<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1996
REGISTRATION NO. 333-4111
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SUNAMERICA INC. MARYLAND 86-0176061
(EXACT NAME OF (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
REGISTRANT INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
AS SPECIFIED IN ITS
CHARTER)
1 SUNAMERICA CENTER
LOS ANGELES, CALIFORNIA 90067-6022
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
SUSAN L. HARRIS, ESQ.
SENIOR VICE PRESIDENT AND
GENERAL COUNSEL--CORPORATE AFFAIRS
SUNAMERICA INC.
1 SUNAMERICA CENTER
LOS ANGELES, CALIFORNIA 90067-6022
(310) 772-6000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------
COPIES TO:
JEFFREY SMALL, ESQ. GREGG A. NOEL, ESQ.
DAVIS POLK & WARDWELL SKADDEN, ARPS, SLATE, MEAGHER & FLOM
450 LEXINGTON AVENUE 300 SOUTH GRAND AVENUE, SUITE 3400
NEW YORK, NEW YORK 10017 LOS ANGELES, CALIFORNIA 90071
(212) 450-4000 (213) 687-5000
---------------
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. [X]
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 5, 1996
PROSPECTUS
LOGO SunAmerica
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
StockSM, % STRYPESSM Due , 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 3, 1996, the last reported sale price
of the Common Stock on the NYSE was $56.50 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 , 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 3, 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 3,
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 , 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 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.
LEGAL MATTERS
The validity of the Common Stock will be passed upon for the Company by
Piper & Marbury L.L.P.,
10
<PAGE>
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.
11
<PAGE>
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).
12
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 1. 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. All of the amounts shown
are estimates, except the SEC registration fee. All of the following expenses
will be paid by Mr. Eli Broad.
<TABLE>
<S> <C>
SEC registration fee......................................... $ 66,471.98
Legal fees and expenses...................................... 350,000.00
Printing expenses............................................ 75,000.00
Fees of accountants.......................................... 40,000.00
Blue sky fees and expenses................................... 10,000.00
Miscellaneous................................................ 3,528.02
-----------
Total...................................................... $545,000.00
===========
</TABLE>
- --------
ITEM 2. 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.
Reference is made to Exhibits 1 and 10.1, pursuant to which Merrill Lynch,
Pierce, Fenner and Smith Incorporated and Eli Broad, respectively, will agree
to indemnify the directors and certain officers of the Company against certain
liabilities, including liabilities under the Securities Act.
ITEM 3. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1 Form of Registration Agreement among the Company, Eli Broad, ML &
Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
4.1 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)
4.2 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)
4.3+ Form of specimen certificate for the Common Stock
5 Opinion of Piper & Marbury L.L.P.
10 Form of Indemnification and Reimbursement Agreement between Eli
Broad and the Company
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5)
24 Power of Attorney for the Company (included on signature pages
hereto)
</TABLE>
- --------
+ Previously filed
II-1
<PAGE>
ITEM 4. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) 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.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions referred to in Item 2 of this
registration statement, or otherwise, the registrant has 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 registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant 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 registrant 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.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON
JUNE 4, 1996.
SunAmerica Inc.
/s/ Jay S. Wintrob
By: _________________________________
NAME: JAY S. WINTROB
TITLE: VICE CHAIRMAN
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATE INDICATED.
SIGNATURE TITLE DATE
Chairman, President
* and Chief Executive June 4, 1996
- ------------------------------------- Officer (Principal
ELI BROAD Executive Officer)
Executive Vice
* President June 4, 1996
- ------------------------------------- (Principal
JAMES R. BELARDI Financial Officer)
Senior Vice
* President and June 4, 1996
- ------------------------------------- Controller
SCOTT L. ROBINSON (Principal
Accounting Officer)
II-3
<PAGE>
SIGNATURE TITLE DATE
Director
- ------------------------------------ June 4, 1996
RONALD J. ARNAULT
Director
* June 4, 1996
- ------------------------------------
KAREN HASTIE-WILLIAMS
Director
* June 4, 1996
- ------------------------------------
DAVID O. MAXWELL
Director
* June 4, 1996
- ------------------------------------
BARRY MUNITZ
Director
June 4, 1996
- ------------------------------------
LESTER POLLACK
Director
* June 4, 1996
- ------------------------------------
CARL E. REICHARDT
Director
* June 4, 1996
- ------------------------------------
RICHARD D. ROHR
Director
* June 4, 1996
- ------------------------------------
SANFORD C. SIGOLOFF
Director
* June 4, 1996
- ------------------------------------
HAROLD M. WILLIAMS
/s/ Susan L. Harris June 4, 1996
*By____________________________
SUSAN L. HARRIS
ATTORNEY-IN-FACT
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON MAY 21, 1996.
SunAmerica Inc.
By: _________________________________
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 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, THE REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATE INDICATED.
SIGNATURE TITLE DATE
Chairman, President
and Chief Executive
- ------------------------------------- Officer (Principal
ELI BROAD Executive Officer)
Executive Vice
President
- ------------------------------------- (Principal
JAMES R. BELARDI Financial Officer)
Senior Vice
President and
- ------------------------------------- Controller
SCOTT L. ROBINSON (Principal
Accounting Officer)
II-5
<PAGE>
EXHIBIT 1
______________________________________________________________________________
______________________________________________________________________________
SUNAMERICA INC.
(a Maryland corporation)
REGISTRATION AGREEMENT
----------------------
Dated: June __, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
SUNAMERICA INC.
(a Maryland corporation)
REGISTRATION AGREEMENT
----------------------
June __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH & CO., INC.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
SunAmerica Inc., a Maryland corporation (the "Company"), and Mr. Eli
Broad (the "Selling Stockholder") confirm their respective agreements with
Merrill Lynch & Co., Inc., a Delaware corporation ("ML&Co."), and with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), in connection with the proposed issue and sale by ML&Co. to the
Underwriter, pursuant to an underwriting agreement, dated the date hereof (the
"Underwriting Agreement"), among ML&Co. and the Underwriter, of an aggregate of
3,000,000 of ML&Co.'s Structured Yield Product Exchangeable for Stock/SM/, ___%
STRYPES/SM/ due ___________, 1999 (each, a "STRYPES"), payable at maturity or
upon redemption by delivery of shares of Common Stock, par value $1.00 per share
(the "SunAmerica Common Stock"), of the Company, and, at the option of the
Underwriter, all or any part of 450,000 additional STRYPES to cover over-
allotments, if any. The aforesaid 3,000,000 STRYPES (the "Initial Securities")
to be purchased by the Underwriter and all or any part of the 450,000 STRYPES
subject to the option described in Section 2(b) of the Underwriting Agreement
(the "Option Securities") are hereinafter called, collectively, the
<PAGE>
"Securities." Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Underwriting Agreement.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement and the Underwriting Agreement have been executed and delivered. The
Company acknowledges that the execution and delivery of this Agreement is a
condition to the execution and delivery of the Underwriting Agreement by the
Underwriter and ML&Co. and that, in consideration of the execution and delivery
of the Underwriting Agreement by the Underwriter and ML&Co., the Company is
willing to make the representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-4111) covering the
registration of 3,450,000 shares of SunAmerica Common Stock that may be
delivered at maturity or upon redemption of the Securities under the Securities
Act of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Each prospectus used before such registration
statement became effective is herein called a "SunAmerica preliminary
prospectus." Such registration statement, including the exhibits thereto, the
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective, is herein called the "SunAmerica Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations") is
herein referred to as the "SunAmerica Rule 462(b) Registration Statement," and
after such filing the term "SunAmerica Registration Statement" shall include the
SunAmerica Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriter for use in
connection with the offering of the Securities is herein called the "SunAmerica
Prospectus." For purposes of this Agreement, all references to the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the
SunAmerica Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in the SunAmerica Registration
Statement, any SunAmerica preliminary prospectus or the SunAmerica Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the SunAmerica Registration Statement, any SunAmerica preliminary
prospectus or the SunAmerica Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the SunAmerica
Registration Statement, such SunAmerica preliminary prospectus or the SunAmerica
Prospectus, as the case may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, the Company,
Merrill Lynch Capital Services, Inc., a wholly owned subsidiary of ML&Co. (the
"ML&Co. Subsidiary"), and the Selling Stockholder have entered into an agreement
(the "Stock Agreement"), pursuant to which the Selling Stockholder is obligated
to deliver to the ML&Co. Subsidiary, on _____, 1999 or immediately prior to a
redemption of his obligations under the Stock Agreement, a specified number of
shares of SunAmerica Common Stock, subject to the Selling Stockholder's option,
exercisable in his sole discretion, to satisfy his obligations under the Stock
Agreement by delivering immediately prior to such maturity or redemption a
specified amount of cash in lieu of such shares.
1. Representations and Warranties. (A) The Company represents and
------------------------------
warrants to each of the Underwriter and to ML&Co. as of the date hereof, as of
the Closing Time referred to in Section 2(c) of the Underwriting Agreement, and
as of each Date of Delivery (if any) referred to in Section 2(b) of the
Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as
follows:
(a) The SunAmerica Registration Statement (including the most
recent post-effective amendment thereto, if any) has been declared
effective by the Commission; no stop order suspending the effectiveness of
the SunAmerica Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the SunAmerica Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the SunAmerica Registration Statement, when
such part became effective, did not contain, and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
SunAmerica Registration Statement, since the later of the date it became
effective and the date of the most recent post-effective amendment, if any,
will not fail to reflect any facts or events which individually or in the
aggregate represent a fundamental change in the information set forth in
the SunAmerica Registration Statement as of such date, (iii) the SunAmerica
Registration Statement and the SunAmerica Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iv) the SunAmerica Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this Section 1(b) do not apply to statements or
omissions in the SunAmerica Registration Statement or the SunAmerica
Prospectus based upon information relating to the Underwriter or ML&Co.
furnished to the Company in writing by the Underwriter or ML&Co. expressly
for use therein.
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(c) This Agreement and the transactions contemplated hereby have
been duly authorized, and this Agreement has been duly executed and
delivered by the Company.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the SunAmerica Registration Statement and SunAmerica
Prospectus; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not have a material adverse effect
on the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries, considered as one enterprise.
(e) Each of SunAmerica Life Insurance Company, First SunAmerica
Life Insurance Company, Anchor National Life Insurance Company, SunAmerica
Asset Management Corp., Resources Trust Company, Royal Alliance Associates,
Inc., SunAmerica Securities, Inc., Ford Life Insurance Company and CalFarm
Life Insurance Company (together, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
its business as presently conducted and as described in the SunAmerica
Registration Statement and SunAmerica Prospectus, and is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the owner-ship or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Company and its subsidiaries,
considered as one enterprise; and all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is
fully paid and nonassessable and is owned (except for directors qualifying
shares) directly or through subsidiaries, by the Company, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(f) The authorized, issued and outstanding capital stock of the
Company is as set forth in the SunAmerica Registration Statement and
SunAmerica Prospectus (except for subsequent issuances, if any, pursuant to
reservations, stock option agreements, employee benefit plans or the
exercise of convertible securities which may be referred to in the
SunAmerica Registration Statement and SunAmerica Prospectus); all of the
issued and outstanding shares of capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and not subject to any
preemptive or similar rights.
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(g) None of the Company nor any of the Subsidiaries is in
violation of its respective charter or bylaws, as applicable, or in default
in the performance of any material obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or of any of the
Subsidiaries is subject, or in violation of any applicable law,
administrative regulation or administrative or court order or decree, which
violation or default would, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise; and the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement and the
registration of the SunAmerica Common Stock, will not conflict with or
constitute a breach of, or a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets
of the Company or any of the Subsidiaries is subject, except for a
conflict, breach, default, lien, charge or encumbrance which would not have
a material adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Company and its subsidiaries considered
as one enterprise, nor will such action result in any violation of the
provisions of the articles of incorporation or by-laws of the Company or
any of the Subsidiaries or any applicable law, administrative regulation or
administrative or court decree and no consent, approval, authorization or
order of or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this Agreement
or the issuance and sale of the Securities, except such as may be required
by the securities or Blue Sky laws or insurance securities laws of the
various states in connection with the offer and sale of the Securities.
(h) There are no legal or governmental proceedings pending or, to
the knowledge of the Company threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
SunAmerica Registration Statement or the SunAmerica Prospectus and are not
so described or which are reasonably likely to result in any material
adverse change in the condition, financial or otherwise, or in the earnings
or business affairs of the Company and its subsidiaries, considered as one
enterprise, or which would be reasonably likely to materially and adversely
affect a material portion of the properties or assets thereof or which is
reasonably likely to materially and adversely affect the consummation of
this Agreement; all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described in the
SunAmerica Registration Statement or the SunAmerica Prospectus, including
ordinary routine litigation incidental to the business of the Company or
any of its subsidiaries, are, considered in the aggregate, not material;
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<PAGE>
and there are no contracts or documents that are required to be filed as
exhibits to the SunAmerica Registration Statement by the Securities Act,
the Exchange Act or the rules and regulations thereunder, that have not
been filed as required.
(i) Price Waterhouse LLP, the accountants who certified the
financial statements and supporting schedules of the Company included or
incorporated by reference in the SunAmerica Registration Statement and
SunAmerica Prospectus, are independent public accountants with respect to
the Company and the subsidiaries of the Company as required by the
Securities Act and the rules and regulations promulgated thereunder.
(j) The financial statements of the Company included or
incorporated by reference in the SunAmerica Registration Statement or
SunAmerica Prospectus present fairly the financial position of the Company
and the consolidated subsidiaries of the Company as of the dates indicated
and the results of their operations for the periods specified; except as
otherwise stated in the SunAmerica Registration Statement and SunAmerica
Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and
the supporting schedules included or incorporated by reference in the
SunAmerica Registration Statement or SunAmerica Prospectus present fairly
the information required to be included therein.
(k) Since the respective dates as of which information is given
in the SunAmerica Registration Statement and SunAmerica Prospectus, and
except as otherwise stated or contemplated therein, (i) there has been no
material adverse change and no development involving a prospective material
adverse change in the condition, financial or otherwise, or in the earnings
or business affairs of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (ii)
there have been no transactions entered into by the Company or any of the
Subsidiaries which are material to the Company and its subsidiaries,
considered as one enterprise, other than those entered into in the ordinary
course of business and (iii) except for regular quarterly dividends, there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(l) The Company and the Subsidiaries possess such certificates,
authorizations or permits issued by the appropriate state or federal
regulatory agencies or bodies as are necessary to conduct the business as
now conducted by them and as described in the SunAmerica Registration
Statement or SunAmerica Prospectus, except where the failure to so possess
such certificates, authorizations or permits would not have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise; and neither the Company nor any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, is reasonably likely to have a material adverse effect
on the condition, financial or otherwise, or the
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earnings or business affairs of the Company and its subsidiaries,
considered as one enterprise.
(m) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or affiliate
located in Cuba.
(n) There are no holders of securities of the Company with
currently exercisable registration rights to have any securities registered
as part of the SunAmerica Registration Statement or included in the
offering contemplated by this Agreement.
(o) The SunAmerica Common Stock conforms in all material respects
to the statements relating thereto contained in the SunAmerica Prospectus
and the SunAmerica Registration Statement.
(p) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(q) All of the SunAmerica Stock currently held by the Selling
Stockholder is, and the SunAmerica Common Stock which will be issued upon
conversion of shares of the Company's Nontransferable Class B Stock, par
value $1.00 per share ("Class B Stock"), currently held by the Selling
Stockholder will be, validly issued, fully paid and non-assessable and not
be subject to any preemptive or other right to subscribe for or purchase
Class B Stock or SunAmerica Common Stock.
(B) The Selling Stockholder represents and warrants to each of the
Underwriter and ML&Co. as of the date hereof, as of the Closing Time referred to
in Section 2(c) of the Underwriting Agreement, and as of each Date of Delivery
(if any) referred to in Section 2(b) of the Underwriting Agreement, and agrees
with each of the Underwriter and ML&Co. as follows:
(a) At the date hereof, the Selling Stockholder is the sole
registered owner of and has all rights in and to at least 3,450,000 shares
of Class B Stock, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. If and when the Selling
Stockholder delivers to the ML&Co. Subsidiary shares of Class B Stock or
SunAmerica Common Stock pursuant to the Stock Agreement, upon delivery by
the Selling Stockholder to the ML&Co. Subsidiary of such shares of
SunAmerica Stock pursuant to the Stock Agreement, the ML&Co. Subsidiary
will be the sole registered owner of an equivalent number of shares of
SunAmerica Common Stock and, assuming the ML&Co. Subsidiary purchased for
value in good faith and without notice of any adverse claim, the ML&Co.
Subsidiary will have acquired all rights in and to such shares of
SunAmerica Common Stock, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. The delivery of shares of
SunAmerica Class B Stock or Common Stock to the ML&Co. Subsidiary in
accordance with the Stock Agreement is not, and at the time
7
<PAGE>
of delivery of such shares will not be, subject to any right of first
refusal or similar rights of any person pursuant to any contract to which
the Selling Stockholder is a party or by which he is bound.
(b) This Agreement has been duly executed and delivered by the Selling
Stockholder.
(c) The Stock Agreement at the Closing Time, will have been duly
executed and delivered by the Selling Stockholder and (assuming the due
authorization, execution and delivery by the ML&Co. Subsidiary) will
constitute a valid and binding agreement of the Selling Stockholder,
enforceable against the Selling Stockholder in accordance with its terms,
except (x) as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally, (y) as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law), and (z) that the
Selling Stockholder makes no representation or warranty as to the
application of the Commodities Exchange Act or the rules and regulations of
the Commodities Futures Trading Commission promulgated thereunder
(collectively, the "CEA"), to the matters set forth in this paragraph (c).
Amounts received by the Selling Stockholder at Closing Time and at each
Date of Delivery, if any, pursuant to the Stock Agreement will not be used
by the Selling Stockholder for the purpose, whether immediate, incidental
or ultimate, of buying or carrying a margin stock, as such terms are
defined in Regulation G promulgated by the Board of Governors of the
Federal Reserve System.
(d) The execution, delivery and performance by the Selling
Stockholder of this Agreement and the Stock Agreement and the consummation
by the Selling Stockholder of the transactions contemplated herein and
therein and compliance by the Selling Stockholder with its obligations
hereunder and thereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or a Selling Stockholder Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Selling Stockholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which
the Selling Stockholder is a part or by which he may be bound, or to which
any of the property or assets of the Selling Stockholder is subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not, singly or in the aggregate, materially and adversely affect
the ability of the Selling Stockholder to perform his obligations under
this Agreement or the Stock Agreement), nor will such action result in any
violation of any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Selling
Stockholder or any of his assets, properties or operations (except for (x)
such violations that would not, singly or in the aggregate, materially and
adversely affect the ability of the Selling
8
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Stockholder to perform his obligations under this Agreement or the Stock
Agreement and (y) violations of the CEA, as to which the Selling
Stockholder makes no representation or warranty). As used herein, a
"Selling Stockholder Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Selling Stockholder.
(e) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the execution, delivery or
performance by the Selling Stockholder of this Agreement or the Stock
Agreement or the consummation by the Selling Stockholder of the
transactions contemplated by this Agreement or the Stock Agreement, except
(x) such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws, and (y) that the
Selling Stockholder makes no representation or warranty as to the
application of the CEA to the matters set forth in this paragraph (e).
(f) The Selling Stockholder is familiar with the representations
and warranties of SunAmerica contained in Section 1(A) of this Agreement
and the information included or incorporated by reference in the SunAmerica
Registration Statement and the SunAmerica Prospectus and has no reason to
believe that (x) the representations and warranties of SunAmerica contained
in Section 1(A) of this Agreement are not true and correct, (y) the
SunAmerica Registration Statement, any SunAmerica Rule 462(b) Registration
Statement or any post-effective amendments thereto, at the respective times
the SunAmerica Registration Statement, any SunAmerica Rule 462(b)
Registration Statement or any post-effective amendments thereto became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or (z) the SunAmerica Prospectus or
any amendment or supplement thereto, at the time the SunAmerica Prospectus
was issued, at the time any such amended or supplemented prospectus was
issued or at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Any certificate signed by the
Selling Stockholder delivered to the Underwriter or the Company shall be
deemed a representation and warranty by the Selling Stockholder to the
Underwriter or the Company, as the case may be, as to the matters covered
thereby.
2. Covenants of the Company. In further consideration of the
------------------------
agreements of the Underwriter and ML&Co. contained herein, the Company covenants
as follows:
(a) To furnish the Underwriter, without charge, a signed copy of the
SunAmerica Registration Statement (including exhibits thereto) and, during the
period mentioned in paragraph (c) below, as many copies of the SunAmerica
Prospectus, any docu-
9
<PAGE>
ments incorporated by reference therein and any supplements and amendments
thereto or to the SunAmerica Registration Statement as the Underwriter may
reasonably request.
(b) Before amending or supplementing the SunAmerica Registration
Statement or the SunAmerica Prospectus with respect to the SunAmerica Common
Stock, to furnish to the Underwriter a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
the Underwriter reasonably objects.
(c) If, during such period after the first date of the public offering
of the Securities as the SunAmerica Prospectus is required by law to be
delivered in connection with sales by the Underwriter or any dealer, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the SunAmerica Prospectus in order to make the statements therein, in
the light of the circumstances when the SunAmerica Prospectus is delivered to a
purchaser, not misleading, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriter, and to any dealers (whose names
and addresses the Underwriter will furnish to the Company) to which Securities
may have been sold by the Underwriter and to any other dealer upon request,
either amendments or supplements to the SunAmerica Prospectus so that the
statements in the SunAmerica Prospectus as so amended or supplemented will not,
in the light of the circumstances when the SunAmerica Prospectus is delivered to
a purchaser, be misleading or so that the SunAmerica Prospectus, as so amended
or supplemented, will comply with law.
(d) To endeavor to qualify the SunAmerica Common Stock for offer and
sale under the securities or Blue Sky laws or insurance securities laws of such
jurisdictions as the Underwriter shall reasonably request.
(e) To make generally available to the Company's security holders and
to the Underwriter as soon as practicable an earning statement covering a twelve
month period beginning on the first day of the first full fiscal quarter after
the date of this Agreement, which earning statement shall satisfy the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) During the period mentioned in paragraph (c) above, to advise the
Underwriter promptly of the issuance by the Commission of any stop order
suspending the effectiveness of the SunAmerica Registration Statement or the
initiation or threatening of any proceeding for that purpose.
(g) Not to, and to cause its subsidiaries not to, without the prior
written consent of the Underwriter, directly or indirectly, for a period of 60
days after the date of the ML&Co. Prospectus, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, or enter into any agreement to
sell, any SunAmerica Common Stock or any securities convertible into or
exchangeable or exercisable for any SunAmerica Common Stock; provided, however,
that such restriction shall not affect the ability of SunAmerica or its
subsidiaries to take any such action (i) as a consequence of obligations under
securities outstanding prior to the date of the ML&Co. Prospectus, (ii) in
connection with any
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employee benefit or incentive plan of SunAmerica or its subsidiaries, (iii) in
connection with the offering of the Securities or (iv) in connection with the
transactions contemplated as of the date hereof by the Share Exchange Agreement
dated as of January 12, 1996, by and among the Company, Stanford Ranch, Inc. and
the stockholders of Stanford Ranch, Inc. listed in the signature pages thereto.
(h) To make timely filings of periodic reports under the 1934 Act and
to take all other actions reasonably requested by the ML&Co. Subsidiary which
request shall be based on an opinion of Brown & Wood, and which opinion shall
state that it is based on a change in law, regulation or judicial or regulatory
interpretation since the date hereof, to ensure the availability of Rule 144
under the 1933 Act in connection with resales of SunAmerica Common Stock by the
ML&Co. Subsidiary.
(i) If the bank or trust company (the "Custodian") acting as
collateral agent and custodian for the ML&Co. Subsidiary delivers to the Company
(or its transfer agent) for transfer shares of Class B Stock together with duly
executed stock transfer powers therefor, to (or cause its transfer agent to)
deliver immediately an equivalent number of shares of SunAmerica Common Stock to
the transferees named in such stock powers.
(j) So long as any Securities remain outstanding, not to amend its
charter in any way that would adversely affect the rights, preferences and
privileges of the holders of Class B Stock including, without limitation, (i)
the combination or reclassification of Class B Stock; (ii) the convertibility of
Class B Stock into SunAmerica Common Stock including but not limited to the
conversion of Class B Stock into shares of SunAmerica Common Stock upon a
transfer of shares of Class B Stock not permitted under SunAmerica's charter;
(iii) the exchange of Class B Stock for shares of Transferable Class B Stock;
(iv) the ability to pledge shares of Class B Stock as collateral security for
indebtedness and the ability of pledgees to register such pledged shares in
"street" or "nominee" name; and (v) the reservation and availability of
SunAmerica Common Stock for issuance upon conversion of outstanding shares of
Class B Stock. The amendment (as described at pages 14 and 15 of the Company's
Notice of Annual Meeting of Shareholders and Proxy Statement dated January 15,
1996) to the Company's charter that was approved by the Company's shareholders
at the Company's Annual Meeting on February 16, 1996 shall not be deemed to
adversely affect the Nontransferable Class B Stock in any way.
3. Covenants of the Selling Stockholder.
------------------------------------
(a) The Selling Stockholder covenants with the Underwriter that,
during a period of 60 days from the date of this Agreement, the Selling
Stockholder will not, without the prior written consent of the Underwriter,
(x) offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any shares of SunAmerica Common Stock, securities convertible
into, exchangeable for or exercisable for or repayable with shares of
SunAmerica Common Stock or any rights or warrants to acquire shares of
SunAmerica Common Stock, or (y) cause to be filed any registration
statement under the 1933 Act with respect to any shares of SunAmerica
Common Stock, securities convertible into, exchangeable for or exercisable
for or repayable with
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<PAGE>
shares of SunAmerica Common Stock, or any rights or warrants to acquire
shares of SunAmerica Common Stock; provided, however, that such restriction
shall not affect the ability of the Selling Stockholder to transfer
SunAmerica Common Stock (i) upon his death, (ii) in a bona fide gift where
the donee agrees to a similar restriction on transfer and (iii) pursuant to
the Share Exchange Agreement dated as of January 31, 1996 by and among the
Company, Stanford Ranch, Inc., the Selling Stockholder and other Stanford
Ranch Stockholders listed in the signature pages thereto.
(b) At or prior to Closing Time, the Selling Stockholder will deliver
to the ML&Co. Subsidiary a duly executed purpose statement on Form FR, G-3
of the Board of Governors of the Federal Reserve System with respect to the
Stock Agreement.
4. Indemnification and Contribution. The Company and the Selling
--------------------------------
Stockholder jointly and severally agree to indemnify and hold harmless the
Underwriter, ML&Co. and each person, if any, who controls the Underwriter or
ML&Co. within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
expense and liabilities, joint or several (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) (collectively, "Losses"), caused by any untrue statement or alleged
untrue statement of a material fact contained in the SunAmerica Registration
Statement or any amendment thereof, any SunAmerica preliminary prospectus or the
SunAmerica Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such Losses are caused by any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Company by the Underwriter or ML&Co. in writing
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any SunAmerica preliminary prospectus shall not inure
to the benefit of the Underwriter or ML&Co., or any person controlling the
Underwriter or ML&Co., if a copy of the SunAmerica Prospectus (as then amended
or supplemented, if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
the person asserting such Losses, if required by law so to have been delivered,
at or prior to the purchase of Securities by such person, and if the SunAmerica
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such Losses. This indemnity will be in addition to any liability which
the Company and the Selling Stockholder may otherwise have.
The obligations and liabilities of the Company under the immediately
preceding paragraph shall be subject to the following terms and conditions: (i)
the indemnified party shall have previously requested indemnification for the
Losses from the Selling Stockholder under this Section 4; (ii) the Company shall
have received from the indemnified party notice of the indemnified party's
request for indemnification from the Selling Stockholder; and (iii)
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<PAGE>
the Selling Stockholder shall have failed to pay or reimburse such indemnified
party, within 60 days from the date such request was made, in accordance with
such request.
The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the SunAmerica Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act and the Selling
Stockholder to the same extent as the foregoing indemnity from the Company and
the Selling Stockholder to such Underwriter, but only to the extent that any
untrue statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with information furnished to the Company by the
Underwriter or ML&Co. in writing expressly for use in the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica
Prospectus or any amendments or supplements thereto. This indemnity will be in
addition to any liability which the Underwriter may otherwise have.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Underwriter, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company and the Selling
Stockholder, in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
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If the indemnification provided for in the first or second paragraph
in this Section 4 is unavailable to an indemnified party or insufficient in
respect of any Losses referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriter and ML&Co. on the other hand, from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Selling Stockholder on the one hand and of the
Underwriter and ML&Co. on the other hand in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the offering of the Securities
shall be deemed to be such that the Underwriter and ML&Co. shall be responsible
for that portion of the aggregate amount of such Losses, represented by the
percentage that the total underwriting discount received by the Underwriter, as
set forth on the cover of the ML&Co. Prospectus, bears to the aggregate initial
public offering price of the Securities as set forth on such cover and the
Company and the Selling Stockholder shall be responsible for the balance. The
relative fault of the Company and the Selling Stockholder on the one hand and of
the Underwriter and ML&Co. on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholder, on
the one hand, or by the Underwriter or ML&Co., on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Stockholder, the Underwriter and ML&Co. agree
that it would not be just or equitable if contribution pursuant to this Section
4 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4, the Underwriter and ML&Co.
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities distributed to the public were offered
to the public exceeds the amount of any damages that the Underwriter and ML&Co.
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 4 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 4
and the representations and warranties of the Company and the Selling
Stockholder, respectively,
14
<PAGE>
contained herein shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriter or ML&Co. or any person controlling the Underwriter or
ML&Co. or by or on behalf of the Company, its directors or officers or any
person controlling the Company or by or on behalf of the Selling Stockholder and
(iii) acceptance of and payment for any of the Securities.
5. Termination. In the event that the Underwriter terminates the
-----------
Underwriting Agreement as provided in Section 9 thereof, this Agreement shall
simultaneously terminate, except that the provisions of Sections 2 and 3, the
indemnity agreements and the contribution provisions set forth in Section 4, and
the provisions of Section 6 shall remain in effect.
6. Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriter shall be
directed to it at North Tower, World Financial Center, New York, New York 10281-
1209, attention of Douglas W. Squires, Managing Director; notices to ML&Co.
shall be directed to it at 100 Church St., 12th Floor, New York, New York 10007,
attention of the Secretary, with a copy to the Treasurer at World Financial
Tower, South Tower, New York, New York 10080-6107; notices to the Company shall
be directed to it at 1 SunAmerica Center, 1999 Avenue of the Stars, Century
City, California 90067-6022, attention of Susan L. Harris, Esq., Senior Vice
President and General Counsel -- Corporate Affairs.
7. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon each of the Underwriter, ML&Co. and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, ML&Co. and the Company and their respective successors and
the controlling persons and officers and directors referred to in Sections 4 and
5 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriter, ML&Co. and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
8. Expenses. The Company and the Selling Stockholder, jointly and
--------
severally, will pay all expenses incident to the performance of their
obligations under this Agreement including, without limitation, the expenses of
printing all documents relating to the offering and of the mailing and
delivering of copies thereof to the Underwriter, any fees charged by investment
rating agencies for rating the Securities, and the fees and disbursements of
their counsel and advisers.
15
<PAGE>
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
10. Effect of Headings. The Article and Section headings herein and
------------------
the Table of Contents are for convenience only and shall not affect the
construction hereof.
11. Counterparts. This Agreement 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 agreement.
16
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, ML&Co., Mr. Eli Broad and the Company in accordance with its
terms.
Very truly yours,
SUNAMERICA INC.
By___________________________
Name:
Title:
ELI BROAD
--------------------------------
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ______________________________________
Authorized Signatory
MERRILL LYNCH & CO., INC.
By ______________________________________
Name:
Title:
17
<PAGE>
EXHIBIT 5
[LETTERHEAD OF PIPER & MARBURY L.L.P.]
May 20, 1996
SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, California 90067-6022
Re: Registration Statement filed May 20, 1996
-----------------------------------------
Ladies and Gentlemen:
We have acted as Maryland counsel to SunAmerica Inc. (the "Corporation")
in connection with its Registration Statement on Form S-3 filed on the date
hereof with the Securities and Exchange Commission (the "Commission") relating
to the sale and transfer by Merrill Lynch & Co., Inc. ("ML&Co.") of up to
3,450,000 shares of Class A Common Stock, par value $1.00 (the "Common Stock")
of the Company.
We have reviewed the Charter and By-Laws of the Corporation, the
Registration Statement and the proceedings heretofore taken by the Corporation
in connection with the authorization, issuance and sale of the shares of Common
Stock and Non-Transferable Class B Stock beneficially owned by Mr. Eli Broad. In
addition, we have examined such other documents, instruments and matters of law
as we have deemed necessary to the rendering of the opinions expressed below. We
have assumed, for purposes of this opinion, that the shares of Common Stock to
be sold by ML&Co. pursuant to the Registration Statement will consist of shares
of Common Stock beneficially owned, directly or indirectly, by Mr. Eli Broad as
of the date of this opinion by virtue of his ownership of shares of Class B
Stock acquired by him at the time of the Corporation's recapitalization in 1985,
and that the number of such shares of Class B Stock owned by him is as set forth
in the Company's most recent annual proxy statement.
Based on the foregoing, we are of the opinion that the shares of Common
Stock to be sold by ML&Co. pursuant to the Registration Statement have been duly
authorized for issuance, and when sold and transferred as contemplated by the
Registration Statement, will be duly issued, fully paid and nonassessable.
<PAGE>
Piper & Marbury L.L.P.
SunAmerica Inc.
May 20, 1996
Page 2
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to our firm in the Registration
Statement.
Very truly yours,
/s/ Piper & Marbury L.L.P.
<PAGE>
EXHIBIT 10
INDEMNIFICATION AND REIMBURSEMENT AGREEMENT
____________, 1996
SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Dear Ladies and Gentlemen:
Mr. Eli Broad (the "Selling Stockholder") confirms his agreement with
SunAmerica Inc., a Maryland corporation (the "Company"), in connection with the
proposed issue and sale by Merrill Lynch & Co., Inc., a Delaware corporation
("ML & Co."), to Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), pursuant to an underwriting agreement (the "Underwriting
Agreement") to be entered into between ML & Co. and the Underwriter of an
aggregate of 3,000,000 of ML & Co.'s Structured Yield Product Exchangeable for
Stock (each, a "STRYPES"), payable at maturity or upon redemption by the
delivery of shares of Common Stock, par value $1.00 per share (the "SunAmerica
Common Stock"), of the Company, subject to ML & Co.'s right to deliver an amount
in cash. In addition, the Underwriting Agreement will provide for the issue and
sale by ML & Co. to the Underwriter up to 450,000 additional STRYPES solely to
cover over-allotments, if any.
The Selling Stockholder understands that the Underwriter proposes to
make a public offering (the "Offering") of the STRYPES as soon as the
Underwriter deems advisable after the Underwriting Agreement and a registration
agreement (the "Registration Agreement") to be entered into among the Company,
the Selling Stockholder, the Underwriter and ML & Co., have been executed and
delivered. The Selling Stockholder acknowledges that the execution and delivery
of this Agreement is a condition to the execution and deliver of the
Registration Agreement by the Company and that, in consideration of the
execution and delivery of the Registration Agreement by the Company, the Selling
Stockholder is willing to make the representations, warranties and covenants
herein contained.
The Selling Stockholder understands that the Company has filed with
the Securities and Exchange Commission (the "Commission") a registration
statement on
<PAGE>
Form S-3 (No. 333-4111) covering the registration of 3,450,000 shares of
SunAmerica Common Stock that may be delivered at maturity or upon redemption of
the STRYPES under the Securities Act of 1933, as amended (the "1933 Act"),
including the related preliminary prospectus or prospectuses. Each prospectus
used before such registration statement becomes effective is herein called a
"SunAmerica Preliminary Prospectus." Such registration statement, including the
exhibits thereto, the schedules thereto, if any, and the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it becomes effective, is herein called the "SunAmerica Registration
Statement." Any registration statement filed pursuant to 462(b) of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") is herein referred to as the "SunAmerica Rule 462(b) Registration
Statement," and after such filing the term "SunAmerica Registration Statement"
shall include the SunAmerica Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriter for use in connection with the offering of the Securities is herein
called the "SunAmerica Prospectus." For purposes of this Agreement, all
references to the SunAmerica Registration Statement, any Sunamerica Preliminary
Prospectus, the SunAmerica Prospectus or any amendment or supplement to any of
the foregoing shall be deemed to include the copy filed with the Commission
pursuant to he Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in the Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
SunAmerica Registration Statement, any SunAmerica Preliminary Prospectus or the
SunAmerica Prospectus (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in the SunAmerica Registration
Statement, any SunAmerica Preliminary Prospectus or the SunAmerica Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Sunamerica Registration Statement, any SunAmerica Preliminary
Prospectus or the SunAmerica Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the SunAmerica
Registration Statement, such SunAmerica Preliminary Prospectus or the SunAmerica
Prospectus, as the case may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, Merrill Lynch
Capital Services Inc., a wholly-owned subsidiary of ML & Co. (the "ML & Co.
Subsidiary"), and the Selling Stockholder will enter into a contract (the "Stock
Agreement"), pursuant to which the Selling Stockholder will be obligated to
deliver to the ML & Co. Subsidiary, upon maturity or redemption of the Stock
Agreement, a specified number of shares of stock of the Company, subject to the
Selling Stockholder's option, exercisable in his sole discretion, to satisfy his
obligation under the Stock Agreement by delivering upon maturity or redemption a
specified amount of cash in lieu of such shares.
1. Representations and Warranties. The Selling Stockholder
------------------------------
represents and warrants to the Company as follows:
(i) Execution and Delivery of the Agreement. This Agreement has been
---------------------------------------
duly executed and delivered by the Selling Stockholder.
(ii) Absence of Defaults and Conflicts. The execution, delivery and
---------------------------------
performance by the Selling Stockholder of this Agreement and the consummation by
the Selling Stockholder of the transactions contemplated herein and compliance
by the Selling Stockholder with its obligations hereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Selling Stockholder pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument to which the Selling Stockholder is a party or by which
he may be bound, or to which any of the property or assets of the Selling
Stockholder is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not, singly or in the aggregate,
materially and adversely affect the ability of the Selling Stockholder to
perform his obligations under this Agreement), nor will such action result in
any violation of any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Selling Stockholder or any of his
assets, properties or operations (except for such violations that would not
singly or in the aggregate, materially and adversely affect the ability of the
Selling Stockholder to perform his obligations under this Agreement).
3
<PAGE>
2. Indemnification and Contribution. The Selling Stockholder agrees
--------------------------------
to indemnify and hold harmless the Company, its directors, its officers who sign
the SunAmerica Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act from and against any and all losses, claims, damages and liabilities,
joint or several (including, without limitation, any legal or other expenses
reasonably incurred by the Company, its directors, its officers who sign the
SunAmerica Registration Statement or any such controlling person in connection
with defending or investigating any such action or claim) arising in connection
with the Offering, including without limitation any such claims, damages or
liabilities (i) caused by any untrue statement or alleged untrue statement of a
material fact contained in the SunAmerica Registration Statement (or any
amendment thereto), any SunAmerica Preliminary Prospectus or the SunAmerica
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) initiated by or
owed to the Underwriter or ML & Co. pursuant to the Registration Agreement
(including, without limitation, any such claims, damages or liabilities (A)
caused by a breach by the Company of any representation or warranty of the
Company contained in the Registration Agreement or (B) pursuant to the
indemnification or contribution provisions of the Registration Agreement).
This indemnity will be in addition to any liability which the Selling
Stockholder may otherwise have.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to the preceding paragraph, such person (the "indemnified
party") shall promptly notify the person against who such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, and the fees and expenses of such counsel shall be at the expense of
such indemnifying party. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same
4
<PAGE>
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgement for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first paragraph of this
Section 2 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then the
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Selling Stockholder on the one hand and the Company on
the other hand from the Offering or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Selling Stockholder on the one hand and
of the Company on the other hand in connection with such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The Selling Stockholder and the Company agree that it would not be
just or equitable if contribution pursuant to this Section 2 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection
5
<PAGE>
with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this Section 2
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 2
and the representations and warranties of the Selling Stockholder contained
herein shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Company, its directors or officers or any person controlling the Company or
on behalf of the Selling Stockholder and (iii) acceptance of and payment for any
of the STRYPES by the Underwriter.
3. Expenses. The Selling Stockholder will pay all expenses incident
--------
to the performance of his obligations in connection with the Offering. In
addition, the Selling Stockholder will reimburse the Company for all out-of-
pocket expenses incurred in connection with the Offering, including, without
limitation, all expenses incident to the performance by the Company of its
obligations under the Registration Agreement and the expenses of printing all
documents relating to the Offering and of the mailing and delivering of copies
thereof to the Underwriter and any fees charged by investment rating agencies
for rating the Securities. The Selling Stockholder's obligations set forth in
this Section 3 shall be without regard to whether the Underwriting Agreement or
the Registration Agreement is executed or the Offering is consummated.
4. Miscellaneous. This Agreement may be signed in any number of
-------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon thereto and hereto were upon the same
instrument.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
6
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Selling Stockholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Selling Stockholder and the Company in accordance
with its terms.
Very truly yours,
__________________
Eli Broad
CONFIRMED AND ACCEPTED,
as of the date first above written:
SUNAMERICA INC.
By____________________
Name:
Title:
7
<PAGE>
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".
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Los Angeles, California
June 4, 1996
