<PAGE>
Filed Pursuant to Rule 424(b)(1)
Registration No. 333-4111
PROSPECTUS
LOGO
3,000,000 SHARES
SUNAMERICA INC.
COMMON STOCK
----------------
This Prospectus relates to 3,000,000 shares of Common Stock, par value $1
per share (the "Common Stock"), of SunAmerica Inc., a Maryland corporation
(the "Company"), which may be delivered by Merrill Lynch & Co., Inc. ("ML &
Co.") upon payment and discharge of the Structured Yield Product Exchangeable
for Stock/SM/, 7 1/4% STRYPES/SM/ Due June 15, 1999 (each a "STRYPES") of ML &
Co. at maturity or upon earlier redemption (subject to ML & Co.'s right to
deliver an amount in cash). ML & Co. has granted the underwriter of the STRYPES
an option for 30 days to purchase up to an additional 450,000 STRYPES, solely to
cover over-allotments, which additional STRYPES may be paid and discharged by ML
& Co. by delivery of up to an additional 450,000 shares of Common Stock, to
which this Prospectus also relates.
The Company will not receive any of the proceeds from the sale of the
STRYPES or from the sale of such Common Stock. All of the shares of Common
Stock covered hereby are beneficially owned by Mr. Eli Broad, Chairman, Chief
Executive Officer and President of the Company, who may deliver such Common
Stock to a subsidiary of ML & Co. (the "ML & Co. Subsidiary") pursuant to an
agreement (the "Stock Agreement") among Mr. Broad, ML & Co. and the ML & Co.
Subsidiary (subject to Mr. Broad's right to deliver an amount in cash).
The STRYPES are offered by a separate prospectus of ML & Co. (the "STRYPES
Prospectus"). This Prospectus relates only to the Common Stock covered hereby
and does not relate to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR
ANY INFORMATION INCLUDED IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE
STRYPES PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT
INCORPORATED BY REFERENCE HEREIN. Because the STRYPES are a separate security
issued by ML & Co. for which the Company has no responsibility, an investment
in the STRYPES may have materially different characteristics from an
investment in the Common Stock.
The Common Stock is traded on the New York Stock Exchange, Inc. ("NYSE")
under the trading symbol "SAI". On June 6, 1996, the last reported sale price
of the Common Stock on the NYSE was $56.375 per share. See "Common Stock Price
Ranges and Dividends."
----------------
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.
----------------
/SM/ Service mark of Merrill Lynch & Co., Inc.
The date of this Prospectus is June 6, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE
NEW YORK STOCK EXCHANGE, ON THE PACIFIC STOCK EXCHANGE, IN THE OVER-THE-
COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSION OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
2
<PAGE>
THE COMPANY
The Company is a diversified financial services company specializing in
retirement savings products and services. At March 31, 1996, the Company held
$34.37 billion of assets throughout its businesses, including $22.01 billion
of assets on its balance sheet, $2.14 billion of assets managed in mutual
funds and private accounts and $10.22 billion under custody in retirement
trust accounts. Together, the Company's life insurance companies rank among
the largest U.S. issuers of annuities. Complementing these annuity operations
are the Company's asset management operations; its three broker-dealer
subsidiaries, which the Company believes, based on industry data, represent
the largest network of independent registered representatives in the nation;
and its trust company, which provides administrative and custodial services to
qualified retirement plans. Through these subsidiaries, the Company
specializes in the sale of tax-deferred long-term savings products and
investments to the expanding preretirement savings market. The Company markets
fixed annuities and fee-generating variable annuities, mutual funds and trust
services, as well as guaranteed investment contracts. The Company's products
are distributed through a broad spectrum of financial services distribution
channels, including independent registered representatives of the Company's
broker-dealer subsidiaries, unaffiliated broker-dealers, independent general
insurance agents and other financial institutions.
Since the beginning of fiscal 1996, the Company has made several
acquisitions that have added a total of $4.6 billion in annuity reserves and
enhanced its position in the financial institution and qualified teachers
markets. On December 29, 1995, the Company purchased CalFarm Life Insurance
Company, which on such date had approximately $640 million in annuity
reserves. On February 29, 1996, the Company acquired Ford Life Insurance
Company, which had annuity reserves of approximately $3 billion on such date
and on April 1, 1996, purchased approximately $950 million in annuity reserves
from the Central National Life Insurance Company of Omaha. On January 2, 1996,
the Company purchased Houston-based broker-dealer Advantage Capital Corp.,
further strengthening its distribution network. This acquisition added more
than 1,000 representatives to the Company's broker-dealer network, bringing
its number of independent registered representatives to more than 6,500.
The Company's net income increased to $133.0 million ($1.90 per share) in
the first six months of fiscal 1996 from $92.5 million ($1.34 per share) in
the first six months of fiscal 1995, or 43.8%.
The principal executive offices of the Company are located at 1 SunAmerica
Center, Los Angeles, California 90067-6022, telephone number (310) 772-6000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
STRYPES or from the sale of the Common Stock. All of the shares of Common
Stock covered hereby are beneficially owned by Mr. Eli Broad, who may deliver
such Common Stock to the ML & Co. Subsidiary pursuant to the Stock Agreement
(subject to Mr. Broad's right to deliver an amount in cash).
3
<PAGE>
STOCK OWNERSHIP BY MR. BROAD
Mr. Broad is the Chairman, Chief Executive Officer and President of the
Company. At April 30, 1996, Mr. Broad beneficially owned an aggregate of
11,026,274 shares of Common Stock and Class B Stock (as defined under
"Description of Capital Stock") and controlled 59.2% 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, 1,363,734 represent shares of Common Stock that Mr. Broad has the
right to purchase, at prices ranging from $4.33 per share to $44.92 per share,
pursuant to vested stock options. In addition, Mr. Broad will have the right
to purchase up to an additional 108,000 shares of Common Stock at prices
ranging from $7.04 per share to $21.46 per share pursuant to stock options
that will be fully vested on various dates during the period July 25, 1996
through July 29, 1998. Such options require Mr. Broad to be employed by the
Company on the date of vesting. Pursuant to the Company's Long-Term
Performance-Based Incentive Compensation Plan, Mr. Broad may be granted by
September 30, 1998, up to an additional 348,372 shares of restricted Common
Stock and options to purchase up to an additional 1,045,116 shares of Common
Stock, depending upon the achievement of specified performance objectives
established at the outset of such plan.
Of the 11,026,274 shares beneficially owned by Mr. Broad, 2,902,500 shares
are registered in the name of Stanford Ranch, Inc. ("Stanford Ranch"), as to
which Mr. Broad exercises voting and investment control. On January 12, 1996,
the Company, Stanford Ranch, Mr. Broad and the other stockholders of Stanford
Ranch entered into an agreement providing for a share exchange (the "Share
Exchange") pursuant to which the stockholders of Stanford Ranch will receive
an aggregate of 2,862,500 shares of Common Stock in exchange for their
ownership interests in Stanford Ranch, the sole asset of which at the time of
the consummation of the Share Exchange will be 2,902,500 shares of Class B
Stock. In addition, prior to the consummation of the Share Exchange, Mr. Broad
is obligated to convert or cause the conversion of a sufficient number of
shares of Class B Stock into Common Stock such that, after giving effect to
such conversion and the Share Exchange, the total number of votes entitled to
be cast by holders of Class B Stock will be less than 50% of the total number
of votes entitled to be cast by holders of Common Stock, Class B Stock and the
Company's Adjustable Rate Cumulative Preferred Stock, Series C, no par value,
voting together as a single class (the "Conversion Commitment"). See
"Description of Capital Stock--Common Stock and Class B Stock--Voting Rights"
and "--Class B Conversion Rights." After giving effect to the Share Exchange
and the Conversion Commitment (assuming conversion of all of the Class B Stock
held by the Donald B. Kaufman Marital Trust) as if such transactions had
occurred on April 30, 1996, Mr. Broad would have controlled 51.9% 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. The Share Exchange is expected to be
consummated in June 1996.
Pursuant to the Stock Agreement, Mr. Broad may deliver up to 3,000,000
shares (3,450,000 shares if the over-allotment option granted to the
underwriter of the STRYPES is exercised in full) of Nontransferable Class B
Stock to the ML & Co. Subsidiary (subject to Mr. Broad's right to deliver an
amount in cash). Mr. Broad has the right at any time to modify the Stock
Agreement so that he may deliver Common Stock (or cash) instead of Class B
Stock (or cash). Until such shares are delivered, Mr. Broad will retain the
right to vote such shares and receive dividends thereon.
4
<PAGE>
COMMON STOCK PRICE RANGES AND DIVIDENDS
The Common Stock sale prices (as quoted on the NYSE Composite Tape) and per
share dividend data for each full quarter during fiscal years ended September
30, 1994 and 1995, for the first and second fiscal quarters of 1996 and for
the third fiscal quarter of 1996 through June 6, 1996 are set forth below. The
payment of future dividends on the Common Stock and the amounts thereof will
depend on business conditions, earnings and financial requirements of the
Company and other relevant factors. The sale prices and dividend amounts set
forth below have been restated to reflect a three-for-two stock split paid in
the form of a stock dividend on November 10, 1995.
The Company's Common Stock trades under the symbol SAI.
<TABLE>
<CAPTION>
COMMON STOCK PRICES DIVIDENDS PAID
------------------- -----------------------
COMMON NONTRANSFERABLE
HIGH LOW STOCK CLASS B STOCK(1)
------------------- ------ ----------------
<S> <C> <C> <C> <C>
FISCAL YEAR
1994
First Quarter..................... $31 $22 $.067 $.06
Second Quarter.................... 29 1/8 22 3/8 .067 .06
Third Quarter..................... 29 1/2 22 7/8 .067 .06
Fourth Quarter.................... 30 7/8 26 7/8 .067 .06
1995
First Quarter..................... $27 7/8 $22 7/8 $.10 $.09
Second Quarter.................... 29 1/2 24 .10 .09
Third Quarter..................... 37 28 1/4 .10 .09
Fourth Quarter.................... 42 33 1/2 .10 .09
1996
First Quarter..................... $49 3/4 $40 53/64 $.15 $.135
Second Quarter.................... 57 1/2 44 1/8 .15 .135
Third Quarter (through June 6,
1996)............................ 58 1/8 45 5/8 .15 .135
</TABLE>
- --------
(1) Holders of Nontransferable Class B Stock are entitled to receive cash
dividends equal to 90% of any cash dividends paid to holders of the Common
Stock. For a description of the rights of holders of Nontransferable Class
B Stock, see "Description of Capital Stock--Common Stock and Class B
Stock."
5
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company at March 31, 1996. The table should be read in conjunction with
the Company's consolidated financial statements and notes thereto included in
the documents incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
MARCH 31, 1996
(IN THOUSANDS)
--------------
<S> <C>
Indebtedness (interest rates are as of March 31, 1996):
Short-term indebtedness.................................... $ 63,359
----------
Long-term notes and debentures:
Medium-term notes due 1998 through 2025 (5 1/2% to 7
3/8%)................................................... 248,335
8 1/8% debentures due April 28, 2023..................... 100,000
9.95% debentures due February 1, 2012.................... 100,000
9% notes due January 15, 1999............................ 125,000
----------
Total long-term notes and debentures................... 573,335
----------
Total indebtedness......................................... 636,694
----------
Company-obligated mandatorily redeemable preferred
securities of subsidiary grantor trusts................... 237,631(1)
----------
Shareholders' equity:
Preferred Stock.......................................... 384,549
Nontransferable Class B Stock............................ 10,240
Common Stock............................................. 49,440
Additional paid-in capital............................... 357,295
Retained earnings........................................ 757,525
Net unrealized losses on debt and equity securities
available for sale...................................... (32,173)
----------
Total shareholders' equity............................... 1,526,876
----------
Total capitalization....................................... $2,401,201
==========
</TABLE>
- --------
(1) Represents the Company-obligated mandatorily redeemable preferred
securities of (1) SunAmerica Capital Trust I, the sole asset of which is
$54.26 million principal amount of 9.95% Junior Subordinated Debentures
due 2044 of the Company and (2) SunAmerica Capital Trust II, the sole
asset of which is $191.22 million principal amount of 8.35% Junior
Subordinated Debentures due 2044 of the Company.
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
Reference is made to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995 (the "Form 10-K"), which is incorporated by
reference herein and which contains the Company's audited consolidated
financial statements, including the consolidated income statement for the
Company's three fiscal years in the period ended September 30, 1995,
consolidated balance sheets as of September 30, 1994 and 1995, and the related
notes. Selected unaudited financial information as of and for the six months
ended March 31, 1995 and 1996 should be read in conjunction with the audited
consolidated financial statements and related notes contained in the Form 10-K
and the unaudited consolidated financial statements contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, which
report is also incorporated by reference herein. Such unaudited information
reflects, in the opinion of management, all adjustments, consisting of only
normal accruals, necessary for a consistent presentation with the audited
financial information. Results of operations for the six months ended March
31, 1995 and 1996 may not necessarily be indicative of the results to be
expected for the full fiscal year. Per share amounts and dividends have been
restated to reflect a three-for-two stock split paid in the form of a stock
dividend on November 10, 1995.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED SEPTEMBER 30, MARCH 31,
----------------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- --------- --------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Net investment income... $ 162,412 $ 219,384 $ 263,791 $ 294,454 $ 365,555 $164,825 $214,420
Net realized investment
losses................. (46,060) (56,364) (21,287) (21,124) (33,012) (15,575) (2,185)
Fee income.............. 92,689 112,831 134,305 150,736 179,288 83,636 104,642
General and
administrative
expenses............... (120,475) (133,058) (135,790) (132,743) (166,540) (74,224) (94,340)
Provision for future
guaranty fund
assessments............ -- -- (22,000) -- -- -- --
Amortization of deferred
acquisition costs...... (40,088) (48,375) (51,860) (66,925) (80,829) (37,414) (40,516)
Other income, net....... 24,903 16,673 16,852 15,603 15,144 9,040 8,006
--------- --------- --------- --------- --------- -------- --------
Pretax income........... 73,381 111,091 184,011 240,001 279,606 130,288 190,027
Income tax expense...... (25,900) (34,300) (57,000) (74,700) (85,400) (37,800) (57,000)
--------- --------- --------- --------- --------- -------- --------
Income before cumulative
effect of change in
accounting for income
taxes.................. 47,481 76,791 127,011 165,301 194,206 92,488 133,027
Cumulative effect of
change in accounting
for income taxes....... -- -- -- (33,500) -- -- --
--------- --------- --------- --------- --------- -------- --------
Net income.............. $ 47,481 $ 76,791 $ 127,011 $ 131,801 $ 194,206 $ 92,488 $133,027
========= ========= ========= ========= ========= ======== ========
EARNINGS PER SHARE:
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME
TAXES.................. $ 0.88 $ 1.20 $ 1.83 $ 2.39 $ 2.84 $ 1.34 $ 1.90
Cumulative effect of
change in accounting
for income taxes....... -- -- -- (0.54) -- -- --
--------- --------- --------- --------- --------- -------- --------
Net income.............. $ 0.88 $ 1.20 $ 1.83 $ 1.85 $ 2.84 $ 1.34 $ 1.90
========= ========= ========= ========= ========= ======== ========
CASH DIVIDENDS PER SHARE
PAID TO COMMON
SHAREHOLDERS:
Nontransferable Class B
Stock(1).............. $ 0.120 $ 0.120 $ 0.168 $ 0.240 $ 0.360 $ .180 $ .270
========= ========= ========= ========= ========= ======== ========
Common Stock........... $ 0.133 $ 0.133 $ 0.187 $ 0.268 $ 0.400 $ .200 $ .300
========= ========= ========= ========= ========= ======== ========
</TABLE>
- --------
(1) Holders of Nontransferable Class B Stock are entitled to receive cash
dividends equal to 90% of any cash dividends paid to holders of the Common
Stock. For a description of the rights of holders of Nontransferable Class
B Stock, see "Description of Capital Stock--Common Stock and Class B
Stock."
7
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT MARCH 31,
----------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL POSITION
Investments............. $ 7,596,275 $ 9,428,266 $10,364,952 $ 9,280,390 $10,808,959 $ 9,798,381 $15,182,399
Variable annuity
assets................. 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,535,622 5,779,699
Deferred acquisition
costs.................. 392,278 436,209 475,917 581,874 526,415 573,152 714,740
Other assets............ 279,007 245,833 231,582 280,868 245,787 323,121 332,127
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets............ $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $15,230,276 $22,008,965
=========== =========== =========== =========== =========== =========== ===========
Reserves for fixed
annuity contracts...... $ 5,359,757 $ 5,143,339 $ 4,934,871 $ 4,519,623 $ 4,862,250 $ 4,798,893 $ 8,730,750
Reserves for guaranteed
investment contracts... 1,598,963 2,023,048 2,216,104 2,783,522 3,607,192 2,949,632 3,865,895
Trust deposits.......... -- 367,458 378,986 442,320 426,595 448,174 456,778
Variable annuity
liabilities............ 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,535,622 5,779,699
Other payables and
accrued liabilities.... 344,789 1,372,010 1,828,153 860,763 747,733 842,121 699,881
Long-term notes and
debentures............. -- 225,000 380,560 472,835 524,835 472,835 573,335
Collateralized mortgage
obligations and reverse
repurchase agreements.. 299,343 182,784 112,032 28,662 -- -- 63,359
Other senior
indebtedness........... 38,035 25,919 15,119 -- -- -- --
Subordinated notes...... 117,985 -- -- -- -- -- --
Deferred income taxes... 58,779 40,682 96,599 74,319 146,847 101,169 74,761
Company-obligated
mandatorily redeemable
preferred securities of
subsidiary grantor
trusts(1).............. -- -- -- -- 52,631 -- 237,631
Shareholders' equity.... 449,909 730,068 1,110,027 961,088 1,213,078 1,081,830 1,526,876
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity... $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $15,230,276 $22,008,965
=========== =========== =========== =========== =========== =========== ===========
BOOK VALUE PER SHARE.... $ 8.16 $ 9.69 $ 15.09 $ 12.60 $ 17.78 $ 14.44 $ 21.16
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
- --------
(1) Represents the Company-obligated mandatorily redeemable preferred
securities, at September 30, 1995, of SunAmerica Capital Trust I, the sole
asset of which is $54.26 million principal amount of 9.95% Junior
Subordinated Debentures due 2044 of the Company and, at March 31, 1996, of
(1) SunAmerica Capital Trust I and (2) SunAmerica Capital Trust II, the
sole asset of which is $191.22 million principal amount of 8.35% Junior
Subordinated Debentures due 2044 of the Company.
8
<PAGE>
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,
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").
At April 30, 1996, there were outstanding 49,446,557 shares of Common Stock,
10,235,524 shares of Nontransferable Class B Stock and 8,001,565 shares of
Preferred Stock. After giving effect to the Share Exchange and Conversion
Commitment as if it had occurred on April 30, 1996, there would have been
outstanding 54,220,157 shares of Common Stock and 5,421,924 shares of
Nontransferable Class B Stock. There are no shares of Transferable Class B
Stock outstanding. The outstanding series of Preferred Stock rank pari passu
with each other and senior to the Common Stock and Class B Stock.
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.
9
<PAGE>
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.
Subsequent to the Share Exchange, the Articles of Incorporation will 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 of the outstanding shares of Common Stock and Nontransferable Class B
Stock are validly issued, fully paid and non-assessable.
PLAN OF DISTRIBUTION
The Company is advised that under the terms of the STRYPES, the ML & Co.
Subsidiary is obligated to pay and discharge the STRYPES at maturity or
redemption by delivering to the holders thereof a specified number of shares
of Common Stock (or an amount in cash). The Company is advised that pursuant
to the terms of the Stock Agreement, Mr. Eli Broad is obligated to deliver to
the ML & Co. Subsidiary on June 14, 1999, a specified number of shares of
Nontransferable Class B (which Class B Stock would convert into Common Stock
upon such delivery--see "Description of Capital Stock--Common Stock and Class
B Stock--Class B Conversion Rights") (subject to Mr. Broad's right to redeem
his obligations early or to deliver an amount in cash). Mr. Broad has the
right at any time to modify the Stock Agreement so that he may deliver Common
Stock (or cash) instead of Class B Stock (or cash). The Company is not a party
to the Stock Agreement and has no obligations thereunder or with respect to
the STRYPES, which are securities of ML & Co. and are not securities of the
Company.
Mr. Broad and the Company have agreed to indemnify the underwriter of the
STRYPES against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
information in this Prospectus (including the documents incorporated by
reference herein). In addition, Mr. Broad has agreed to indemnify the Company
against certain liabilities, including liabilities under the Securities Act.
SunAmerica has agreed that, subject to certain limited exceptions, it will
not, and will cause its subsidiaries not to, without the prior written consent
of the underwriter of the STRYPES, directly or indirectly, for a period of 60
days after the date of this Prospectus, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, or enter into any agreement to sell,
any Common Stock or any securities convertible into or exchangeable or
exercisable for any Common Stock. The Selling Stockholder has similarly
agreed, subject to certain limited exceptions, not to sell, for a period of 60
days of this Prospectus, any shares by the Selling Stockholder without the
prior written consent of the underwriter of the STRYPES.
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LEGAL MATTERS
The validity of the Common Stock will be passed upon for the Company by
Piper & Marbury L.L.P., Baltimore, Maryland. Certain other legal matters 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. 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 outstanding 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 Form 10-K, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
ERISA MATTERS
The Company and certain affiliates of the Company, including Anchor National
Life Insurance Company and SunAmerica Life Insurance Company, may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a "disqualified person"
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code") with respect to many employee benefit plans. Prohibited transactions
within the meaning of ERISA or the Code may arise, for example, if the Common
Stock is 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
Common Stock is 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 Common Stock should consult with its legal counsel.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the Commission's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549, or at the public reference facilities of the
regional offices in Chicago and New York. The addresses of these regional
offices are as follows: 500 West Madison Street, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material also can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington D.C. 20549, upon payment of
the fees prescribed by the rules and regulations of the Commission. Reports,
proxy statements, and other information concerning the Company may also be
inspected at the offices of the New York Stock Exchange, Inc. at 20 Broad
Street, New York, New York 10005 and at the offices of the Pacific Stock
Exchange at 301 Pine Street, San Francisco, California 94104. The Company's
Common Stock is listed on both exchanges.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered by this
Prospectus. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference." Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, are qualified in
all respects by reference to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is subject to and qualified in its entirety by such reference. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement, including the
exhibits thereto, and the documents incorporated herein by reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated by reference in the Prospectus the following
documents previously filed by the Company with the Commission pursuant to the
1934 Act:
1. Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended December 31, 1995
and March 31, 1996.
3. Current Reports on Form 8-K filed on October 6, 1995, October 19, 1995,
October 31, 1995, November 9, 1995, December 12, 1995, as amended by
Amendment No. 2 on Form 8-K/A, filed May 7, 1996, January 29, 1996,
March 15, 1996, as amended by Amendment No. 1 on Form 8-K/A, filed May
7, 1996, April 24, 1996, and April 27, 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 document shall be directed to
SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022,
Attention: Vice President, Investor Relations (telephone (310) 772-6000).
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