of ERISA or the Code may arise, for example, if the Offered Securities
are acquired by a pension or other employee benefit plan with respect to which
the Company or any of its affiliates is a service provider, unless such
Offered Securities are acquired pursuant to an exemption for transactions
effected on behalf of such plan by a "qualified professional asset manager" or
pursuant to any other available exemption. Any such pension or employee
benefit plan proposing to invest in the Offered Securities should consult with
its legal counsel.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are
estimates, except the SEC registration fee.
SEC registration fee.......................... $ 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
-----------
Item 15. Indemnification of Directors and Officers.
Section 2-418 of the Maryland General Corporation law permits the
indemnification of directors, officers, employees and agents of Maryland
corporations. Article Eighth of the Company's Restated Articles of
Incorporation, as amended and restated (the "Articles") authorizes the
indemnification of directors and officers to the full extent required or
permitted by the General Laws of the State of Maryland, now or hereafter in
force, whether such persons are serving the Company, or, at its request, any
other entity, which indemnification shall include the advance of expenses
under the procedures and to the full extent permitted by law. Article Eighth
of the Articles of Incorporation, as amended and restated, further provides
that the foregoing rights of indemnification shall not be exclusive of any
other rights to which those seeking indemnification may be entitled and that
no amendment or repeal of Article Eighth shall apply to or have any effect on
any right to indemnification provided thereunder with respect to acts or
omissions occurring prior to such amendment or repeal. In addition, the
Company's officers and directors are covered by certain directors' and
officers' liability insurance policies maintained by the Company. Reference
is made to section 2-418 of the Maryland General Corporation Law and Article
Eighth of the Articles, which are incorporated herein by reference.
Each Amended and Restated Declaration of Trust (a "Declaration") of a
SunAmerica Trust provides that no Trustee, affiliate of any Trustee or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee or any employee or agent of such
SunAmerica Trust or its affiliates (each, an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to any employee or
agent of such SunAmerica Trust or its affiliates, or any officers, directors,
shareholders, employees, representatives or agents of the Company or its
affiliates or to any holders of Trust Securities of such SunAmerica Trust for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of such
SunAmerica Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of the authority conferred on such Indemnified Person
by the Declaration of such SunAmerica Trust or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's gross negligence (or, in the case of
the Property Trustee of such SunAmerica Trust, negligence) or willful
misconduct with respect to such acts or omissions. Each Declaration also
provides that, to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of such SunAmerica Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person
shall be entitled to be indemnified in respect of any loss, damage or claim
incurred by such Indemnified Person by reason of gross negligence (or, in the
case of the Property Trustee of such SunAmerica Trust, negligence) or willful
misconduct with respect to such acts or omissions. Each Declaration further
provides that to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or the final disposition of such claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Company prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Company of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified pursuant to such
Declaration.
Item 16. List of Exhibits.
Exhibit
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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 (incorporated herein by reference to
Exhibit 4.2 of the Company's Registration Statement No. 33-62405
on Form S-3, declared effective September 29, 1995)
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 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 (incorporated by reference to Exhibit 4.12 of the
Company's Registration Statement No. 33-62405 on Form S-3,
declared effective September 29, 1995)
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 (incorporated by reference to Exhibit 4.14 of the
Company's Registration Statement No. 33-62405 on Form S-3,
declared effective September 29, 1995)
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
____________________, as Purchase Contract Agent (including as
Exhibit A the Form of Security Certificate)
4.23(*) Form of Pledge Agreement among SunAmerica Inc., ________________,
as Collateral Agent, and ____________________, as Purchase
Contract Agent
5.1(*) Opinion of Davis Polk & Wardwell
5.2(*) Opinion of Piper & Marbury LLP
5.3(*) Opinion of Richards, Layton & Finger
12.1 Statement re: Computation of ratio of earnings to fixed charges
12.2 Statement re: Computation of ratio of earnings to combined fixed
charges and preferred stock dividends
23.1 Consent of Price Waterhouse LLP
23.2(*) Consent of Susan L. Harris
23.3(*) Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4(*) Consent of Piper & Marbury LLP (included in Exhibit 5.2)
23.5(*) Consent of Richards, Layton & Finger (included in Exhibit 5.3)
24.1 Powers of Attorney for the Company (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
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
- -------------------
(+)To be filed under subsequent Form 8-K
(*)To be filed by amendment
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this registration statement shall be deemed to be
a new registration statement relating to the securities offered thereby, and
for the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions referred to in Item 15
of this registration statement, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
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 15, 1996.
SUNAMERICA INC.
By: /s/ James R. Belardi
--------------------------------
Name: James R. Belardi
Title: Executive Vice President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Eli Broad, Jay S. Wintrob and Susan L. Harris
his or her true and lawful attorneys-in-fact and agents, each acting alone,
with full powers of substitution and resubstitution, for him or her and in his
or her name, place and stead, in any and all capacities, to sign any or all
amendments to this Registration Statement, including post-effective
amendments, as well as any related registration statement (or amendment
thereto) filed pursuant to Rule 462 promulgated under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratifies and
confirms all his or her said attorneys-in-fact and agents or any of them or
his or her substitute or substitutes may lawfully do or cause to be done by
virtue thereof.
This Power of Attorney may be executed in multiple counterparts, each of
which shall be deemed an original, but which taken together shall constitute
one instrument.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------------ ------------------------------- ------------------
<S> <C> <C>
/s/ Eli Broad Chairman, President and October 15, 1996
- ------------------------------------
Eli Broad Chief Executive Officer
(Principal Executive Officer)
/s/ James R. Belardi Executive Vice President October 15, 1996
- ------------------------------------
James R. Belardi (Principal Financial Officer)
/s/ Scott L. Robinson Senior Vice President and October 15, 1996
- ------------------------------------
Scott L. Robinson Controller (Principal
Accounting Officer)
/s/ Ronald J. Arnault Director October 15, 1996
- ------------------------------------
Ronald J. Arnault
/s/ Karen Hastie-Williams Director October 15, 1996
- ------------------------------------
Karen Hastie-Williams
- ------------------------------------
/s/ David O. Maxwell Director October 15, 1996
- ------------------------------------
David O. Maxwell
/s/ Barry Munitz Director October 15, 1996
- ------------------------------------
Barry Munitz
/s/ Lester Pollack Director October 15, 1996
- ------------------------------------
Lester Pollack
/s/ Carl E. Reichardt Director October 15, 1996
- ------------------------------------
Carl E. Reichardt
/s/ Richard D. Rohr Director October 15, 1996
- ------------------------------------
Richard D. Rohr
Director October 15, 1996
- ------------------------------------
Sanford C. Sigoloff
/s/ Harold M. Williams Director October 15, 1996
- ------------------------------------
Harold M. Williams
</TABLE>
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 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 15, 1996.
SUNAMERICA CAPITAL TRUST III
By: SunAmerica Inc., as Sponsor
By: /s/ James R. Belardi
------------------------------------
Name: James R. Belardi
Title: Executive Vice President
SUNAMERICA CAPITAL TRUST IV
By: SunAmerica Inc., as Sponsor
By: /s/ James R. Belardi
------------------------------------
Name: James R. Belardi
Title: Executive Vice President
SUNAMERICA CAPITAL TRUST V
By: SunAmerica Inc., as Sponsor
By:
------------------------------------
Name: James R. Belardi
Title: Executive Vice President
SUNAMERICA CAPITAL TRUST VI
By: SunAmerica Inc., as Sponsor
By:
------------------------------------
Name: James R. Belardi
Title: Executive Vice President
EXHIBIT INDEX
Exhibit
- -------
1.1(+)Form of Underwriting Agreement (Debt)
1.2(+)Form of Underwriting Agreement (Equity)
1.3(+)Form of Underwriting Agreement (Preferred Securities)
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 (incorporated herein by reference to Exhibit
4.2 of the Company's Registration Statement No. 33-62405 on Form S-3,
declared effective September 29, 1995)
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)
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
(incorporated by reference to Exhibit 4.12 of the Company's Registration
Statement No. 33-62405 on Form S-3, declared effective September 29,
1995)
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 (incorporated by reference to Exhibit 4.14 of the Company's
Registration Statement No. 33-62405 on Form S-3, declared effective
September 29, 1995)
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
____________________, as Purchase Contract Agent (including as Exhibit A
the Form of Security Certificate)
4.23(*) Form of Pledge Agreement among SunAmerica Inc., ____________________,
as Collateral Agent, and ____________________, as Purchase Contract
Agent
5.1(*)Opinion of Davis Polk & Wardwell
5.2(*)Opinion of Piper & Marbury LLP
5.3(*)Opinion of Richards, Layton & Finger
12.1 Statement re: Computation of ratio of earnings to fixed charges
12.2 Statement re: Computation of ratio of earnings to combined fixed
charges and preferred stock dividends
23.1 Consent of Price Waterhouse LLP
23.2(*)Consent of Susan L. Harris
23.3(*)Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
23.4(*)Consent of Piper & Marbury LLP (included in Exhibit 5.2)
23.5(*)Consent of Richards, Layton & Finger (included in Exhibit 5.3)
24.1 Powers of Attorney for the Company (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
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
- ------------
(+)To be filed under subsequent Form 8-K
(*)To be filed by amendment
Exhibit 4.2
CONFORMED COPY
SUNAMERICA INC.
and
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
____________
SUPPLEMENTAL INDENTURE
Dated as of June 28, 1993
Supplementing Indenture Dated as of April 15, 1993
____________
SUPPLEMENTAL INDENTURE dated as of June 28, 1993, between
SunAmerica Inc., a Maryland corporation (the "Issuer"), and The First National
Bank of Chicago, a national banking association (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has heretofore executed and delivered to
the Trustee a certain Indenture dated as of April 15, 1993 (the "Indenture")
providing for the issuance from time to time of its unsecured debentures,
notes or other evidences of indebtedness to be issued in one or more series
(the "Securities") up to such principal amount or amounts as may from time to
time be authorized in accordance with the Indenture; and
WHEREAS, because of an error, the Indenture as executed does not
correctly reflect the address of the trustee; and
WHEREAS, the parties hereto desire to enter into this
Supplemental Indenture for the purpose of amending the terms of the Indenture,
as permitted in accordance with Section 8.1 of the Indenture, to correct this
defect;
NOW, THEREFORE:
In consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Issuer and the Trustee mutually covenant and agree for the equal and
proportionate benefit of the respective holders from time to time of the
Securities as follows:
Section 1. Corporate Trust Office. The address listed for the
Corporate Trust Office set forth in Section 1.1 shall be amended by
substituting the words "County of Cook, the city of Chicago" for the words
"County of Los Angeles, the city of Los Angeles".
Section 2. New York Law to Govern. This Supplemental
Indenture shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State, except as may otherwise be required by mandatory provisions of law.
Section 3. Counterparts. 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.
Section 4. Effect of Headings. The Section headings herein
are for convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
SUNAMERICA INC.
By /s/ James R. Belardi
--------------------
Title: Senior Vice President
Attest:
By /s/ Susan L. Harris
-------------------
Title: Vice President
THE FIRST NATIONAL BANK
OF CHICAGO,
as Trustee
By /s/ R. D. Manella
------------------
Title: Vice President
Attest:
By /s/ T. Marshall
-----------------
Title: Assistant Secretary
STATE OF CALIFORNIA )
: ss.:
COUNTY OF LOS ANGELES )
On this 28th day of June, 1993, before me personally came James
R. Belardi, to me known, who being by me personally sworn, did depose and say
that he is the Senior Vice President of SunAmerica Inc., the corporation
described in and on behalf of which he has executed the above instrument, and
that he is authorized by said corporation to execute the same.
Virginia N. Puzon
-----------------
Notary Public
STATE OF ILLINOIS )
: ss.:
COUNTY OF COOK )
On this 28th day of June, 1993, before me personally came R. D.
Manella, who being known personally to me, did depose and say that he is the
Vice President of The First National Bank of Chicago, the national banking
association described in and on behalf of which he has executed the above
instrument, and that he is authorized by said national banking association to
execute the same.
Theresa DePalma
---------------
Notary Public
<TABLE>
<CAPTION>
EXHIBIT 12.1
SUNAMERICA INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(EXCLUDING INTEREST INCURRED ON FIXED ANNUITIES, GUARANTEED INVESTMENT
CONTRACTS AND TRUST DEPOSITS)
Years ended September 30, Nine mos. Nine mos.
---------------------------------------------------------------- ended ended
1991 1992 1993 1994 1995 June 30 1995 June 30, 1996
-------- -------- -------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands, except ratios)
Earnings:
Pretax income.................. $73,381 $111,091 $184,011 $240,001 $279,606 $199,653 $289,484
-------- -------- -------- -------- -------- -------- --------
Add:
Interest incurred on:
Senior indebtedness....... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes........ 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred... 43,545 37,165 36,246 50,292 55,985 41,031 53,112
-------- -------- -------- -------- -------- -------- --------
Dividends paid on
preferred securities of
grantor trusts............ -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total earnings.............. $116,926 $148,256 $220,257 $290,293 $337,264 $241,048 $357,660
======== ======== ======== ======== ======== ======== ========
Fixed charges:
Interest incurred on:
Senior indebtedness........ $33,072 $33,224 $36,246 $50,292 $55,985 $41,031 $53,112
Subordinated notes......... 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred.... 43,545 37,165 36,246 50,292 55,985 41,031 53,112
Dividends paid on
preferred securities of
grantor trusts............. -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total fixed charges......... $ 43,545 $ 37,165 $ 36,246 $ 50,292 $ 57,658 $ 41,395 $ 68,176
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges (excluding
interest incurred on fixed
annuities, guaranteed
investment contracts and
trust deposits)............ 2.7x 4.0x 6.1x 5.8x 5.8x 5.8x 5.2x
======== ======== ======== ======== ======== ======== ========
SUNAMERICA INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(INCLUDING INTEREST INCURRED ON FIXED ANNUITIES, GUARANTEED INVESTMENT
CONTRACTS AND TRUST DEPOSITS)
Years ended September 30, Nine mos. Nine mos.
---------------------------------------------------------------- ended ended
1991 1992 1993 1994 1995 June 30 1995 June 30, 1996
-------- -------- -------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands, except ratios)
Earnings:
Pretax income............... $ 73,381 $111,091 $184,011 $240,001 $279,606 $199,653 $289,484
-------- -------- -------- -------- -------- -------- --------
Add:
Interest incurred on:
Fixed annuity contracts.. 411,084 362,094 308,910 254,464 258,730 190,284 284,576
Guaranteed investment
contracts.............. 124,381 140,114 136,984 150,424 213,340 151,776 185,782
Trust deposits........... -- 4,256 8,438 8,516 10,519 7,901 7,585
Senior indebtedness...... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes....... 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred.. 579,010 543,629 490,578 463,696 538,574 390,992 531,055
-------- -------- -------- -------- -------- -------- --------
Dividends paid on
preferred securities of
grantor trusts........... -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total Earnings.............. $652,391 $654,720 $674,589 $703,697 $819,853 $591,009 $835,603
======== ======== ======== ======== ======== ======== =========
Fixed charges:
Interest incurred on:
Fixed annuity contracts... $411,084 $362,094 $308,910 $254,464 $258,730 $190,284 $284,576
Guaranteed investment
contracts................ 124,381 140,114 136,984 150,424 213,340 151,776 185,782
Trust deposits............ -- 4,256 8,438 8,516 10,519 7,901 7,585
Senior indebtedness....... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes........ 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred 579,010 543,629 490,578 463,696 538,574 390,992 531,055
Dividends paid on preferred
securities of grantor
trusts.................... -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total fixed charges......... $579,010 $543,629 $490,578 $463,696 $540,247 $391,356 $546,119
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges (including interest
incurred on fixed
annuities, guaranteed
investment contracts and
trust deposits)............ 1.1x 1.2x 1.4x 1.5x 1.5x 1.5x 1.5x
======== ======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 12.2
SUNAMERICA INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(EXCLUDING INTEREST INCURRED ON FIXED ANNUITIES, GUARANTEED INVESTMENT
CONTRACTS AND TRUST DEPOSITS)
Years ended September 30, Nine mos. Nine mos.
---------------------------------------------------------------- ended ended
1991 1992 1993 1994 1995 June 30 1995 June 30, 1996
-------- -------- -------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands, except ratios)
Earnings:
Pretax income................... $73,381 $111,091 $184,011 $240,001 $279,606 $199,653 $289,484
-------- -------- -------- -------- -------- -------- --------
Add:
Interest incurred on:
Senior indebtedness.......... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes........... 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred.... 43,545 37,165 36,246 50,292 55,985 41,031 53,112
-------- -------- -------- -------- -------- -------- --------
Dividends paid on preferred
securities of grantor trusts. -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total earnings.................. $116,926 $148,256 $220,257 $290,293 $337,264 $241,048 $357,660
======== ======== ======== ======== ======== ======== ========
Combined fixed charges
and preferred stock dividends:
Interest incurred on:
Senior indebtedness.......... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes........... 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred...... 43,545 37,165 36,246 50,292 55,985 41,031 53,112
Dividends paid on preferred
securities of grantor trusts... -- -- -- -- 1,673 364 15,064
Dividends paid on preferred
stock of SunAmerica Inc.,
on a tax equivalent basis... 8,369 17,733 42,675 54,528 41,914 30,718 30,108
-------- -------- -------- -------- -------- -------- --------
Total combined fixed charges
and preferred stock
dividends................. $51,914 $54,898 $78,921 $104,820 $99,572 $72,113 $98,284
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
combined fixed charges and
preferred stock dividends
(excluding interest incurred
on fixed annuities,
guaranteed investment
contracts and trust
deposits)............. 2.3x 2.7x 2.8x 2.8x 3.4x 3.3x 3.6x
======== ======== ======== ======== ======== ======== ========
SUNAMERICA INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(INCLUDING INTEREST INCURRED ON FIXED ANNUITIES, GUARANTEED INVESTMENT
CONTRACTS AND TRUST DEPOSITS)
Years ended September 30, Nine mos. Nine mos.
---------------------------------------------------------------- ended ended
1991 1992 1993 1994 1995 June 30 1995 June 30, 1996
-------- -------- -------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
(In thousands, except ratios)
Earnings:
Pretax income................... $73,381 $111,091 $184,011 $240,001 $279,606 $199,653 $289,484
-------- -------- -------- -------- -------- -------- --------
Add:
Interest incurred on:
Fixed annuity contracts...... 411,084 362,094 308,910 254,464 258,730 190,284 284,576
Guaranteed investment
contracts................... 124,381 140,114 136,984 150,424 213,340 151,776 185,782
Trust deposits............... -- 4,256 8,438 8,516 10,519 7,901 7,585
Senior indebtedness.......... 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes........... 10,473 3,941 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total interest incurred...... 579,010 543,629 490,578 463,696 538,574 390,992 531,055
-------- -------- -------- -------- -------- -------- --------
Dividends paid on
preferred securities of
grantor trusts. -- -- -- -- 1,673 364 15,064
-------- -------- -------- -------- -------- -------- --------
Total earnings.................. $652,391 $654,720 $674,589 $703,697 $819,853 $591,009 $835,603
======== ======== ======== ======== ======== ======== ========
Combined fixed charges
and preferred
stock dividends:
Interest incurred on:
Fixed annuity contracts........ $411,084 $362,094 $308,910 $254,464 $258,730 $190,284 $284,576
Guaranteed investment
contracts..................... 124,381 140,114 136,984 150,424 213,340 151,776 185,782
Trust deposits................. -- 4,256 8,438 8,516 10,519 7,901 7,585
Senior indebtedness............ 33,072 33,224 36,246 50,292 55,985 41,031 53,112
Subordinated notes............. 10,473 3,941 -- -- -- -- --
------- -------- -------- -------- -------- -------- --------
Total interest
incurred...................... 579,010 543,629 490,578 463,696 538,574 390,992 531,055
Dividends paid on
preferred securities
of grantor trusts............. -- -- -- -- 1,673 364 15,064
Dividends paid on
preferred stock of
SunAmerica Inc. on
a tax equivalent
basis......................... 8,369 17,733 42,675 54,528 41,914 30,718 30,108
------- -------- -------- -------- -------- -------- --------
Total combined fixed
charges and preferred
stock dividends............... $587,379 $561,362 $533,253 $518,224 $582,161 $422,074 $576,227
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to
combined fixed charges
and preferred stock
dividends (including
interest incurred on
fixed annuities,
guaranteed investment
contracts and trust
deposits)...................... 1.1x 1.2x 1.3x 1.4x 1.4x 1.4x 1.5x
======== ======== ======== ======== ======== ======== ========
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting 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 11, 1996
