<PAGE>
As filed with the Securities and Exchange Commission on April 27, 1995
File Nos. 2-85370; 811-3807
________________________________________________________________________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 16 x
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 15 X
SUNAMERICA MONEY MARKET FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
733 Third Avenue - 3rd Floor
New York, NY 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (800) 858-8850
Robert M. Zakem, Esq.
Senior Vice President and General Counsel
SunAmerica Asset Management Corp.
733 Third Avenue - 3rd Floor
New York, NY 10017
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPY TO:
Margery K. Neale, Esq.
Shereff, Friedman, Hoffman, & Goodman, LLP
919 Third Avenue
New York, NY 10022
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
__ immediately upon filing x on May 1, 1995 pursuant to
pursuant to paragraph (b) of Rule 485 ___ paragraph (b) of Rule 485
__ 60 days after filing pursuant ___ on (date) pursuant to paragraph
to paragraph (a) of Rule 485 (a) of Rule 485
____________________
Registrant has elected to register an indefinite number of shares of
common stock, par value $.001 per share, under the Securities Act of 1933
pursuant to Rule 24f-2 under the Investment Company Act of 1940. The Rule 24f-2
Notice for Registrant's fiscal year ended December 31, 1994 was filed on
February 23, 1995.
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
SUNAMERICA MONEY MARKET FUNDS, INC.
CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
Under the Securities Act of 1933
--------------------------------
<TABLE>
<CAPTION>
PART A
Item No. Registration Statement Caption Caption in Prospectus
- ---------- ------------------------------ ---------------------
<S> <C> <C>
1 Cover Page Cover Page
2 Synopsis Summary of Fund Expenses
3 Condensed Financial Information Financial Highlights;
Performance Data
4 General Description of Registrant Investment Objective and Policies;
Investment Restrictions; General
Information; Appendix
5 Management of the Fund Management of the Corporation; Portfolio
Transactions and Brokerage
5A Management's Discussion of Fund Performance *
6 Capital Stock and Other Dividends, Distributions and Taxes;
Securities General Information
7 Purchase of Securities Being Purchase of Shares; Determination
Offered of Net Asset Value
8 Redemption or Repurchase Redemption of Shares; Exchange Privilege
9 Pending Legal Proceedings Inapplicable
<CAPTION>
PART B Caption in Statement
Item No. Registration Statement Caption of Additional Information
- ---------- ------------------------------ -------------------------
<S> <C> <C>
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 General Information and History History of the Fund
13 Investment Objectives and Investment Objective and Policies;
Policies Investment Restrictions; Appendix
14 Management of the Fund Directors and Officers
15 Contact Persons and Principal Holders Directors and Officers
of Securities
16 Investment Advisory and Other Adviser, Personal Trading, Distributor and
Services Administrator; Additional Information
17 Brokerage Allocation Portfolio Transactions and Brokerage
18 Capital Stock and Other Securities Dividends, Distributions and Taxes;
Description of Shares; Additional Information
19 Purchase, Redemption and Pricing Additional Information Regarding
of Securities Being Offered Purchase of Shares; Additional
Information Regarding Redemption of
Shares; Determination of Net Asset Value;
Retirement Plans; Additional Information
20 Tax Status Dividends, Distributions and Taxes
21 Underwriters Adviser, Personal Trading, Distributor and Administrator
22 Calculation of Performance Data Performance Data
23 Financial Statements Financial Statements
</TABLE>
PART C
The information required to be included in Part C is set forth under the
appropriate item, so numbered in Part C of this Registration Statement
* Included in the Annual Report to Shareholders for fiscal year ended
December 31, 1994.
_______________________________
<PAGE>
SUNAMERICA MONEY MARKET FUND
733 THIRD AVENUE, NEW YORK, NY 10017-3204
GENERAL MARKETING AND SHAREHOLDER INFORMATION
(800) 858-8850
SunAmerica Money Market Fund (the "Fund") seeks as high a level of current
income as is consistent with liquidity and stability of capital by investing
in a portfolio of high quality, short-term money market instruments. The Fund
is the only series of SunAmerica Money Market Funds, Inc., an open-end diver-
sified management investment company organized as a Maryland corporation (the
"Corporation"). The Fund is advised by SunAmerica Asset Management Corp. (the
"Adviser").
The Fund seeks to maintain a stable net asset value of $1.00 per share, al-
though no assurance can be given that the Fund will be able to do so. An in-
vestment in the Fund is neither insured nor guaranteed by the U.S. Government
or any other entity.
The Fund currently offers Class A shares and Class B shares. The offering
price is the next-determined net asset value per share, plus, for Class B
shares only, a declining contingent deferred sales charge ("CDSC") imposed on
certain redemptions made within six years. Each class makes account mainte-
nance and service fee payments, and Class B shares also make distribution fee
payments, under a plan pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "1940 Act"). Class B shares of the Fund will convert
automatically to Class A shares on the first business day of the month follow-
ing the seventh anniversary of the issuance of such Class B shares and at such
time will be subject to the lower distribution fee applicable to Class A
shares. Investors wishing to purchase shares of the Fund are generally re-
quired to purchase Class A shares. Class B shares will be typically issued
upon an exchange of Class B shares from another mutual fund in the SunAmerica
Family of Mutual Funds. See "Purchase of Shares."
Shares of the Fund are not deposits or obligations of, or guaranteed or en-
dorsed by, any bank through which such shares may be sold, and are not feder-
ally insured by the Federal Deposit Insurance Corporation, the Federal Reserve
Board, or any other agency.
This Prospectus explains concisely what you should know before investing in
the Fund. Please read it carefully and retain it for future reference. You can
find more detailed information about the Fund in the Statement of Additional
Information dated May 1, 1995, which is incorporated by reference into this
Prospectus and further information about the performance of the Fund in the
Corporation's Annual Report to Shareholders. The Statement of Additional In-
formation and Annual Report to Shareholders may be obtained without charge by
contacting the Corporation at the address or telephone number listed above.
- -------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES 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.
- -------------------------------------------------------------------------------
PROSPECTUS DATED MAY 1, 1995
<PAGE>
SUMMARY OF FUND EXPENSES
A general comparison of the sales arrangements and other non-recurring
expenses applicable to Class A shares and Class B shares follows:
<TABLE>
<CAPTION>
CLASS A CLASS B(/1/)
------- ------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Initial Sales Load................................ None None
Maximum Sales Load on Reinvested Dividends................ None None
Deferred Sales Load(/2/).................................. None 4.00%
Redemption Fees(/3/)...................................... None None
Exchange Fees............................................. $5.00 $5.00
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees........................................... 0.50% 0.50%
12b-1 Fees(/4/)........................................... 0.15% 0.90%
Other Expenses............................................ 0.35% 0.29%
----- -----
Total Operating Expenses.................................. 1.00% 1.69%
===== =====
</TABLE>
- --------
(1) Investors wishing to purchase shares of the Fund are generally required to
purchase Class A shares. Class B shares of the Fund will typically be issued
in exchange for Class B shares of other mutual funds in the SunAmerica Family
of Mutual Funds.
(2) The contingent deferred sales charge on Class B shares applies only if a
redemption occurs within six years from their purchase date.
(3) A $15.00 fee may be imposed for wire redemptions.
(4) 0.15% of the 12b-1 fee comprises an Account Maintenance and Service Fee. A
portion of the Account Maintenance and Service Fee is allocated to member
firms of the National Association of Securities Dealers, Inc. for continuous
personal service by such members to investors in the Fund, such as responding
to shareholder inquiries, providing current marketing material and attending
to other shareholder matters.
2
<PAGE>
EXAMPLE:
You would pay the following expenses on a $1,000 investment over various time
periods assuming (1) a 5% annual return and (2) redemption at the end of each
time period. The 5% return and the expenses used in this Example should not be
considered indicative of actual or expected performance or expenses, both of
which will vary:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares.................................. $10 $32 $ 55 $122
Class B shares*................................. $57 $83 $112 $172
</TABLE>
You would pay the following expenses on the same investment, assuming no
redemption:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A shares.................................. $10 $32 $55 $122
Class B shares*................................. $17 $53 $92 $172
</TABLE>
The foregoing examples should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
- --------
* Class B shares convert to Class A shares seven years after purchase.
Therefore, years 8, 9 and 10 reflect the expenses attributable to ownership
of Class A shares.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following information regarding per share data and ratios for the years
through December 31, 1994 has been audited by Price Waterhouse LLP, the Fund's
independent accountants, whose report on the financial statements containing
such information is included in the Fund's Annual Report to Shareholders. These
Financial Highlights should be read in conjunction with the Fund's financial
statements and notes thereto, which are included in the Statement of Additional
Information and are incorporated by reference herein.
<TABLE>
<CAPTION>
NET
GAIN/LOSS
ON RATIO OF
INVESTMENTS DIVIDENDS NET NET NET
NET ASSET (BOTH FROM ASSET ASSETS RATIO OF INVESTMENT
VALUE NET REALIZED TOTAL FROM NET VALUE END OF EXPENSES INCOME TO
PERIOD BEGINNING INVESTMENT AND INVESTMENT INVESTMENT END OF TOTAL PERIOD TO AVERAGE AVERAGE
ENDED OF PERIOD INCOME UNREALIZED) OPERATIONS INCOME PERIOD RETURN(/3/) (000'S) NET ASSETS NET ASSETS
- ------ --------- ---------- ------------ ---------- ---------- ------ ----------- -------- ---------- ----------
CLASS A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/85 $1.000 $0.073 $-- $0.073 $(0.073) $1.000 7.30% $104,901 1.09% 7.26%
12/31/86 1.000 0.060 -- 0.060 (0.060) 1.000 6.00 302,987 0.99 5.82
12/31/87 1.000 0.059 -- 0.059 (0.059) 1.000 5.90 381,405 1.00 5.87
12/31/88 1.000 0.067 -- 0.067 (0.067) 1.000 6.70 522,163 1.09 6.71
12/31/89 1.000 0.082 -- 0.082 (0.082) 1.000 8.52 402,720 1.19 8.22
12/31/90 1.000 0.072 -- 0.072 (0.072) 1.000 7.44 302,440 1.10 7.23
12/31/91 1.000 0.052 -- 0.052 (0.052) 1.000 5.32 270,405 1.21 5.25
12/31/92 1.000 0.027 -- 0.027 (0.027) 1.000 2.74 215,521 1.27 2.76
12/31/93 1.000 0.023 -- 0.023 (0.023) 1.000 2.32 189,160 1.16 2.30
12/31/94 1.000 0.034 -- 0.034 (0.034) 1.000 3.47 213,958 1.00 3.43
<CAPTION>
CLASS B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/24/93-
12/31/93 $1.000 $0.004 $-- $0.004 $(0.004) $1.000 0.44%(/1/) $ 41,915 1.69%(/2/) 1.69%(/2/)
12/31/94 1.000 0.027 -- 0.027 (0.027) 1.000 2.76 98,398 1.69 2.91
</TABLE>
- --------
(1) Total Return is not annualized.
(2) Annualized.
(3) Does not reflect sales load or account maintenance fees.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek as high a level of current
income as is consistent with liquidity and stability of capital through
investment primarily in high quality money market instruments. There can be no
assurance that the investment objective of the Fund will be achieved.
Except as specifically indicated, the investment policies and strategies
described herein are not fundamental policies of the Fund and may be changed
by the Board of Directors ("Directors") without the approval of shareholders.
The Fund's investment objective and fundamental investment restrictions,
however, may not be changed without the approval of shareholders of the Fund.
See "Investment Restrictions."
The Fund will seek to achieve its investment objective by investing in a
diversified portfolio of money market instruments, including: (i) securities
issued or guaranteed as to principal and interest by the U.S. government or by
its agencies or instrumentalities; (ii) certificates of deposit, bankers'
acceptances and time deposits; (iii) commercial paper and other short-term
obligations of U.S. and foreign corporations; (iv) repurchase agreements;
and(v) reverse repurchase agreements. The Fund seeks to maintain a constant
net asset value of $1.00 per share pursuant to regulations under the 1940 Act
which permit the Fund to use the amortized cost method of valuation in
computing its current share price. See "Determination of Net Asset Value."
Under these regulations, the Fund is required to limit its portfolio
investments to those U.S. dollar denominated instruments determined in
accordance with procedures established by the Directors to present minimal
credit risks and which are at the time of acquisition "eligible securities" as
defined in the regulations. Under the regulations an eligible security is an
instrument that is rated (or that has been issued by an issuer rated with
respect to other short-term debt of comparable priority and security) by at
least two nationally recognized statistical rating organizations (or if only
one such organization has issued a rating, by that organization) in one of the
two highest rating categories for short-term debt obligations, or an unrated
security which is determined to be of comparable quality under procedures
established by the Directors. The amortized cost regulations prohibit the Fund
from investing more than 5% of its assets in the securities of any one issuer.
In addition, the Fund may not invest more than 5% of its assets in securities
which have not been rated (or deemed comparable to securities rated) in the
highest rating category, with investment in such second tier securities of any
one issuer being limited to the greater of 1% of the Fund's assets or $1
million. These issuer diversification restrictions do not apply to U.S.
government securities. The amortized cost regulations also prohibit the Fund
from purchasing any instrument with a remaining maturity of greater than 397
calendar days, and require the Fund to maintain a dollar-weighted average
portfolio maturity of 90 days or less. For purposes of the regulations,
certain variable or floating rate instruments are deemed to have a maturity
equal to the period remaining until the next readjustment of their interest
rate or, in the case of an instrument that is subject to a demand feature, the
period remaining until the principal amount can be recovered through demand.
See the Appendix and the Statement of Additional Information for more
information on the types of securities in which the Fund may invest.
INVESTMENT RESTRICTIONS
The Fund has adopted certain fundamental policies designed to maintain the
diversity of its portfolio and reduce investment risk. With respect to 75% of
the Fund's total assets, the Fund may not invest more than 5% of its assets in
the securities of any one issuer (other than obligations of the U.S.
government, its agencies and instrumentalities) or purchase more than 10% of
an issuer's voting securities or more than 10% of any class of an issuer's
outstanding securities. The Fund may not purchase securities if as a result of
such purchase more than 25% of the Fund's total assets would be invested in
any one industry, except that the Fund may invest without limit in obligations
issued or guaranteed by the U.S. government, its agencies and
instrumentalities. In addition, the Fund reserves freedom of action to invest
in obligations issued by domestic branches of U.S. banks. As a fundamental
policy, the Fund may borrow up to 10% of its total assets for temporary or
emergency purposes. The Fund may also pledge its assets to secure such
borrowings. See the Statement of Additional Information for information
concerning other fundamental policies.
5
<PAGE>
MANAGEMENT OF THE CORPORATION
DIRECTORS. The Directors of the Corporation are responsible for the overall
supervision of the operation of the Corporation and the Fund and perform
various duties imposed on directors of investment companies by the 1940 Act
and by the State of Maryland.
THE ADVISER. The Adviser selects and manages the investments of the Fund,
provides various administrative services and supervises the Fund's daily
business affairs, subject to general review by the Directors. The Adviser is
an indirect wholly owned subsidiary of SunAmerica Inc. ("SunAmerica"), an
investment-grade financial services company which has total capital of
approximately $1.6 billion. SunAmerica's principal executive offices are
located at 1 SunAmerica Center, Century City, Los Angeles, CA 90067-6022. In
addition to serving as adviser to the Fund, the Adviser serves as adviser,
manager and/or administrator for Anchor Pathway Fund, SunAmerica Equity Funds,
SunAmerica Income Funds, Anchor Series Trust and SunAmerica Series Trust. The
Adviser managed and/or administered assets of approximately $7 billion as of
December 31, 1994 for investment companies, individuals, pension accounts, and
corporate and trust accounts.
Pursuant to the Investment Advisory and Management Agreement entered into
between the Adviser and the Corporation, on behalf of the Fund, the Fund pays
the Adviser a fee, payable monthly, computed daily at the annual rate of .50%
on the first $600 million of the Fund's average daily net assets, .45% on the
next $900 million of net assets and .40% on net assets over $1.5 billion for
the services performed on behalf of the Fund and the facilities furnished by
the Adviser. For the fiscal year ended December 31, 1994, the Fund paid the
Adviser a fee equal to .50% of the average daily net assets of the Fund.
PORTFOLIO MANAGEMENT. The following individual is primarily responsible for
the day-to-day management of the Fund.
Kenneth A. Fahrman has served as portfolio manager of the Fund since January
1995. Mr. Fahrman is an Assistant Vice President of the Adviser and has been
an assistant portfolio manager with the firm since September 1993. Previously,
Mr. Fahrman was a portfolio analyst with Dime Savings Bank.
THE DISTRIBUTOR. SunAmerica Capital Services, Inc. (the "Distributor"), an
indirect wholly owned subsidiary of SunAmerica, acts as distributor of the
shares of the Fund pursuant to the Distribution Agreement between the
Distributor and the Corporation on behalf of the Fund. The Distributor and
other broker-dealers pay commissions to salespersons, as well as the cost of
printing and mailing prospectuses to potential investors and of any
advertising expenses incurred by them in connection with their distribution of
Fund shares.
The Distributor, at its expense, may from time-to-time, provide additional
compensation to broker-dealers (including in some instances, exclusively to
Royal Alliance Associates, Inc. and/or SunAmerica Securities, Inc., affiliates
of the Distributor, or such unaffiliated broker-dealers as Advantage Capital
Management Corporation) in connection with sales of shares of the Fund. Such
compensation may include (i) full reallowance of the front-end sales charge on
Class A shares; (ii) additional compensation with respect to the sale of Class
B shares; or (iii) financial assistance to broker-dealers in connection with
conferences, sales or training programs for their employees, seminars for the
public, advertising campaigns regarding one or more of the Funds, and/or other
broker-dealer-sponsored special events. In some instances, this compensation
will be made available only to certain broker-dealers whose representatives
have sold a significant amount of shares of the Fund. Compensation may also
include payment for travel expenses, including lodging, incurred in connection
with trips taken by invited registered representatives and members of their
families to locations within or outside of the United States for meetings or
seminars of a business nature. In addition, the following types of non-cash
compensation may be offered through sales contests: (i) vacation trips,
including the provision of travel arrangements and lodging at luxury resorts
in exotic locations or travel mileage on major air carriers; (ii) tickets for
entertainment events (such as concerts or sporting events); or (iii)
merchandise (such as clothing, trophies, clocks, pens or other electronic
equipment). Broker-dealers may not use sales of the Fund's shares to qualify
for this compensation to the extent receipt of such compensation may be
prohibited by the laws of any state or any self-regulatory agency, such as, for
example, the National Association of Securities
6
<PAGE>
Dealers, Inc. Dealers who receive bonuses or other incentives may be deemed to
be underwriters under the Securities Act of 1933.
Certain laws and regulations limit the ability of banks and other depository
institutions to underwrite and distribute securities. However, in the opinion
of the Adviser based upon the advice of counsel, these laws and regulations do
not prohibit such depository institutions from providing other services to
investment companies of the type contemplated by the Distribution Plans (as
described below). The Directors will consider appropriate modifications to the
operations of the Fund, including discontinuance of payments under the
Distribution Plans to banks and other depository institutions, in the event
such institutions can no longer provide the services called for under their
agreements.
DISTRIBUTION PLANS. Rule 12b-1 under the 1940 Act permits an investment
company directly or indirectly to pay expenses associated with the
distribution of its shares ("distribution expenses") in accordance with a plan
adopted by the investment company's board of directors and approved by its
shareholders. Pursuant to such rule, the Directors and the shareholders of
each class of shares of the Fund have adopted Distribution Plans hereinafter
referred to as the "Class A Plan" and the "Class B Plan." In adopting the
Class A Plan and the Class B Plan, the Directors determined that there was a
reasonable likelihood that each such Plan would benefit the Fund and the
shareholders of the respective class. The sales charge and distribution fees
of the Class B shares will not be used to subsidize the sale of Class A
shares.
Under the Class B Plan, the Distributor may receive payments from the Fund
at the annual rate of up to 0.75% of the average daily net assets of the
Fund's Class B shares to compensate the Distributor and certain securities
firms for providing sales and promotional activities for distributing that
class of shares. The distribution costs for which the Distributor may be
reimbursed out of such distribution fees include fees paid to broker-dealers
that have sold Fund shares, commissions, and other expenses such as those
incurred for sales literature, prospectus printing and distribution and
compensation to wholesalers. It is possible that in any given year the amount
paid to the Distributor under the Class B Plan may exceed the Distributor's
distribution costs as described above. The Class A Plan does not provide for a
distribution fee. Both the Class A and Class B Plans provide that each
respective class of shares of the Fund may also pay the Distributor an account
maintenance and service fee of up to 0.15% of the aggregate average daily net
assets of such class of shares for payments to broker-dealers for providing
continuing account maintenance. In this regard, some payments are used to
compensate broker-dealers with account maintenance and service fees in an
amount up to 0.15% per year of the assets maintained in the Fund by their
customers.
For the fiscal year ended December 31, 1994, under the Class A Plan, the
Fund paid the Distributor a fee equal to .15% of average daily net assets. For
the same period, under the Class B Plan, the Fund paid the Distributor a fee
equal to .90% of average daily net assets.
ADMINISTRATOR. The Corporation has entered into a Service Agreement under
the terms of which SunAmerica Fund Services, Inc. ("SAFS"), an indirect wholly
owned subsidiary of SunAmerica, assists the Transfer Agent in providing
shareholder services and may receive reimbursement from the Corporation of its
costs in providing such services through a fee approved annually by the
Directors.
PURCHASE OF SHARES
GENERAL. Shares of the Fund are sold at net asset value per share, plus for
Class B shares only, a deferred sales charge. The Fund seeks to maintain a
stable net asset value per share of $1.00, although no assurance can be given
that the Fund will be able to do so.
The minimum initial investment in the Fund is $1,000 and the minimum
subsequent investment is $100. However, for Individual Retirement Accounts
(IRAs), Keogh Plan accounts and accounts for other qualified plans, the
minimum initial investment is $250 and minimum subsequent investment is $25.
Investors purchasing shares of the Fund are generally required to purchase
Class A shares, since there is no sales charge or distribution fee. Class B
shares are typically intended to be purchased in connection with exchanges of
Class B shares from other funds in the SunAmerica Family of Mutual Funds.
Dealers may receive different levels of
7
<PAGE>
compensation depending on which class of shares they sell.
Upon making an investment in shares of the Fund, an open account will be
established under which shares of the Fund and additional shares
acquired through reinvestment of dividends and distributions will be held for
each shareholder's account by State Street Bank and Trust Company ("State
Street") and its affiliate, National Financial Data Services ("NFDS")
(collectively, the "Transfer Agent"). Shareholders will not be issued
certificates for their shares. Shareholders receive regular statements from
the Transfer Agent that report each transaction affecting their accounts.
Further information may be obtained by calling Shareholder/Dealer Services at
(800) 858-8850.
CLASS A SHARES. Class A shares are offered at net asset value. No sales
charge is imposed on purchases or redemptions of Class A shares; provided,
however, that shareholders who purchased their Class A shares of the Fund
through an exchange from another fund in the SunAmerica Family of Mutual Funds
without an initial sales charge on the original purchase because such purchase
was in excess of $1 million, will remain subject to the 1% CDSC applicable to
such redemptions. See "Exchange Privilege."
CLASS B SHARES. Class B shares are offered at net asset value. Certain
redemptions of Class B shares within the first six years of the date of
purchase are subject to a CDSC. The charge is assessed on an amount equal to
the lesser of the then-current market value or the purchase price of the
shares being redeemed. No charge is assessed on shares derived from
reinvestment of dividends or capital gains distributions. In determining
whether the CDSC is applicable to a redemption, the calculation is determined
in the manner that results in the lowest possible rate being charged.
Therefore, it is assumed that the redemption is first of any Class A shares,
second of any shares in the shareholder's Fund account that are not subject to
a CDSC (i.e., shares representing reinvested dividends and distributions),
third of shares held more than six years and fourth of shares held the longest
during the six-year period. The amount of the CDSC, if any, will vary
depending on the number of years from the time of payment for the purchase of
Fund shares until the time of redemption of such shares. Solely for purposes
of determining the number of years from the time of any payment for the
purchase of shares, all payments during a month are aggregated and deemed to
have been made on the first day of the month. The following table sets forth
the rates of the CDSC.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE OF
DOLLARS INVESTED OR
YEAR SINCE PURCHASE PAYMENT WAS MADE REDEMPTION PROCEEDS
- ------------------------------------ -------------------------
<S> <C>
First................................................. 4%
Second................................................ 4%
Third................................................. 3%
Fourth................................................ 3%
Fifth................................................. 2%
Sixth................................................. 1%
Seventh and thereafter................................ 0%
</TABLE>
The CDSC will be waived in connection with redemptions which are (a)
requested within one year of the death or the initial determination of
disability of a shareholder; (b) taxable distributions or loans to
participants made by qualified retirement plans or retirement accounts (not
including rollovers) for which the Adviser serves as a fiduciary (e.g.,
prepares all necessary tax reporting documents); provided that, in the case of
a taxable distribution, the plan participant or accountholder has attained the
age of 59 1/2 at the time the redemption is made; (c) made pursuant to a
Systematic Withdrawal Plan, up to a maximum amount of 12% per year from a
shareholder account based on the value of the account at the time the Plan is
established, provided, however, that all dividends and capital gains
distributions are reinvested in Fund shares; and (d) made of shares in
accounts consisting of assets which were originally individually managed by
the Adviser and had paid an investment advisory fee to the Adviser. See the
Statement of Additional Information for further information concerning
conditions with respect to (a) above. For Federal income tax purposes, the
amount of the CDSC will reduce the amount realized on the redemption of
shares, concomitantly reducing gain or increasing loss. For information on the
imposition and waiver of the CDSC contact Shareholder/Dealer Services at (800)
858-8850.
Shareholders of the Fund that acquired their Class B shares pursuant to a
reorganization effected with another SunAmerica mutual fund will remain
subject to the terms of the CDSC in effect for the
8
<PAGE>
previous fund at the time of such reorganization. For additional information,
see "Additional Information Regarding Purchase of Shares" in the Statement of
Additional Information.
Conversion Feature. Class B shares (including a pro rata portion of the
Class B shares purchased through the reinvestment of dividends and
distributions) will convert automatically to Class A shares on the first
business day of the month following the seventh anniversary of the issuance of
such Class B shares. Class B shares of the Fund issued upon an exchange of
Class B shares of another SunAmerica Mutual Fund will convert into Class A
shares of the Fund on the first business day of the month following the
seventh anniversary of the issuance of the original Class B shares. Subsequent
to the conversion of a Class B share to a Class A share, such share will no
longer be subject to the higher distribution fee of Class B shares. Such
conversion will be on the basis of the relative net asset values of Class B
shares and Class A shares, without the imposition of any sales load, fee or
charge.
ADDITIONAL PURCHASE INFORMATION. All purchases are confirmed to each
shareholder. The Corporation reserves the right to reject any purchase order
and may at any time discontinue the sale of any class of shares of the Fund.
Shares of the Fund may be purchased through the Distributor or SAFS, by
check or federal funds wire and through a pre-authorized check investment
program. Shares will be priced at the net asset value next-determined after
the order is placed with the Distributor or SAFS. See "Additional Information
Regarding Purchase of Shares" in the Statement of Additional Information for
more information regarding these services and the procedures involved and when
orders are deemed to be received.
REDEMPTION OF SHARES
Shares of the Fund may be redeemed at any time at their net asset value
next-determined, less any applicable contingent deferred sales charge (Class B
shares only), after receipt by the Fund of a redemption request in proper
form. See "Dividends, Distributions and Taxes."
REGULAR REDEMPTION. Shareholders may redeem their shares by sending a
written request to SAFS, Mutual Fund Operations, 733 Third Avenue, New York,
NY 10017-3204. All written requests for redemption must be endorsed by the
shareholder(s) with signature(s) guaranteed by an "eligible guarantor
institution" which includes: banks, brokers, dealers, credit unions,
securities and exchange associations, clearing agencies and savings
associations. Guarantees must be signed by an authorized signatory of the
eligible guarantor and the words "Signature Guaranteed" must appear with the
signature. Signature guarantees by notaries will not be accepted. SAFS may
request further documentation from corporations, executors, administrators,
trustees or guardians.
REPURCHASE THROUGH DISTRIBUTOR. The Distributor is authorized, as agent for
the Fund, to offer to repurchase shares which are presented by telephone to
the Distributor by investment dealers. Orders received by dealers must be at
least $500. The repurchase price is the net asset value per share of the
applicable class of shares of the Fund next-determined after the repurchase
order is received, less any applicable contingent deferred sales charge (Class
B shares only). Repurchase orders received by the Distributor after 4:00 P.M.,
Eastern time, will be priced based on the next business day's close. Dealers
may charge for their services in connection with the repurchase, but neither
the Fund nor the Distributor imposes any charge. The offer to repurchase may
be suspended at any time, as described below.
TELEPHONE REDEMPTION. The Corporation accepts telephone requests for
redemption of shares with a value of less than $100,000. The proceeds of a
telephone redemption may be sent by wire to the shareholder's bank account as
set forth in the New Account Application or in a subsequent written
authorization. Shareholders utilizing the redemption through the electronic
funds transfer method will incur a $15.00 transaction fee. The Corporation
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. Failure to do so may result in liability to the
Corporation for losses incurred due to unauthorized or fraudulent telephone
instructions. Such procedures include, but are not limited to, requiring some
form of personal identification prior to acting upon instructions received by
telephone and/or tape recording of telephone instructions.
9
<PAGE>
A shareholder making a telephone redemption should call Shareholder/Dealer
Services at (800) 858-8850, and state (i) the name of the shareholder(s)
appearing on the Fund's records, (ii) his or her account number with the Fund,
(iii) the amount to be redeemed, and (iv) the name of the person(s) requesting
the redemption. The Corporation reserves the right to terminate or modify the
telephone redemption service at any time.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders who have invested at least $5,000
in the Fund may provide for the periodic payment from the account pursuant to
the Systematic Withdrawal Plan. At the shareholder's election, such payment
may be made directly to the shareholder or to a third party on a monthly,
quarterly, semi-annual or annual basis. The minimum periodic payment is $50.
Maintenance of a withdrawal plan concurrently with purchases of additional
shares may be disadvantageous to a shareholder because of the sales charge
applicable to such purchases. Further information may be obtained by calling
Shareholder/Dealer Services at (800) 858-8850.
CHECKS. An individual shareholder may request from SAFS a supply of checks
which may be used to effect the redemption of shares having a value of at
least $250. Such checks may not be used to purchase shares of the Fund. When a
check is presented for payment, the Transfer Agent redeems a sufficient number
of full and fractional shares in the shareholder's account to cover the amount
of the check. The use of a check to make a withdrawal enables a shareholder of
the Fund to receive dividends on the shares to be redeemed up to the time the
check clears the Fund. Checks provided by the Fund may not be certified. There
is no charge to shareholders for checks provided by the Fund.
GENERAL. Normally payment is made on the next business day for shares
redeemed, but in any event, payment is made by check within seven days after
receipt by the Transfer Agent of a redemption request in proper form. Under
unusual circumstances, the Fund may suspend repurchases or postpone payment
for up to seven days or longer, as permitted by the federal securities laws.
At various times, the Fund may be requested to redeem shares for which it
has not yet received good payment. The Fund may delay or cause to be delayed
the mailing of a redemption check until such time as good payment (e.g., cash
or certified check drawn on a United States bank) has been collected for the
purchase of such shares, which will not exceed 15 days.
Because of the high cost of maintaining smaller shareholder accounts, the
Fund may redeem on at least 60 days' written notice and without shareholder
consent, any account that, due to a shareholder redemption and not to market
fluctuation of the account's value, has a net asset value of less than $500
($250 for retirement plan accounts), as of the close of business on the day
preceding such notice, unless such shareholder increases the account balance
to at least $500 during such 60-day period. In the alternative, the Fund may
impose a $2.00 monthly charge on accounts below the minimum account size.
If a shareholder redeems shares of any class of the Fund and then within one
year from the date of redemption decides the shares should not have been
redeemed, the shareholder may use all or any part of the redemption proceeds
to reinstate, with the crediting of any CDSC paid with respect to such
reinstated shares at the time of redemption (Class B shares), all or any part
of the redemption proceeds in shares of the Fund at the then-current net asset
value. Reinstatement may affect the tax status of the prior redemption.
EXCHANGE PRIVILEGE
Shareholders in the Fund may exchange their shares for the same class of
shares of other funds in the SunAmerica Family of Mutual Funds that offer such
class at the respective net asset value per share; however, exchanges of Class
A shares may be subject to the applicable sales load imposed by the acquired
fund. Shareholders who wish to use the exchange privilege to exchange their
shares will incur a $5.00 exchange fee. Before making an exchange, you should
obtain and review the prospectus of the fund whose shares are being acquired.
All exchanges are subject to applicable minimum initial investment
requirements and can only be effected if the shares to be acquired are
qualified for sale in the state in which the shareholder resides. Exchanges of
shares generally will constitute a taxable transaction except for IRAs, Keogh
Plans and other qualified or tax-exempt accounts. The exchange privilege may
be terminated or modified upon 60 days' written notice. Further information
about the exchange privilege may be
10
<PAGE>
obtained by calling Shareholder/Dealer Services at (800) 858-8850.
If a shareholder acquires Class A shares through an exchange from another
fund in the SunAmerica Family of Mutual Funds and the original purchase of
such fund's Class A shares was not subject to an initial sales charge because
the purchase was in excess of $1 million, such shareholder will remain subject
to the 1% CDSC, if any, applicable to such redemptions. In such event, the
period for which the original shares were held prior to the exchange will be
"tacked" with the holding period of the shares acquired in the exchange for
purposes of determining whether the 1% CDSC is applicable upon a redemption of
any of such shares.
A shareholder who acquires Class B shares through an exchange from another
fund in the SunAmerica Family of Mutual Funds will retain liability for any
deferred sales charge which is outstanding on the date of the exchange. In
such event, the period for which the original shares were held prior to the
exchange will be "tacked" or combined with the holding period of the shares
acquired in the exchange for purposes of determining what, if any, CDSC is
applicable upon a redemption of any of such shares.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Adviser is responsible for decisions to buy and sell securities for the
Fund, the selection of broker-dealers and negotiation of commission rates.
Since purchases and sales of portfolio securities by the Fund are usually
principal transactions, the Fund incurs little or no brokerage commissions.
Portfolio securities are normally purchased directly from the issuer or from a
market maker for the securities. The purchase price paid to dealers serving as
market makers may include a spread between the bid and asked price. The Fund
may also purchase securities from underwriters at prices which include a
concession paid by the issuer to the underwriter.
As a general matter, the Adviser selects broker-dealers which, in its best
judgment, provide prompt and reliable execution at favorable security prices
and reasonable commission rates. The Adviser may select broker-dealers which
provide it with research services and may cause the Fund to pay such broker-
dealers commissions which exceed those which other broker-dealers may have
charged, if in the Adviser's view the commissions are reasonable in relation
to the value of the brokerage and/or research services provided by the broker-
dealer. Brokerage arrangements may take into account the distribution of Fund
shares by broker-dealers, subject to best price and execution. The Adviser may
effect portfolio transactions through an affiliated broker-dealer, acting as
agent and not as principal, in accordance with the requirements of the 1940
Act and other applicable securities laws.
DETERMINATION OF NET ASSET VALUE
The Fund calculates the net asset value of each class of its shares
separately by dividing the total value of each class's net assets by the
shares of each class outstanding. Shares are valued each day the Fund is open
for business, with the exception of holidays on which the New York Stock
Exchange ("NYSE") is closed, at the close of regular trading on the NYSE
(currently, 4:00 P.M., Eastern time). It is the intention of the Fund to
maintain a net asset value per share of $1.00, although there can be no
assurance that the Fund will be able to do so. In accordance with the rules
and regulations of the Securities and Exchange Commission (the "SEC"), the
Fund intends to value its portfolio securities based upon their amortized
cost. This entails initially valuing a security at its cost and thereafter
assuming a constant amortization to maturity of any premium or discount
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may
result in periods during which value, as determined by the amortized cost
method, is higher or lower than the price the Fund would receive if it sold
the instrument.
PERFORMANCE DATA
The Fund may advertise performance data that reflects its yield and
effective yield. Yield is based on historical earnings and is not intended to
indicate future performance.
The Fund's yield is calculated by determining the net change in value of a
hypothetical account which had one share at the beginning of a seven day
period. The yield is compounded in order to determine the effective yield.
Yield is determined by a standard
11
<PAGE>
formula prescribed by the SEC to facilitate comparison with yields quoted by
other mutual funds. A detailed discussion of the yield computation is
contained in the Statement of Additional Information.
Since expenses for Class B shares are higher than those for Class A shares,
the performance of Class B shares will be lower than that for Class A shares.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. Dividends from net investment income are
declared daily and paid monthly on or about the fifteenth day of the month.
Dividends and distributions generally are taxable in the year in which they
are paid, except any dividends paid in January which were declared in the
previous calendar quarter will be treated as paid in December of the previous
year. Dividends and distributions are paid in additional shares based on the
next-determined net asset value, unless the shareholder elects in writing, not
less than five business days prior to the payment date, to receive such
amounts in cash.
In addition to having the dividends and distributions of the Fund reinvested
in shares of the Fund, a shareholder may, if he or she so elects on the New
Account Application, have dividends and distributions invested in the same
class of shares of any other SunAmerica Mutual Fund at the then-current net
asset value of such Fund(s).
The excess of net realized long-term capital gains over net capital losses
("capital gain distributions"), if any, will be distributed to shareholders
annually. The Fund's policy is to offset any prior year capital loss carry-
forward against any realized capital gains, and accordingly, no distribution
of capital gains will be made until gains have been realized in excess of any
such capital loss carry-forward.
TAXES. The Fund is qualified and intends to continue to qualify as a
regulated investment company under the Internal Revenue Code of 1986, as
amended. While so qualified, the Fund will not be subject to U.S. Federal
income tax on the portion of its investment company taxable income and net
capital gains distributed to its shareholders.
For Federal income tax purposes, dividends of net ordinary income and
distributions of any net realized short-term capital gain, whether paid in
cash or reinvested in shares of the Fund, are taxable to shareholders as
ordinary income.
Statements as to the tax status of distributions to shareholders of the Fund
will be mailed annually. Shareholders are urged to consult their own tax
advisors regarding specific questions as to Federal, state or local taxes. See
"Dividends, Distributions and Taxes" in the Statement of Additional
Information.
GENERAL INFORMATION
REPORTS TO SHAREHOLDERS. The Corporation sends to its shareholders audited
annual and unaudited semi-annual reports for the Fund. The financial
statements appearing in annual reports are audited by independent accountants.
In addition, the Transfer Agent sends to each shareholder having an account
directly with the Fund a statement confirming transactions in the account.
ORGANIZATION. The Corporation, organized under the laws of the State of
Maryland on July 20, 1983, is an open-end diversified management investment
company, commonly referred to as a mutual fund. The Fund is the only
investment series or fund of the Corporation. The Directors have the authority
to issue up to an aggregate of ten billion (10,000,000,000) shares of common
stock of the Corporation of separate series and classes, par value $.001 per
share. The Fund currently offers Class A shares and Class B shares.
The Corporation does not hold annual shareholder meetings. The Directors are
required to call a meeting of shareholders for the purpose of voting upon the
question of removal of any Director when so requested in writing by the
shareholders of record holding at least 25% of the Corporation's outstanding
shares. Each share of the Fund has equal voting rights on each matter
pertaining to the Fund or matters to be voted upon by the Corporation, except
as noted in the Statement of Additional Information. Each share of the Fund is
entitled to participate equally with the other shares of the Fund in dividends
and other distributions and the proceeds of any liquidation, except that, due
to the differing expenses borne by the two classes, such dividends and
proceeds are likely to be lower for Class B shares than for Class A shares.
See the Statement of Additional Information for more information with respect
to the distinctions among classes.
12
<PAGE>
INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL. Price Waterhouse LLP, 1177 Avenue
of the Americas, New York, NY 10036, has been selected to serve as the Fund's
independent accountants for the Corporation. The firm of Shereff, Friedman,
Hoffman & Goodman, LLP, 919 Third Avenue, New York, NY 10022, has been
selected as legal counsel to the Corporation.
SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed
to the Fund at the telephone number or address on the cover page of this
Prospectus. For questions concerning share ownership, dividends, transfer of
ownership or share redemption, contact SAFS, Mutual Fund Operations, 733 Third
Avenue, New York, NY 10017-3204, or call Shareholder/Dealer Services at (800)
858-8850.
APPENDIX
U.S. GOVERNMENT OBLIGATIONS. Securities issued or guaranteed as to principal
and interest by the U.S. government or its agencies and instrumentalities
include U.S. Treasury obligations, consisting of bills, notes and bonds, which
principally differ in their interest rates, maturities and times of issuance,
and obligations issued or guaranteed by agencies and instrumentalities which
are supported by (i) the full faith and credit of the U.S. Treasury (such as
securities of the Small Business Administration), (ii) the limited authority
of the issuer to borrow from the U.S. Treasury (such as securities of the
Student Loan Marketing Association), or (iii) the authority of the U.S.
government to purchase certain obligations of the issuer (such as securities
of the Federal National Mortgage Association). No assurance can be given that
the U.S. government will provide financial support to its agencies and
instrumentalities as described in "(ii)" or "(iii)" above other than as set
forth, since it is not obligated to do so by law.
BANK OBLIGATIONS. These obligations include certificates of deposit and
bankers' acceptances issued by domestic banks and savings and loan
associations and other savings depositories, which have total assets in excess
of $2 billion. In addition, the Fund may invest in U.S. dollar denominated
obligations issued by foreign branches of the domestic banks described above
("Eurodollar CD's"), including non-negotiable fixed time deposits maturing in
seven days or less, and in U.S. dollar denominated certificates of deposit
issued through U.S. branches of foreign banks ("Yankee CD's") having total
assets in excess of $2 billion. These investments may involve risks which
differ from investments in domestic obligations, such as future unfavorable
political and economic developments, the possible imposition of exchange
controls or other governmental restrictions, the availability of public
information about issuers, and differing accounting and financial reporting
standards.
COMMERCIAL PAPER. Commercial paper is a promissory note issued by a
corporation to finance short-term credit needs. The Fund may invest in
commercial paper of domestic corporations and in U.S. dollar denominated
commercial paper issued by foreign corporations. Commercial paper may be
either unsecured or backed by a letter of credit. Commercial paper obligations
may include variable amount master demand notes. These notes permit the
investment of fluctuating amounts at varying rates of interest pursuant to
note arrangements between the Fund, acting as lender, and the borrower. The
Fund only invests in such notes if they are redeemable at face value, plus
accrued interest, on not more than seven days' notice at any time.
CORPORATE OBLIGATIONS. These obligations include bonds, debentures and notes
issued by corporations to finance long-term credit needs. Although issued with
maturities in excess of one year, the Fund's investments in corporate
obligations are limited to obligations having remaining maturities of 397
calendar days or less at the time of purchase by the Fund.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements in
order to generate income while providing liquidity. When a Fund acquires a
security from a bank or securities dealer, it may simultaneously enter into a
repurchase agreement, wherein the seller agrees to repurchase the security at
a mutually agreed-upon time (generally within seven days) and price. The
repurchase price is in excess of the purchase price by an amount which
reflects an agreed-upon market rate of return, which is not tied to the coupon
rate or maturity of the underlying security. Repurchase agreements will be
fully collateralized. If, however, the seller defaults on its obligation to
repurchase the underlying security, the Fund may experience delay or
difficulty in
13
<PAGE>
exercising its rights to realize upon the security and might incur a loss if
the value of the security has declined. The Fund might also incur disposition
costs in liquidating the security. There is no limit on the amount of the
Fund's net assets that may be subject to repurchase agreements having a
maturity of seven days or less. Repurchase agreements with a maturity of
greater than seven days will be treated as illiquid securities and subject to
the 10% limitation described below.
REVERSE REPURCHASE AGREEMENTS. Subject to the Fund's restriction with
respect to borrowing, the Fund may enter into reverse repurchase agreements.
In a reverse repurchase agreement, the Fund sells a security subject to the
rights and obligations to repurchase such security. The Fund then invests the
proceeds from the transaction in another obligation in which the Fund is
authorized to invest. In order to minimize any risk involved, the Fund
maintains in a segregated account cash, cash equivalents or liquid high grade
debt securities equal in value to the repurchase price.
ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets,
determined as of the date of purchase, in illiquid securities including
repurchase agreements which have a maturity of longer than seven days,
securities with legal or contractual restrictions on resale (restricted
securities) and securities that are not readily marketable in securities
markets either within or without the United States. Restricted securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, as
amended, or certain private placements of commercial paper issued in reliance
on an exemption from such an Act pursuant to Section 4(2) thereof, that have a
readily available market are not con-sidered illiquid for purposes of the
Fund's 10% limitation on purchases of illiquid securities. The Adviser will
monitor the liquidity of such restricted securities under the supervision of
the Directors. See "Illiquid Securities" in the Statement of Additional
Information for a further discussion of investments in such securities.
LOANS OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
brokers, dealers and other financial institutions, provided such loans are
callable at any time by the Fund and are at all times secured by cash or
equivalent collateral. By lending its portfolio securities, the Fund will
receive income while retaining the securities' potential for capital
appreciation. As with any extensions of credit, there are risks of delay in
recovery and, in some cases, even loss of rights in the collateral should the
borrower of the securities fail financially. However, these loans of portfolio
securities will only be made to firms deemed by the Adviser to be
creditworthy.
FUTURE DEVELOPMENTS. The Fund may invest in securities and other instruments
which do not presently exist but may be developed in the future, provided that
each such investment is consistent with the Fund's investment objectives,
policies and restrictions and is otherwise legally permissible under federal
and state laws. The Prospectus will be amended or supplemented as appropriate
to discuss any such new investments.
14
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS,
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE STATEMENT OF ADDITIONAL
INFORMATION AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, THE ADVISER OR
THE DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SO-
LICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JU-
RISDICTION IN WHICH SUCH OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY MAY
NOT LAWFULLY BE MADE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus................................................................ Cover
Summary of Fund Expenses.................................................. 2
Financial Highlights...................................................... 4
Investment Objective and Policies......................................... 5
Investment Restrictions................................................... 5
Management of the Corporation............................................. 6
Purchase of Shares........................................................ 7
Redemption of Shares...................................................... 9
Exchange Privilege........................................................ 10
Portfolio Transactions and
Brokerage................................................................ 11
Determination of Net Asset Value.......................................... 11
Performance Data.......................................................... 11
Dividends, Distributions and
Taxes.................................................................... 12
General Information....................................................... 12
Appendix.................................................................. 13
</TABLE>
Investment Adviser:
SUNAMERICA ASSET MANAGEMENT CORP.
733 Third Avenue
New York, NY 10017
Distributor:
SUNAMERICA CAPITAL SERVICES, INC.
733 Third Avenue
New York, NY 10017
Custodian and Transfer Agent:
STATE STREET BANK AND TRUST COMPANY
1776 Heritage Drive
North Quincy, MA 02171
Servicing Agent:
SUNAMERICA FUND SERVICES, INC.
733 Third Avenue
New York, NY 10017
SUNAMERICA MONEY MARKET FUND
PROSPECTUS
MAY 1, 1995
LOGO SunAmerica
Capital Services
Distributor
<PAGE>
SUNAMERICA MONEY MARKET FUND
Statement of Additional Information
DATED MAY 1, 1995
733 Third Avenue General Marketing and
New York, NY 10017-3204 Shareholder Information
(800) 858-8850
SunAmerica Money Market Fund (the "Fund") seeks as high a level of current
income as is consistent with liquidity and stability of capital by investing in
a portfolio of high quality, short-term money market instruments. The Fund is
the only series of SunAmerica Money Market Funds, Inc., which is registered as
an open-end diversified management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act") and organized as a Maryland
corporation (the "Corporation").
This Statement of Additional Information is not a Prospectus, but should be
read in conjunction with the Fund's Prospectus dated May 1, 1995. To obtain a
Prospectus, please call the Fund at (800) 858-8850. Capitalized terms used
herein but not defined have the meanings assigned to them in the Prospectus.
TABLE OF CONTENTS
PAGE
----
HISTORY OF THE FUND....................................... B- 2
INVESTMENT OBJECTIVE AND POLICIES......................... B- 2
INVESTMENT RESTRICTIONS................................... B- 8
DIRECTORS AND OFFICERS.................................... B-12
ADVISER, PERSONAL TRADING, DISTRIBUTOR AND ADMINISTRATOR.. B-16
PORTFOLIO TRANSACTIONS AND BROKERAGE...................... B-22
ADDITIONAL INFORMATION REGARDING PURCHASE OF SHARES....... B-24
ADDITIONAL INFORMATION REGARDING REDEMPTION OF SHARES..... B-28
DETERMINATION OF NET ASSET VALUE.......................... B-28
PERFORMANCE DATA.......................................... B-30
DIVIDENDS, DISTRIBUTIONS AND TAXES........................ B-33
RETIREMENT PLANS.......................................... B-36
DESCRIPTION OF SHARES..................................... B-37
ADDITIONAL INFORMATION.................................... B-39
APPENDIX.................................................. B-40
FINANCIAL STATEMENTS...................................... B-44
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
Statement of Additional Information or in the Prospectus, and, if given or made,
such other information or representations must not be relied upon as having been
authorized by the Fund, the Adviser or the Distributor. This Statement of
Additional Information and the Prospectus do not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction in which such an offer to sell or solicitation of an offer to buy
may not lawfully be made.
<PAGE>
HISTORY OF THE FUND
The Corporation was organized under the name Integrated Money Market
Securities, Inc. on July 20, 1983 and was subsequently renamed SunAmerica Money
Market Securities, Inc. in 1990. On September 23, 1993, the Articles of
Incorporation of the Corporation were amended to permit the creation of multiple
series and classes of shares, and on September 24, 1993, the Corporation
reorganized with the SunAmerica Cash Fund ("Cash Fund") and was renamed
SunAmerica Money Market Funds, Inc. (the "Reorganization"). All of the
outstanding shares of the Corporation were redesignated Class A shares of the
Fund in the Reorganization. In addition, in the Reorganization, the
shareholders of Cash Fund received Class B shares of the Fund.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective and policies of the Fund are described in the
Prospectus. Certain types of securities in which the Fund may invest and
certain investment practices which the Fund may employ, which are described in
the Prospectus and in the Appendix thereto, are discussed more fully below.
U.S. GOVERNMENT OBLIGATIONS. As discussed in the Prospectus, the Fund may
invest in a variety of short-term debt securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. These securities include a
variety of Treasury securities which differ in their rates of interest,
maturities and dates of issuance. Treasury bills are obligations issued with
maturities of one year or less. Treasury notes are generally issued with
maturities of from one to ten years. Treasury bonds are generally issued with
maturities of more than ten years. Obligations issued by agencies and
instrumentalities, which may be purchased by the Fund, also vary in terms of
their maturities at the time of issuance. However, the Fund invests only in
obligations that, at their time of purchase by the Fund, have remaining
maturities of 397 calendar days or less.
BANK OBLIGATIONS. Certificates of deposit ("CD's") and bankers' acceptances may
be purchased by the Fund. CD's are securities which represent deposits in a
depository institution (e.g., a commercial bank or savings and loan association)
for a specified period at a specified rate of interest and normally are
negotiable. CD's issued by a foreign branch (usually London) of a U.S. domestic
bank, are known as Eurodollar CD's. Although certain risks may be associated
with Eurodollar CD's which are not associated with CD's issued in the U.S. by
domestic banks, the credit risks of these obligations are similar because U.S.
banks generally are liable for the obligations of their branches. CD's issued
through U.S. branches of foreign banks are known as Yankee CD's. These branches
are subject to Federal or state banking regulations. The secondary
B-2
<PAGE>
markets for Eurodollar and Yankee CD's may be less liquid than the market for
CD's issued by domestic branches of U.S. banks.
Bankers' acceptances are short-term credit instruments that represent
the promise of a bank to pay a draft which has been drawn by one of its
customers at its maturity. These obligations are used to finance the import,
export, transfer or storage of goods and represent the obligation of both the
accepting bank and its customer.
COMMERCIAL PAPER. As discussed in the Prospectus, the commercial paper in which
the Fund may invest may be unsecured or may be backed by letters of credit.
Commercial paper that is backed by a letter of credit is, in effect, "two party"
paper with the issuer of the paper initially responsible for repayment and a
bank guaranteeing the repayment if not made by the issuer at maturity. The Fund
may also invest in variable amount master demand notes which represent a direct
lending arrangement between the Fund and a corporate borrower. These notes
permit daily changes in the amount borrowed. The Fund has the right to increase
the amount loaned under the note at any time up to the full amount provided in
the loan agreement or to decrease the amount loaned. The borrower generally has
the right to prepay up to the full amount of the loan without penalty. These
notes are generally not traded in a secondary market; however, the Fund will
only enter into such arrangements where it has the right to redeem the note on
not more than seven days notice.
CORPORATE OBLIGATIONS. These obligations include bonds, debentures and notes
issued by corporations to finance long-term credit needs. Although issued with
maturities in excess of one year, the Fund's investments in corporate
obligations are limited to obligations having remaining maturities of 397
calendar days or less at the time of purchase by the Fund.
ILLIQUID SECURITIES. The Fund may invest up to 10% of its net assets,
determined as of the date of purchase, in illiquid securities including
repurchase agreements which have a maturity of longer than seven days or in
other securities that are illiquid by virtue of the absence of a readily
available market or legal or contractual restrictions on resale. Historically,
illiquid securities have included securities subject to contractual or legal
restrictions on resale because they have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), securities which are
otherwise not readily marketable and repurchase agreements having a maturity of
longer than seven days. Repurchase agreements subject to demand are deemed to
have a maturity equal to the notice period. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other
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illiquid securities because of the potential for delays on resale and
uncertainty in valuation. Limitations on resale may have an adverse effect on
the marketability of portfolio securities and a mutual fund might be unable to
dispose of restricted or other illiquid securities promptly or at reasonable
prices and might thereby experience difficulty satisfying redemptions within
seven days. A mutual fund might also have to register such restricted securities
in order to dispose of them, resulting in additional expense and delay. There
generally will be a lapse of time between a mutual fund's decision to sell an
unregistered security and the registration of such security promoting sale.
Adverse market conditions could impede a public offering of such securities.
When purchasing unregistered securities, the Fund will seek to obtain the right
of registration at the expense of the issuer.
In recent years, a large institutional market has developed for
certain securities that are not registered under the Securities Act, including
repurchase agreements, commercial paper, foreign securities, municipal
securities and corporate bonds and notes. Institutional investors depend on an
efficient institutional market in which the unregistered security can be readily
resold or on an issuer's ability to honor a demand for repayment. The fact that
there are contractual or legal restrictions on resale to the general public or
to certain institutions may not be indicative of the liquidity of such
investments.
Restricted securities eligible for resale pursuant to Rule 144A under
the Securities Act for which there is a readily available market will not be
deemed to be illiquid. The Fund's investment adviser, SunAmerica Asset
Management Corp. (the "Adviser"), will monitor the liquidity of such restricted
securities subject to the supervision of the Board of Directors of the
Corporation (the "Directors"). In reaching liquidity decisions the Adviser will
consider, inter alia, pursuant to guidelines and procedures established by the
Directors, the following factors: (1) the frequency of trades and quotes for
the security; (2) the number of dealers wishing to purchase or sell the security
and the number of other potential purchasers; (3) dealer undertakings to make a
market in the security; and (4) the nature of the security and the nature of the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of the transfer).
Commercial paper issues in which the Fund may invest include
securities issued by major corporations without registration under the
Securities Act in reliance on the exemption from such registration afforded by
Section 3(a)(3) thereof, and commercial paper issued in reliance on the so-
called private placement exemption from registration which is afforded by
Section 4(2) of the Securities Act ("Section 4(2) paper"). Section 4(2) paper
is restricted as to disposition under the Federal securities laws in that any
resale must similarly be made in an exempt transaction.
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Section 4(2) paper is normally resold to other institutional investors through
or with the assistance of investment dealers who make a market in Section 4(2)
paper, thus providing liquidity. Section 4(2) paper that is issued by a company
that files reports under the Securities Exchange Act of 1934 is generally
eligible to be sold in reliance on the safe harbor of Rule 144A described above.
The Fund's 10% limitation on investments in illiquid securities includes Section
4(2) paper other than Section 4(2) paper that the Adviser has determined to be
liquid pursuant to guidelines established by the Directors. The Directors
delegated to the Adviser the function of making day-to-day determinations of
liquidity with respect to Section 4(2) paper, pursuant to guidelines approved by
the Directors that require the Adviser to take into account the same factors
described above for other restricted securities and require the Adviser to
perform the same monitoring and reporting functions.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
banks, brokers or securities dealers. In such agreements, the seller agrees to
repurchase a security from the Fund at a mutually agreed-upon time and price.
The period of maturity is usually quite short, either overnight or a few days
although it may extend over a number of months. The resale price is in excess
of the purchase price, reflecting an agreed-upon rate of return effective for
the period of time the Fund's money is invested in the security. Whenever the
Fund enters into a repurchase agreement, it obtains collateral having a value at
least equal to the amount of the purchase price. The instruments held as
collateral are valued daily and if the value of the instruments declines, the
Fund will require additional collateral. If the seller defaults and the value
of the collateral securing the repurchase agreements declines, the Fund may
incur a loss. In addition, if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited. The Directors have established guidelines to be used by the
Adviser in connection with transactions in repurchase agreements and will
regularly monitor the Fund's use of repurchase agreements. The Fund will not
invest in repurchase agreements maturing in more than seven days if the
aggregate of such investments along with other illiquid securities exceeds 10%
of the value of its net assets. However, there is no limit on the amount of the
Fund's net assets that may be subject to repurchase agreements having a maturity
of seven days or less for temporary defensive purposes.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements, which is considered by the Fund to be a borrowing practice subject
to the Fund's borrowing limitations, with banks and broker-dealers. A reverse
repurchase agreement involves the sale of a security held by the Fund, subject
to an agreement by the Fund to repurchase that security at an agreed upon price,
date and interest payment. The Fund uses the proceeds of
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the reverse repurchase agreement to make additional investments which mature on
or prior to the repurchase date, and will enter into a reverse repurchase
agreement when it anticipates that the interest income to be earned from
investing the proceeds of the reverse repurchase agreement will exceed the
interest expense of the transaction. During the time a reverse repurchase
agreement is outstanding, the Fund will maintain a segregated custodial account
containing cash, U.S. Government or other liquid high quality debt securities
having a value at least equal to the repurchase price under the agreement. In
the event that the other party to the reverse repurchase agreement defaults on
its obligation to resell to the Fund the underlying securities because of
insolvency or otherwise, the Fund could experience delays and costs in gaining
access to the securities and could suffer a loss to the extent that the value of
the proceeds of the agreement fell below the value of the underlying securities.
Reverse repurchase agreements are considered to be borrowings and are subject to
the percentage limitations on borrowings. See "Investment Restrictions."
LOANS OF PORTFOLIO SECURITIES. Consistent with applicable regulatory
requirements, the Fund may lend portfolio securities in amounts up to 20% of
total assets to brokers, dealers and other financial institutions, provided,
that such loans are callable at any time by the Fund and are at all times
secured by cash or equivalent collateral that is equal to at least 100% of the
market value, determined daily, of the loaned securities. In lending its
portfolio securities, a Fund receives income while retaining the securities'
potential for capital appreciation. The advantage of such loans is that a Fund
continues to receive the interest and dividends on the loaned securities while
at the same time earning interest on the collateral, which will be invested in
short-term obligations. Where securities instead of cash are delivered to the
Fund as collateral, the Fund earns its return in the form of a loan premium paid
by the borrower. A loan may be terminated by the borrower on one business day's
notice or by the Fund at any time. If the borrower fails to maintain the
requisite amount of collateral, the loan automatically terminates, and the Fund
can use the collateral to replace the securities while holding the borrower
liable for any excess of replacement cost over collateral. As with any
extensions of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower of the securities fail
financially. However, these loans of portfolio securities will only be made to
firms deemed by the Adviser to be creditworthy. On termination of the loan, the
borrower is required to return the securities to the Fund; and any gain or loss
in the market price of the loaned security during the loan would inure to the
Fund. The Fund will pay reasonable finders', administrative and custodial fees
in connection with a loan of its securities or may share the interest earned on
collateral with the borrower.
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Since voting or consent rights which accompany loaned securities pass
to the borrower, the Fund will follow the policy of calling the loan, in whole
or in part as may be appropriate, to permit the exercise of such rights if the
matters involved would have a material effect on the Fund's investment in the
securities which are the subject of the loan.
BORROWINGS. As noted in the Prospectus, the Fund may borrow from banks for
temporary or emergency purposes or to meet redemption requests. The consequence
of such borrowings might be to reduce the Fund's yield below that which would
have been realized in the absence of such borrowings.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES. From time to time, in the ordinary
course of business, the Fund may purchase securities on a when-issued or
delayed-delivery basis - i.e., delivery and payment can take place a month or
more after the date of the transactions. Such agreements might be entered into,
for example, when the Fund anticipates a decline in the yield of securities of a
given issuer and is able to obtain a more advantageous yield by committing
currently to purchase securities to be issued later. The securities so
purchased are subject to market fluctuation and no interest accrues to the
purchaser during this period. At the time of delivery of the securities, the
value may be more or less than the purchase price. The Fund will establish and
maintain until the date of delivery of such when-issued securities, a segregated
account on the books with the Fund's Agent in which it will maintain cash or
cash equivalents or other high-grade portfolio securities equal in value to
commitments for such when-issued or delayed-delivery securities. The Fund will
make payment for such when-issued securities on the delivery date utilizing
then-available cash and, if cash is not available, or if it is not
disadvantageous to the Fund, utilizing the proceeds of the liquidation of
portfolio securities held in such segregated account.
SPECIAL RISK FACTORS. In the case of bank obligations not insured by the Federal
Deposit Insurance Corporation ("FDIC") or the Federal Savings and Loan Insurance
Corporation ("FSLIC"), the Fund will be dependent solely on the financial
resources of the issuing bank for payment of principal and interest. The Fund's
investments in commercial paper issued by foreign corporations and securities of
foreign branches of domestic banks and domestic branches of foreign banks
involve certain investment risks in addition to those affecting obligations of
U.S. domestic issuers. These risks include the possibility of adverse political
and economic developments, and the risk of: imposition of foreign withholding
taxes on the interest payable on such securities; seizure, expropriation or
nationalization of foreign deposits; and adoption of foreign governmental
restrictions, such as exchange controls, which might adversely affect the
payment of principal and interest on such securities. In addition, certain
reserve requirements and
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other regulations to which domestic banks are subject may not apply to foreign
branches or foreign banks, which also may use accounting methods different from
those used by U.S. domestic banks. Non-negotiable time deposits, unlike
negotiable certificates of deposit, cannot be sold in a secondary market and may
be subject to penalties for early withdrawal.
INVESTMENT RESTRICTIONS
The Fund is subject to a number of investment restrictions that are
fundamental policies and may not be changed without the approval of the holders
of a majority of the Fund's outstanding voting securities. As defined in the
1940 Act, a "majority of the outstanding voting securities" of the Fund means
the lesser of (i) 67% of the shares of the Fund represented at a meeting at
which more than 50% of the outstanding shares are present in person or
represented by proxy or (ii) more than 50% of the outstanding shares. Unless
otherwise indicated, all percentage limitations apply only at the time the
investment is made; any subsequent change in any applicable percentage resulting
from fluctuations in value will not be deemed an investment contrary to these
restrictions. Under these restrictions, the Fund may not:
1. Purchase securities other than those described under "Investment
Objective and Policies."
2. Enter into reverse repurchase agreements exceeding in the
aggregate 1/3 of the value of the Fund's total assets, less
liabilities other than obligations under such reverse repurchase
agreements.
3. Purchase the securities of issuers conducting their principal
business activity in the same industry if immediately after such
purchase the value of its investments in such industry would
exceed 25% of the value of the Fund's total assets, provided that
there is no limitation with respect to investments in securities
issued by domestic branches of U.S. banks or the U.S. Government,
its agencies or instrumentalities.
4. Invest more than 5% of its assets in the securities of any one
issuer (exclusive of securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities) except that up to
25% of the value of the Fund's total assets may be invested
without regard to such 5% limitation, subject to applicable
limitations imposed by Rule 2a-7 under the 1940 Act.
5. Make loans, except through the purchase or holding of debt
obligations in accordance with the Fund's investment
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objective and policies (see "Investment Objective and Policies").
6. Lend its portfolio securities in excess of 20% of its total assets
provided that such loans are made according to the guidelines of
the Securities and Exchange Commission and the Fund's Board of
Directors, including maintaining collateral from the borrower
equal at all times to the current market value of the securities
loaned.
7. Borrow money except from banks for temporary or emergency purposes
to meet redemption requests which might otherwise require the
untimely disposition of securities (not for the purpose of
increasing income), provided that borrowings in the aggregate may
not exceed 10% of the value of the Fund's total assets, including
the amount borrowed, at the time of such borrowing.
8. Purchase or sell puts, calls, straddles, spreads or any
combination thereof, real estate, commodities, commodity contracts
or interests in oil, gas and/or mineral exploration or development
programs, provided that the Fund may purchase bonds or commercial
paper issued by companies, including real estate investment
trusts, which invest in real estate or interests therein.
9. Invest in securities of other registered investment companies,
except by purchases in the open market involving only customary
brokerage commissions and as a result of which the Fund will not
hold more than 3% of the outstanding voting securities of any one
investment company, will not have invested more than 5% of its
total assets in any one investment company and will not have
invested more than 10% of its total assets in such securities of
one or more investment companies (each of the above percentages to
be determined at the time of investment), or except as part of a
merger, consolidation or other acquisition.
10. Act as an underwriter of securities.
11. Make short sales of securities or maintain a short position,
provided that this restriction shall not be deemed to be
applicable to the purchase or sale of "when issued" securities or
of securities for delivery at a future date.
12. Invest in or hold securities of any issuer if those officers and
Directors of the Fund or the Adviser owning individually more than
1/2 of 1% of the securities of such issuer together own more than
5% of the securities of such issuer.
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The following additional restrictions are not fundamental policies and
may be changed by the Directors without a shareholder vote:
(1) The Fund may not invest more than 10% of its net assets in
illiquid securities, including repurchase agreements which have a
maturity of longer than seven days, time deposits with a maturity
of longer than seven days, securities with legal or contractual
restrictions on resale and securities that are not readily
marketable in securities markets either within or without the
United States. Restricted securities eligible for resale pursuant
to Rule 144A under the Securities Act that have a readily
available market, and commercial paper exempted from registration
under the Securities Act pursuant to Section 4(2) of the
Securities Act that may be offered and sold to "qualified
institutional buyers" as defined in Rule 144A, which the Adviser
has determined to be liquid pursuant to guidelines established by
the Directors, will not be considered illiquid for purposes of
this 10% limitation on illiquid securities.
(2) In connection with the qualification or registration of the Fund's
shares for sale under the securities laws of certain states, the
Fund has agreed that it will not invest more than 5% of the value
of its total assets at the time of purchase in commercial paper,
including variable amount master demand notes, of any one issuer.
In addition, pursuant to regulations under the 1940 Act, the Fund may
not purchase any security that matures more than 397 calendar days from the date
of purchase, or which has an implied maturity of more than 397 calendar days.
For the purpose of satisfying this requirement, the maturity of a portfolio
security shall be deemed to be the period remaining until the date on which the
principal amount must be paid or, in the case of a security called for
redemption, the date on which the redemption payment must be made, except that:
1. A variable rate instrument, the principal amount of which is
scheduled on the face of the instrument to be paid in 397 calendar
days or less shall be deemed to have a maturity equal to the
period remaining until the next readjustment of the interest rate.
2. A variable rate instrument that is subject to a demand feature
shall be deemed to have a maturity equal to the longer of the
period remaining until the next readjustment of the interest rate
or the period remaining until the principal amount can be
recovered through demand.
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3. A floating rate instrument that is subject to a demand feature
shall be deemed to have a maturity equal to the period remaining
until the principal amount can be recovered through demand.
4. A repurchase agreement shall be deemed to have a maturity equal to
the period remaining until the date on which the repurchase of the
underlying securities is scheduled to occur, or where no date is
specified, but the agreement is subject to demand, the notice
period applicable to a demand for the repurchase of securities.
5. A portfolio lending agreement shall be treated as having a
maturity equal to the period remaining until the date on which the
loaned securities is scheduled to be returned, or, where no date
is specified, but the agreement is subject to a demand, the notice
period applicable to a demand for the return of the loaned
securities.
6. The maturity of an instrument subject to a stand-by commitment
will not be affected by the stand-by commitment.
7. An instrument that is issued or guaranteed by the U.S. Government,
or any agency thereof, which has a variable rate of interest
readjusted no less frequently than every 762 days shall be deemed
to have a maturity equal to the period remaining until the next
readjustment of the interest rate.
[This area intentionally left blank.]
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DIRECTORS AND OFFICERS
The following table lists the Directors and executive officers of the
Corporation, their ages, their business addresses and principal occupations
during the past five years. The SunAmerica Family of Mutual Funds consists of
SunAmerica Equity Funds, SunAmerica Income Funds and SunAmerica Money Market
Funds, Inc. (the "SunAmerica Family of Mutual Funds"). An asterisk indicates
those directors who are interested persons of the Fund within the meaning of the
1940 Act.
Position Principal Occupations
Name, Age and Address with the Fund During Past 5 Years
- --------------------- ------------- -------------------
Eli Broad/*/, 61 Director Chairman, President and Chief
1 SunAmerica Center Executive Officer, SunAmerica
Century City Inc., Co-founded the company
Los Angeles, CA 90067 in 1957; Founder and Chairman, Kaufman
and Broad Home Corporation, ("KBHC")
since 1986 (prior to 1986, KBHC was
owned by SunAmerica Inc.);
Trustee/Director of the SunAmerica
Family of Mutual Funds; Director of
Federal National Mortgage Association
since 1984; Chairman of Stanford Ranch
since 1966; Co-owner and Co-Chairman of
Sacramento Kings and ARCO Arena since
1992; and Trustee of Committee for
Economic Development since 1993.
S. James Coppersmith, 61 Director Formerly, President and
7 Elmwood Road General Manager, WCVB-TV, a
Marblehead, MA 01945 division of the Hearst Corporation from
1982 to 1994 (retired); Trustee/Director
of the SunAmerica Family of Mutual Funds
and Trustee of Anchor Series Trust.
Samuel M. Eisenstat, 54 Chairman of Attorney in private practice;
430 East 86 Street the Board Trustee of RPS Realty Trust
New York, NY 10028 since December 1988; Director of Volt
Information Sciences Funding, Inc., a
subsidiary of Volt Information Sciences,
Inc. since October 1993; Chairman of the
Board of the SunAmerica Family of Mutual
Funds and Anchor Series Trust.
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Position Principal Occupations
Name, Age and Address with the Fund During Past 5 Years
- --------------------- ------------- -------------------
Stephen J. Gutman, 51 Director Chairman of the Board, Chief
340 East 79 Street Operating and Executive
New York, NY 10021 Officer of Beau Brummel Casuals Limited,
Inc., a menswear specialty retailer
since May 1989; Trustee/Director of the
SunAmerica Family of Mutual Funds and
Trustee of Anchor Series Trust.
Sebastiano Sterpa, 65 Director Founder of Sterpa Realty
Suite 200 Inc., a full service real
200 West Glenoaks Blvd estate firm, since 1962;
Glendale, CA 91202 Chairman of the Sterpa Group, real
estate investments and management
company; Trustee/Director of the
SunAmerica Family of Mutual Funds.
Jay S. Wintrob/*/, 37 Director Executive Vice President, Sun-
1 SunAmerica Center America Inc., since November
Century City 1991; Formerly, Senior Vice
Los Angeles, CA 90067 President, SunAmerica Inc., from April
1989 to November 1991; Trustee/Director
of the SunAmerica Family of Mutual Funds
and Trustee of Anchor Series Trust.
Peter A. Harbeck, 41 President Executive Vice President and
733 Third Avenue Director, SunAmerica Asset
New York, NY 10017 Management Corp., President of
SunAmerica Fund Services, Inc. since May
1988; Chief Operating Officer,
SunAmerica Asset Management Corp. since
September, 1994; President of the
SunAmerica Family of Mutual Funds since
November, 1994; Executive Vice
President, SunAmerica Capital Services,
Inc., since November 1991. Director,
Resources Trust Company.
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Position Principal Occupations
Name, Age and Address with the Fund During Past 5 Years
- --------------------- ------------- -------------------
Stanton J. Feeley, 57 Executive Executive Vice President and
733 Third Avenue Vice Chief Investment Officer, Sun-
New York, NY 10017 President America Asset Management Corp., since
February 1992; Formerly, Senior
Portfolio Manager, Delaware Management
Company, Inc. from December 1987 to
February 1992.
P. Christopher Leary, 35 Vice Senior Vice President,
733 Third Avenue President SunAmerica Asset Management,
New York, NY 10017 Corp., since January 1994; Portfolio
Manager since 1990; Formerly, Investment
Manager, Equitable Capital Management.
Peter C. Sutton, 30 Controller Vice President, SunAmerica
733 Third Avenue Asset Management Corp., since
New York, NY 10017 September 1994,; Controller, SunAmerica
Funds (since March 1993); Assistant
Controller, SunAmerica Funds (1990-
1993); Formerly, Senior Accountant/
Supervisor, The Dreyfus Corporation
(1986-1990).
Robert M. Zakem, 37 Secretary Senior Vice President and
733 Third Avenue and General Counsel, Sun-
New York, NY 10017 America Asset Management Corp., since
April 1993; Executive Vice President and
Director, SunAmerica Capital Services,
Inc., since February 1993; Vice
President of SunAmerica Fund Services,
Inc., since January 1994; Formerly, Vice
President and Associate General Counsel,
SunAmerica Asset Management Corp., since
March 1992; Associate, Piper & Marbury
from 1989 to 1992.
The following table sets forth information describing the compensation of each
disinterested Director as defined herein of the Corporation for his services as
Director for the fiscal year ended December 31, 1994.
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COMPENSATION TABLE
============================================================================
PENSION
OR RETIREMENT
BENEFITS TOTAL COMPENSATION
AGGREGATE ACCRUED AS FROM REGISTRANT
COMPENSATION PART OF FUND AND FUND COMPLEX
FROM REGISTRANT EXPENSES/*/ PAID TO DIRECTORS/*/
[S] [C] [C] [C]
============================================================================
S. James Coppersmith $5,174 $30,000 $65,000
Samuel M. Eisenstat 5,370 0 69,000
Stephen J. Gutman 5,174 11,945 65,000
Sebastiano Sterpa 5,207 0 43,333
/*/ Information is as of December 31, 1994 for the four investment companies
in the complex which pay fees to these directors/trustees.
Directors and officers of the Corporation are also trustees and officers of
some or all of the other investment companies managed, administered or advised
by the Adviser, and distributed by SunAmerica Capital Services, Inc. ("SACS" or
the "Distributor") and other affiliates of SunAmerica Inc.
The Corporation pays each Director who is not an affiliated person of the
Adviser annual compensation in addition to reimbursement of out-of-pocket
expenses in connection with attendance at meetings of the Directors.
Specifically, each unaffiliated director receives a pro rata portion (based upon
the Corporation's net assets) of the $40,000 in annual compensation for acting
as a director or trustee to all the retail funds in the SunAmerica Family of
Mutual Funds (namely, the Corporation, SunAmerica Equity Funds and SunAmerica
Income Funds). In addition, Mr. Eisenstat receives an aggregate of $2,000 in
annual compensation for serving as Chairman of the Boards of the retail funds in
the SunAmerica Family of Mutual Funds. Officers of the Corporation receive no
direct remuneration in such capacity from the Corporation or the Fund.
In addition, each unaffiliated Director also serves on the Audit Committee of
the Board of Directors. Each member of the Audit Committee receives an
aggregate of $5,000 in annual compensation for serving on the Audit Committees
of all of the retail funds of the SunAmerica Family of Mutual Funds as well as
Anchor Series Trust. With respect to the Corporation, each member of the
committee receives a pro rata portion of the $5,000 annual compensation, based
on the relative net assets of the Corporation. The Corporation also has a
Nominating Committee, comprised solely of unaffiliated Directors, which
recommends to the Directors those persons to be nominated for election as
Directors by shareholders and selects and proposes nominees for election by
Directors between shareholders' meetings. Members of the Nominating Committee
serve without compensation.
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The Directors (and Trustees) of the SunAmerica Family of Mutual Funds have
adopted the SunAmerica Disinterested Trustees' and Directors' Retirement Plan
(the "Retirement Plan") effective January 1, 1993 for the Directors who are not
"interested persons" (within the meaning of the 1940 Act) of the SunAmerica
Mutual Funds (the "disinterested Directors"). The Retirement Plan provides
generally that if a disinterested Director who has at least 10 years of
consecutive service as a disinterested Director of any of the SunAmerica Mutual
Funds (an "Eligible Director") retires after reaching age 60 but before age 70
or dies while a Director, such person will be eligible to receive a retirement
or death benefit from each SunAmerica Mutual Fund with respect to which he or
she is an Eligible Director. As of each birthday, prior to the 70th birthday,
each Eligible Director will be credited with an amount equal to (i) 50% of his
or her regular fees (excluding committee fees) for services as a disinterested
Director of each SunAmerica Mutual Fund for the calendar year in which such
birthday occurs, plus (ii) 8.5% of any amounts credited under clause (i) during
prior years. An Eligible Director may receive any benefits payable under the
Retirement Plan, at his or her election, either in one lump sum or in up to
fifteen annual installments.
As of April 11, 1995, the Directors and officers of the Fund owned in the
aggregate, less than 1% of the Fund's total outstanding shares.
ADVISER, PERSONAL TRADING, DISTRIBUTOR AND ADMINISTRATOR
THE ADVISER. The Adviser, organized as a Delaware corporation in 1982, is
located at 733 Third Avenue, New York, NY 10017-3204, and serves as adviser to
the Fund pursuant to the Investment Advisory and Management Agreement dated
September 23, 1993 (the "Advisory Agreement") with the Corporation, on behalf of
the Fund. The Adviser is an indirect wholly owned subsidiary of SunAmerica Inc.
SunAmerica Inc., is incorporated in the State of Maryland and maintains its
principal executive offices at 1 SunAmerica Center, Century City, Los Angeles,
CA 90067-6022, telephone (310) 772-6000.
Under the Advisory Agreement, the Adviser selects and manages the investments
of the Fund, provides various administrative services and supervises the Fund's
daily business affairs, subject to general review by the Directors.
Except to the extent otherwise specified in the Advisory Agreement, the Fund
pays, or causes to be paid, all other expenses of the Corporation and the Fund,
including, without limitation, charges and expenses of any registrar, custodian,
transfer and dividend disbursing agent; brokerage commissions; taxes; engraving
and printing of share certificates; registration costs of the Fund and its
shares under Federal and state securities laws; the cost and expense of
printing, including typesetting, and distributing
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Prospectuses and Statements of Additional Information respecting the Fund, and
supplements thereto, to the shareholders of the Fund; all expenses of
shareholders' and Directors' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; all expenses incident to any
dividend, withdrawal or redemption options; fees and expenses of legal counsel
and independent accountants; membership dues of industry associations; interest
on borrowings of the Fund; postage; insurance premiums on property or personnel
(including Officers and Directors) of the Corporation which inure to its
benefit; extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto); and
all other costs of the Corporation's operation.
As compensation for its services to the Fund, the Adviser receives a fee from
the Fund, payable monthly, computed daily at the annual rate of .50% on the
first $600 million of the Fund's average daily net assets, .45% on the next $900
million of net assets and .40% on net assets over $1.5 billion.
The Advisory Agreement was approved by the Directors, including a majority of
the Directors who are not parties to the Advisory Agreement or "interested
persons" of any such party, on May 11, 1993, and with respect to the Class A
shares, by the shareholders of the Fund on September 23, 1993, and with respect
to the Class B shares, by the Adviser, the sole initial stockholder, on
September 23, 1993. The Advisory Agreement became effective on September 24,
1993. Pursuant to the Advisory Agreement, for the fiscal year ended December
31, 1994, the Adviser received total advisory fees of $1,420,692.
For the fiscal year ended December 31, 1993, the Adviser received total
advisory fees of $1,060,498 from the Fund pursuant to the Advisory Agreement.
In addition, the Adviser received fees from the Fund and the Cash Fund, pursuant
to the prior Advisory Agreements between the Corporation and the Adviser and the
Cash Fund and the Adviser, as described below.
In the Reorganization, all outstanding shares of the Corporation were
redesignated Class A shares of the Fund. The Corporation paid the Adviser an
advisory fee at the same annual rate as is payable by the Fund under the
Advisory Agreement. For the fiscal year ended December 31, 1992, the Adviser
received an advisory fee from the Corporation in the amount of $1,217,255. In
addition, in the Reorganization, the Cash Fund was reorganized with, and its
shareholders received, Class B shares of the Fund. The Cash Fund paid the
Adviser an advisory fee at the same annual rate as is payable by the Fund under
the Advisory Agreement. For the fiscal year ended December 31, 1992, the
Adviser received an advisory fee from the Cash Fund in the amount of $151,890.
B-17
<PAGE>
Certain states in which the shares of the Fund are qualified for sale impose
limitations on the expenses of the Fund. The current annual expense limitations
require that the Adviser reimburse the Fund in any amount necessary to prevent
the Fund's aggregate ordinary operating expenses (excluding interest, taxes,
distribution and brokerage fees and commissions, and extraordinary charges such
as litigation costs) from exceeding, in any fiscal year, 2 1/2% of the first $30
million of the average daily net assets of the Fund, 2% of the next $70 million
of such assets, plus 1 1/2% of such assets in excess of $100 million. In
accordance with the terms of the Advisory Agreement, if the expenses of the
Fund exceed the amount of the fees paid by the Fund to the Adviser, then the
Adviser will reimburse the Fund the amount of such excess. For the fiscal years
ended December 31, 1994 and 1993, expense reimbursements were not required.
Pursuant to prior advisory arrangements with the Corporation (all of whose
outstanding shares were redesignated Class A shares of the Fund) and pursuant to
prior advisory arrangements with the Cash Fund (which reorganized with and whose
shareholders received Class B shares of the Fund), the Adviser was required to
reimburse each of these funds in the manner required under the Advisory
Agreement described above. For the fiscal year ended December 31, 1992, no
reimbursement was made by the Adviser with respect to the Corporation or the
Cash Fund.
The Advisory Agreement will continue in effect with respect to the Fund until
September 23, 1995, and thereafter from year-to-year, if approved at least
annually by vote of a majority of the Directors or by the holders of a majority
of the Fund's outstanding voting securities. Any such continuation also
requires approval by a majority of the Directors who are not parties to the
Advisory Agreement or "interested persons" of any such party as defined in the
1940 Act by vote cast in person at a meeting called for such purpose. The
Advisory Agreement may be terminated with respect to the Fund at any time,
without penalty, on 60 days' written notice by the Directors by the holders of a
majority of the Fund's outstanding voting securities or by the Adviser. The
Advisory Agreement automatically terminates with respect to the Fund in the
event of its assignment (as defined in the 1940 Act and the rules thereunder).
Under the terms of the Advisory Agreement, the Adviser is not liable to the
Fund, or its shareholders, for any act or omission by it or for any losses
sustained by the Fund or its shareholders, except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
PERSONAL TRADING. The Fund and the Adviser have adopted a written Code of
Ethics (the "Code") which prescribes general rules of conduct and sets forth
guidelines with respect to personal securities trading by "Access Persons"
thereof. An Access Person
B-18
<PAGE>
as defined in the Code is an individual who is a trustee, director, officer,
general partner or advisory person of the Fund or the Adviser. The guidelines on
personal securities trading include: (i) securities being considered for
purchase or sale, or purchased or sold, by any Investment Company advised by the
Adviser, (ii) Initial Public Offerings, (iii) private placements, (iv) blackout
periods, (v) short-term trading profits, (vi) gifts, and (vii) services as a
director. These guidelines are substantially similar to those contained in the
Report of the Advisory Group on Personal Investing issued by the Investment
Company Institute's Advisory Panel. The Adviser reports to the Board of
Directors on a quarterly basis, as to whether there were any violations of the
Code by Access Persons of the Fund or the Adviser during the quarter.
THE DISTRIBUTOR. The Corporation, on behalf of the Fund, has entered into a
distribution agreement (the "Distribution Agreement") with the Distributor, a
registered broker-dealer and an indirect wholly owned subsidiary of SunAmerica
Inc., to act as the principal underwriter of the shares of the Fund. The
address of the Distributor is 733 Third Avenue, New York, NY 10017-3204. The
Distribution Agreement provides that the Distributor has the exclusive right to
distribute shares of the Fund through its registered representatives and
authorized broker-dealers. The Distribution Agreement also provides that the
Distributor will pay the promotional expenses, including the incremental cost of
printing prospectuses, annual reports and other periodic reports respecting the
Fund, for distribution to persons who are not shareholders of the Fund and the
costs of preparing and distributing any other supplemental sales literature.
However, certain promotional expenses may be borne by the Fund (see
"Distribution Plans" below).
The Distribution Agreement was approved by the Directors, including a
majority of those Directors who are not "interested persons" of the Corporation,
on May 11, 1993. The Distribution Agreement became effective on September 24,
1993. The Distribution Agreement will remain in effect until September 23, 1995
and thereafter from year-to-year with respect to the Fund if such continuance is
approved at least annually by the Directors, including a majority of the
Directors who are not "interested persons" of the Corporation. The Corporation
or the Distributor each has the right to terminate the Distribution Agreement
with respect to the Fund on 60 days' written notice, without penalty. The
Distribution Agreement will terminate automatically in the event of its
assignment as defined in the 1940 Act and the rules thereunder.
The Distributor may, from time-to-time, pay additional commissions or
promotional incentives to brokers, dealers or other financial services firms
that sell shares of the Fund. In some instances, such additional commissions,
fees or other incentives
B-19
<PAGE>
may be offered only to certain firms, including Royal Alliance Associates, Inc.
and SunAmerica Securities, Inc., affiliates of the Distributor, that sell or are
expected to sell during specified time periods certain minimum amounts of shares
of the Fund, or of other funds underwritten by the Distributor. In addition, the
terms and conditions of any given promotional incentive may differ from firm to
firm. Such differences will, nevertheless, be fair and equitable, and based on
such factors as size, geographic location, or other reasonable determinants, and
will in no way affect the amount paid to any investor.
DISTRIBUTION PLANS. As indicated in the Prospectus, the Directors of the
Corporation and the shareholders of each class of shares of the Fund have
adopted Distribution Plans (the "Class A Plan" and the "Class B Plan," and
collectively, the "Distribution Plans"). Reference is made to "Management of
the Corporation - Distribution Plans" in the Prospectus for certain information
with respect to the Distribution Plans.
Under the Class B Plan, the Distributor may receive payments from the Fund at
the annual rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares, to compensate the Distributor and certain securities firms for
sales and promotional activities for distributing that class of shares. The
distribution costs for which the Distributor may be reimbursed out of such
distribution fees include fees paid to broker-dealers that have sold Fund
shares, commissions and other expenses such as sales literature, prospectus
printing and distribution and compensation to wholesalers. It is possible that
in any given year the amount paid to the Distributor under the Class B Plan will
exceed the Distributor's distribution costs as described above. The Class A
Plan does not provide for a distribution fee. Both Distribution Plans, however,
provide that each class of shares of the Fund may pay the Distributor an account
maintenance and service fee of up to 0.15% of the aggregate average daily net
assets of such class of shares for payments to broker-dealers for providing
continuing account maintenance. In this regard, some payments are used to
compensate broker-dealers with account maintenance and service fees in an amount
up to 0.15% per year of the assets maintained in the Fund by their customers.
The Distribution Plans were approved on May 11, 1993 by the Directors,
including a majority of the Directors who are not "interested persons" of the
Corporation and who have no direct or indirect financial interest in the
operation of the Distribution Plans (the "Independent Directors"), and with
respect to Class A shares, by the shareholders of the Fund on September 23,
1993, and with respect to the Class B Shares, by the Adviser, the sole initial
stockholder, on September 23, 1993. The Distribution Plans became effective on
September 24, 1993.
B-20
<PAGE>
For the fiscal year ended December 31, 1994, the Distributor received
distribution fees of $307,701 from the Fund pursuant to the Class A Distribution
Plan. For the same period, the Distributor received distribution fees of
$714,820 from the Fund pursuant to the Class B Distribution Plan.
For the fiscal year ended December 31, 1993, the Distributor received
distribution fees of $303,272 from the Fund pursuant to the Class A Distribution
Plan. For the fiscal period from September 24, 1993 through December 31, 1993,
the Distributor received distribution fees of $89,267 from the Fund pursuant to
the Class B Distribution Plan. In addition, fees were received by the
Distributor from the Corporation and were received or waived by the Distributor
with respect to the Cash Fund pursuant to distribution plans which were in
effect prior to the Reorganization (each, a "Predecessor Distribution Plan"), as
described below.
In the Reorganization, all outstanding shares of the Corporation were
redesignated Class A shares of the Fund. The Predecessor Distribution Plan for
the Corporation limited distribution expenditures to an annual rate of 0.30% of
average daily net assets, and provided that the Corporation reimburse the
Distributor at the maximum annual rate of 0.15% of average daily net assets. In
addition, the Predecessor Distribution Plan provided that the Distributor may
bear up to an additional 0.15% of average daily net assets for distribution-
related expenses. The Predecessor Distribution Plan also provided that payments
under the plan in any particular year may not exceed the amounts expended by the
Distributor for assistance provided to the Fund during any particular year. For
the fiscal year ended December 31, 1992, the Distributor received $365,177,
pursuant to the Predecessor Distribution Plan with the Corporation. In
addition, in the Reorganization, the Cash Fund was reorganized with, and its
shareholders received Class B shares of, the Fund. The Predecessor Distribution
Plan for the Cash Fund provided for a distribution fee at the same annual rate
and calculated in the same manner as in the Corporation's Predecessor
Distribution Plan. For the fiscal year ended December 31, 1992, the Distributor
waived all fees due it under the Predecessor Distribution Plan with the Cash
Fund. Had these fees accrued, they would have amounted to $45,567.
Continuance of the Distribution Plans with respect to the Fund is subject to
annual approval by vote of the Directors, including a majority of the
Independent Directors. A Distribution Plan may not be amended to increase
materially the amount authorized to be spent thereunder with respect to a class
of shares of the Fund, without approval of the shareholders of the affected
class of shares of the Fund. In addition, all material amendments to the
Distribution Plans must be approved by the Directors in the manner described
above. A Distribution Plan may be terminated at any time with respect to the
Fund without payment of any penalty by vote of a majority of the Independent
Directors or by vote of a majority of
B-21
<PAGE>
the outstanding voting securities (as defined in the 1940 Act) of the affected
class of shares of the Fund. So long as the Distribution Plans are in effect,
the election and nomination of the Independent Directors of the Corporation
shall be committed to the discretion of the Independent Directors. In the
Directors' quarterly review of the Distribution Plans, they will consider the
continued appropriateness of, and the level of, compensation provided in the
Distribution Plans. In their consideration of the Distribution Plans with
respect to the Fund, the Directors must consider all factors they deem relevant,
including information as to the benefits of the Fund and the shareholders of the
relevant class of the Fund.
THE ADMINISTRATOR. The Corporation has entered into a Service Agreement, under
the terms of which SunAmerica Fund Services, Inc. ("SAFS"), an indirect wholly
owned subsidiary of SunAmerica Inc., acts as a servicing agent assisting State
Street Bank and Trust Company ("State Street") in connection with certain
services offered to the shareholders of the Fund. Under the terms of the
Service Agreement, SAFS may receive reimbursement of its costs in providing such
shareholder services. SAFS is located at 733 Third Avenue, New York, NY 10017-
3204.
The Directors, including a majority of the Directors who are not parties to
the Service Agreement or "interested persons", as that term is defined in the
1940 Act, approved the Service Agreement on May 11, 1993. The Service Agreement
will remain in effect until September 23, 1995 and from year-to-year thereafter
provided its continuance is approved annually by vote of the Directors including
a majority of the disinterested Directors.
Pursuant to the Service Agreement, as compensation for services rendered,
SAFS will receive a fee from the Corporation subject to review and approval by
the Directors. This fee represents the balance of fees due on a full service
shareholder servicing and transfer agency account charge, after the deduction of
those fees paid to State Street, and its affiliate, National Financial Data
Services ("NFDS" and with State Street, the "Transfer Agent"). For further
information regarding the Transfer Agent see the section entitled "Additional
Information" below.
PORTFOLIO TRANSACTIONS AND BROKERAGE
As discussed in the Prospectus, the Adviser is responsible for decisions to
buy and sell securities for the Fund, selection of broker-dealers and
negotiation of commission rates. Purchases and sales of securities on a
securities exchange are effected through brokers-dealers who charge a negotiated
commission for their services. Orders may be directed to any broker-dealer
including, to the extent and in the manner permitted by applicable law, an
affiliated brokerage subsidiary of SunAmerica Inc.
B-22
<PAGE>
In the over-the-counter market, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission (although the price of the security usually includes a profit to the
dealer). In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
The Adviser's primary consideration in effecting a security transaction is to
obtain the best net price and the most favorable execution of the order.
However, the Adviser may select broker-dealers which provide them with research
services and may cause the Fund to pay such broker-dealers commissions which
exceed those that other broker-dealers may have charged, if in its view the
commissions are reasonable in relation to the value of the brokerage and/or
research services provided by the broker-dealer. Certain research services
furnished by brokers may be useful to the Adviser with clients other than the
Corporation. No specific value can be determined for research services
furnished without cost to the Adviser by a broker. The Adviser is of the
opinion that because the material must be analyzed and reviewed by its staff,
its receipt does not tend to reduce expenses, but may be beneficial in
supplementing the Adviser's research and analysis. Therefore, it may tend to
benefit the Fund by improving the quality of the Adviser's investment advice.
The investment advisory fees paid by the Fund are not reduced because the
Adviser receives such services. When making purchases of underwritten issues
with fixed underwriting fees, the Adviser may designate the use of broker-
dealers who have agreed to provide the Adviser with certain statistical,
research and other information.
Subject to applicable law and regulations, consideration may also be given to
the willingness of particular brokers to sell shares of the Fund as a factor in
the selection of brokers for transactions effected on behalf of the Fund,
subject to the requirement of best price and execution.
Although the objectives of other accounts or investment companies which the
Adviser manages may differ from those of the Fund, it is possible that, at
times, identical securities will be acceptable for purchase by the Fund and one
or more other accounts or investment companies which the Adviser manages.
However, the position of each account or company in the securities of the same
issue may vary with the length of the time that each account or company may
choose to hold its investment in those securities. The timing and amount of
purchase by each account and company will also be determined by its cash
position. If the purchase or sale of a security is consistent with the
investment policies of the Fund and one or more of these other accounts or
companies is considered at or about the same time, transactions in such
securities will be
B-23
<PAGE>
allocated in a manner deemed equitable by the Adviser. The Adviser may combine
such transactions, in accordance with applicable laws and regulations, where the
size of the transaction would enable it to negotiate a better price or reduced
commission. However, simultaneous transactions could adversely affect the
ability of the Fund to obtain or dispose of the full amount of a security, which
it seeks to purchase or sell, or the price at which such security can be
purchased or sold.
For the fiscal years ended December 31, 1994 and 1993, no brokerage
commissions were paid by the Fund. In addition, information regarding brokerage
commissions paid by the Fund or the Fund's predecessors prior to the
Reorganization is as described below.
The Corporation (all of whose outstanding shares were redesignated Class A
Shares of the Fund) and the Cash Fund (which reorganized with and whose
shareholders received Class B shares of the Fund) paid no brokerage commissions
during the fiscal year ended December 31, 1992.
ADDITIONAL INFORMATION REGARDING PURCHASE OF SHARES
Shares of the Fund are sold at net asset value next-determined after receipt
of a purchase order, plus for Class B shares, a deferred sales charge.
Reference is made to "Purchase of Shares" in the Prospectus for certain
information as to the purchase of Fund shares.
For the fiscal year ended December 31, 1994, the Distributor informed the
Fund that it received $546,660 in contingent deferred sales charges from the
sale of the Fund's Class B shares.
For the fiscal year ended December 31, 1993, the Distributor informed the
Fund that it received $64,877 in contingent deferred sales charges from the sale
of the Fund's Class B shares. No contingent deferred sales charges from the sale
of shares of the Cash Fund were received by the Distributor for the fiscal year
ended December 31, 1992.
CONTINGENT DEFERRED SALES CHARGES ("CDSCS") APPLICABLE TO CERTAIN CLASS B
SHARES. Class B shares of the Fund issued to shareholders in exchange for
shares of the Cash Fund in the Reorganization, are subject to the CDSC schedule,
if any, that applied to such shares at the time of Reorganization. In the event
that the shares were originally acquired in an exchange from another SunAmerica
Mutual Fund which imposes a CDSC (a "CDSC Fund"), the CDSC schedule that was
applicable to such shares at the time of the exchange will continue to apply;
provided, that in determining the holding period for such shares, the holding
period prior to such exchange and the holding period following the date of the
Reorganization will be
B-24
<PAGE>
"tacked" or combined. No credit toward the holding period is given for the time
during which the Cash Fund shares were held. For example, if shares of a CDSC
Fund were held by a shareholder for two years prior to an exchange for shares of
Cash Fund, Cash Fund shares were held for one year prior to the Reorganization,
and the Class B shares of the Fund were held for one year prior to redemption,
when the Class B shares are redeemed by the shareholder, they will be subject to
a contingent deferred sales charge as though they were redeemed from the CDSC
Fund three years after the initial investment in the CDSC Fund without regard to
the length of time that the Cash Fund shares were actually held.
The following CDSC schedule applies to shares originally acquired (prior to
the date of the Reorganization) in an exchange from one of the four series of
shares of the SunAmerica Fund Group (i.e., SunAmerica U.S. Government Securities
Fund, SunAmerica High Income Fund, SunAmerica Emerging Growth Fund and
SunAmerica Balanced Assets Fund) or from the SunAmerica Federal Securities Fund:
<TABLE>
<CAPTION>
Year Since Contingent Deferred Sales Charges
Purchase Payment as a Percentage of Dollars
Was Made Invested or Redemption Proceeds
-------- -------------------------------
<S> <C>
First 5%
Second 4
Third 3
Fourth 2
Fifth 1
Sixth and thereafter 0
</TABLE>
The following table sets forth the rates of CDSC applicable to shares
originally acquired (prior to the date of the Reorganization) in an exchange
from the SunAmerica Diversified Income Fund series of SunAmerica Multi-Asset
Portfolios, Inc.:
<TABLE>
<CAPTION>
Year Since Contingent Deferred Sales Charges
Purchase Payment as a Percentage of Dollars
Was Made Invested or Redemption Proceeds
-------- -------------------------------
<S> <C>
First 3%
Second 2
Third 1
Fourth and thereafter 0
</TABLE>
Any Class B shares purchased after the date of the Reorganization (other
than through the reinvestment of dividends and distributions, which are not
subject to the CDSC) will be subject to the CDSC schedule reflected in the
Prospectus. After the Reorganization, in calculating the contingent deferred
sales
B-25
<PAGE>
charge due upon redemption of Class B shares of the Fund acquired through
an exchange from a CDSC Fund or in the Reorganization, a shareholder will
receive credit toward the holding period for the period of time they held Class
B shares of the Fund.
CONVERSION FEATURE APPLICABLE TO CLASS B SHARES. Class B shares (including a
pro rata portion of the Class B shares purchased through reinvestment of
dividends and distributions) will convert automatically to Class A shares on the
first business day of the month following the seventh anniversary of issuance of
such Class B shares or, in the case of Class B shares acquired pursuant to the
Reorganization, seven years after the issuance of a shareholder's original CDSC
Fund shares (which were subsequently exchanged for the Cash Fund shares which
were in turn exchanged for Class B shares of the Fund in the Reorganization),
provided, that in calculating such seven-year period, any time during which the
shareholder held the Cash Fund shares will be excluded. For example, if shares
of a CDSC Fund were held by a shareholder for four years and then exchanged for
shares of Cash Fund which were then held for two years as of the date of the
Reorganization, such shareholder's Class B shares of the Fund received in the
Reorganization will convert to Class A shares of the Fund at the end of the
third year following consummation of the Reorganization. The conversion to
Class A shares will be on the basis of the relative net asset values of Class B
shares and Class A shares, without the imposition of any sales load, fee or
charge.
WAIVER OF CONTINGENT DEFERRED SALES CHARGES. As discussed under "Purchase of
Shares" in the Prospectus, CDSCs may be waived on redemptions of Class B shares
under certain circumstances. The conditions set forth below are applicable with
respect to the following situations with the proper documentation:
Death. CDSCs may be waived on redemptions within one year following the
------
death (i) of the sole shareholder on an individual account, (ii) of a joint
tenant where the surviving joint tenant is the deceased's spouse, or (iii) of
the beneficiary of a Uniform Gifts to Minors Act, Uniform Transfers to Minors
Act or other custodial account. The CDSC waiver is also applicable in the case
where the shareholder account is registered as community property. If, upon the
occurrence of one of the foregoing, the account is transferred to an account
registered in the name of the deceased's estate, the CDSC will be waived on any
redemption from the estate account occurring within one year of the death. If
the Class B shares are not redeemed within one year of the death, they will
remain Class B shares and be subject to the applicable CDSC, when redeemed.
Disability. CDSCs may be waived on redemptions occurring within one year
-----------
after the sole shareholder on an individual account or a joint tenant on a
spousal joint tenant account becomes disabled (as defined in Section 72(m)(7) of
the Internal Revenue
B-26
<PAGE>
Code of 1986, as amended). To be eligible for such waiver, (i) the disability
must arise AFTER the purchase of shares AND (ii) the disabled shareholder must
have been under age 65 at the time of the initial determination of disability.
If the account is transferred to a new registration and then a redemption is
requested, the applicable CDSC will be charged.
PURCHASES THROUGH THE DISTRIBUTOR. An investor may purchase shares of the Fund
through dealers which have entered into selected dealer agreements with the
Distributor. An investor's dealer who has entered into a distribution
arrangement with the Distributor is expected to forward purchase orders and
payment promptly to the Fund. Orders received by the Distributor before the
close of business will be executed on that day. Orders received by the
Distributor after the close of business will be executed on the next trading
day. The Distributor reserves the right to cancel any purchase order for which
payment has not been received by the fifth business day following the
investment. The Fund will not be responsible for delays caused by dealers.
PURCHASE BY CHECK. In the case of a new account, purchase orders by check must
be submitted directly by mail to SunAmerica Fund Services, Inc., Mutual Fund
Operations, 733 Third Avenue, New York, NY 10017-3204, together with payment for
the purchase price of such shares and a completed New Account Application.
Shares of the Fund may be purchased directly through the Transfer Agent. Upon
receipt of the completed New Account Application and payment check, the Transfer
Agent will purchase full and fractional shares of the Fund at the net asset
value next computed after the check is received. Certified checks are not
necessary, but checks are accepted subject to collection at full face value in
United States funds and must be drawn on a bank located in the United States.
Checks should be made payable to "SunAmerica Money Market Fund." There are
restrictions on the redemption of shares purchased by check for which funds are
being collected. (See "Redemption of Shares.")
PURCHASE THROUGH SAFS. SAFS will effect a purchase order on behalf of a customer
who has an investment account upon confirmation of a verified credit balance at
least equal to the amount of the purchase order (subject to the minimum
investment requirements set forth in the Prospectus). If such order is received
at or prior to 4:00 P.M., Eastern time, on a day the New York Stock Exchange
("NYSE") is open for business, the purchase of shares of the Fund will be
effected on that day. If the order is received after 4:00 P.M., Eastern time,
the order will be effected on the next business day.
PURCHASE BY FEDERAL FUNDS WIRE. An investor may make purchases by having his or
her bank wire Federal funds to the Corporation's Transfer Agent. Federal funds
purchase orders will be accepted only on a day on which the Corporation and the
Transfer Agent are
B-27
<PAGE>
open for business. In order to insure prompt receipt of a Federal funds wire, it
is important that these steps be followed:
1. You must have an existing SunAmerica Fund Account before wiring funds.
To establish an account, complete the New Account Application and send
it via facsimile to SunAmerica Fund Services, Inc. at: (212) 551-5343.
2. Call SunAmerica Fund Services' Shareholder/Dealer Services, toll free
at (800) 858-8850, extension 5125 to obtain your new account number.
3. Instruct the bank to wire the specified amount to the Transfer Agent:
State Street Bank and Trust Company, Boston, MA, ABA# 0110-00028; DDA#
99029712, SunAmerica [name of Fund, Class __] (include shareholder
name and account number).
ADDITIONAL INFORMATION REGARDING REDEMPTION OF SHARES
Reference is made to "Redemption of Shares" in the Prospectus for certain
information as to the redemption of Fund shares.
If the Directors determine that it would be detrimental to the best
interests of the remaining shareholders of the Fund to make payment wholly or
partly in cash, the Corporation, having filed with the Securities and Exchange
Commission ("SEC") a notification of election pursuant to Rule 18f-1 on behalf
of the Fund, may pay the redemption price in whole, or in part, by a
distribution in kind of securities from the Fund in lieu of cash. In conformity
with applicable rules of the SEC, the Fund is committed to pay in cash all
requests for redemption of Fund shares, by any shareholder of record, limited in
amount with respect to each shareholder during any 90-day period to the lesser
of (i) $250,000, or (ii) 1% of the net asset value of the Fund at the beginning
of such period. If shares are redeemed in kind, the redeeming shareholder would
incur brokerage costs in converting the assets into cash. The method of valuing
portfolio securities is described below in the section entitled "Determination
of Net Asset Value," and such valuation will be made as of the same time the
redemption price is determined.
DETERMINATION OF NET ASSET VALUE
The Fund calculates the net asset value of each class of its shares
separately by dividing the total value of each class's net assets by the shares
of such class outstanding. Shares are valued each day the Fund is open for
business, with the exception of holidays on which the NYSE is closed, at the
close of regular trading on the NYSE (currently, 4:00 P.M., Eastern time). The
net
B-28
<PAGE>
asset value may not be computed on a day in which no orders to purchase,
sell or redeem Fund shares have been received.
Under applicable rules of the SEC, the valuation of the Fund's investments
is based upon their amortized cost. This entails valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any premium
or discount regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which the value of an instrument, as determined by
the amortized cost method, is higher or lower than the price the Fund would
receive if it sold the instrument. During periods of rising interest rates, the
daily yield on shares of the Fund computed on an amortized cost basis may tend
to be higher than the like computation made by a mutual fund with identical
investments utilizing a method of valuation based upon market prices. The
converse would apply in a period of declining rates. The purpose of this method
of valuation is to facilitate the maintenance of a constant net asset value per
share of $1.00. There can be no assurance, however, that the Fund will be able
to maintain a stable net asset value of $1.00 per share.
Certain conditions must be met in connection with the application of
valuation rules to the Fund. These conditions include maintaining a dollar-
weighted average portfolio maturity of 90 days or less, purchasing instruments
having remaining maturities of 397 calendar days or less, and investing only in
securities determined by the Adviser under procedures adopted by the Directors
to present minimal credit risks and which are of high quality as determined by
the requisite number of nationally recognized statistical rating organizations
or, in the case of any instrument that is not rated, determined to be of
comparable quality by the Adviser under procedures adopted by the Directors. In
accordance with the applicable regulations, the Directors have established
procedures designed to stabilize at $1.00 the Fund's net asset value per share
to the extent reasonably possible. Such procedures include review of the Fund's
portfolio holdings at such intervals as appropriate to determine whether the
Fund's net asset value, calculated by using available market quotations,
deviates from $1.00 per share based on amortized cost. If such deviation
exceeds .5% of the Fund's $1.00 per share net asset value, the Directors will
promptly consider what action, if any, will be initiated. In the event that the
Directors determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, they
will take such corrective action as they deem necessary and appropriate, which
may include selling portfolio instruments, withholding dividends or establishing
a net asset value per share based upon available market quotations.
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PERFORMANCE DATA
The Fund may advertise performance data that reflects various measures of
yield. An explanation of the data presented and the methods of computation that
will be used are as follows.
The Fund's performance may be compared to the historical returns of various
investments, performance indices of those investments or economic indicators,
including, but not limited to, stocks, bonds, certificates of deposit, money
market deposit accounts, money market funds and U.S. Treasury Bills. Certain of
these alternative investments may offer fixed rates of return and guaranteed
principal and may be insured.
Yield is determined separately for Class A and Class B shares of the Fund
in accordance with a standardized formula prescribed by the SEC and is not
indicative of the amounts which were or will be paid to shareholders. The yield
quoted in the Fund's advertisements is computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one share at the beginning of the 7-day period. A
hypothetical charge reflecting deductions for shareholder accounts is subtracted
from the above net change and the difference is divided by the value of the
account at the beginning of the 7-day period. The resulting figure is
multiplied by 365 divided by seven and carried to the nearest one hundredth of
one percent.
Effective yield quoted in the Fund's advertisements is computed by
determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share at the beginning
of the 7-day period. A hypothetical charge reflecting deductions from
shareholder accounts is subtracted from the above net change and the difference
is divided by the value of the account at the beginning of the 7-day period. The
resulting figure is then compounded by adding one, raising the sum to a power
equal to 365 divided by seven, and subtracting one. The following formula
illustrates the effective yield computation.
[(Base period return + 1) to the power of 365/7] - 1
The Fund's yield for the 7-day period ended December 31, 1994, was 4.89%
(Class A) and 4.19% (Class B). The Fund's effective yield for the 7-day period
ended December 31, 1994, was 5.01% (Class A) and 4.28% (Class B).
The Fund's yield for the 7-day period ended December 31, 1993, was 2.39%
(Class A) and 1.83% (Class B). The Fund's effective yield for the 7-day period
ended December 31, 1993, was 2.42% (Class A) and 1.85% (Class B). In addition,
information concerning
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yield and effective yield prior to the Reorganization is available for the
Corporation and Cash Fund.
In the Reorganization, all outstanding shares of the Corporation were
redesignated Class A shares of the Fund. For the 7-day period ended December
31, 1992, the Corporation's yield was 2.31% and its effective yield was 2.33%.
In addition, in the Reorganization the Cash Fund reorganized with, and all of
its shareholders received, Class B shares of the Fund. For the 7-day period
ended December 31, 1992, the Cash Fund's yield was 2.26% and its effective yield
was 2.29%.
COMPARISONS
- -----------
The Fund may compare its yield to similar measures as calculated by various
publications, services, indices, or averages. Such comparisons are made to
assist in evaluating an investment in the Fund. The following references may be
used:
a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow Jones
Industrial Average), 15 utilities company stocks (Dow Jones Utilities Average),
and 20 transportation company stocks (Dow Jones Transportation Average).
Comparisons of performance assume reinvestment of dividends.
b) Standard & Poor's 500 Stock Index or its component indices -- an
unmanaged index composed of 400 industrial stocks, 40 financial stocks, 40
utilities stocks, and 20 transportation stocks. Comparisons of performance
assume reinvestment of dividends.
Standard & Poor's 100 Stock Index -- an unmanaged index based on the
prices of 100 blue chip stocks, including 92 industrials, one utility, two
transportation companies, and five financial institutions. The Standard &
Poor's 100 Stock Index is a smaller, more flexible index for options trading.
c) The New York Stock Exchange composite or component indices --unmanaged
indices of all industrial, utilities, transportation, and finance stocks listed
on the New York Stock Exchange.
d) Wilshire 2000 and 5000 Equity Indices -- represents the return on the
market value of all common equity securities for which daily pricing is
available. Comparisons of performance assume reinvestment of dividends.
e) Lipper: Mutual Fund Performance Analysis, Fixed Income Analysis, and
Mutual Fund Indices -- measures total return and average current yield for the
mutual fund industry. Ranks individual mutual fund performance over specified
time periods
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assuming reinvestment of all distributions, exclusive of sales charges.
f) CDA Mutual Fund Report, published by CDA Investment Technologies,
Inc., analyzes price, current yield, risk, total return, and average rate of
return (average annual compounded growth rate) over specified time periods for
the mutual fund industry.
g) Mutual Fund Source Book, published by Morningstar, Inc. -- analyzes
price, risk and total return for the mutual fund industry.
h) Financial publications: Wall Street Journal, Business Week, Changing
Times, Financial World, Forbes, Fortune, Money, Pension and Investment Age,
United Mutual Fund Selector, and Wiesenberger Investment Companies Service, and
other publications containing financial analyses which rate mutual fund
performance over specified time periods.
i) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of periodic change in the
price of goods and services in major expenditure groups.
j) Stocks, Bonds, Bills, and Inflation, published by Ibbotson Associates
- -- historical measure of yield, price, and total return for common and small
company stock, long-term government bonds, treasury bills, and inflation.
k) Savings and Loan Historical Interest Rates as published in the U.S.
Savings & Loan League Fact Book.
l) Shearson-Lehman Municipal Bond Index and Government/Corporate Bond
Index -- unmanaged indices that track a basket of intermediate and long-term
bonds. Reflect total return and yield and assume dividend reinvestment.
m) Salomon GNMA Index published by Salomon Brothers Inc. -- Market value
of all outstanding 30-year GNMA Mortgage Pass-Through Securities that includes
single family and graduated payment mortgages.
Salomon Mortgage Pass-Through Index published by Salomon Brothers Inc.
- -- Market value of all outstanding agency mortgage pass-through securities that
includes 15- and 30-year FNMA, FHLMC and GNMA Securities.
n) Value Line Geometric Index -- broad based index made up of
approximately 1700 stocks each of which have an equal weighting.
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o) IBC/Donoghue's Inc. Money Fund Report -- comprehensive evaluation of
money market funds which monitors portfolio characteristics on a weekly basis.
The Report provides the information with respect to yield, average maturity,
security selection (asset allocation) and credit quality.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the Fund's portfolio, that the averages are
generally unmanaged and that the items included in the calculations of such
averages may not be identical to the formula used by the Fund to calculate its
figures. Specifically, the Fund may compare its performance to that of certain
indices which include securities with government guarantees. However, the
Fund's shares do not contain any such guarantees. In addition, there can be no
assurance that the Fund will continue its performance as compared to such other
standards.
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS. The Fund intends to distribute to the registered
holders of its shares all or substantially all of its net investment income,
which includes dividends, interest and net short-term capital gains, if any, in
excess of any net long-term capital losses. The Fund intends to distribute any
net long-term capital gains in excess of any net short-term capital losses.
Dividends from net investment income are declared daily and paid monthly.
Dividends are paid on or about the fifteenth day of the month. Net capital
gains, if any, will be paid annually. In determining amounts of capital gains
to be distributed, any capital loss carry-forwards from prior years will be
offset against capital gains.
Dividends and distributions are paid in additional Fund shares based on the
net asset value at the close of business on the record date, unless the
shareholder notifies the Fund at least five business days prior to the payment
date to receive such distributions in cash.
TAXES. The Fund is qualified and intends to remain qualified and elects to be
treated as a regulated investment company under Subchapter M of the Code for
each taxable year. In order to remain qualified as a regulated investment
company, the Fund generally must, among other things, (a) derive at least 90% of
its gross income from dividends, interest, proceeds from loans of stock or
securities and certain other related income; (b) derive less than 30% of its
gross income from the sale or other disposition of stock or securities held less
than 3 months; and (C) diversify its holdings so that, at the end of each fiscal
quarter, (i) 50% of the market value of the Fund's assets is represented by
cash, government securities, securities of other regulated investment companies
and
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other securities limited, in respect of any one issuer, to an amount not greater
than 5% of the Fund's assets and not greater than 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its assets
is invested in the securities of any one issuer (other than government
securities or the securities of other regulated investment companies).
As a regulated investment company, the Fund will not be subject to U.S.
Federal income tax on its income and gains which it distributes as dividends or
capital gains distributions to shareholders provided that it distributes to
shareholders at least 90% of its investment company taxable income for the
taxable year. The Fund intends to distribute sufficient income to meet this
qualification requirement.
Under the Code, amounts not distributed on a timely basis in accordance
with a calendar year distribution requirement are subject to a nondeductible 4%
excise tax. To avoid the tax, the Fund must distribute during each calendar
year (1) at least 98% of its ordinary income (not taking into account any
capital gains or losses) for the calendar year, (2) at least 98% of its net
capital gains, i.e., capital gains in excess of its capital losses for the 12-
month period ending on October 31 of the calendar year, and (3) all ordinary
income and net capital gains for the previous years that were not distributed
during such years. To avoid application of the excise tax, the Fund intends to
make distributions in accordance with the calendar year distribution
requirement. A distribution will be treated as paid on December 31 of the
calendar year if it is paid during the calendar year or if declared by the Fund
in October, November or December of such year, payable to shareholders of record
on a date in such month and paid by the Fund during January of the following
year. Any such distributions paid during January of the following year will be
taxable to shareholders as of December 31, rather than the date on which the
distributions are received.
Distributions of net investment income and short-term capital gains are
taxable to a shareholder as ordinary dividend income regardless of whether the
shareholder receives such distributions in additional shares or in cash.
Distributions of net long-term capital gains, if any, are taxable as long-term
capital gains regardless of whether the shareholder receives such distributions
in additional shares or in cash or how long the investor has held his or her
shares. Dividends and distributions paid by the Fund will not be eligible for
the dividends received deduction for corporations.
Upon a sale or exchange of its shares, a shareholder will realize a taxable
gain or loss depending upon its basis in the shares. Such gain or loss will be
treated as capital gain or loss if the shares are capital assets in the
shareholder's hands and will be long-term capital gain or loss if the shares
have been held
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for more than one year. Generally, any loss realized on a sale or exchange will
be disallowed to the extent the shares disposed of are replaced within a period
of 61 days beginning 30 days before and ending 30 days after the shares are
disposed of. Any loss realized by a shareholder on the sale of shares of the
Fund held by the shareholder for six months or less will be treated for tax
purposes as a long-term capital loss to the extent of any distributions of net
capital gains received by the shareholder with respect to such shares.
Under certain circumstances (such as the exercise of an exchange privilege
in certain cases), the tax effect of sales load charges imposed on the purchase
of shares in a regulated investment company is deferred if the shareholder does
not hold the shares for at least 90 days.
Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Income tax
treaties between certain countries and the United States may reduce or eliminate
such taxes. It is impossible to determine in advance the effective rate of
foreign tax to which the Fund will be subject, since the amount of the Fund's
assets to be invested in various countries is not known. It is not anticipated
that the Fund will qualify to pass through to shareholders the ability to claim
as a foreign tax credit their respective shares of foreign taxes paid by the
Fund.
The Fund may be required to backup withhold U.S. Federal income tax at the
rate of 31% of all taxable distributions payable to shareholders who fail to
provide their correct taxpayer identification number or fail to make required
certifications, or who have been notified by the Internal Revenue Service that
they are subject to backup withholding. Backup withholding is not an additional
tax. Any amounts withheld may be credited against a shareholder's U.S. Federal
income tax liability.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and Treasury regulations currently in effect.
Shareholders are urged to consult their tax advisers regarding specific
questions as to Federal, state and local taxes. In addition, foreign investors
should consult with their own tax advisers regarding the particular tax
consequences, including foreign tax consequences, to them of an investment in
the Fund. Qualification as a regulated investment company under the Code for
tax purposes does not entail government supervision of management or investment
policies.
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<PAGE>
RETIREMENT PLANS
Shares of the Fund are eligible to be purchased in conjunction with various
types of retirement plans. The summary below is only a brief description of
Federal income tax laws and does not purport to be complete. It is recommended
that a shareholder considering the plan described below, consult a tax adviser
before participating in such a plan.
INDIVIDUAL RETIREMENT ACCOUNT (IRA). Shareholders who are not (and whose
spouses are not) "active participants" in a retirement plan can invest annually
in an IRA up to the lesser of 100% of compensation or $2,000 (or $2,250 in the
case of a spousal IRA) and take a tax deduction for the entire amount invested.
If, however, the shareholder, or his or her spouse, is an "active participant"
in a retirement plan and their combined adjusted gross income is above certain
specified levels, the amount of the deductible contribution he or she may make
to an IRA is phased out and eventually eliminated.
A person is an "active participant" for a year if he or she is covered by a
retirement plan, i.e., if his or her employer or union maintains a retirement
plan under which money is added to his or her account or he or she is eligible
to earn retirement benefits. A person is an "active participant" for a year
even if he or she has not yet vested in the retirement benefit. Also, if a
person makes required contributions or voluntary employee contributions to a
retirement plan, he or she may be an "active participant".
Even if a person is above the threshold level and thus may not make a
deductible contribution, he or she may still make a nondeductible contribution
of up to the lesser of 100% of compensation or $2,000 to an IRA ($2,250 for a
spousal IRA). A shareholder also may choose to make a nondeductible
contribution even if he or she could have deducted part or all of the
contribution. Income derived from IRA contributions, whether from deductible or
nondeductible contributions, is not subject to tax until withdrawn from the IRA.
A shareholder may also establish an IRA under the "rollover" provision of
the Code if the shareholder is retiring or changing jobs and receives an
"eligible rollover distribution" from a qualified retirement plan (or receives
such a distribution by virtue of the termination of the employer's qualified
retirement plan). The establishment of such account generally will enable the
shareholder to defer the payment of all current Federal income taxes on the
distribution and enable the distribution to continue earning income, which will
not be subject to Federal income taxes, as long as it remains in the account.
However, the distribution from the qualified retirement plan may be subject to
withholding if the rollover is not accomplished directly between the trustee of
the qualified retirement plan and the trustee of the IRA.
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Penalty taxes, however, may be imposed in the event of contributions in
excess of the above annual limitations or distribution prior to age 59 1/2,
except upon death or disability. Distributions from an IRA must begin no later
than April 1, the year after the year in which age 70 1/2 is attained. A
penalty tax also is imposed if the minimum amount required to be distributed
from an IRA is not actually distributed. An application to establish an
Individual Retirement Account to invest in shares of a Fund may be obtained by
calling Shareholder Dealer/Services at (800) 858-8850.
SELF-EMPLOYED RETIREMENT PLAN (KEOGH PLAN). The Fund provides a prototype
retirement plan for self-employed individuals ("Keogh Plan"). Resources Trust
Company, an indirect wholly owned subsidiary of SunAmerica Inc., will be
available to furnish all custodian services for the Keogh Plan for service fees
chargeable to the self-employed individuals. Under the Code, a self-employed
person may contribute to his or her Keogh Plan up to the lesser of 25% of annual
earned income or $30,000, and deduct that amount for Federal income tax
purposes. The amount deducted and the earnings from investments under this
account generally will not be subject to Federal income taxes until distributed.
Certain distribution requirements applicable to all qualified retirement
plans should be considered when deciding whether or not to start a Keogh Plan.
As is the case with other forms of retirement plans, the Code and the rules
applicable to Keogh Plans may change. The potential effect of such changes
should be also taken into account in determining whether a Keogh Plan should be
created.
DESCRIPTION OF SHARES
Ownership of the Corporation is represented by transferable shares of
common stock, having a par value of $.001 per share. The Articles of
Incorporation, as amended to date (the "Articles of Incorporation"), permit the
Directors to issue an unlimited number of full and fractional shares and to
divide or combine the shares into a greater or lesser number of shares without
thereby changing the proportionate interests of shareholders of the Corporation.
Currently, one series of shares of the Corporation, the Fund, has been
authorized pursuant to the Articles of Incorporation. This series has been
divided into two classes of shares, designated as Class A and Class B shares.
The Directors may authorize the creation of additional series of shares so as to
be able to offer to investors additional investment portfolios within the
Corporation that would operate independently from the Corporation's present
portfolio, or to distinguish among shareholders, as may be necessary, to comply
with future regulations or other unforeseen circumstances. Each series of the
Corporation's shares, in the event that more than one series is authorized, will
represent the
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interests of the shareholders of that series in a particular portfolio of the
Corporation's assets. In addition, the Directors may authorize the creation of
additional classes of shares in the future.
Shareholders are entitled to a full vote for each full share held. The
Directors have terms of unlimited duration (subject to certain removal
procedures) and have the power to alter the number of Directors, and appoint
their own successors, provided that at all times at least a majority of the
Directors have been elected by shareholders. The voting rights of shareholders
are not cumulative, so that holders of more than 50% of the shares voting can,
if they choose, elect all Directors being elected, while the holders of the
remaining shares would be unable to elect any Directors. Although the
Corporation need not hold annual meetings of shareholders, the Directors may
call special meetings of shareholders for action by shareholder vote as may be
required by the 1940 Act, Maryland law, the Articles of Incorporation or the By-
Laws of the Corporation (the "By-Laws"). Also, a shareholders meeting must be
called, if so requested in writing by the holders of record of 25% or more of
the outstanding shares of the Corporation. In addition, the Directors may be
removed only for cause by the action of the holders of record of at least a
majority of all outstanding shares entitled to vote for election of Directors.
All series of shares will vote with respect to certain matters, such as election
of Directors. When all series of shares, to the extent that more than one
series is authorized, are not affected by a matter to be voted upon, such as
approval of investment advisory agreements or changes in a series' policies,
only shareholders of the series affected by the matter may be entitled to vote.
Both classes of shares of the Fund are identical in all respects, except
that (i) each class may bear differing amounts of certain class-specific
expenses, (ii) Class A shares are subject to an ongoing account maintenance and
service fee, (iii) Class B shares are subject to a contingent deferred sales
charge, a distribution fee and an ongoing account maintenance and service fee,
(iv) Class B shares convert automatically to Class A shares on the first
business day of the month seven years after the purchase of such Class B Shares,
(v) each class has voting rights on matters that pertain to the Rule 12b-1 plan
adopted with respect to such class, except that under certain circumstances, the
holders of Class B shares may be entitled to vote on material changes to the
Class A Rule 12b-1 plan, and (vi) each class of shares will be exchangeable only
into the same class of shares of other funds in the SunAmerica Family of Mutual
Funds that offers that class. All shares of the Corporation issued and
outstanding and all shares offered by the Prospectus when issued, are and will
be fully paid and non-assessable. Shares have no preemptive or other
subscription rights and are freely transferable on the books of the
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Corporation. In addition, shares have no conversion rights, except as described
above.
The By-Laws provide that the Corporation shall indemnify any person who was
or is a Director, officer or employee of the Corporation to the maximum extent
permitted by Maryland law and the 1940 Act upon a determination, made in
accordance with the terms of the By-Laws, that indemnification is proper in the
circumstances. In addition, the By-Laws provide that the Corporation may
maintain insurance on behalf of any person who is or was a director or officer,
employee or agent of the Corporation or who is or was serving at the request of
the Corporation as director, officer, agent or employee of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted or incurred in connection with serving in such capacity. However, no
Director or officer of the Corporation will be protected by indemnification,
insurance or otherwise from any liability to the Corporation or its shareholders
to which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in his
or her office.
ADDITIONAL INFORMATION
REPORTS TO SHAREHOLDERS. The Fund sends audited annual and unaudited semi-
annual reports to shareholders of the Fund. In addition, the Transfer Agent
sends a statement to each shareholder having an account directly with the Fund
to confirm transactions in the account.
CUSTODIAN AND TRANSFER AGENCY. State Street Bank and Trust Company, 1776
Heritage Drive, North Quincy, MA 02171, serves as Custodian and Transfer Agent
for the Fund and in those capacities maintains certain financial and accounting
books and records pursuant to agreements with the Corporation. Transfer agent
functions are performed for State Street, by National Financial Data Services,
P.O. Box 419572, Kansas City, MO 64141-6572, an affiliate of State Street.
INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL. Price Waterhouse LLP, 1177 Avenue of
the Americas, New York, NY 10036, has been selected to serve as the Fund's
independent accountants and in that capacity examines the annual financial
statements of the Fund. The firm of Shereff, Friedman, Hoffman & Goodman, LLP,
919 Third Avenue, New York, NY 10022, has been selected as legal counsel to the
Corporation.
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APPENDIX
BOND, NOTE AND COMMERCIAL PAPER RATINGS
DESCRIPTION OF APPLICABLE MOODY'S INVESTORS SERVICE, INC.'S ("MOODY'S")
CORPORATE BOND RATINGS
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than the
best bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-
term risks appear somewhat larger than in Aaa securities .
Note: Moody's may apply numerical modifiers 1, 2 and 3 to issues rated Aa
to denote relative strength within such classification. The modifier 1
indicates that the security ranks in the higher end of the Aa rating category;
the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that
the issue ranks in the lower end of the Aa rating category.
DESCRIPTION OF APPLICABLE MOODY'S NOTE RATINGS
MIG 1 Notes bearing the designation MIG 1 are judged to be of the best
quality, enjoying strong protection from established cash flows of
funds for their servicing or from established and broad-based access
to the market for refinancing, or both.
MIG 2 Notes bearing the designation MIG 2 are judged to be of high
quality, with margins of protection ample although not so large as
in the preceding group.
DESCRIPTION OF APPLICABLE MOODY'S COMMERCIAL PAPER RATINGS
The term "commercial paper" as used by Moody's means promissory obligations
not having an original maturity in excess of
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nine months. Moody's makes no representations as to whether such commercial
paper is by any other definition "commercial paper" or is exempt from
registration under the Securities Act.
Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. Moody's makes no representation that such obligations
are exempt from registration under the Securities Act, nor does it represent
that any specific note is a valid obligation of a rated issuer or issued in
conformity with any applicable law.
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. PRIME-1 repayment
capacity will normally be evidenced by the following characteristics:
-- Leading market positions in well established industries
-- High rates of return on funds employed
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection
-- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation
-- Well established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
If an issuer represents to Moody's that its commercial paper obligations
are supported by the credit of another entity or entities, then the name or
names of such supporting entity or entities are listed within parentheses
beneath the name of the issuer, or there is a footnote referring the reader to
another page for the name or names of the supporting entity or entities. In
assigning ratings to such issuers, Moody's evaluates the financial strength of
the indicated affiliated corporations, commercial banks, insurance companies,
foreign governments or other entities, but only as one factor in the total
rating assessment. Moody's makes no representation and gives no opinion on the
legal validity or enforceability of any support arrangement. You are cautioned
to review with your counsel any questions regarding particular support
arrangements.
Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer;
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(2) economic evaluation of the issuer's industry or industries and an appraisal
of speculative type risks which may be inherent in certain areas; (3) evaluation
of the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of ten years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by management of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
DESCRIPTION OF APPLICABLE STANDARD & POOR'S CORPORATION'S ("S&P") BOND RATINGS
An S&P corporate rating is a current assessment of the creditworthiness of
an obligor with respect to a specific obligation. This assessment may take into
consideration obligers such as guarantors, insurers, or lessees.
The debt rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
an audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended or withdrawn as a
result of changes in, or unavailability of, such information, or for other
reasons.
The ratings are based, in varying degrees, on the following considerations:
(1) likelihood of default capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.
AAA Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest-rated issues only in small
degree.
Plus (+) or minus (-): The rating of "AA" may be modified by the addition
of a plus or minus sign to show relative standing within these ratings
categories.
B-42
<PAGE>
PROVISIONAL RATINGS:
P The letter "p" indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project being financed
by the debt being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the successful and
timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project,
makes no comment on the likelihood or risk of default upon failure of
such completion. The investor should exercise judgment with respect to
such likelihood and risk.
L The letter "L" indicates that the rating pertains to the principal
amount of those bonds to the extent that the underlying deposit
collateral is insured by the Federal Savings & Loan Insurance Corp. or
the Federal Deposit Insurance Corp. and interest is adequately
collateralized.
* Continuance of the rating is contingent upon S&P receipt of an
executed copy of the escrow agreement or closing documentation
confirming investments and cash flows.
NR Indicates that no rating has been requested, that there is
insufficient information on which to base a rating or that S&P does
not rate a particular type of obligation as a matter of policy.
Debt Obligations of Issuers outside the United States and its territories
are rated on the same basis as domestic corporate issues. The ratings measure
the credit worthiness of the obligor but do not take into account currency
exchange and related uncertainties.
APPLICABLE BOND INVESTMENT QUALITY STANDARDS: Under present commercial bank
regulations issued by the Comptroller of the Currency, bonds rated "AAA" or "AA"
(commonly known as "investment grade" ratings) are generally regarded as
eligible for bank investment. In addition, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance companies
and fiduciaries generally.
DESCRIPTION OF APPLICABLE S&P NOTE RATINGS
SP-1 The designation "SP-1" indicates a very strong capacity to pay
principal and interest. A "+" is added for those issues determined to possess
overwhelming safety characteristics.
B-43
<PAGE>
SP-2 An "SP-2" designation indicates a satisfactory capacity to pay
principal and interest.
DESCRIPTION OF APPLICABLE S&P COMMERCIAL PAPER RATINGS.
A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt having an original maturity of not more than 365 days.
A-1 Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are
delineated with the numbers 1, 2 and 3 to indicate the relative degree
of safety.
A This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined
to possess overwhelming safety characteristics are denoted with a plus
(+) sign designation.
The commercial paper rating is not a recommendation to purchase or sell a
security. The ratings are based on current information furnished to S&P by the
issuer or obtained from other sources it considers reliable. The ratings may be
changed, suspended, or withdrawn as a result of changes in or unavailability of
such information.
FINANCIAL STATEMENTS
Set forth following this Statement of Additional Information are the
financial statements of SunAmerica Money Market Funds, Inc. with respect to its
SunAmerica Money Market Fund series for the fiscal year ended December 31, 1994.
B-44
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 3)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER--59.7%
Abbey National North
America $12,000 5.75-5.81% 1/03/95 -2/15/95 $ 11,927,479
Accor S.A. 5,000 5.52 1/24/95 4,982,367
Alberta (Province of) 7,000 5.88 1/04/95 6,996,570
Anheuser-Busch Co., Inc. 10,000 5.50-5.80 2/16/95 -2/28/95 9,918,639
AT&T Corp. 12,000 5.43-5.76 1/04/95 -2/06/95 11,968,033
Bridge Oil International
Finance Ltd. 5,000 5.47 2/16/95 4,965,053
Chemical Banking Corp. 7,000 5.45 2/13/95 6,954,432
Daewoo International
(America) Corp. 5,000 5.85 2/13/95 4,965,063
Dresdner U.S. Finance,
Inc. 5,000 5.75 2/17/95 4,962,465
General Electric Capital
Corp. 12,000 5.40-5.50 1/03/95 -2/15/95 11,951,222
Golden Peanut Co. 5,000 5.48 2/21/95 4,961,183
Goldman Sachs Group LP 7,000 5.80 2/03/95 6,962,783
Hanson Finance (UK) PLC 5,000 5.75 2/14/95 4,964,861
Iris Partners LP 5,530 5.82 2/15/95 5,489,769
JMG Funding LP 5,000 5.90 2/07/95 4,969,681
Lilly (Eli) & Co. 7,000 5.80 2/01/95 6,965,039
McGraw-Hill, Inc. 10,000 4.70-5.93 2/02/95 -2/07/95 9,943,165
Merrill Lynch & Co.,
Inc. 11,000 5.45-5.75 2/14/95 10,924,528
New South Wales Treasury
Corp. 7,000 5.83 2/03/95 6,962,591
SAFECO Credit Co., Inc. 7,000 5.43 2/13/95 6,954,599
SCI Systems, Inc. 5,000 5.97 1/31/95 4,975,125
Sheffield Receivables
Corp. 6,000 5.95 2/03/95 5,967,275
Southern California Gas
Co. 5,000 5.80 2/09/95 4,968,583
Toyota Motor Credit
Corp. 7,000 5.93 2/02/95 6,963,102
Walt Disney Co. 10,000 5.70 1/03/95 9,996,833
Wool International 5,000 5.40 2/16/95 4,965,500
------------
TOTAL COMMERCIAL PAPER
(amortized cost
$186,525,940) 186,525,940
------------
</TABLE>
B-45
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS AT DECEMBER 31, 1994--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
SECURITY DESCRIPTION (IN THOUSANDS) RATE** MATURITY (NOTE 3)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT AGENCIES--
15.1%
Agency for International
Development India+ $5,000 6.20% 1/03/95 $ 5,018,705
Agency for International
Development Israel+ 4,672 6.81 1/03/95 4,672,453
Agency for International
Development Panama+ 5,503 5.98 1/03/95 5,540,720
Federal Farm Credit Bank
Discount Note 7,000 5.40 2/15/95 6,952,750
Federal Home Loan Bank
Discount Note 10,000 5.75 1/03/95 9,996,806
Federal Home Loan
Mortgage Corp. FRN+ 5,000 5.53 1/03/95 4,995,549
Federal Home Loan
Mortgage Discount Notes 10,000 5.57-5.64 1/04/95 -2/06/95 9,969,479
------------
TOTAL GOVERNMENT AGEN-
CIES
(amortized cost
$47,146,462) 47,146,462
------------
MEDIUM TERM NOTES--5.6%
Australian Wheat Board 5,000 4.90 4/18/95 4,995,285
Bear Stearns & Co.,
Inc.+ 7,000 6.24 1/11/95 7,000,000
Branch Bank & Trust Co.+ 5,000 5.63 1/03/95 5,000,000
Premier Auto Trust 1994-
2(ABS) 446 4.65 5/02/95 445,755
------------
TOTAL MEDIUM TERM NOTES
(amortized cost
$17,441,040) 17,441,040
------------
TAXABLE MUNICIPAL MEDIUM
TERM NOTES--9.0%
Illinois Student Assis-
tance Corp.+ 3,600 6.17 1/04/95 3,600,000
Nebraska Higher Educa-
tion Loan Program+ 9,700 5.97 1/03/95 9,700,000
New Hampshire State In-
dustrial Development
Authority 11,000 5.94 1/23/95 11,000,000
State of Texas Veteran's
Housing Assistance+ 3,900 6.10 1/04/95 3,900,000
------------
TOTAL TAXABLE MUNICIPAL
MEDIUM TERM NOTES
(amortized cost
$28,200,000) 28,200,000
------------
TOTAL INVESTMENT SECURI-
TIES
(amortized cost
$279,313,442) 279,313,442
------------
REPURCHASE AGREEMENT--
10.6%
Joint Repurchase Agreement Ac-
count (Note 4)
(cost $33,179,000) 33,179 5.60 1/03/95 33,179,000
------------
TOTAL INVESTMENTS--
(amortized cost
$312,492,442*) 100.0% 312,492,442
Liabilities in excess of
other assets-- 0.0 (135,865)
------ ------------
NET ASSETS 100.0% $312,356,577
====== ============
</TABLE>
- -------
* At December 31, 1994 the cost of securities for Federal income tax purposes
was the same as for book purposes.
** Rates shown are rates in effect as of December 31, 1994.
+ Maturity date reflects the next reset date.
ABS--Asset Backed Security
FRN--Floating Rate Note
<TABLE>
<CAPTION>
<S> <C>
PORTFOLIO
BREAKDOWN
(EXCLUDING
REPURCHASE
AGREEMENT)
BY
INDUSTRY@
</TABLE>
<TABLE>
<S> <C>
Government
Agencies 24.1%
International
Finance 10.5
Securities
Holding Company 7.9
International
Banking 5.4
Sovereign 4.4
Finance 4.0
</TABLE>
<TABLE>
<S> <C>
Technology 3.8%
Banking 3.8
Industrial 3.5
Entertainment 3.2
Food & Beverages 3.2
Publishing &
Printing 3.2
</TABLE>
<TABLE>
<S> <C>
Drugs &
Cosmetics 2.2%
Insurance 2.2
Commodities 1.6
Conglomerate 1.6
Electronics 1.6
Oil & Gas 1.6
Hotels 1.6
----
89.4%
====
</TABLE>
@ As grouped by Moody's Investors Service Global Short Term Market Record
See Notes to Financial Statements
B-46
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 1994
<TABLE>
<S> <C>
ASSETS:
Investment securities, at value (amortized cost $279,313,442)...... $279,313,442
Repurchase agreement............................................... 33,179,000
Cash............................................................... 806,020
Receivable for Fund shares sold.................................... 1,360,655
Interest receivable................................................ 657,057
Prepaid expenses................................................... 127,543
Receivable for investments sold.................................... 16,661
------------
Total assets...................................................... 315,460,378
------------
LIABILITIES:
Payable for Fund shares repurchased................................ 2,521,393
Accrued expenses................................................... 328,829
Investment advisory and management fees payable.................... 132,417
Distribution and service maintenance fees payable.................. 101,443
Dividends payable.................................................. 19,719
------------
Total liabilities................................................. 3,103,801
------------
Net assets...................................................... $312,356,577
============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001 par value...................................... $ 312,327
Additional paid-in capital......................................... 311,919,558
------------
312,231,885
Accumulated undistributed net investment income.................... 124,692
------------
Net assets...................................................... $312,356,577
============
CLASS A (UNLIMITED SHARES AUTHORIZED):
Net asset value and redemption price per share
($213,958,373/213,944,970 shares outstanding).................... $1.00
=====
CLASS B (UNLIMITED SHARES AUTHORIZED):
Net asset value and redemption price per share
($98,398,204/98,381,676 shares outstanding)...................... $1.00
=====
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................... $12,713,598
EXPENSES:
Investment advisory and management fees................ $1,420,692
Service maintenance fees--Class A...................... 307,071
Distribution and service maintenance fees--Class B..... 714,820
Transfer agent fees and expenses--Class A.............. 439,353
Transfer agent fees and expenses--Class B.............. 122,551
Custodian fees and expenses............................ 117,475
Registration fees--Class A............................. 70,503
Registration fees--Class B............................. 21,501
Audit and tax consulting fees.......................... 37,955
Printing expense....................................... 33,190
Directors fees and expenses............................ 27,591
Legal fees and expense................................. 14,230
Insurance expense...................................... 11,822
Interest expense....................................... 1,975
Miscellaneous expenses................................. 10,637 3,351,366
---------- -----------
Net investment income.................................. 9,362,232
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $ 9,362,232
===========
</TABLE>
See Notes to Financial Statements
B-47
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................... $ 9,362,232 $ 4,826,972
------------ ------------
Net increase in net assets resulting from
operations............................... 9,362,232 4,826,972
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income (Class A)...... (7,019,390) (4,659,020)
From net investment income (Class B)...... (2,312,911) (167,952)
------------ ------------
Total dividends and distributions to
shareholders............................. (9,332,301) (4,826,972)
INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS (NOTE 6)..................... 81,252,104 15,553,854
------------ ------------
Total increase in net assets.............. 81,282,035 15,553,854
NET ASSETS:
Beginning of period....................... 231,074,542 215,520,688
------------ ------------
End of Period (including undistributed net
investment income of $124,692 at December
31, 1994)................................ $312,356,577 $231,074,542
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
RATIO OF RATIO OF
NET NET NET EXPENSES NET
ASSET TOTAL DIVIDENDS ASSET ASSETS TO INVESTMENT
VALUE NET FROM FROM NET VALUE END OF AVERAGE INCOME TO
PERIOD BEGINNING INVESTMENT INVESTMENT INVESTMENT END OF TOTAL PERIOD NET AVERAGE
ENDED OF PERIOD INCOME OPERATIONS INCOME PERIOD RETURN(1) (000'S) ASSETS NET ASSETS
- --------------------------------------------------------------------------------
CLASS A
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/90 $1.000 $0.072 $0.072 $(0.072) $1.000 7.44% $302,440 1.10% 7.23%
12/31/91 1.000 0.052 0.052 (0.052) 1.000 5.32 270,405 1.21 5.25
12/31/92 1.000 0.027 0.027 (0.027) 1.000 2.74 215,521 1.27 2.76
12/31/93 1.000 0.023 0.023 (0.023) 1.000 2.32 189,160 1.16 2.30
12/31/94 1.000 0.034 0.034 (0.034) 1.000 3.47 213,958 1.00 3.43
<CAPTION>
CLASS B
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
09/24/93-
12/31/93 $1.000 $0.004 $0.004 $(0.004) $1.000 0.44% $41,915 1.69%(2) 1.69%(2)
12/31/94 1.000 0.027 0.027 (0.027) 1.000 2.76 98,398 1.69 2.91
</TABLE>
- --------
(1)Total Return is not annualized
(2)Annualized
See Notes to Financial Statements
B-48
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994
NOTE 1. ORGANIZATION
SunAmerica Money Market Fund (the "Fund") is an open-end diversified
management investment company organized as a Maryland Corporation
("Corporation").
Effective September 24, 1993, the Fund offers Class A shares and Class B
shares. The offering price is the next determined net asset value per share,
plus, for Class B shares only, a declining contingent deferred sales charge
("CDSC") imposed on certain redemptions made within six years. Class B
shares of the Fund will convert automatically to Class A shares on the first
business day of the month seven years after the issuance of such Class B
shares and at such time will be subject to the lower distribution fee
applicable to Class A shares. Each class of shares bears the same voting,
dividend, liquidation and other rights and conditions and each makes
distribution and account maintenance and service fee payments under a
distribution plan pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "1940 Act") except that Class B shares are subject to higher
distribution fee rates.
NOTE 2. REORGANIZATION
On March 31, 1993 and September 23, 1993, the Board of Directors/Trustees
and Shareholders, respectively, of the various funds comprising the
SunAmerica Mutual Funds approved the Agreement and Plan of Reorganization
dated March 13, 1993, whereby all of the assets and liabilities of the
determined Funds were transferred in a tax-free reorganization for shares of
the series of the SunAmerica Money Market Fund.
Prior to the Reorganization, the Fund was known as SunAmerica Money Market
Securities, Inc. and consisted of one series, SunAmerica Money Market
Securities, Inc. Upon consummation of the reorganization, SunAmerica Money
Market Securities, Inc. was renamed SunAmerica Money Market Fund and the
then outstanding shares were redesignated as Class A shares of the Fund.
Upon consummation of the reorganization, the SunAmerica Cash Fund ("SACF")
was reorganized into the SunAmerica Money Market Fund. In exchange for all
the assets and liabilities of SACF, the Fund issued 39,802,476 Class B
shares to SACF shareholders at a net asset value of $1.00 per share or
$39,802,476 which was the equivalent of the net assets of SACF as of the
close of business on September 24, 1993. The net assets of SunAmerica Money
Market Securities, Inc. were $190,309,937 as of September 24, 1993.
NOTE 3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Fund in the preparation of its financial statements:
SECURITY VALUATIONS: Portfolio securities are valued at amortized cost,
which approximates market value. The amortized cost method involves valuing
a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium.
REPURCHASE AGREEMENTS: The Fund, along with other affiliated registered
investment companies, may transfer uninvested cash balances into a single
joint account, the daily aggregate balance of which is invested in one or
more repurchase agreements collateralized by U.S. Treasury or federal agency
obligations. The Fund's custodian takes possession of the collateral pledged
for investments in repurchase agreements. The underlying collateral is
valued daily on a mark to market basis to ensure that the value, including
accrued
B-49
<PAGE>
- -------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994--(CONTINUED)
interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, a Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If
the seller defaults and the value of the collateral declines or if
bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or
limited.
SECURITIES TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS: Securities transactions are recorded on the trade date.
Interest income, including the accretion of discount and amortization of
premium, is accrued daily. Realized gains and losses on sales of
investments are calculated on the identified cost basis.
Net investment income other than class specific expenses, and realized and
unrealized gains and losses are allocated daily to each class of shares
based upon the relative net asset value of outstanding shares of each class
of shares at the beginning of the day (after adjusting for the current
capital shares activity of the respective class).
Dividends from net investment income are declared daily and paid monthly.
STATEMENT OF POSITION 93-2: During the year ended December 31, 1993, the
Fund adopted Statement of Position 93-2 Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. For the year ended December
31, 1994, the effect of differences arising from current book/tax
differences totaling $94,761 were reclassified from undistributed net
investment income to paid in capital.
FEDERAL INCOME TAXES: It is the Fund's policy to meet the requirements of
the Internal Revenue Code of 1986, as amended, applicable to regulated
investment companies and to distribute all of its taxable net income to its
shareholders. Therefore, no federal income or excise tax provisions are
required.
For the year ended December 31, 1994, the cost of securities for federal
income tax purposes was the same as for book purposes. At December 31,
1994, the Fund had a capital loss carryforward of $5,892 expiring in the
year 2002. Capital losses incurred after October 31, 1994 are deemed to
arise on the first business day of the next taxable year. Accordingly, the
Fund incurred and elected to defer capital losses of $23,205 to the taxable
year ended December 31, 1995.
NOTE 4. JOINT REPURCHASE AGREEMENT ACCOUNT
As of December 31, 1994, the Fund had a 17.0% undivided interest which
represented $33,179,000 in principal amount in a repurchase agreement in
the joint account. As of such date, the repurchase agreement in the joint
account and the collateral therefore was as follows:
Morgan Stanley & Co., Inc., Repurchase Agreement, 5.60% dated 12/30/94, in
the principal amount of $195,483,000 repurchase price $195,604,634 due
1/3/95 collateralized by $50,000,000 U.S. Treasury Notes 5.125% due
2/28/98, $45,420,000 U.S. Treasury Notes 6.875% due 7/31/99, $50,000,000
U.S. Treasury Notes 8.875% due 2/15/99, $50,000,000 U.S. Treasury Notes
9.125% due 5/15/99 and $970,000 U.S. Treasury Bonds 8.750% due 11/15/08,
approximate aggregate value $199,618,633.
B-50
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994--(CONTINUED)
NOTE 5. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, DISTRIBUTION AGREEMENT
AND SERVICE AGREEMENT
The Fund has an Investment Advisory and Management Agreement (the
"Agreement") with SunAmerica Asset Management Corp. ("SAAMCo"), an indirect
wholly owned subsidiary of SunAmerica Inc. Under the Agreement, SAAMCo
provides continuous supervision of the Fund's portfolio and administers its
corporate affairs, subject to general review by the Directors. In connection
therewith, SAAMCo furnishes the Fund with office facilities, maintains
certain of the Fund's books and records, and pays the salaries and expenses
of all personnel, including officers of the Fund who are employees of SAAMCo
and its affiliates. The investment advisory and management fee to SAAMCo is
computed daily, and payable monthly, at an annual rate of .50% on the first
$600 million of the Fund's average daily net assets, .45% on the next $900
million of net assets and .40% on net assets over $1.5 billion.
SAAMCo has agreed that, in any fiscal year, it will refund or rebate its
management fee to the Fund to the extent that the Fund's expenses (including
the fees of SAAMCo and amortization of organizational expenses, but
excluding interest, taxes, brokerage commissions, distribution fees and
other extraordinary expenses) exceed the most restrictive expense limitation
imposed by states where the Fund's shares are sold. The most restrictive
expense limitation is presently believed to be 2 1/2% of the first $30
million of the Fund's average daily net assets, 2% of the next $70 million
of average net assets and 1 1/2% of such net assets in excess of $100
million. For the year ended December 31, 1994, no such reimbursement was
required.
The Fund has a Distribution Agreement with SunAmerica Capital Services, Inc.
("SACS"), an indirect wholly owned subsidiary of SunAmerica Inc. The Fund
has adopted a Distribution Plan (the "Plan") in accordance with the
provisions of Rule 12b-1 under the 1940 Act. Rule 12b-1 under the 1940 Act
permits an investment company directly or indirectly to pay expenses
associated with the distribution of its shares ("distribution expenses") in
accordance with a plan adopted by the investment company's board of
directors and approved by its shareholders. Pursuant to such rule, the
Directors and the shareholders of each class of shares of the Fund have
adopted Distribution Plans hereinafter referred to as the "Class A Plan" and
the "Class B Plan." In adopting the Class A Plan and the Class B Plan, the
Directors determined that there was a reasonable likelihood that each such
Plan would benefit the Fund and the shareholders of the respective class.
The sales charge and distribution fees of the Class B shares will not be
used to subsidize the sale of Class A shares.
Upon consummation of the reorganization, the Distributor began to receive
payments from the Fund at the annual rate of up to 0.75% of the average
daily net assets of the Fund's Class B shares, to compensate the Distributor
and certain securities firms for providing sales and promotional activities
for distributing that class of shares. The distribution costs for which the
Distributor may be reimbursed out of such distribution fees include fees
paid to broker-dealers that have sold Fund shares, commissions, and other
expenses such as those incurred for sales literature, prospectus printing
and distribution and compensation to wholesalers. It is possible that in any
given year the amount paid to the Distributor under the Class B Plan may
exceed the Distributor's distribution costs as described above. The Class A
Plan does not provide for a distribution fee. The Distribution Plans provide
that each class of shares of the Fund may also pay the Distributor an
account maintenance and service fee of up to 0.15% of the aggregate average
daily net assets of such class of shares for payments to broker-dealers for
providing continuing account maintenance. In this regard, some payments are
used to compensate broker-dealers with account maintenance and service fees
in an amount up to 0.15% per year of the assets maintained in the Fund by
their customers. For the year ended December 31, 1994, SACS earned fees of
$1,021,891 from the Fund.
B-51
<PAGE>
- -------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994--(CONTINUED)
SACS also receives the proceeds of contingent deferred sales charges paid
by investors in connection with certain redemptions of the Fund's Class B
shares. For the year ended December 31, 1994, SACS informed the Fund (Class
B) that it received approximately $546,660 in contingent deferred sales
charges.
The Fund has entered into a Service Agreement with SunAmerica Fund
Services, Inc. ("SAFS"), an indirect wholly owned subsidiary of SunAmerica
Inc. Under the Service Agreement, SAFS performs certain shareholder account
functions by assisting the Fund's transfer agent in connection with the
services that it offers to the shareholders of the Fund. The Service
Agreement permits the Fund to reimburse SAFS for costs incurred in
providing such services which is approved annually by the Directors. For
the year ended December 31, 1994, the Fund (Class A, Class B) incurred
expenses of $318,668 to reimburse SAFS pursuant to the terms of the Service
Agreement. Of this amount, $106,498 was payable to SAFS at December 31,
1994.
NOTE 6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of each class, all at $1.00 per share, for the year
ended December 31, 1994 and for the prior periods were as follows:
<TABLE>
<CAPTION>
MONEY MARKET FUND
--------------------------------------------------------
CLASS A CLASS B
---------------------------- -------------------------- ---
INCEPTION
FOR THE FOR THE FOR THE (SEPTEMBER
YEAR ENDED YEAR ENDED YEAR ENDED 24, 1993) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1994 1993 1994 1993
------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Shares sold............. 904,696,309 1,000,893,848 504,544,389 126,241,435
Shares issued in connec-
tion with the
acquisition of the
SACF................... -- -- -- 39,802,476
Reinvested dividends.... 6,720,048 4,688,948 1,759,780 121,874
Shares redeemed......... (886,631,162) (1,031,943,709) (449,837,260) (124,251,018)
------------ -------------- ------------ ------------
Net increase (decrease). 24,785,195 (26,360,913) 56,466,909 41,914,767
============ ============== ============ ============
</TABLE>
NOTE 7. COMMITMENTS AND CONTINGENCIES
The Fund has established an uncommitted line of credit with State Street
Bank and Trust Company with interest payable at the Federal Funds rate plus
100 basis points. Borrowings under the line of credit will commence when
the Fund's cash shortfall exceeds $100,000. The Fund periodically utilized
the uncommitted line of credit and incurred an interest expense of $1,975
for the year ended December 31, 1994.
B-52
<PAGE>
- --------------------------------------------------------------------------------
SUNAMERICA MONEY MARKET FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
SunAmerica Money Market Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of SunAmerica Money Market Fund (the
"Fund") at December 31, 1994, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1994 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 13, 1995
B-53
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements:
Set forth in Part B of Registrant's Statement of Additional
Information are the financial statements of the SunAmerica Money
Market Funds, Inc. with respect to its SunAmerica Money Market Fund
series for the fiscal year ended December 31, 1994. Selected per
share data and ratios are set forth in Part A of the Prospectus under
the caption "Financial Highlights". No financial statements are
included in Part C.
All other financial statements, schedules and historical financial
information are omitted because the conditions requiring their filing
do not exist.
(b) Exhibits:
(1)(a) Articles of Incorporation. Incorporated herein by reference
to Registrant's Registration Statement on Form N-1A (File
No. 2-85370) filed on July 22, 1983.
(1)(b) Articles of Amendment. Incorporated herein by reference to
Post Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(2) By-Laws, as amended. Incorporated herein by reference to
Post-Effective Amendment No 15. to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(3) Inapplicable.
(4) Inapplicable.
(5) Investment Advisory and Management Agreement between
Registrant and SunAmerica Asset Management Corp.
("SunAmerica"). Incorporated herein by reference to Post-
Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(6)(a) Distribution Agreement between Registrant and SunAmerica
Capital Services, Inc. Incorporated herein by reference to
Post-
<PAGE>
Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(6)(b) Dealer Agreement. Incorporated herein by reference to Post-
Effective Amendment No. 3 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on April 30,
1987.
(7) Directors'/Trustees' Retirement Plan. Incorporated herein
by reference to Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form N-1A (File No.
2-85370) filed on March 25, 1994.
(8) Custodian Agreement between Registrant and State Street Bank
and Trust Company.
(9)(a) Transfer Agency and Service Agreement between Registrant and
State Street Bank and Trust Company.
(9)(b) Service Agreement between Registrant and SunAmerica Fund
Services, Inc. Incorporated herein by reference to Post-
Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(10) Inapplicable.
(11) Consent of Independent Accountants.
(12) Inapplicable.
(13) Inapplicable.
(14) Model Retirement Plans.
(15) Distribution Plans pursuant to Rule 12b-1 (Class A Shares
and Class B Shares). Incorporated herein by reference to
Post-Effective Amendment No. 15 to Registrant's Registration
Statement on Form N-1A (File No. 2-85370) filed on March 25,
1994.
(16) Schedule of Computation of Performance Quotations.
(17) Powers of Attorney.
C-2
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
There are no persons controlled by or under common control with
Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Number of Record
Holders as of
Title of Class March 31, 1995
-------------- ----------------
Money Market Fund Class A
Common Stock 19,368
($.001 par value)
Money Market Fund Class B
Common Stock 2,295
($.001 par value)
ITEM 27. INDEMNIFICATION.
Registrant's policy with respect to indemnification is as
follows:
To the maximum extent permitted by the laws of the State of Maryland
as from time to time amended, Registrant shall indemnify its currently
acting and its former directors and officers and those persons who, at
the request of the Registrant, serve or have served another
corporation, partnership, joint venture, trust or other enterprise in
one or more of such capacities.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been advised, that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act, 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 against the Registrant by such
director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction
C-3
<PAGE>
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER.
Information concerning the business and other connections of
SunAmerica is incorporated herein by reference to SunAmerica's Form
ADV (File No. 801-19813) and is currently on file with the Securities
and Exchange Commission.
Reference is also made to the caption "Management of the Corporation"
in the Prospectus constituting Part A of the Registration Statement
and "Adviser, Personal Trading, Distributor and Administrator" and
"Directors and Officers" constituting Part B of the Registration
Statement.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) The principal underwriter of the Registrant also acts as principal
underwriter for:
SunAmerica Equity Funds
SunAmerica Income Funds
SunAmerica Series Trust
(b) The following persons are the officers and directors of SunAmerica
Capital Services, Inc., the principal underwriter of Registrant's
shares:
Name and Principal Position With Position with the
Business Address Underwriter Registrant
------------------ -------------- -----------------
Mathew H. Lobas President and None
733 Third Avenue Director
New York, NY 10017
Gary Croatt Executive Vice None
733 Third Avenue President and
New York, NY 10017 Director
Robert M. Zakem Executive Vice Secretary
733 Third Avenue President and
New York, NY 10017 Director
Peter A. Harbeck Executive President
733 Third Avenue President
New York, NY 10017
C-4
<PAGE>
Name and Principal Position With Position with the
Business Address Underwriter Registrant
------------------ ------------- -----------------
Susan L. Harris Secretary None
SunAmerica Inc.
1 Sun America Center
Century City
Los Angeles, CA 90067-6022
Steven E. Rothstein Treasurer None
733 Third Avenue
New York, NY 10017
(c) Inapplicable
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
SunAmerica Asset Management Corp., 733 Third Avenue, New York, NY
10017-3204, or an affiliate thereof, will maintain physical possession
of each such accounts, books or other documents of Registrant, except
for those maintained by Registrant's custodian, State Street Bank and
Trust Company, 1776 Heritage Drive, North Quincy, MA 02171, and its
affiliate, National Financial Data Services, P.O. Box 419572, Kansas
City, MO 64141-6572.
ITEM 31. MANAGEMENT SERVICES.
Inapplicable.
ITEM 32. UNDERTAKINGS.
Registrant hereby undertakes to furnish an investor to whom a
prospectus is delivered with a copy of Registrant's latest annual
report to shareholders, upon request and without charge.
C-5
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended, Registrant certifies that it
meets all of the requirements for effectiveness of the Post-Effective Amendment
No. 16 to the Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933, as amended and that Registrant has duly caused the Post-
Effective Amendment No. 16 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York, on the 25th day of April.
SUNAMERICA MONEY MARKET FUNDS, INC.
By: /s/ Peter A. Harbeck
---------------------------------
Peter A. Harbeck
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Post-Effective Amendment No. 16 to the Registration Statement has been
signed below by the following persons in the capacities and on the dates
indicated:
* Director April 25th, 1995
- -----------------------------
Eli Broad
* Director April 25th, 1995
- -----------------------------
S. James Coppersmith
* Director April 25th, 1995
- -----------------------------
Samuel M. Eisenstat
* Director April 25th, 1995
- -----------------------------
Stephen J. Gutman
* Director April 25th, 1995
- -----------------------------
Sebastiano Sterpa
* Director April 25th, 1995
- -----------------------------
Jay S. Wintrob
*By: /s/ Robert M. Zakem
---------------------------------
Robert M. Zakem, Attorney-in-fact
C-6
<PAGE>
SUNAMERICA MONEY MARKET FUNDS, INC.
EXHIBIT INDEX
Exhibit No. Name
- ----------- -------------------------------- Page No.
--------
8 Custodian Agreement ______
9a Transfer Agency and Service ______
Agreement
11 Consent of Price Waterhouse ______
14 Model Retirement Plans ______
16 Schedule of Computation of ______
Performance Quotations
17 Powers of Attorney ______
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A . Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form N-
1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Peter A. Harbeck
- --------------------- President November 30, 1994
Peter A. Harbeck (Principal
Executive Officer)
/s/ Peter C. Sutton
- --------------------- Controller November 30, 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- --------------------- Director November , 1994
S. James Coppersmith
- --------------------- Director November , 1994
Samuel M. Eisenstat
- --------------------- Director November , 1994
Stephen J. Gutman
- --------------------- Director November , 1994
Jay S. Wintrob
- --------------------- Director November , 1994
Sebastiano Sterpa
- --------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities as set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- --------------------- President November , 1994
Peter A. Harbeck (Principal
Executive Officer)
- --------------------- Controller November , 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
/s/ S. James Coppersmith
- --------------------- Director November 30, 1994
S. James Coppersmith
- --------------------- Director November , 1994
Samuel M. Eisenstat
- --------------------- Director November , 1994
Stephen J. Gutman
- --------------------- Director November , 1994
Jay S. Wintrob
- --------------------- Director November , 1994
Sebastiano Sterpa
- --------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- --------------------- President November , 1994
Peter A. Harbeck (Principal
Executive Officer)
- --------------------- Controller November , 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- --------------------- Director November , 1994
S. James Coppersmith
/s/ Samuel M. Eisenstat
- --------------------- Director November 30, 1994
Samuel M. Eisenstat
- --------------------- Director November , 1994
Stephen J. Gutman
- --------------------- Director November , 1994
Jay S. Wintrob
- --------------------- Director November , 1994
Sebastiano Sterpa
- --------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities as set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- ------------------- President November , 1994
Peter A. Harbeck (Principal
Executive Officer)
- ------------------- Controller November , 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- ------------------- Director November , 1994
S. James Coppersmith
- ------------------- Director November , 1994
Samuel M. Eisenstat
/s/ Stephen J. Gutman
- ------------------- Director November 30, 1994
Stephen J. Gutman
- ------------------- Director November , 1994
Jay S. Wintrob
- ------------------- Director November , 1994
Sebastiano Sterpa
- ------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- ------------------- President November , 1994
Peter A. Harbeck (Principal
Executive Officer)
- ------------------- Controller November , 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- ------------------- Director November , 1994
S. James Coppersmith
- ------------------- Director November , 1994
Samuel M. Eisenstat
- ------------------- Director November , 1994
Stephen J. Gutman
/s/ Jay S. Wintrob
- ------------------- Director November 30, 1994
Jay S. Wintrob
- ------------------- Director November , 1994
Sebastiano Sterpa
- ------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- ------------------- President November , 1994
Peter A. Harbeck (Principal
Executive Officer)
- ------------------- Controller November , 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- ------------------- Director November , 1994
S. James Coppersmith
- ------------------- Director November , 1994
Samuel M. Eisenstat
- ------------------- Director November , 1994
Stephen J. Gutman
- ------------------- Director November , 1994
Jay S. Wintrob
/s/ Sebastiano Sterpa
- ------------------- Director November 30, 1994
Sebastiano Sterpa
- ------------------- Director November , 1994
Eli Broad
</TABLE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors
of SunAmerica Money Market Funds, Inc. do hereby severally constitute and
appoint Peter A. Harbeck, Peter C. Sutton and Robert M. Zakem or any of them,
the true and lawful agents and attorneys-in-fact of the undersigned with respect
to all matters arising in connection with the Registration Statement on Form
N-1A and any and all amendments (including post-effective amendments) thereto,
with full power and authority to execute said Registration Statement for and on
behalf of the undersigned, in our names and in the capacities indicated below,
and to file the same, together with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission. The
undersigned hereby give to said agents and attorneys-in-fact full power and
authority to act in the premises, including, but not limited to, the power to
appoint a substitute or substitutes to act hereunder with the same power and
authority as said agents and attorneys-in-fact would have if personally acting.
The undersigned hereby ratify and confirm all that said agents and attorneys-in-
fact, or any substitute or substitutes, may do by virtue hereof.
WITNESS the due execution hereof on the date and in the capacities as set
forth below.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
- ------------------- President November 16, 1994
Peter A. Harbeck (Principal
Executive Officer)
- ------------------- Controller November 16, 1994
Peter C. Sutton (Principal Financial
and Accounting Officer)
- ------------------- Director November 16, 1994
S. James Coppersmith
- ------------------- Director November 16, 1994
Samuel M. Eisenstat
- ------------------- Director November 16, 1994
Stephen J. Gutman
- ------------------- Director November 16, 1994
Jay S. Wintrob
- ------------------- Director November 16, 1994
Sebastiano Sterpa
/s/ Eli Broad
- ------------------- Director November 16, 1994
Eli Broad
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> SUNAMERICA MONEY MARKET FUND CLASS A
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 312492442<F1>
<INVESTMENTS-AT-VALUE> 312492442<F1>
<RECEIVABLES> 2034373<F1>
<ASSETS-OTHER> 127543<F1>
<OTHER-ITEMS-ASSETS> 806020<F1>
<TOTAL-ASSETS> 315460378<F1>
<PAYABLE-FOR-SECURITIES> 0<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 3103801<F1>
<TOTAL-LIABILITIES> 3103801<F1>
<SENIOR-EQUITY> 0<F1>
<PAID-IN-CAPITAL-COMMON> 312231885<F1>
<SHARES-COMMON-STOCK> 213944970<F2>
<SHARES-COMMON-PRIOR> 189159775<F2>
<ACCUMULATED-NII-CURRENT> 124692<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 0<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 0<F1>
<NET-ASSETS> 312356577<F1>
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 12713598<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (3351366)<F1>
<NET-INVESTMENT-INCOME> 9362232<F1>
<REALIZED-GAINS-CURRENT> 0<F1>
<APPREC-INCREASE-CURRENT> 0<F1>
<NET-CHANGE-FROM-OPS> 9362232<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (9332301)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 904696309<F2>
<NUMBER-OF-SHARES-REDEEMED> (886631162)<F2>
<SHARES-REINVESTED> 6720048<F2>
<NET-CHANGE-IN-ASSETS> 81282035<F1>
<ACCUMULATED-NII-PRIOR> 0<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 1023570<F2>
<INTEREST-EXPENSE> 1355<F2>
<GROSS-EXPENSE> 2026531<F2>
<AVERAGE-NET-ASSETS> 204713916<F2>
<PER-SHARE-NAV-BEGIN> 1<F2>
<PER-SHARE-NII> .034<F2>
<PER-SHARE-GAIN-APPREC> 0<F2>
<PER-SHARE-DIVIDEND> (.034)<F2>
<PER-SHARE-DISTRIBUTIONS> 0<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 1<F2>
<EXPENSE-RATIO> 1<F2>
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1>Information given pertains to the SunAmerica Money Market Fund as a whole.
<F2>Information given pertains to SunAmerica Money Market Fund Class A.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 002
<NAME> SUNAMERICA MONEY MARKET FUND CLASS B
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 312492442<F1>
<INVESTMENTS-AT-VALUE> 312492442<F1>
<RECEIVABLES> 2034373<F1>
<ASSETS-OTHER> 127543<F1>
<OTHER-ITEMS-ASSETS> 806020<F1>
<TOTAL-ASSETS> 315460378<F1>
<PAYABLE-FOR-SECURITIES> 0<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 3103801<F1>
<TOTAL-LIABILITIES> 3103801<F1>
<SENIOR-EQUITY> 0<F1>
<PAID-IN-CAPITAL-COMMON> 312231885<F1>
<SHARES-COMMON-STOCK> 98381676<F2>
<SHARES-COMMON-PRIOR> 41914767<F2>
<ACCUMULATED-NII-CURRENT> 124692<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 0<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 0<F1>
<NET-ASSETS> 312356577<F1>
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 12713598<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (3351366)<F1>
<NET-INVESTMENT-INCOME> 9362232<F1>
<REALIZED-GAINS-CURRENT> 0<F1>
<APPREC-INCREASE-CURRENT> 0<F1>
<NET-CHANGE-FROM-OPS> 9362232<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (9332301)<F1>
<DISTRIBUTIONS-OF-GAINS> 0<F1>
<DISTRIBUTIONS-OTHER> 0<F1>
<NUMBER-OF-SHARES-SOLD> 504544389<F2>
<NUMBER-OF-SHARES-REDEEMED> (449837260)<F2>
<SHARES-REINVESTED> 1759780<F2>
<NET-CHANGE-IN-ASSETS> 81282035<F1>
<ACCUMULATED-NII-PRIOR> 0<F1>
<ACCUMULATED-GAINS-PRIOR> 0<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 397122<F2>
<INTEREST-EXPENSE> 620<F2>
<GROSS-EXPENSE> 1324834<F2>
<AVERAGE-NET-ASSETS> 79424438<F2>
<PER-SHARE-NAV-BEGIN> 1<F2>
<PER-SHARE-NII> .027<F2>
<PER-SHARE-GAIN-APPREC> 0<F2>
<PER-SHARE-DIVIDEND> (.027)<F2>
<PER-SHARE-DISTRIBUTIONS> 0<F2>
<RETURNS-OF-CAPITAL> 0<F2>
<PER-SHARE-NAV-END> 1<F2>
<EXPENSE-RATIO> 1.69<F2>
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1>Information given pertains to the SunAmerica Money Market Fund as a whole.
<F2>Information given pertains to SunAmerica Money Market Fund Class B.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99.(b)(8)
CUSTODIAN CONTRACT
Between
SUNAMERICA MONEY MARKET FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
1. Employment of Custodian and Property to be Held By
It........................................................... 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States....... 3
2.1 Holding Securities...................................... 3
2.2 Delivery of Securities.................................. 3
2.3 Registration of Securities.............................. 8
2.4 Bank Accounts........................................... 9
2.5 Availability of Federal Funds........................... 10
2.6 Collection of Income.................................... 10
2.7 Payment of Fund Monies.................................. 11
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased......................... 14
2.9 Appointment of Agents................................... 14
2.10 Deposit of Fund Assets in Securities System............. 14
2.11 Segregated Account...................................... 17
2.12 Ownership Certificates for Tax Purposes................. 19
2.13 Proxies................................................. 19
2.14 Communications Relating to Portfolio Securities......... 19
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States................... 20
3.1 Appointment of Foreign Sub-Custodians................... 20
3.2 Assets to be Held....................................... 21
3.3 Foreign Securities Depositories......................... 21
3.4 Agreements with Foreign Banking Institutions............ 21
3.5 Access of Independent Accountants of the Fund........... 22
3.6 Reports by Custodian.................................... 23
3.7 Transactions in Foreign Custody Account................. 23
3.8 Liability of Foreign Sub-Custodians..................... 24
3.9 Liability of Custodian.................................. 25
3.10 Reimbursement for Advances.............................. 25
3.11 Monitoring Responsibilities............................. 26
3.12 Branches of U.S. Banks.................................. 27
3.13 Tax Law................................................. 27
4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund........................................ 28
5. Proper Instructions.......................................... 29
6. Actions Permitted Without Express Authority.................. 30
7. Evidence of Authority........................................ 30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
8. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net
Income....................................................... 31
9. Records...................................................... 31
10. Opinion of Fund's Independent Accountants.................... 32
11. Reports to Fund by Independent Public Accountants............ 32
12. Compensation of Custodian.................................... 33
13. Responsibility of Custodian.................................. 33
14. Effective Period, Termination and Amendment.................. 35
15. Successor Custodian.......................................... 36
16. Interpretive and Additional Provisions....................... 37
17. Additional Funds............................................. 38
18. Massachusetts Law to Apply................................... 38
19. Prior Contracts.............................................. 38
20. Shareholder Communications................................... 38
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
------------------
This Contract between SunAmerica Money Market Funds, Inc., a corporation
organized and existing under the laws of Maryland, having its principal
place of business at 733 Third Avenue, New York, New York 10017-3204 hereinafter
called the "Fund", and State Street Bank and Trust Company, a Massachusetts
trust company, having its principal place of business at 225 Franklin Street,
Boston, Massachusetts, 02110, hereinafter called the "Custodian", WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in one series,
SunAmerica Money Market Fund (such series together with all other series
subsequently established by the Fund and made subject to this Contract in
accordance with paragraph 17, being herein referred to as the "Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
-----------------------------------------------------
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States
<PAGE>
("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of capital
stock of the Fund representing interests in the Portfolios, ("Shares") as may be
issued or sold from time to time. The Custodian shall not be responsible for any
property of a Portfolio held or received by the Portfolio and not delivered to
the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article
5), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Directors of the Fund on
behalf of the applicable Portfolio (s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such sub-
custodian has to the Custodian . The Custodian may employ as sub-custodian for
the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2
<PAGE>
2. Duties of the Custodian with Respect to Property of the
-------------------------------------------------------
Fund Held By the Custodian in the United States
- -----------------------------------------------
2.1 Holding Securities. The Custodian shall hold and physically segregate
------------------
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio , other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository
or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System".
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
----------------------
securities owned by a Portfolio held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions from the Fund on behalf of the applicable Portfolio, which
may be continuing instructions when deemed appropriate by the parties,
and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 hereof;
3
<PAGE>
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities
are called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.9 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article 1; or for exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in
--------
any such case , the new securities are to be delivered to
the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; provided that in any such case, the Custodian shall
have no
4
<PAGE>
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities,
the surrender thereof in the exercise of such warrants,
rights or similar securities or the surrender of interim
receipts or temporary securities for definitive securities;
provided that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;
10) For delivery in connection with any 1oans of securities made
by the Portfolio, but only against receipt of adequate
--- ----
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which
5
<PAGE>
may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which
collateral is to be credited to the Custodian's account in
the book-entry system authorized by the U.S. Department of
the Treasury, the Custodian will not be held liable or
responsible for the delivery of securities owned by the
Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, but only
--- ----
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow
6
<PAGE>
or other arrangements in connection with transactions by the
Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectus and statement of
additional information of the Fund, related to the Portfolio
("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt
--- ----
of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a
7
<PAGE>
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth
the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the
person or persons to whom delivery of such securities shall
be made.
2.3 Registration of Securities. Domestic securities held by the
--------------------------
Custodian (other than bearer securities ) shall be registered in the
name of the Portfolio or in the name of any nominee of the Fund on
behalf of the Portfolio or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Portfolio, unless the
------
Fund has authorized in writing the appointment of a nominee to be
used in common with other registered investment companies having the
same investment adviser as the Portfolio, or in the name or nominee
name of any agent appointed pursuant to Section 2.9 or in the name
or nominee name of any sub-custodian appointed pursuant to Article 1.
All securities accepted by the Custodian on behalf of the Portfolio
under the terms of this Contract shall be in "street name" or
other good delivery form. If, however, the Fund directs the Custodian
to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely
8
<PAGE>
collect income due the Fund on such securities and to notify the Fund on
a best efforts basis only of relevant corporate actions including,
without limitation, pendency of calls, maturities, tender or exchange
offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
-------------
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received
by it from or for the account of the Portfolio, other than cash
maintained by the Portfolio in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for a Portfolio may be deposited by it
to its credit as Custodian in the Banking Department of the Custodian
or in such other banks or trust companies as it may in its discretion
deem necessary or desirable; provided, however, that every such
--------
bank or trust company shall be qualified to act as a custodian under
the Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or trust
company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Directors of the Fund. Such funds
shall be deposited by the Custodian in its capacity as Custodian and
shall be withdrawable by the Custodian only in that capacity.
9
<PAGE>
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
-----------------------------
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of
such Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
--------------------
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer domestic securities
if, on the date of payment by the issuer, such securities are held by
the Custodian or its agent thereof and shall credit such income, as
collected, to such Portfolio's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present
for payment all coupons and other income items requiring presentation
as and when they become due and shall collect interest when due on
securities held hereunder. Income due each Portfolio on securities
loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no
10
<PAGE>
duty or responsibility in connection therewith, other than to provide
the Fund with such information or data as may be necessary to assist the
Fund in arranging for the timely delivery to the Custodian of the
income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
----------------------
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account
of the Portfolio but only (a) against the delivery of
such securities or evidence of title to such options,
futures contracts or options on futures contracts to the
Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by
the Custodian as its agent for this purpose) registered
in the name of the Portfolio or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof
or in proper form for transfer; (b) in the case of a
purchase effected through a Securities
11
<PAGE>
System, in accordance with the conditions set forth in
Section 2.10 hereof; (c) in the case of repurchase
agreements entered into between the Fund on behalf of the
Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with
written evidence of the agreement by the Custodian to
repurchase such securities from the Portfolio or (d) for
transfer to a time deposit account of the Fund in any bank,
whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper
Instructions from the Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
12
<PAGE>
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest, taxes,
management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses
are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
--- ----
addition to proper Instructions from the Fund on behalf of
the Portfolio, a certified copy of a resolution of the Board
of Directors or of the Executive Committee of the Fund signed
by an officer of the Fund and certified by its Secretary or
an Assistant Secretary, specifying the amount of such
payment, setting forth the purpose for which such payment is
to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to
be made.
13
<PAGE>
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
-------------------------------------------------------------------
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities to
the same extent as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
---------------------
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
--------
not relieve the Custodian of its responsibilities or liabilities
hereunder.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
--------------------------------------------
and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities
14
<PAGE>
System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in the
Securities System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to securities of
the Portfolio which are maintained in a Securities System
shall identify by book-entry those securities belonging to
the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer
for the account of the Portfolio. The Custodian shall
transfer securities sold for the account of the Portfolio
upon (i) receipt of advice from the
15
<PAGE>
Securities system that payment for such securities has been
transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. Copies of all
advices from the Securities System of transfers of securities
for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the Custodian
and be provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of
daily transaction sheets reflecting each day's transactions
in the Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received from the Fund on behalf
of the Portfolio the initial or
16
<PAGE>
annual certificate, as the case may be, required by Article
14 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; at the election of the Fund, it shall be entitled to
be subrogated to the rights of the Custodian with respect to
any claim against the Securities System or any other person
which the Custodian may have as a consequence of any such
loss or damage if and to the extent that the Portfolio has
not been made whole for any such loss or damage.
2.11 Segregated Account. The Custodian shall upon receipt of Proper
------------------
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities
17
<PAGE>
maintained in an account by the Custodian pursuant to Section 2.10
hereof, (i) in accordance with the provisions of any agreement among the
Fund on behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts
by registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
--- ----
addition to Proper Instructions from the Fund on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board of
Directors or of the Executive Committee signed by an officer of the Fund
and
18
<PAGE>
certified by the Secretary or an Assistant Secretary, setting
forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
2.12 Ownership Certificates for Tax Purposes. The Custodian shall execute
---------------------------------------
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio
held by it and in connection with transfers of securities;.
2.13 Proxies. The Custodian shall, with respect to the domestic securities
-------
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Portfolios such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.14 Communications; Relating to Portfolio Securities
------------------------------------------------
Subject to the provisions of Section 2.3, the Custodian shall transmit
promptly to the Fund for each Portfolio all written information
(including, without limitation, pendency of calls and maturities of
domestic securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund on
behalf of the Portfolio and the maturity of futures
19
<PAGE>
contracts purchased or sold by the Portfolio) received by the Custodian
from issuers of the securities being held for the Portfolio. With
respect to tender or exchange offers, the Custodian shall transmit
promptly to the Portfolio all written information received by the
Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or
exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction,
the Portfolio shall notify the Custodian at least three business
days prior to the date on which the Custodian is to take such
action.
3. Duties of the Custodian with Respect to Property of the Fund Held
-----------------------------------------------------------------
Outside of the United States
- ----------------------------
3.1 Appointment of Foreign Sub-Custodians
-------------------------------------
The Fund hereby authorizes and instructs the Custodian to employ as sub-
custodians for the Portfolio's securities and other assets maintained
outside the United States the foreign banking institutions and foreign
securities depositories designated on Schedule A hereto ("foreign sub-
custodians"). Upon receipt of "Proper Instructions", as defined in
Section 5 of this Contract, together with a certified resolution of the
Fund's Board of Directors, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign
banking institutions and foreign securities depositories to act as sub-
custodian. Upon receipt of Proper Instructions, the
20
<PAGE>
Fund may instruct the Custodian to cease the employment of any one or
more such sub-custodians for maintaining custody of the Portfolio's
assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
-----------------
assets maintained in the custody of the foreign sub-custodians to:
(a) "foreign securities", as defined in paragraph (c)(1) of Rule 17f-5
under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may
determine to be reasonably necessary to effect the Portfolio's
foreign securities transactions. The Custodian shall identify on its
books as belonging to the Fund, the foreign securities of the Fund
held by each foreign sub-custodian.
3.3 Foreign Securities Depositories. Except as may otherwise be agreed upon
-------------------------------
in writing by the Custodian and the Fund, assets of the Portfolios
shall be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving
as sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.4 hereof.
3.4 Agreements with Foreign Banking Institutions. Each agreement with a
--------------------------------------------
foreign banking institution shall be substantially in the form set
forth in Exhibit 1 hereto and shall provide that: (a) the assets of
each Portfolio will
21
<PAGE>
not be subject to any right, charge, security interest, lien or claim of
any kind in favor of the foreign banking institution or its creditors
or agent, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money
or value other than for custody or administration; (c) adequate
records will be maintained identifying the assets as belonging to
each applicable Portfolio; (d) officers of or auditors employed by, or
other representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants for
the Fund, will be given access to the books and records of
the foreign banking institution relating to its actions under its
agreement with the Custodian; and (e) assets of the Portfolios held
by the foreign sub-custodian will be subject only to the instructions
of the Custodian or its agents.
3.5 Access of Independent Accountants of the Fund. Upon request of the Fund,
---------------------------------------------
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records
of any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
22
<PAGE>
3.6 Reports by Custodian. The Custodian will supply to the Fund from time to
--------------------
time, as mutually agreed upon, statements in respect of the securities
and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities and other assets and advices
or notifications of any transfers of securities to or from each
custodial account maintained by a foreign banking institution for the
Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.7 Transactions in Foreign Custody Account
---------------------------------------
(a) Except as otherwise provided in paragraph (b) of this Section 3.7,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
mutatis mutandis to the foreign securities of the Fund held outside the
------- --------
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be effected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof
23
<PAGE>
or to a dealer therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving later payment for
such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same
extent as set forth in Section 2.3 of this Contract, and the Fund
agrees to hold any such nominee harmless from any liability as a
holder of record of such securities.
3.8 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
-----------------------------------
the Custodian employs a foreign banking institution as a foreign sub-
custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless,
the Custodian and each Fund from and against any loss
(including reasonable attorneys fees and court cost), damage, cost,
expense, liability or claim arising out of or in connection with the
institution's performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claims against a foreign banking
institution as a consequence of any such loss (including reasonable
attorneys fees and court cost), damage, cost, expense, liability or
claim if and to the extent that the Fund has not been made whole for
any such loss, damage, cost, expense, liability or claim.
24
<PAGE>
3.9 Liability of Custodian. The Custodian shall be liable for the acts or
----------------------
omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and,
regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as contemplated by paragraph 3.12 hereof, the
Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where
the sub-custodian has otherwise exercised reasonable care.
Notwithstanding the foregoing provisions of this paragraph 3.9, in
delegating custody duties to State Street London Ltd., the Custodian
shall not be relieved of any responsibility to the Fund for any loss
due to such delegation, except such loss as may result from (a)
unforeseen political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other
losses (excluding a bankruptcy or insolvency of State Street London
Ltd. not caused by political risk) due to Acts of God, nuclear
incident or other losses under circumstances beyond the control of
the Custodian and State Street.
3.10 Reimbursement for Advances. If the Fund requires the Custodian to
--------------------------
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale
25
<PAGE>
of foreign exchange or of contracts for foreign exchange, or in the
event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may
arise from its or its nominee's own negligent action, negligent failure
to act or willful misconduct, any property at any time held for the
account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of such
Portfolios assets to the extent necessary to obtain reimbursement.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to
---------------------------
the Fund, during the month of June, information concerning the
foreign sub-custodians employed by the Custodian. Such information
shall be similar in kind and scope to that furnished to the Fund in
connection with the initial approval of this Contract. In addition,
the Custodian will promptly inform the Fund in the event that the
Custodian learns of a material adverse change in the financial
condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not
the subject of an exemptive order from the Securities and Exchange
Commission is notified by such foreign sub-custodian that there
appears to be a substantial likelihood that its shareholders' equity
will decline below $200 million (U.S. dollars or the
26
<PAGE>
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally
accepted U.S. accounting principles).
3.12 Branches of U.S. Banks
----------------------
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of the Portfolios' assets are
maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the Investment Company Act of
1940 meeting the qualification set forth in Section 26(a) of said Act.
The appointment of any such branch as a sub-custodian shall be governed
by paragraph 1 of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund
with the Custodian's London branch, which account shall be subject to
the direction of the Custodian, State Street London Ltd. or both.
3.13 Tax Law
-------
The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or the Custodian as custodian of the Fund by the tax
law of jurisdictions other than those mentioned in the
27
<PAGE>
above sentence, including responsibility for withholding and other
taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with
regard to such tax law shall be to use reasonable efforts to assist
the Fund with respect to any claim for exemption or refund under
the tax law of jurisdictions for which the Fund has provided such
information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
----------------------------------------------------------------------
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the
appropriate Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The Custodian will
provide timely notification to the Fund on behalf of each such Portfolio and
the Transfer Agent of any receipt by it of payments for Shares of such
Portfolio.
From such funds as may be available for the purpose but subject to
the limitations of the Articles of Incorporation and any applicable votes
of the Board of Directors of the Fund pursuant thereto, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of a Portfolio, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire funds
to or through a commercial bank designated by the
28
<PAGE>
redeeming shareholders. In connection with the redemption or repurchase of
Shares of the Fund, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
5. Proper Instructions
-------------------
Proper Instructions as used throughout this Contract means a
writing signed or initialled by two or more persons as the Board of
Directors shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Directors of the Fund accompanied by a
detailed description of procedures approved by the Board of Directors, Proper
Instructions may include communications effected directly between electro-
mechanical or electronic devices provided that the Board of Directors and
the Custodian are satisfied that such procedures afford adequate safeguards
for the Portfolios' assets. For purposes of this Section, Proper
Instructions shall include instructions received by the Custodian
29
<PAGE>
pursuant to any three-party agreement which requires a segregated asset
account in accordance with Section 2.11.
6. Actions Permitted without Express Authority
-------------------------------------------
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
provided that all such payments shall be accounted for to the Fund on behalf
- --------
of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise
directed by the Board of Directors of the Fund.
7. Evidence of Authority
---------------------
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed
by it to be genuine and to have been properly executed by or on behalf of
the Fund. The Custodian may receive and accept a certified copy of a vote
of the Board of Directors of the Fund as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Directors pursuant
30
<PAGE>
to the Articles of Incorporation as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of
written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and
------------------------------------------------------------
Calculation of Net Asset Value and Net Income
- ---------------------------------------------
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Directors of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
share of the outstanding shares of each Portfolio or, if directed in writing to
do so by the Fund on behalf of the Portfolio, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate daily the net income of the Portfolio as
described in the Fund's currently effective prospectus related to such Portfolio
and shall advise the Fund and the Transfer Agent daily of the total amounts of
such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of each Portfolio shall be made at the time or times
described from time to time in the Fund's currently effective prospectus related
to such Portfolio.
9. Records
-------
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of
31
<PAGE>
the Fund under the Investment Company Act of 1940, with particular attention
to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records
shall be the property of the Fund and shall at all times during the regular
business hours of the Custodian be open for inspection by duly authorized
officers, employees or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by each Portfolio and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from
year to year favorable opinions from the Fund's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Fund's Form N-1A, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other requirements of such
Commission.
11. Reports to Fund's Independent Public Accountants
------------------------------------------------
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts,
32
<PAGE>
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Contract; such
reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be
33
<PAGE>
counsel for the Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
If the Fund on behalf of a Portfolio requires the Custodian to take
any action with respect to securities, which action involves the payment of
money or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being
liable for the payment of money or incurring liability of some other form,
the Fund on behalf of the Portfolio, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in
an amount and form satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries
or agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) for the benefit of a Portfolio including the purchase or sale of
foreign exchange or of contracts for foreign exchange or in the event
that the Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection
with the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available
cash and to dispose of such Portfolio's assets to the extent necessary to
obtain reimbursement.
34
<PAGE>
14. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
--------
however that the Custodian shall not with respect to a Portfolio act under
Section 2.lO hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Directors of the Fund has
approved the initial use of a particular Securities System by such Portfolio and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Directors has reviewed the use by such Portfolio of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, as amended; provided further, however, that the Fund shall
-------- -------
not amend or terminate this Contract in contravention of any applicable
federal or state regulations, or any provision of the Articles of
Incorporation, and further provided, that the Fund on behalf of one or more of
the Portfolios may at any time by action of its Board of Directors (i)
substitute another bank or trust company for the Custodian by giving notice as
described above to the Custodian, or (ii) immediately terminate this Contract in
the event of the appointment of a conservator or receiver for the Custodian by
the Comptroller of the Currency or upon the happening of a like event
35
<PAGE>
at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
-------------------
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Directors of the Fund, the Custodian
shall, upon termination, deliver to such successor custodian at the office of
the Custodian, duly endorsed and in the form for transfer, all securities of
each applicable Portfolio then held by it hereunder and shall transfer to
an account of the successor custodian all of the securities of each such
Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered
to the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act
of 1940, doing
36
<PAGE>
business in Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published
report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and
all instruments held by the Custodian relative thereto and all other
property held by it under this Contract on behalf of each applicable
Portfolio and to transfer to an account of such successor custodian all of
the securities of each such Portfolio held in any Securities System.
Thereafter, such bank or trust company shall be the successor of the Custodian
under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or
of the Board of Directors to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor
of this Contract. Any
37
<PAGE>
such interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
--------
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Articles of Incorporation of the Fund. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.
17. Additional Funds
----------------
In the event that the Fund establishes one or more series of Shares in
addition to SunAmerica Money Market Fund with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it
shall so notify the Custodian in writing, and if the Custodian agrees in
writing to provide such services, such series of Shares shall become a Portfolio
hereunder.
18. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
20. Shareholder Communications
--------------------------
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers
of securities for the names, addresses and
38
<PAGE>
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, we need you to indicate whether
you authorize us to provide your name, address, and share position to
requesting companies whose stock you own. If you tell us "no", we will not
provide this information to requesting companies. If you tell us "yes" or do
not check either "yes" or "no" below, we are required by the rule to treat
you as consenting to disclosure of this information for all securities owned
by you or any funds or accounts established by you. For your protection, the
Rule prohibits the requesting company from using your name and address for
any purpose other than corporate communications. Please indicate below whether
you consent or object by checking one of the alternatives below.
YES [ ] You are authorized to release our name, address, and share
positions.
NO [ X ] You are not authorized to release our name, address, and share
positions.
39
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 29th day of November, 1994.
ATTEST SUNAMERICA MONEY MARKET FUNDS, INC.
/s/ Robert M. Zakem BY /s/ Peter A. Harbeck
- ----------------------- --------------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Diane Anderson BY /s/ Ronald E. Louge
- ----------------------- --------------------------------------
Executive Vice President
40
<PAGE>
Schedule A
----------
The following foreign banking institutions and foreign securities depositories
have been approved by the Board of Directors of SunAmerica Money Market Funds,
Inc. for use as sub-custodians for the Fund's securities and other assets:
(Insert banks and securities depositories)
Certified:
Fund's Authorized Officer
Date:
<PAGE>
EXHIBIT 99.B9
TRANSFER AGENCY AND SERVICE AGREEMENT
between
SUNAMERICA MONEY MARKET FUNDS, INC.
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<C> <S> <C>
Article 1 Terms of Appointment; Duties of the Bank.................... 2
Article 2 Fees and Expenses........................................... 6
Article 3 Representations and Warranties of the Bank.................. 6
Article 4 Representations and Warranties of the Fund.................. 6
Article 5 Data Access and Proprietary Information..................... 7
Article 6 Indemnification............................................. 10
Article 7 Standard of Care............................................ 12
Article 8 Covenants of the Fund and the Bank.......................... 12
Article 9 Termination of Agreement.................................... 14
Article 10 Additional Funds............................................ 14
Article 11 Assignment.................................................. 14
Article 12 Amendment................................................... 15
Article 13 Massachusetts Law to Apply.................................. 15
Article 14 Force Majeure............................................... 15
Article 15 Consequential Damages....................................... 15
Article 16 Merger of Agreement......................................... 16
Article 17 Counterparts................................................ 16
</TABLE>
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
-------------------------------------
AGREEMENT made as of the 29th day of November, 1994, by and between
SUNAMERICA MONEY MARKET FUNDS, INC., a Maryland corporation, having its
principal office and place of business at 733 Third Avenue, New York, New
York 10017-3204 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company having its principal office and place of
business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in one series,
SunAmerica Money Market Fund (each such series, together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with Article 10, being herein referred to, as a "Portfolio", and
collectively as the "Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank
as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities and the
Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows
<PAGE>
Article 1 Terms of Appointment; Duties of the Bank
----------------------------------------
1.01 Subject to the terms and conditions set forth in this Agreement, the
Fund, on behalf of the Portfolios, hereby employs and appoints the Bank to act
as, and the Bank agrees to act as its transfer agent for the authorized and
issued shares of capital stock of the Fund representing interests in each of the
respective Portfolios ("Shares"), dividend disbursing agent, custodian of
certain retirement plans and agent in connection with any accumulation, open-
account or similar plans provided to the shareholders of each of the respective
Portfolios of the Fund ("Shareholders") and set out in the currently effective
prospectus and statement of additional information ("prospectus") of the Fund on
behalf of the applicable Portfolio, including without limitation any periodic
investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund on behalf of each of the Portfolios, as applicable
and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
Custodian of the Fund authorized pursuant to the Articles of
Incorporation of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of Shares
and hold such Shares in the appropriate Shareholder account;
2
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(iii) Receive for acceptance redemption requests and redemption directions
and deliver the appropriate documentation thereof to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii) above,
the Bank shall execute transactions directly with broker-dealers
authorized by the Fund who shall thereby be deemed to be acting on
behalf of the Fund;
(v) At the appropriate time as and when it receives monies paid to it by
the Custodian with respect to any redemption, pay over or cause to be
paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and distributions declared
by the Fund on behalf of the applicable Portfolio;
(viii) Issue replacement certificates for those certificates alleged to have
been lost, stolen or destroyed upon receipt by the Bank of
indemnification satisfactory to the Bank and protecting the Bank and
the Fund, and the Bank at its option, may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity;
3
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(ix) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(x) Record the issuance of Shares of the Fund and maintain pursuant to SEC
Rule 17Ad-10(e) a record of the total number of Shares of the
Fund which are authorized, based upon data provided to it by the
Fund, and issued and outstanding. The Bank shall also provide the
Fund on a regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the services
set forth in the above paragraph (a), the Bank shall: (i) perform the customary
services of a transfer agent, dividend disbursing agent, custodian of certain
retirement plans and, as relevant, agent in connection with accumulation, open-
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program), including but not limited to: maintaining
all Shareholder accounts , preparing Shareholder meeting lists, mailing proxies,
mailing Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts, preparing
and filing U.S. Treasury Department Forms 1099 and other
4
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appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for Shareholders, and
providing Shareholder account information and (ii) provide a system which will
enable the Fund to monitor the total number of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to the Bank in writing those
transactions and assets to be treated as exempt from blue sky reporting for each
State and (ii) verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily activity for each
State. The responsibility of the Bank for the Fund's blue sky State registration
status is solely limited to the initial establishment of transactions subject to
blue sky compliance by the Fund and the reporting of such transactions to the
Fund as provided above.
(d) Procedures as to who shall provide certain of these services in Article
1 may be established from time to time by agreement between the Fund on behalf
of each Portfolio and the Bank per the attached service responsibility schedule.
The Bank may at times perform only a portion of these services and the Fund or
its agent may perform these services on the Fund's behalf.
5
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(e) The Bank shall provide additional services on behalf of the Fund (i.e.,
escheatment services) which may be agreed upon in writing between the Fund and
the Bank.
Article 2 Compensation of Custodian
-------------------------
2.01 The Custodian shall be entitled to reasonable compensation (including
out of pocket expenses) for its services and expenses as Custodian, as agreed
upon from time to time between the Fund on behalf of each applicable Portfolio
and the Custodian.
Article 3 Representations and Warranties of the Bank
------------------------------------------
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good standing
under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to the Bank that:
4.01 It is a corporation duly organized and existing and in good standing
under the laws of Maryland.
6
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4.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.03 All corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as amended
on behalf of each of the Portfolios is currently effective and will remain
effective, and appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Fund being offered for
sale.
Article 5 Data Access and Proprietary Information
---------------------------------------
5.01 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's ability to
access certain Fund-related data ("Customer Data") maintained by the Bank on
data bases under the control and ownership of the Bank or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to the Bank or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Fund agrees to treat all Proprietary
7
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Information as proprietary to the Bank and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents:
(a) to access Customer Data solely from locations as may be designated
in writing by the Bank and solely in accordance with the Bank's
applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information;
(c) to refrain from obtaining unauthorized access to any portion of
the Proprietary Information, and if such access is inadvertently
obtained, to inform in a timely manner of such fact and dispose of
such information in accordance with the Bank's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer facility
or other location, except with the prior written consent of the
Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at
8
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common law, under federal copyright law and under other federal
or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Article 5. The obligations of this Article shall
survive any earlier termination of this Agreement.
5.02 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely manner to
correct such failure. Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and the Fund agrees to make no claim against the Bank arising out of
the contents of such third-party data, including, but not limited to, the
accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE
EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information (such transactions constituting a "COEFI"), then in such
event the Bank shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long as such
9
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instruction is undertaken in conformity with security procedures established by
the Bank from time to time.
Article 6 Indemnification
---------------
6.01 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and against,
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liability arising out of or attributable to:
(a) All actions of the Bank or its agent or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The negligent or willful breach of any representation or warranty of
the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or subcontractors of
information, records, documents or services which (i) are received by the Bank
or its agents or subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of the Fund
including but not limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of any instructions or requests of the Fund on behalf of the
applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of any
stop order or other
10
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determination or ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state.
6.02 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by the Bank under this
Agreement, and the Bank and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund on behalf of the applicable Portfolio for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. The Bank, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by
or on behalf of the Fund, reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any instruction, information,
data, records or documents provided the Bank or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund. The Bank, its
agents and subcontractors shall also be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a co-
transfer agent or co-registrar.
6.03 In order that the indemnification provisions contained in this Article
6 shall apply, upon the assertion of a
11
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claim for which the Fund may be required to indemnify the Bank, the Bank shall
promptly notify the Fund of such assertion, and shall keep the Fund advised with
respect to all developments concerning such claim. The Fund shall have the
option to participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank. The Bank shall in
no case confess any claim or make any compromise in any case in which the Fund
may be required to indemnify the Bank except with the Fund's prior written
consent.
Article 7 Standard of Care
----------------
7.01 The Bank shall at all times act in good faith and agrees to use its
best efforts to insure the accuracy of all services performed under this
Agreement, but assumes no responsibility and shall not be liable for loss or
damage due to errors unless said errors are caused by its negligence, bad faith,
or willful misconduct of that of its employees.
Article 8 Covenants of the Fund and the Bank
----------------------------------
8.01 The Fund shall on behalf of each of the Portfolios promptly furnish to
the Bank the following:
(a) A certified copy of the resolution of the Directors of the Fund
authorizing the appointment of the Bank and the execution and delivery of this
Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and all
amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile
12
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signature imprinting devices, if any; and for the preparation or use, and for
keeping account of, such certificates, forms and devices.
8.03 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
8.04 The Bank and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
13
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Article 9 Termination of Agreement
------------------------
9.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
9.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund on behalf of the applicable Portfolio(s). Additionally, the Bank
reserves the right to charge for any other reasonable expenses associated with
such termination and/or a charge equivalent to the average of three (3) months'
fees.
Article 10 Additional Funds
----------------
10.01 In the event that the Fund establishes one or more series of Shares
in addition to SunAmerica Money Market Fund with respect to which it desires to
have the Bank render services as transfer agent under the terms hereof, it shall
so notify the Bank in writing, and if the Bank agrees in writing to provide such
services, such series of Shares shall become a Portfolio hereunder.
Article 11 Assignment
----------
11.01 Except as provided in Section 11.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
11.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
11.03 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston
14
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Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which is
duly registered as a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(1)"), (ii) a BFDS
subsidiary duly registered as a transfer agent pursuant to Section 17A(c)(1) or
(iii) a BFDS affiliate; provided, however, that the Bank shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor as it is
for its own acts and omissions.
Article 12 Amendment
---------
12.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Directors of the Fund.
Article 13 Massachusetts Law to Apply
--------------------------
13.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 14 Force Majeure
-------------
14.01 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
beyond its control, such party shall not be liable for damages to the other for
any damages resulting from such failure to perform or otherwise from such
causes.
Article 15 Consequential Damages
---------------------
15.01 Neither party to this Agreements shall be liable to the other party
for consequential damages under any provision of
15
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this Agreement or for any consequential damages arising out of any act or
failure to act hereunder.
Article 16 Merger of Agreement
-------------------
16.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof whether oral or written.
Article 17 Counterparts
------------
17.01 This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
SUNAMERICA MONEY MARKET FUNDS, INC.
BY:/s/ Peter A. Harbeck
--------------------------------
ATTEST:
/s/ Robert M. Zakem
- -----------------------------------
STATE STREET BANK AND TRUST COMPANY
BY:/s/ Ronald E. Louge
--------------------------------
Executive Vice President
ATTEST:
/s/ Joanne MacNevin
- -----------------------------------
16
<PAGE>
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund/Agent
---- ----------
1. Receive orders for the purchase of Shares. X X
2. Issue Shares and hold Shares in Shareholders
accounts. X
3. Receive redemption requests. X
4. Effect transactions 1-3 above directly with
broker-dealers. X
5. Pay over monies to redeeming Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends and distributions. X X
8. Issue Replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and accurate control
book for each issue of securities. X
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current Shareholders. X
15. Withhold taxes on U.S. resident and non-resident
alien accounts. X
16. Prepare and file U.S. Treasury Department forms. X
17. Prepare and mail account and confirmation
statements for Shareholders. X
17
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Service Performed Responsibility
- ----------------- --------------
Bank Fund/Agent
---- ----------
18. Provide Shareholder account information. X
19. Blue sky reporting. X
* Such services are more fully described in Article 1.02 (a), (b) and (c) of
the Agreement.
SUNAMERICA MONEY MARKET FUNDS, INC.
BY:/s/ Peter A. Harbeck
--------------------------------
ATTEST:
/s/ Robert M. Zakem
- -----------------------------------
STATE STREET BANK AND TRUST COMPANY
BY:/s/ Ronald E. Louge
--------------------------------
Executive Vice President
ATTEST:
/s/ Joanne MacNevin
- -----------------------------------
18
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EXHIBIT 99.B11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 16 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
February 13, 1995, relating to the financial statements and financial highlights
of SunAmerica Money Market Fund, which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement. We also
consent to the reference to us under the heading "Independent Accountants and
Legal Counsel" in such Statement of Additional Information and to the reference
to us under the headings "Financial Highlights" and "Independent Accountants and
Legal Counsel" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
April 24, 1995
<PAGE>
EXHIBIT 99.B14
ADVANTAGE-PLUS
401(k) PLAN
ESTABLISHMENT DOCUMENTS
LOGO Resources Trust
A SunAmerica Company
<PAGE>
ADVANTAGE-PLUS 401(K) PLAN
ESTABLISHMENT DOCUMENTS
- --------------------------------------------------------------------------------
The documents contained in this package are all you need to establish an
Advantage-Plus 401(k) Plan. On page 1 is a checklist to be used in verifying
that you have given us the necessary documents to establish the plan.
Before adopting this plan, the employer should consult with a tax advisor or
attorney.
<TABLE>
<S> <C>
Plan Establishment Checklist.............................................. 1
Plan Establishment Questionnaire.......................................... 2
Employee Census........................................................... 3
Services Agreement........................................................ 5
Account Representative Authorization
and signature page....................................................... 8
Investment Instructions................................................... 9
Order for Enrollment Forms
and Information Brochures................................................ 10
Sample Customized Enrollment Form......................................... 11
Enrollment Form........................................................... 13
Designation of Beneficiary................................................ 14
Certificate of Corporate Resolution
for a New Plan........................................................... 17
Certificate of Corporate Resolution
for an Existing Plan..................................................... 18
Adoption Agreement........................................................ 19
Employer Information.................................................... 19
Plan Information........................................................ 20
Eligibility, Vesting and Retirement Age................................. 21
Contributions, Allocation and Distribution.............................. 24
Top-Heavy Requirements.................................................. 29
Miscellaneous........................................................... 30
Signature Page.......................................................... 32
Amendment Number One...................................................... 33
Prototype IRS Opinion Letter.............................................. 39
Contribution Transmittal Form............................................. 41
Transfer Letter........................................................... 45
</TABLE>
<PAGE>
PLAN ESTABLISHMENT CHECKLIST
ADVANTAGE-PLUS 401(K) PLAN
I. New and Transferred Plans:
Please complete the following items and return all of the completed forms to
Resources Trust Company. All necessary forms are included in this brochure.
____ 1. Completed Plan Establishment Questionnaire, including Census
Information on all employees. (Pages 2-4)
____ 2. Original 401(k) Services Agreement. (Pages 5-8) Resources Trust Company
will countersign and return the original to you.
____ 3. Investment Instructions Form. (Page 9)
____ 4. Copies of completed Designation of Beneficiary forms and Enrollment
Forms for each participant. Standard forms are included on pages 13-16
(The Plan Administrator should retain the original forms.) You may
order a customized plan enrollment form or personalized enrollment
forms for your plan participants by completing the order form on page
10. (See the sample customized enrollment form on pages 11-12.)
____ 5. A copy of the corporate resolution establishing or amending the plan.
You may draft your own or use the sample resolutions on pages 17-18. If
more than one business is adopting the plan, each business must prepare
a corporate resolution.
____ 6. Original completed and signed Adoption Agreement (either the
standardized or non-standardized) for the Resources Trust Company
Prototype 401(k) Plan. (The standardized is on pages 19-32. To receive
a copy of the non-standardized, please contact RTC.) Resources Trust
Company will countersign and return the original to you.
____ 8. Amendment Number One to Resources Trust Company Defined Contribution
Plan and Trust. Execute this amendment if applicable (see Amendment
Note on page 33.) Return a copy to Resources Trust.
____ 9. Contribution Transmittal Form. (Pages 41-43) You may use this form to
accompany each contribution check. Your contribution checks should be
made payable to Resources Trust Company. If your plan has more than 50
participants, additional fees apply if you do not submit contribution
information on diskette. Please contact our Qualified Plans Division
for diskette specifications.
____ 10. Establishment Fees. (Please make your check payable to Resources Trust
Company)
New Plans Takeover of Existing Plan
Base Fee $ 550 Base Fee $ 800
Plus Each Participant $ 10 Plus Each Participant $ 20
II. Transferred Plans Only:
If an existing plan is being transferred to Resources Trust Company, the
following additional information must be supplied. In order to provide ongoing
service for existing plans that have been administered elsewhere, it is
important that adequate data be furnished to Resources Trust Company.
____ 1. Copies of the original plan and trust documents and any subsequent
amendments.
____ 2. A copy of the most recent IRS Determination Letter on the plan. If no
letter is available, please indicate the reason.
____ 3. Copies of the most recent Form 5500, 5500 EZ, or 5500-C filed for the
plan, and any 5500-R forms filed subsequent to a 5500-C. (You must
include any schedules filed with the form.)
____ 4. A copy of the most recent Participant Allocation Report showing
individual participant account balances and vested percentages as of the
end of the most recent valuation period.
____ 5. Original Resources Trust Company Transfer Letter for transfer of plan
assets. (Pages 44-46)
Any questions on plan establishment should be directed to:
Resources Trust Company (800) 525-9054
Qualified Plans Division (303) 694-2917
P.O. Box 3485 Choose option 1,
Englewood, CO 80155-3485 then enter extension 401k
1
<PAGE>
PLAN ESTABLISHMENT QUESTIONNAIRE
ADVANTAGE-PLUS 401(K) PLAN
PLAN NAME:
---------------------------------------------------
Please supply the following information and census data for your plan.
PART I
1. Please provide the names and signatures of the individual(s) who are
authorized to exercise administrative authority on behalf of the employer or
plan (i.e., individuals who can authorize participant distributions,
withdrawals, loans, etc.):
NAME SIGNATURE
- ----------------------------------- -------------------------------------
- ----------------------------------- -------------------------------------
- ----------------------------------- -------------------------------------
2. In addition to your account representative, please list any individuals
(such as an accountant or attorney) Resources Trust Company is authorized to
release information to or discuss plan matters with:
Name: Name:
------------------------------ --------------------------------
Firm Name: Firm Name:
------------------------- ---------------------------
Address: Address:
--------------------------- -----------------------------
--------------------------- -----------------------------
Telephone #: Telephone #:
----------------------- -------------------------
3. If the plan is insured by a fidelity bond, please provide:
Name of surety company:
---------------------------------------------------
Amount of bond coverage:
--------------------------------------------------
(Plan fiduciaries--The Employer, the Plan Administrator, and the Plan
Trustees(s)--should be bonded. The amount of bond coverage should be 10% of
plan assets with a minimum face amount of $1,000 and a maximum of $500,000.)
4. Description of the employer's business:
-----------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
Part 11 ADVANTAGE-PLUS 401(K) PLAN EMPLOYEE CENSUS
Provide information on all employees (including owner-employees),
whether or not they are eligible to participate.
Name of Employer _____________________________ Data as of:___________________
<TABLE>
<CAPTION>
# EMPLOYEE SOCIAL MARITAL # OF DATE DATE OF # OF HOURS % OF ANNUAL EMPLOYEE FAMILY
NAME SECURITY STATUS/1/ PERSONAL OF EMPLOYMENT OF SERVICE STOCK OR COMPEN- CATEGORY/2/ MEMBER
NUMBER EXEMPT- BIRTH PER YEAR BUSINESS SATION CATEGORY/3/
IONS/1/ MO DAY YR MO DAY YR OWNED
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
2 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
3 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
4 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
5 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
6 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
7 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
8 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
9 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
10 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
11 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
12 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
13 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
14 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
15 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
16 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
17 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
18 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
19 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
20 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
</TABLE>
/1/ Only necessary if you wish to order customized employee enrollment forms.
/2/ EMPLOYEE CATEGORY (Code all that apply.)
(O) Officer
(SE) Self-Employed
(S) Salaried
(H) Hourly
(U) Union
(A) Non-resident Alien
(L) Leased
(C) Commissioned
/3/ FAMILY MEMBER CATEGORY (Code all that apply.)
(S) Spouse
(A) Lineal Ascendant (parent, grandparent)
(D) Lineal Descendant (child, grandchild)
For any employee who is in one of the above relationships to another employee,
please indicate the code corresponding to the relationship and the number of the
employee to which related. For example: Assume employee #1 is the father of
employee #2 and employee #2 is married to employee #3. Employee #1 would be
coded A2 because he is a lineal ascendant relative to employee #2. Employee #2
would be coded Dl because he is a lineal descendant of #1 and would also be
coded S3 because he is the spouse of employee #3. Employee #3 would be coded as
S2, being the spouse of employee #2.
<PAGE>
<TABLE>
<CAPTION>
# EMPLOYEE SOCIAL MARITAL # OF DATE DATE OF # OF HOURS % OF ANNUAL EMPLOYEE FAMILY
NAME SECURITY STATUS/1/ PERSONAL OF EMPLOYMENT OF SERVICE STOCK OR COMPEN- CATEGORY/2/ MEMBER
NUMBER EXEMPT- BIRTH PER YEAR BUSINESS SATION CATEGORY/3/
IONS MO DAY YR MO DAY YR OWNED
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
22 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
23 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
24 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
25 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
26 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
27 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
28 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
29 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
30 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
31 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
32 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
33 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
34 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
35 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
36 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
37 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
38 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
39 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
40 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
41 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
42 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
43 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
44 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
45 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
46 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
47 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
48 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
49 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
50 ________ ________ _________ ________ _________ _________ __________ ________ _______ ___________ ___________
</TABLE>
If more room is needed, please make copies of this side of this form.
<PAGE>
SERVICES AGREEMENT
ADVANTAGE-PLUS 401(K) PLAN
The Employer, Plan Administrator and Trustee (herein referred to as the Client)
engage Resources Trust Company (herein referred to as RTC) for the following
establishment, administration and custodial services, and special services as
mutually agreed upon from time to time by RTC and the Client.
PLAN ESTABLISHMENT OR TAKEOVER SERVICES
1) Provision of an RTC-sponsored prototype plan document for establishment of
the Plan or plan amendment upon takeover. Plan documents should be reviewed
by Client's legal counsel before adoption.
2) Preparation of forms necessary for Client's submission of RTC prototype
documents to the Internal Revenue Service (IRS) for a determination letter
on the Plan's qualification.
3) Preparation of a Summary Plan Description (SPD) and enrollment forms for
plan participants.
4) Establishment of administrative records for the Plan and plan participants,
including existing account records for takeover plans.
ADMINISTRATION AND CUSTODIAL SERVICES
1) Determination of participant status for each employee, including
eligibility for plan participation, credited service, vesting service,
eligibility for normal or early retirement, eligibility for payment of
benefits, and key employee and highly compensated employee status.
2) Preparation of quarterly reports for the Client and account statements for
participants reporting investment account values and allocations of
contributions, forfeitures and trust earnings.
3) Determination of top-heavy plan status and compliance with the minimum
participation and coverage requirements of Code Sections 401(a)(26),
401(a)(4), and 410(b).
4) Preparation of semi-annual antidiscrimination testing.
5) Preparation of the IRS Form 5500 Series Annual Report, including required
schedules (other than the accountant's certification required for plans with
100 or more participants). Preparation of the Summary Annual Report for plan
participants. It is the Client's responsibility to file the Form 5500 with
the IRS.
6) Preparation of IRS Forms 1099-R reporting distributions to plan
participants.
7) Receipt of plan contributions not more frequently than biweekly and their
investment in accordance with participant investment selections or the
instructions of the Client or the Account Representative designated by the
Client. Investment of transferred assets in accordance with the instructions
of the participant, the Client or the Account Representative designated by
the Client.
8) Custody of plan investments. Plan is allowed up to six mutual fund and/or
variable annuity portfolio options.
9) Processing of participant investment selection changes and any exchanges
necessitated thereby. Exchanges are processed once per quarter for the plan.
10) Processing of participant distributions, hardship withdrawals and loans
authorized by the Client.
11) Deposit of any contributions pending investment, or any other cash not
otherwise invested, in deposits of a commercial bank or trust company
(including deposits of Resources Trust Company) whose deposits are insured
by the Federal Deposit Insurance Corporation; or investment into shares of
an open-end money market fund registered under the Investment Company Act of
1940.
5
<PAGE>
RESOURCES TRUST COMPANY AGREES TO PROVIDE THE SERVICES
DESCRIBED ABOVE SUBJECT TO THE FOLLOWING CONDITIONS:
1) The Client agrees to provide RTC in writing with all information deemed by
RTC as necessary to perform the above services. The Client agrees to certify
to the accuracy of any information furnished to RTC and RTC shall assume no
duty of care to investigate or question the accuracy or completeness of any
information provided by the client. RTC shall be held harmless in relying
on the information provided by the client in performing its duties under this
Agreement.
2) The Client agrees to hold RTC harmless for any errors resulting from
incorrect information provided to RTC by the Client, and any delay in filing
required annual returns/reports that is a result of the Client's delay in
supplying RTC with the information. The Client also agrees to bear the cost
of any changes required to be made because of incorrect information provided
by the Client.
3) The Client agrees to pay RTC the following fees for plan establishment,
administration and custodial services. RTC reserves the right to deduct fees
from the custodial account, charge interest and/or penalties for late payment
of fees, and to liquidate assets in the account if necessary to cover fees
past due.
<TABLE>
<S> <C>
ESTABLISHMENT FEES:
NEW PLANS/1/
Base fee $ 550
Plus, each participant $ 10
TAKEOVER OF EXISTING PLAN
Base fee/1/ $ 800
Plus, each participant $ 20
Plus, each asset transferred $ 10
ANNUAL ADMINISTRATION AND CUSTODIAL FEES:/2/
Base fee $ 1500
Plus, each participant/3/ $ 25
Plus, transaction fee (after three)/4/ $ 10 ea.
Loan origination/5/ $ 50 ea
Loan maintenance $ 50 ea.
Additional investment options/6/ $ 200 ea.
TERMINATION FEES:/7/
Base Fee $ 100
Plus, per asset $ 10
</TABLE>
/1/ Base fee is increased $100 for age-weighted or cross-tested profit sharing
feature.
/2/ The minimum annual charge to maintain a 401(k) plan is $2,000 (base fee and
participant fees combined).
/3/ If plan has more than 50 active participants and contributions are not
submitted on diskette, the fee increases to $30 for monthly contribution
transmittals and $35 for semi-monthly transmittals.
/4/ Asset sales, purchases, exchanges and distributions. Mutual fund
transactions are exempt from transaction fees.
/5/ $50 fee to issue, renegotiate or consolidate a loan.
/6/ In excess of six mutual fund and/or variable annuity portfolio options.
/7/ Fees are for transfer of assets and cessation of administration services.
Additional fees may apply for plan terminations, provision of documents to a
new administrator, or special report requests.
RTC reserves the right to adjust fees upon 30 days' written notice to the
Client. Establishment fees are payable upon plan establishment.
6
<PAGE>
4) The Client agrees that any IRS user fees charged separately by the IRS are
not included in RTC fees.
5) The Client agrees that nothing in this Agreement will be deemed to make RTC
a fiduciary of the Plan and that RTC is contracting solely to provide
custodial and administrative services to the Plan. RTC is not the Plan
Administrator, the Plan Trustee, an attorney, or tax or investment advisor
and does not render legal advice in connection with the creation, adoption
or operation of the Plan. The Client should seek legal advice as needed as
to matters that might arise regarding the adoption and/or operation of the
Plan.
6) The Client agrees that the Client or the Account Representative appointed by
the Client as agent of the Client or plan participants, if participant
direction is permitted under the plan, will have sole authority and
responsibility to direct the investment of assets into any investment
permitted by RTC. Permitted and non-permitted investments are those for
which RTC will agree to provide custody. Identification of an investment
category as permitted or non-permitted does not constitute a determination
by RTC of the prudence or advisability of such investment nor does RTC
provide investment advice or recommend or evaluate the merits or suitability
of any investment. Investment instructions must be made in accordance with
procedures specified by RTC. RTC will have no liability for acts or
omissions of a participant, the Client or the Client's authorized agent or
for any losses realized because RTC followed the investment directions given
by a participant, the Client or the Client's authorized agent.
7) The Client assumes responsibility for securing repayment of any
participant loans authorized and for the reporting and payment of any
unrelated business income taxes incurred by the Plan's trust under Sections
511-514 of the Internal Revenue Code.
8) This Agreement will continue in effect and shall automatically renew
annually unless or until otherwise modified or terminated by either party.
This Agreement may be canceled by either party upon 30 days' written notice
by the canceling party to the other party. Written notice from the Client
will include notice of the appointment of a successor contract administrator
and custodian.
SPECIAL SERVICES
Special Services will be provided as requested by the Client for an hourly fee
or such flat rate fee as quoted by RTC:
1) Investment options other than mutual funds and variable annuities.
2) Exchange processing more frequently than once per quarter.
3) Contribution and/or investment processing more frequently than biweekly.
4) Reports or valuations more frequent than quarterly.
5) Mailing of participant statements directly to participants.
6) Administration of earmarked (segregated) accounts for participant accounts
or profit sharing assets.
7) Administration of life insurance in the plan.
8) Assistance with IRS or other plan audits.
9) Participation in employee/employer meetings on the Plan.
10) Plan amendment services (included in establishment services for takeover
plans).
11) Consultation and design assistance for plan amendments if using RTC
prototype plan documents (included in establishment services for takeover
plans).
12) Revision of statements or reports as a result of incorrect, incomplete or
late information from the Client.
13) Plan terminations, mergers or consolidations.
14) Trust accounting reconciliation services for takeover plans.
7
<PAGE>
ACCOUNT REPRESENTATIVE AUTHORIZATION AND SIGNATURE PAGE
ACCOUNT REPRESENTATIVE AUTHORIZATION
COMPLETE THIS SECTION TO AUTHORIZE AN ACCOUNT REPRESENTATIVE FOR THE PLAN.
I authorize this individual to execute purchase and sale transactions for the
Plan. I also authorize this individual to receive statements and any other Plan
information from Resources Trust Company via written, telephone or electronic
communications.
I agree it is my responsibility to authorize and initiate transactions for the
Plan through my Account Representative. Resources Trust Company is instructed to
make or receive payment for security transactions, as indicated by confirmation
or application received by Resources Trust Company, executed by my authorized
Account Representative.
I agree Resources Trust Company is under no duty to investigate or inquire about
any directions or instructions given by my Account Representative. I further
agree that Resources Trust Company will have no liability for any losses
occurring because of changes in the market value of an asset or because
Resources Trust Company acted in reliance on instructions from me by my Account
Representative.
I understand that I may replace my Account Representative by giving written
notice to Resources Trust Company and that removing my Account Representative
will not cancel any instructions given by the Account Representative before
Resources Trust Company received written notice that a new Account
Representative has been designated.
-------------------------------------------
Account Representative Name
-------------------------------------------
Brokerage Firm Name
-------------------------------------------
Street Address
-------------------------------------------
City State ZIP
-------------------------------------------
Account Representative # Telephone #
TELEPHONE AUTHORIZATION
[_] INITIAL THIS BOX IF YOU WANT YOU OR YOUR ACCOUNT
REPRESENTATIVE TO BE ABLE TO MAKE PURCHASE AND SALE
TRANSACTIONS FOR THE PLAN BY TELEPHONE.
I authorize Resources Trust Company to honor telephone transaction requests from
me or any other person for the Plan. This authorization is not valid for
securities purchase and sale transactions for which RTC would normally be
notified by confirmation; i.e., stocks, bonds, etc. The Plan Account Number
will be required as verification before any requests will be accepted. I
understand and agree that Resources Trust Company will not be liable for any
loss, expense or cost arising out of any requests effected hereunder.
- --------------------------------------------------------------------------------
The terms of this Agreement shall commence with the first day of the Plan year
beginning:
--------------------------------------
month day year
Plan Name:
--------------------------------------------------------------------
Printed Name of Plan Administrator/Employer:
----------------------------------
Signature of Plan Administrator/Employer:
-------------------------------------
Title:
-------------------------------------
Printed Name(s) of Plan Trustee(s): Signature(s) of Plan Trustee(s):
- ----------------------------------- -----------------------------------
- ----------------------------------- -----------------------------------
Date:
------------------------------
Resources Trust Company
Accepted by: Title:
----------------------- -----------------------------
Date:
------------------------------
8
<PAGE>
INVESTMENT INSTRUCTIONS
PLAN NAME: DATE:
--------------------------------------- ---------------------
INVESTMENT AUTHORIZATION FOR IDLE CASH:
I direct the Custodian to invest any cash in the account, which is not otherwise
invested or while pending investment, in deposits of a commercial bank or trust
company (including deposits of the Custodian) whose deposits are insured by the
Federal Deposit Insurance Corporation or into shares of an open-end money market
registered under the Investment Company Act of 1940.
INVESTMENT OPTIONS UNDER THE PLAN:
The following investment options shall be available to participants under the
above plan and the Custodian is directed to invest each participant's
contributions under the plan in the available investment options in accordance
with the participant's instructions:
Investment Option #l
----------------------------
Investment Option #2
----------------------------
Investment Option #3
----------------------------
Investment Option #4
----------------------------
Investment Option #5
----------------------------
Investment Option #6
----------------------------
Participants shall have the right to direct the investment into the above
options of (check all that apply):
[_] Salary deferral contributions
[_] Employer matching contributions (if any)
[_] Profit sharing contributions (if any)
[_] Rollover or transfer funds (if any)
Any contributions not directed by the participant as permitted above shall be
invested by the Custodian at the Trustee's direction.
- --------------------------------------------------------------------------------
Signature of Plan Administrator/Employer:
---------------------------------------
Signatures of Plan Trustee(s):
- --------------------------------------------------
- --------------------------------------------------
Date:
---------------------------------------------
9
<PAGE>
ADVANTAGE-PLUS 401(K) PLAN
ORDER FOR ENROLLMENT FORMS AND INFORMATION BROCHURES
Use this form to order a supply of information brochures and/or a customized
enrollment form for your 401(k) plan participants. In order to prepare the
customized form, we will need to have received from you the Plan Adoption
Agreement, and the information requested below. You may also use the standard
enrollment form on page 13.
Please mark the appropriate boxes below to indicate your order:
[_] (#) of copies of the employee information brochure
"WHAT YOU SHOULD KNOW ABOUT YOUR EMPLOYER'S 401(K) PLAN"
[_] Customized enrollment form
For our information in preparing the enrollment form, please provide
the name of the individual or the department to whom the employee
should submit his enrollment form: _____________ and the deadline date
for submission of the form:___________________ . Please indicate when
the payroll period deductions will begin ______________________.
Indicate the names of the investment fund alternatives which will be
offered as investment choices under the plan:
[_] ________________________________
[_] ________________________________
[_] ________________________________
[_] ________________________________
[_] ________________________________
[_] ________________________________
Plan Name:__________________________________________
Date Requested:_____________________________________
Mail brochures and enrollment form to: _____________
_____________________________________
_____________________________________
_____________________________________
_____________________________________
MAIL TO: RESOURCES TRUST COMPANY
Qualified Plans Division
P.O. Box 3485
Englewood, CO 80155-3485
(800) 525-9054
(303) 694-2917
Choose option 1, then enter extension 401k.
10
<PAGE>
(Sample customized enrollment form)
ABC CORPORATION
ENROLLMENT FORM
SALARY DEFERRAL AGREEMENT AND INVESTMENT ELECTION
TO: John Doe DATE: December 15, 1993
-------------------------------------- ------------------------------
Effective January 1, 1994 , you will become eligible to participate in
--------------------
the 401(k) plan of ABC Corporation .
----------------------------
If you wish to participate in the plan, you may make salary deferral
contributions to the plan of 2% to 15% on a pre-tax basis. Please complete the
- --
appropriate section indicating whether you elect to authorize salary deferral
contributions to the plan at this time. This form must be returned to Human
-----
Resources by December 31, 1993 in order for your participation to be effective
- --------- -----------------
January 1, 1994.
- ---------------
TO: PLAN ADMINISTRATOR
- --------------------------------------------------------------------------------
SALARY DEFERRAL AGREEMENT
( ) I elect to participate in salary deferral contributions to the 401(k)
plan of ABC Corporation .
------------------------------------------------------------
As a participant, I hereby authorize payroll deductions of:
___ % of my compensation (not to exceed 15 %) to be contributed by the
----
company to the plan as a salary deferral contribution for allocation
to my account.
I understand that company matching contributions of 25 % will be made on salary
----
deferral contributions up to 6 % of my compensation.
---
I have indicated my investment elections in the following section.
- --------------------------------------------------------------------------------
INVESTMENT ELECTION
I hereby authorize that company matching contributions on my behalf and any
contributions made pursuant to a salary deferral agreement under the above plan
be invested according to the elections indicated below:
1. Investment Account #1: Money Market Fund %
------------------------------- -----
2. Investment Account #2: US Government Securities Fund %
------------------------------- -----
3. Investment Account #3: Growth Fund %
------------------------------- -----
4. Investment Account #4: Growth & Income Fund %
------------------------------- -----
5. Investment Account #5: Multi-Asset Fund %
------------------------------- -----
6. Investment Account #6: Balanced Fund %
------------------------------- -----
TOTAL = 100%
-----
11
<PAGE>
(SAMPLE CUSTOMIZED ENROLLMENT FORM, CONTINUED)
- --------------------------------------------------------------------------------
WAIVER OF PARTICIPATION
( ) I do not wish to authorize salary deferral contributions to the plan at
this time. I understand that I may begin contributing to the plan on any
1/1, 4/1, 7/1, or 10/1 by filing, in advance, a Salary Deferral
----------------------
Agreement.
(Enrollment Dates)
- --------------------------------------------------------------------------------
I understand that the above elections will remain in force until I elect to make
a change in accordance with the provisions of the plan.
- -------------------------------- ------------------------
(Participant Signature) (Date)
Social Security #____________ Date of Birth___________ Date of Hire___________
Received by the Plan Administrator this _________day of_______________, 19__.
12
<PAGE>
ENROLLMENT FORM
ADVANTAGE-PLUS 401(K) PLAN
SALARY DEFERRAL AGREEMENT AND INVESTMENT ELECTION
TO:______________________________________ DATE: ______________________________
(Name of Employee)
Effective____________________, you will become eligible to participate in
(Date)
the 401(k) plan of ________________________________________________.
(Employer)
Please complete the appropriate section below indicating whether you elect to
authorize salary deferral contributions to the plan at this time. This form must
be returned to ________________________ by __________________ in order for your
(Date)
participation to be effective __________________________.
(Date)
TO: PLAN ADMINISTRATOR
- --------------------------------------------------------------------------------
SALARY DEFERRAL AGREEMENT
( ) I elect to participate in salary deferral contributions to the 401(k)
plan of .
------------------------------------------------------------
As a participant, I hereby authorize payroll deductions of:
___ % of my compensation (not to exceed ___%) to be contributed by the
company to the plan as a salary deferral contribution for allocation
to my account.
I understand that company matching contributions of ___% will be made on salary
deferral contributions up to ___% of my compensation.
I have indicated my investment elections in the following section.
- --------------------------------------------------------------------------------
INVESTMENT ELECTION
I hereby authorize any contributions made pursuant to a salary deferral
agreement and any other contributions I am permitted to direct be invested
according to the elections indicated below:
<TABLE>
<CAPTION>
Current Balances
Future Contributions (if applicable)
<S> <C> <C> <C>
1. Investment Account #1: ________________________________ ______________________% _____________________%
2. Investment Account #2: ________________________________ ______________________% _____________________%
3. Investment Account #3: ________________________________ ______________________% _____________________%
4. Investment Account #4: ________________________________ ______________________% _____________________%
5. Investment Account #5: ________________________________ ______________________% _____________________%
6. Investment Account #6: ________________________________ ______________________% _____________________%
TOTAL = 100 % 100 %
---------------------- ---------------------
</TABLE>
- --------------------------------------------------------------------------------
WAIVER OF PARTICIPATION
( ) I do not wish to authorize salary deferral contributions to the plan at
this time. I understand that I may begin contributing to the plan on any
______________________ by filing, in advance, a Salary Deferral Agreement.
(Enrollment Dates)
I understand that the above elections will remain in force until I elect to make
a change in accordance with the provisions of the plan.
- --------------------------------------------------------------------------------
- -------------------------------- ------------------------
(Participant Signature) (Date)
Social Security #____________ Date of Birth___________ Date of Hire___________
Received by the Plan Administrator this _________day of_______________, 19__.
13
<PAGE>
DESIGNATION OF BENEFICIARY
QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY NOTICE, WAIVER AND CONSENT OF SPOUSE
Please see the important information about your beneficiary designation which
follows this form.
GENERAL INFORMATION
NAME OF PLAN_________________________________________________________
NAME OF PARTICIPANT__________________________________________________
ADDRESS______________________________________________________________
CITY______________________STATE___________________ZIP________________
SOCIAL SECURITY#__________________DATE OF BIRTH______________________
CURRENT MARITAL STATUS
[_] I am not married I understand that if I become married in the future, my
spouse will be my Primary Beneficiary unless I complete
a new Designation of Beneficiary form and my spouse
consents to my designation.
[_] I am married I understand that my spouse will be my Primary
Beneficiary. However, I understand I may designate a
Primary Beneficiary other than my spouse on the space
below if my spouse signs the section below entitled
"Consent of Spouse."
DESIGNATION OF BENEFICIARY(IES)
Pursuant to the provisions of the plan permitting the designation of a
beneficiary or beneficiaries by a participant, I
<TABLE>
<S> <C>
PRIMARY BENEFICIARY:__________________% PRIMARY BENEFICIARY:_________________%
- ---------------------------------------------------------------------------------------------------------------------------
Name Name
- ---------------------------------------------------------------------------------------------------------------------------
Social Security Number(Required) Date of Birth Social Security Number(Required) Date of Birth
- ---------------------------------------------------------------------------------------------------------------------------
Street Address Street Address
- ---------------------------------------------------------------------------------------------------------------------------
City State Zip City State Zip
- ---------------------------------------------------------------------------------------------------------------------------
Relationship Relationship
SECONDARY BENEFICIARY:_________________% SECONDARY BENEFICIARY:_______________%
- ---------------------------------------------------------------------------------------------------------------------------
Name Name
- ---------------------------------------------------------------------------------------------------------------------------
Social Security Number(Required) Date of Birth Social Security Number(Required) Date of Birth
- ---------------------------------------------------------------------------------------------------------------------------
Street Address Street Address
- ---------------------------------------------------------------------------------------------------------------------------
City State Zip City State Zip
- ---------------------------------------------------------------------------------------------------------------------------
Relationship Relationship
</TABLE>
hereby designate the following person or persons as Primary and Secondary
Beneficiaries of my account balance under the plan payable by reason of my
death.
I RESERVE THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION. I HEREBY
REVOKE ALL PRIOR DESIGNATIONS (IF ANY) OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES.
The Plan Administrator shall pay all sums payable under the plan by reason of
death to the Primary Beneficiary if he or she survives me; if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Plan Administrator shall pay all amounts to my
estate. NOTE: Unless the participant provides otherwise in completing this
designation, the Plan Administrator shall pay all sums payable to more than one
beneficiary equally to the living beneficiaries, subject, however, to the
requirements, if any, of the Qualified Joint and Survivor Annuity provisions or
of the Qualified Pre-Retirement Survivor Annuity provisions of ERISA. The Plan
Administrator will not accept the Designation of Beneficiary of a married
participant designating a Primary Beneficiary
14
<PAGE>
other than the participant's spouse unless the spouse has consented to the
designation. Spousal consent is not required if the participant's spouse is
the sole Primary Beneficiary.
______________________________________ ____________________________________
Signature of Participant Date
WAIVER ELECTION
MARRIED PARTICIPANT'S ELECTION TO WAIVE THE QUALIFIED PRE-RETIREMENT
SURVIVOR ANNUITY.
As a married participant in my employer's qualified retirement plan, I
acknowledge that I have read the information about Qualified Pre-Retirement
Survivor Annuities on page 16. I understand that when I die, any amount
remaining in my plan account will be paid to my surviving spouse in the form
of a Qualified Pre-Retirement Survivor Annuity. I understand that I have a
right to waive that form of payment.
I hereby elect to waive the requirement that my surviving spouse be paid any
benefits that I may have in the plan at the time of my death in the form of a
Qualified Pre-Retirement Survivor Annuity. I understand and agree that this
waiver is valid only if my spouse has consented by reading and signing the
statement below.
_____________________________________ _____________________________________
Signature of Participant Date
CONSENT OF SPOUSE
I am the spouse of the participant named above. I hereby consent to my
spouse's election not to have benefits remaining in his or her plan paid in
the form of a Qualified Pre-Retirement Survivor Annuity at his or her death.
I understand that my consent cannot be revoked unless my spouse revokes the
above waiver.
I also consent to the above Designation of Beneficiary. I understand that if
anyone other than me is designated as Primary Beneficiary on this form, I am
waiving any rights I may have to receive benefits under the plan when my
spouse dies.
My consent to the Designation of Beneficiary extends to (check 1 or 2):
[_] 1. the above named beneficiary(ies) only
[_] 2. to the above named beneficiary(ies) and to any future beneficiary(ies)
my spouse may name. I understand that I have the right to limit my consent to
this beneficiary only and I voluntarily elect to relinquish that right.
_____________________________________ _____________________________________
Signature of Spouse Date
WITNESS OF SIGNATURE
Signature of spouse witnessed this____________ day of ___________________19,
_____, in the presence of:
___________________________________________________
Signature of Plan Representative
OR
___________________________________________________
Name of Plan Representative (Print or Type)
BEFORE ME, the undersigned, a Notary Public, personally_____________________
appeared who executed the above Consent of Spouse as a
free and voluntary act.
IN WITNESS WHEREOF, I have signed my name and affixed my official seal this
_____________ day of __________________,19______.
___________________________________________________
Notary Public
My commission expires _____________________________
15
<PAGE>
IMPORTANT INFORMATION ABOUT QUALIFIED
PRE-RETIREMENT SURVIVOR ANNUITIES
If you are a married participant and you die before payment of your benefits has
begun, the law requires that 50% of your account balance be paid to your
surviving spouse in a certain manner at your death unless you and your spouse
elect otherwise as explained below. This manner of payment, called a "Qualified
Pre-Retirement Survivor Annuity," will provide your spouse with a series of
periodic payments over his or her life. The size of the periodic payments will
depend on the amount available in your plan acccount.
For example, assume that a participant dies with an account balance of $20,000.
If 50% of the balance is paid to the surviving spouse in the form of a Qualified
Pre-Retirement Survivor Annuity, the annuity will provide the spouse with
monthly payments of $76.60. (This payment amount is an estimate based on the
Individual Annuity Mortality Tables - 71 using a 5% interest rate with payments
commencing at age 65.)
You may elect to waive the following:*
1. The requirement that your surviving spouse be paid in the form of a
Qualified Pre-Retirement Survivor Annuity, and,
2. The requirement that your spouse be the beneficiary of the Qualified
Pre-Retirement Survivor Annuity.
You may waive either the first requirement or both requirements beginning with
the first day after which you become a participant in the plan. Any waiver
election you sign before age 35 will become invalid the first day of the plan
year in which you attain age 35. At that time you may again waive the Qualified
Pre-Retirement Survivor Annuity and the requirement that your spouse be the
beneficiary.
Your spouse must consent in writing to either waiver. The spousal consent must
be witnessed by a notary public or plan representative (e.g. plan trustee or
business owner). The spousal consent for a plan representative should be
witnessed by a notary or other disinterested plan representative. You have the
right to revoke any waiver that you have made at any time before your death.
Your spouse must also consent to any subsequent changes of beneficiary unless
the spousal consent expressly permits beneficiary changes by you without further
spousal consent. You may, at any time, designate a beneficiary for death
benefits payable under the plan that are in excess of the Qualified Pre-
Retirement Survivor Annuity.
If your vested account balance is $3,500 or less at the time of your death,
the Plan Administrator may make a distribution to your surviving spouse in a
single sum cash payment even if you did not waive the Qualified Pre-Retirement
Survivor Annuity.
Because a spouse has certain rights under the law, you should inform your Plan
Administrator immediately of any changes in your marital status. A change in
your marital status may require you to complete a new Designation of Beneficiary
form. Consent by one spouse is binding only with respect to that spouse. A
subsequent spouse of the same participant is not bound by the prior spouse's
consent.
For more information regarding Pre-Retirement Survivor Annuities, contact your
Plan Administrator (employer).
*Note: Profit sharing plans generally are not subject to the requirement that
survivor benefits be paid annuity form. However, spousal consent to a
non-spouse beneficiary is required for all plans. Therefore, if you are
married and you name a non-spouse beneficiary, the WAIVER ELECTION and
CONSENT OF SPOUSE selections should be completed regardless of the type
of plan.
16
<PAGE>
FOR A CORPORATION ADOPTING A NEW PLAN
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned secretary of____________________________________________________
(Name of Corporation)
(the corporation) hereby certifies that the following resolutions were duly
adopted by the board of directors of the corporation on ________________________
(Date of Adoption)
and that such resolutions have not been modified or rescinded as of the date
hereof:
"RESOLVED, that the form of ____________________________________________________
(Name of Plan)
effective_______________________________, is hereby approved and adopted and
(Effective Date of Plan)
that the proper officers of the corporation are hereby authorized and directed
to execute and deliver to the trustee of the plan one or more counterparts of
the plan."
"RESOLVED FURTHER, that for purposes of the limitations on contributions and
benefits under the plan, prescribed by section 415 of the Internal Revenue Code,
the limitation year shall be a 12- month period ending on_________________.
"RESOLVED FURTHER, that the proper officers of the corporation shall act within
a reasonable period of time to notify the employees of the corporation of the
adoption of the
________________________________________________________________________________
(Name of Plan)
by delivering to each employee a copy of the summary description of the plan."
The undersigned further certifies that attached hereto as Exhibit A is a true
copy of
________________________________________________________________________________
(Name of Plan)
adopted in the foregoing resolution.
Secretary_________________________________________
Date:_____________________________________________
(affix corporate seal)
17
<PAGE>
FOR A CORPORATION AMENDING AN EXISTING PLAN
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned secretary of ___________________________________________________
(Name of Corporation)
(the corporation) hereby certifies that the following resolutions were duly
adopted by the board of directors of the corporation on ________________________
(Date of Adoption)
and that such resolutions have not been modified or rescinded as of the date
hereof.
"RESOLVED, that the form of ____________________________________________________
(Name of Plan)
effective __________________________________, is hereby amended and restated
(Original Effective Date of Plan)
in its entirety to be effective__________________________ in the form presented
(Effective Date of Amendment)
to this meeting, is hereby approved and adopted and that the proper officers of
the corporation are hereby authorized and directed to execute and deliver to the
trustee of the plan one or more counterparts of the plan."
"RESOLVED FURTHER, that the plan shall henceforth be named _____________________
________________________________________.
(Name of plan as amended)
"RESOLVED FURTHER, that for purposes of the limitations on contributions and
benefits under the plan, prescribed by section 415 of the Internal Revenue Code,
the limitation year shall be a 12-month period ending on _____________________."
"RESOLVED FURTHER, that the proper officers of the corporation shall act within
a reasonable period of time to notify the employees of the corporation of the
amendment and restatement of the
________________________________________________________________________________
(Name of Plan)
by delivering to each employee a copy of the summary description of the plan."
The undersigned further certifies that attached hereto as Exhibit A is a true
copy of
________________________________________________________________________________
(Name of Plan)
amended and restated in the foregoing resolutions.
Secretary______________________________________________
Date:__________________________________________________
(affix corporate seal)
18
<PAGE>
ADOPTION AGREEMENT FOR RESOURCES TRUST COMPANY
STANDARDIZED 401(K) PROFIT SHARING PLAN AND TRUST
(WITH PAIRING PROVISIONS)
- --------------------------------------------------------------------------------
CAUTION: The failure to properly fill out this Adoption Agreement may result
in disqualification of the Plan.
The undersigned Employer adopts the Resources Trust Company Standardized
401(k) Profit Sharing Plan for those Employees who shall qualify as
Participants hereunder, to be known as the
A1____________________________________________________________
(Enter Plan Name)
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
EMPLOYER INFORMATION
B1 Name of Employer__________________________________________
B2 Address___________________________________________________
___________________________________________________
City State ZIP
Telephone_________________________________________________
B3 Employer Identification Number____________________________
B4 Date Business Commenced___________________________________
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. ( ) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other________________________________
AND, is the Employer a member of ...
g. a controlled group? ( ) Yes ( ) No
h. an affiliated service group? ( ) Yes ( ) No
B6 NAME(S) OF TRUSTEE(S)
a.________________________________________________________
b.________________________________________________________
c.________________________________________________________
B7 TRUSTEES' ADDRESS
a.( ) Use Employer Address
b.( ) ____________________________________________________
Street
____________________________________________________
City State ZIP
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE
a. ( ) state of_________________or b.( ) commonwealth of
____________________________and this Plan and Trust shall be governed
under the same.
19
<PAGE>
B9 EMPLOYER FISCAL YEAR (means the 12 consecutive-month period):
Commencing on
a._______________________________(e.g., January 1st) and ending on
month day
b._______________________________
month day
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the Resources Trust Company Standardized
401(k) Profit Sharing Plan and Trust shall:
a.( ) establish a new Plan and Trust effective as of__________________
(hereinafter called the "Effective Date").
b.( ) constitute an amendment and restatement in its entirety of a
previously established qualified Plan and Trust of the Employer
which was effective______________________(hereinafter called
the "Effective Date").
Except as specifically provided in the Plan, the effective date of
this amendment and restatement is________________________. (For
TRA '86 amendments, enter the first day of the first Plan Year
beginning in 1989).
C2 PLAN YEAR means the 12 consecutive-month period:
Commencing on
a.________________________________ (e.g., January 1st) and ending on
b.________________________________
IS THERE A SHORT PLAN YEAR?
c.( ) No
d.( ) Yes,begining________________
and ending___________________.
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a.________________________________
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a.( ) 001
b.( ) 002
c.( ) 003
d.( ) Other________________________
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to appoint
an Administrator. If none is named, the Employer will become the
Administrator.)
a.( ) Employer (Use Employer Address)
b.( ) Name__________________________________________
Address_______________________________________
______________________________________________
City State ZIP
Telephone_____________________________________
Administrator's I.D.Number____________________
20
<PAGE>
C6 PlAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. ( ) Employer(Use Employer Address)
b. ( ) Name_____________________________________________
Address____________________________________________________
City State ZIP
ELIGIBILITY, VESTING AND RETIREMENT AGE
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer, any Affiliated Employer, and any leased
employees deemed to be Employees under Code Section 414(n) or 414(o).
D1 ELIGIBLE EMPLOYEES(Plan Section 1.15)shall mean all Employees who have
satisfied the eligibility requirements except those checked below:
a. ( ) N/A. No exclusions
b. ( ) Employees whose employment is governed by a collective bargaining
agreement between the Employer and "employee representatives"under
which retirement benefits were the subject of good faith
bargaining. For this purpose, the term "employee representatives"
does not include any organisation more than half of whose members
are employees who are owners, officers, or executives of the
Employer.
c. ( ) Employees who are nonresident aliens who received no earned income
(within the meaning of Code Section 911(d)(2)) from the Employer
which constitutes income from sources within the United States
(within the meaning of Code Section 861 (a)(3)).
D2 HOURS OF SERVICE (Plan Section 1.31) will be determined on the basis of the
method selected below. Only one method may be selected. The method selected
will be applied to all Employees covered under the Plan.
a. ( ) On the basis of actual hours for which an Employee is paid or
entitled to payment.
b. ( ) On the basis of days worked. An Employee will be credited with ten
(10) Hours of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be credited forty-
five (45) Hours of Service if under the Plan such Employee would be
credited with at least (1) Hour of Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An Employee will be
credited with ninety-five (95) Hours of Service if under the Plan
such Employee would be credited with at least one (1) Hour of
Service during the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be credited with
one hundred ninety (190) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of Service
during the month.
21
<PAGE>
D3 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
Check either a. OR b. and c., and if applicable, d.
Any Eligible Employee will be eligible to participate in the Plan if
such Eligible Employee has satisfied the service and age requirements,
if any, specified below:
a. ( ) NO AGE OR SERVICE REQUIRED
b. ( ) SERVICE REQUIREMENT (may not exceed 1 year)
1.( ) None
2.( ) 1/2 Year of Service
3.( ) 1 Year of Service
4.( ) Other_____________________
c. ( ) AGE REQUIREMENT (may not exceed 21)
1.( ) N/A - No Age Requirement
2.( ) 20 1/2
3.( ) 21
4.( ) Other_____________________
d. ( ) FOR NEW PLANS ONLY-Regardless of any of the above age or
service requirements, any Eligible Employee who was
employed on the Effective Date of the Plan shall be eligible
to participate hereunder and shall enter the Plan as of such
date.
NOTE: If the Year(s) of Service selected is or includes a fractional year, an
Employee will not be required to complete any specified number of Hours of
Service to receive credit for such fractional year. If expressed in
Months of Service, an Employee will not be required to complete any
specified number of Hours of Service in a particular month.
D4 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2) An Eligible
Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met he
requirements, if he met the requirements in the first 6
months of the Plan Year, or as of the first day of the next
succeeding Plan Year if he met the requirements in the last
6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month or the
first day of the Plan Year coinciding with or next following
the date on which he met the requirements.
d. ( ) the first day of the Plan Year next following the date on
which he met the requirements. (Eligibility must be 1/2 Year
of Service or less and age 20 1/2 or less.)
e. ( ) the first day of the month coinciding with or next following
the date on which he met the requirements.
f. ( ) Other:______________________________________________________
provided that an Employee who has satisfied the maximum age
and service requirements that are permissible in Section D3
above and who is otherwise entitled to participate, shall
commence participation no later than the earlier of (a) 6
months after such requirements are satisfied, or (b) the
first day of the first Plan Year after such requirements are
satisfied, unless the Employee separates from service before
such participation date.
D5 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be as
follows:
a. ( ) 100% upon entering Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c.( ) 0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 year 0% e.( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
22
<PAGE>
f. ( ) 1 year 20% g.( ) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h.( ) Other - Must be at least as liberal as either c or g above.
Years of Service Percentage
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
D6 FOR AMENDED PLANS (Plan Section 6.4(f)). If the vesting schedule has been
amended to a less favorable schedule, enter the pre-amended schedule below:
a. ( ) Vesting schedule has not been amended or amended schedule is more
favorable in all years.
b. ( ) Years of Service Percentage
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
______________________ _______________________
c. ( ) N/A
D7 TOP-HEAVY VESTING (Plan Section 6.4 (c)). If this Plan becomes a Top-Heavy
Plan, the following vesting schedule, based on number of Years of Service,
for such Plan Year and each succeeding Plan Year, whether or not the Plan is
a Top-Heavy Plan, shall apply and shall be treated as Plan amendment
pursuant to this Plan. Once effective, this schedule shall also apply to any
contributions made prior to the effective date of Code Section 416 and/or
before the Plan became a Top-Heavy Plan.
a. ( ) N/A (D5a, b, d, e or f was selected)
b. ( ) 0-1 year 0% c.( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of any Participant
who does not have an Hour of Service after the Plan has initially become
top heavy. Such Participant's Account balance attributable to Employer
contributions and Forfeitures will be determined without regard to this
section.
D8 VESTING (Plan Section 6.4(h)). In determining Years of Service for vesting
purposes, Years of Service attributable to the following shall be EXCLUDED:
a. ( ) Service prior to the Effective Date of the Plan or a predecessor
plan.
b. ( ) N/A
c. ( ) Service prior to the time an Employee attained age 18.
d. ( ) N/A
NOTE: If the predecessor Employer maintained this qualified Plan, then Years of
Service with such predecessor Employer shall be recognized pursuant to
Section 1.74 and b. must be marked.
D9 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. ( ) No.
b. ( ) Yes: Years of Service with _______________________________________
shall be recognized for the purpose of this Plan.
23
<PAGE>
D10 NORMAL RETIREMENT AGE ("NRA")(Plan Section 1.42) means:
a. ( ) the date a Participant attains his________birthday. (not to
exceed 65th)
b. ( ) the later of the date a Participant attains his________
birthday (not to exceed 65th) or the c.________(not to exceed
5th) anniversary of the first day of the Plan Year in which
participation in the Plan commenced.
D11 NORMAL RETIREMENT DATE (Plan Section 1.43) shall commence:
a. ( ) as of the Participant's "NRA".
OR (must select b. or c. AND 1. or 2.)
b. ( ) as of the first day of the month ...
c. ( ) as of the Anniversary Date ...
1.( ) coinciding with or next following the Participant's "NRA".
2.( ) nearest the Participant's "NRA".
D12 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. ( ) No Early Retirement provision provided.
b. ( ) date on which a Participant ...
c. ( ) first day of the month coinciding with or next following
the date on which a Participant ...
d. ( ) Anniversary Date coinciding with or next following the date on
which a Participant
AND, if b, c or d was selected ...
1.( ) attains his_____________________birthday and has
2.( ) completed at least______________Years of Service
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any Participant means:
1. ( ) "415 Compensation."
2. ( ) Compensation reportable as wages on Form W-2.
b. COMPENSATION shall be
1. ( ) actually paid (must be selected if Plan is integrated)
2. ( ) accrued
c. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
1. ( ) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending within the Plan
Year.
3. ( ) the Calendar Year coinciding with or ending within the Plan
Year.
d. HOWEVER, for an Employee's first year of participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. ( ) the date the Participant entered the Plan.
e. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. ( ) shall 2. ( ) shall not
include compensation which is not currently includable in the
Participant's gross income by reason of the application of Code
Sections 125, 402(a)(8), 402(h)(1) (B), or 403(b).
NOTE: The Limitation Year shall be the same as the year on which Compensation
is based.
E2 SALARY REDUCTION ARRANGEMENT-ELECTIVE CONTRIBUTION (Plan Section 11.2). Each
Employee may elect to have his Compensation reduced by:
a. ( ) ____________%
b. ( ) up to___________%
c. ( ) from______% to_______%
d. ( ) up to the maximum percentage allowable not to exceed the
limits of Code Sections 401(k), 404 and 415.
24
<PAGE>
AND ...
e. ( )A Participant may elect to commence salary reductions as of
__________________________________________________________
(ENTER AT LEAST ONE DATE OR PERIOD). A Participant may modify the
amount of salary reductions as of_______________________________
______________________________(ENTER AT LEAST ONE DATE OR
PERIOD).
AND ... Shall cash bonuses paid within 2 1/2 months after the end of the
Plan Year be subject to the salary reduction election?
f. ( ) Yes
g. ( ) No
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION (Plan Section
11.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions equal to______%
(e.g. 50%) of the Participant's salary reductions.
c. ( ) The Employer may take matching contributions equal to a
discretionary percentage, to be determined by the Employer, of the
Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal to the sum of
_______% of the portion of the Participant's salary reduction which
does not exceed________% of the Participant's Compensation plus
_______% of the portion of the Participant's salary reduction
which exceeds _______% of the Participant's Compensation but does
not exceed _____% of the Participant's Compensation.
e. ( ) The Employer shall make matching contributions equal to the
percentage determined under the following schedule:
<TABLE>
<CAPTION>
Participant's Total Matching Percentage
Years of Service
<S> <C>
________________________ ________________________
________________________ ________________________
________________________ ________________________
</TABLE>
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. ( ) Matching contributions:
g.( ) shall
h.( ) shall not
be used in satisfying the deferral percentage tests. (If used, full
vesting and restrictions on withdrawals will apply and the match will be
deemed to be an Elective Contribution).
i. ( ) For Plan Years beginning prior to 1990, a Year of Service
( ) N/A
( ) shall
j.( ) shall not
be required in order to share in the matching contributions. For Plan
Years beginning after 1989, a Year of Service shall not be required in
order to share in the matching contributions.
k. ( ) in determining matching contributions, only salary reductions up
to______% of a Participant's Compensation will be matched.
l.( ) N/A
m. ( ) The matching contribution made on behalf of a Participant for any
Plan Year shall not exceed $_________.
n.( ) N/A
o. ( ) Matching contributions shall be made on behalf of
1.( ) all Participants.
2.( ) only Non-Highly Compensated Employees.
25
<PAGE>
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan Section
11.1(c))
a. ( ) No.
b. ( ) Yes, the Employer may make a discretionary contribution out
of its current or accumulated Net Profit.
c. ( ) Yes, the Employer may make a discretionary contribution which
is not limited to its current or accumulated Net Profit.
IF YES (b,or c, is selected above), the Employer's discretionary
contribution shall be allocated as follows
d. ( ) FOR A NON-INTEGRATED PLAN: The Employer discretionary
contribution for the Plan Year shall be allocated in the
same ratio as each Participant's Compensation bears to the
total of such Compensation of all Participants.
e. ( ) FOR AN INTEGRATED PLAN: The Employer discretionary
contribution for the Plan Year shall be allocated in
accordance with Plan Section 4.3(b)(2) based on a
Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage Base.
h. ( ) _______% of the Taxable Wage Base (See Note).
i. ( ) $___________(See Note).
NOTE: If the plan is Top Heavy for any plan year, a 3% employer contribution
may be required.
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if h. or i. (above) is more than 20% and less than or equal to
80% of the Taxable Wage Base.
2. 5.4% if h. or i. (above) is less than 100% and more than 80% of the
Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))
a. ( ) N/A. There shall be no Qualified Non-Elective Contributions
except as provided in Sections 11.5(b) and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective Contribution
equal to _______% of the total Compensation of all
Participants eligible to share in the allocations.
c. ( ) The Employer may make a Qualified Non-Elective Contribution
in an amount to be determined by the Employer.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions
shall be ...
1.( ) N/A. No contributions other than matching contributions or
non-matching contributions are fully vested.
2.( ) added to the Employer's contribution under the Plan.
3.( ) allocated to all Participants eligible to share in the
allocations in the same proportion that each Participant's
Compensation for the year bears to the compensation of all
participants for such year.
b. Forfeitures of matching contributions shall be ...
1.( ) N/A. No matching contributions or match is fully vested.
2.( ) used to reduce the Employer's matching contribution.
3.( ) allocated to all Participants eligible to share in the
allocations in proportion to each such Participant's
Compensation for the year.
4.( ) allocated to all Non-Highly Compensated Employees eligible
to share in the allocations in proportion to each such
Participant's Compensation for the year.
E7 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan Year for
reasons other than death, Total and Permanent Disability or
retirement:
a. With respect to the allocation of Employer Non-Elective
Contributions (other than matching), Qualified Non-Elective
Contributions, and Forfeitures for Plan Years Beginning
prior to 1990:
26
<PAGE>
1.( ) N/A
2.( ) shall share in such allocations provided such Participant
completed a Year of Service.
3.( ) shall not share in such allocations regardless of Hours of
Service.
Note: The Plan provides that for Plan Years beginning after 1989, a
terminated Participant shall share in such allocations provided such
Participant completed more than 500 Hours of Service.
b. With respect to the allocation of Employer Matching Contributions, a
Participant:
1. For Plan Year beginning after 1989.
i. ( ) N/A, Plan does not provide for matching
contributions.
ii. ( ) shall share in the allocations,regardless of Hours
of Service.
iii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
2. For Plan Years Beginning before 1990,
i. ( ) N/A, new Plan, or same as Plan Years beginning
after 1989.
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii. ( ) shall share in the allocations provided such
Participant completed a Year of Service.
E8 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earnings with respect to amounts contributed to the
Plan after the previous Anniversary Date or other valuation date
shall be determined ...
a. ( ) by using a weighted average.
b. ( ) by treating one-half of all such contributions as being a
part of the Participant's nonsegregated account balance as
of the previous Anniversary Date or valuation date.
c. ( ) by using the method specified in Section 4.3(c).
d. ( ) other__________________________________.
E9 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
NOTE: If a.3 below is selected, an Employer may not rely on the opinion
letter issued by the Internal Revenue Service that this Plan is qualified
under Code Section 401.
a. If any Participant is or was covered under another qualified
defined contribution plan maintained by the Employer, other than
a Master or Prototype Plan, or if the Employer maintains a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section 415(1)(2),
under which amounts are treated as Annual Additions with respect
to any Participant in this Plan:
1.( ) N/A
2.( ) The provisions of Section 4.4(b) of the Plan will apply as
if the other plan were a Master or Prototype Plan.
3.( ) Provide the method under which the Plans will limit total
Annual Additions to the Maximum Permissible Amount, and
will properly reduce any Excess Amounts, in a manner that
precludes Employer discretion:
________________________________________________________
________________________________________________________
________________________________________________________
b. If the Participant is or ever has been a Participant in a defined
benefit plan (other than a plan that is paired with this Plan)
maintained by the Employer:
1.( ) N/A.
2.( ) In any Limitation Year, the Annual Additions credited to
the Participant under this Plan may not cause the sum of
the Defined Benefit Plan Fraction and the Defined
Contribution Fraction to exceed 1.0. If the Employer's
contribution that would otherwise be made on the
Participant's behalf during the limitation year would cause
the 1.0 limitation to be exceeded, the rate of contribution
under this Plan will be reduced so that the sum of the
fractions equals 1.0. If the 1.0 limitation is exceeded
because of an Excess Amount, such Excess Amount will be
reduced in accordance with Section 4.4(a)(4) of the Plan.
Except, however, if the plans are standardized paired
plans, the rate of accrual in the defined benefit plan will
be reduced to the extent necessary so that the sum of the
Defined Contribution Fraction and the Defined Benefit
Fraction will equal 1.0.
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<PAGE>
3. ( ) Provide the method under which the Plans involved will
satisfy the 1.0 limitation in a manner that precludes
Employer discretion:
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
E10 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall:
a. ( ) be made pursuant to the election of the Participant or
beneficiary.
b. ( ) begin within 1 year of death for a designated beneficiary and
be payable over the life (or over a period not exceeding the
life expectancy) of such beneficiary, except that if the
beneficiary is the Participant's spouse, begin within the
time the Participant would have attained age 70 1/2.
c. ( ) be made within 5 years of death for all beneficiaries.
d. ( ) other ______________________________________________________.
E11 LIFE EXPECTANCIES (PlanSection 6.5(f)) for minimum distributions required
pursuant to Code Section 401(a)(9) shall:
a. ( ) be recalculated at the Participant's election.
b. ( ) be recalculated.
c. ( ) not be recalculated.
E12 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section
6.4(a) of the Plan shall not be made unless the following conditions
have been safisfied:
a. ( ) N/A. Immediate distributions may be made at Participant's
election.
b. ( ) The Participant has incurred _____1-Year Break(s) in Service.
c. ( ) The Participant has reached his or her Early or Normal
Retirement Age.
d. ( ) Distributions may be made at the Participant's election on or
after the Anniversary Date following termination of
employment.
e. ( ) Other ______________________________________________________.
E13 FORM OF DISTRIBUTIONS (Plan Section 6.5 and 6.6)
Distributions under the Plan may be made...
a. 1.( ) in lump sums.
2.( ) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1.( ) no annuities are allowed (avoids Joint and Survivor rules).
2.( ) annuities are allowed (Plan Section 6.13 shall not apply).
c. AND may be made in ...
1.( ) cash only (except for insurance or annuity contracts).
2.( ) cash or property.
NOTE: b.1. above may not be elected if this is an amendment to a plan which
permitted annuities as a form of distribution or if this Plan has
accepted a plan to plan transfer of assets from a plan which permitted
annuities as a form of distribution.
28
<PAGE>
TOP-HEAVY REQUIREMENTS
F1 TOP-HEAVY DUPLICATIONS (Plan Section 4.3(i)). When a Non-Key Employee is a
Partcipant in this Plan and a Defined Benefit Plan maintained by the
Employer, indicate which method shall be utilized to avoid duplication of
top-heavy minimum benefits.
a.( ) N/A. The Employer does not maintain a Defined Benefit Plan.
b.( ) A minimum, non-integrated contribution of 5% of each Non-Key
Employee's total Compensation shall be provided in this Plan, as
specified in Section 4.3(i). (The Defined Benefit and Defined
Contirbution Fractions will be computed using 100% if this choice is
selected.)
c.( ) A minimum, non-integrated contribution of 7 1/2% each Non-Key
Employee's total Compensation shall be provided in this Plan, as
sepcified in Section 4.3(i).
d.( ) Specify the method under which the Plans will provide top-heavy
minimum benefits for Non-Key Employees that will prelude Employer
discretion and avoid inadvertent omissions, including any
adjustments required under Code Section 415(e):
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
NOTE: If d. above is selected, an Employer may not rely on the opinion
letter issued by the Internal Revenue Service that this Plan is qualified
under Code Section 401.
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top-Heavy purposes
where the Employer maintains a Defined Benefit Plan in addition to this
Plan, shall be based on:
a.( ) N/A. The Employer does not maintain a defined benefit plan.
b.( ) Interest Rate:____________________________________
Mortality Table:__________________________________
F3 TOP-HEAVY DUPLICATIONS: Employer maintaining two (2) or more Defined
Contribution Plans (other than paired plans).
a.( ) N/A.
b.( ) A minimum, non-integrated contribution of 3% of each Non-Key
Employee's total Compensation shall be provided in the Money Purchase
Plan (or other plan subject to Code Section 412), where the Employer
maintains two (2) or more non-paired Defined Contribution Plans.
c.( ) Specify the method under which the Plans will provide top-heavy
minimum benefits for Non-Key Employees that will preclude Employer
discretion and avoid inadvertent omissions, including and adjustments
required under Code Section 415(e):
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
F4 IS THIS A PAIRED PLAN?
a. ( ) Yes. Name the Plan(s) with which this is paired:
______________________________________________________________________
b. ( ) No or N/A.
29
<PAGE>
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS(Plan Section 7.4)
a. ( ) Yes, loans may be made up to $50,000 or 1/2 Vested interest.
b. ( ) No, loans may not be made.
if YES ,(check all that apply)...
c. ( ) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial necessity.
e. ( ) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of Vested
interest. (If selected, plan may need security in addition
to Vested interest.)
NOTE: Department of Labor Regulations require the adoption of a separate written
loan program setting forth the requirements outlined in Plan Section
7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are permitted for the
interest in any one or more accounts.
a. ( ) Yes, regardless of the Participant's Vested interest in the
Plan.
b. ( ) Yes, but only with respect to the Participant's Vested
interest in the Plan.
c. ( ) Yes, but only with respect to those accounts which are 100%
Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. ( ) Yes, transfers from qualified plans (and rollovers) will be
allowed.
b. ( ) No, transfers from qualified plans (and rollovers) will not
be allowed.
AND, transfers shall be permitted...
c. ( ) from any employee, even if not a Participant.
d. ( ) from Participants only.
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.7)
a. ( ) Yes, Voluntary Contributions are allowed subject to the
limits of Section 4.10.
b. ( ) No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to strict discrimination rules.
G5 HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and 11.8)
a. ( ) Yes, from any accounts up to the vested balance.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account only.
d. ( ) No.
NOTE: Distributions from a Participant's Elective Account are limited to the
portion of such account attributable to such Participant's Deferred
Compensation and earnings attributable thereto up to December 31, 1988.
Also, hardship distributions are not permitted from a Participant's
Qualified Non-Elective Account.
30
<PAGE>
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. ( ) If a Participant has reached the age of _________, distributions
may be made, at the Participant's election, from any accounts up to
the vested balance without requiring the Participant to terminate
employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions are not permitted prior to age 59 1/2 from a Participant's
Qualified Non-Elective Account, or from a Participant's Elective Account
except in the case of a Hardship Distribution under G5.
G7 LIFE INSURANCE (Plan Section 7.2(d)) may be purchased with Plan
contributions.
a. ( ) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. ( ) Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance shall be subject
to the following limitations (select all that apply):
d. ( ) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face amount of $_______.
f. ( ) each additional Contract shall have a minimum face amount of
$_________.
g. ( ) the Participant has completed ____ Years of Service.
h. ( ) the Participant has completed ____ Years of Service while a
Participant in the Plan.
i. ( ) the Participant is under age ____ on the Contract issue date.
j. ( ) the maximum amount of all Contracts on behalf of a Participant
shall not exceed $__________.
k. ( ) the maximum face amount of life insurance shall be $___________.
An Employer who has ever maintained or who later adopts any plan
in addition to the Plan (including a welfare benefit fund, as
defined in Code Section 419(e), which provides post-retirement
medical benefits allocated to separate accounts for Key Employees,
as defined in Code Section 419A(d)(3) or an individual medical
account, as defined in Code Section 415(1)(2)) (other than paired
plan #03-002, #03-004, #02-003 or #02-004) may not rely on the
opinion letter issued by the National Office of the Internal
Revenue Service as evidence that this Plan is qualified under Code
Section 401. If the employer who adopts or maintains multiple
plans wishes to obtain reliance that the Employer's plan(s) are
qualified, application for a determination letter should be made
to the appropriate key district director of Internal Revenue.
This Adoption Agreement may be used only in conjunction with
basic plan document #03. This Adoption Agreement and the
basic Plan document shall together be known as Resources
Trust Company Standardized 401(k) Profit Sharing Plan #03-
006.
The adoption of this Plan, its qualification by the IRS, and
the related tax consequences are the responsibility of the
Employer and its independent tax and legal advisors.
Resources Trust Company will notify the Employer of any
amendments made to the Plan or of the discontinuance or
abandonment of the Plan provided this Plan has been
acknowledged by Resources Trust Company or its authorized
representative. Furthermore, in order to be eligible to
receive such notification, we agree to notify Resources
Trust Company of any charge in address.
31
<PAGE>
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to
be executed on this______day of__________ 19 ___. Furthermore, this
Plan may not be used unless acknowledged by Resources Trust Company or
its authorized representative.
EMPLOYER: TRUSTEE(S):
_____________________ ________________________
(enter name) TRUSTEE SIGNATURE
By:__________________ ________________________
TRUSTEE SIGNATURE
PARTICIPATING EMPLOYER: ________________________
TRUSTEE SIGNATURE
_____________________
(enter name)
By:__________________
This Plan may not be used, an shall not be deemed to be a Prototype
Plan, unless an authorized representative of Resources Trust Company
has acknowledged the use of the Plan. Such acknowledgment is for
administerial purposes only. It acknowledges that the Employer is
using the Plan but does not represent that this Plan, including the
choices selected on the Adoption Agreement, has been reviewed by a
representative of the sponsor or constitutes a qualified retirement
plan.
RESOURCES TRUST COMPANY
By: ________________________
With regard to any questions regarding the provisions of the Plan,
adoption of the Plan, or the effect of an opinion letter from the IRS,
call or write (this information must be completed by the sponsor of
this Plan or its designated representative):
Name Resources Trust Company
------------------------------------------
Address P.O. Box 3485
----------------------------------------
Englewood, CO 80155-3485
---------------------------------------------
Telephone 303 694_2917
--------------------------------------
32
<PAGE>
AMENDMENT NUMBER ONE TO
RESOURCES TRUST COMPANY
DEFINED CONTRIBUTION PLAN AND TRUST
- --------------------------------------------------------------------------------
NOTE: You will need to execute this amendment (page 39) to adopt a safe harbor
definition of compensation as described opposite. You may also elect to
have all matching contributions related to excess deferrals under the
plan forfeited rather than distributed (page 39). If you execute the
amendment, you should also complete the corporate resolution (page 40).
Return a copy to Resources Trust.
Resources Trust Company Defined Contribution Plan and Trust is hereby amended as
follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the following as
elected in the Adoption Agreement. However, compensation for any Self-Employed
Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051 and 6052
(Wages, Tips and Other Compensation Box on Form W2). Compensation is
defined as wages as defined in section 3401(a) and all other payments of
compensation to an employee by the employer (in the course of the
employer's trade or business) for which the employer is required to
furnish the employee a written statement under sections 6041(d) and
6051(a)(3) of the Code. Compensation must be determined without regard
to any rules under section 3401(a) that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in
section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within the
meaning of section 3401(a) for the purposes of income tax withholding at
the source but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
employer maintaining the plan to the extent that the amounts are
includible in gross income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits and reimbursements or other expense allowances under a non-
accountable plan (as described in 1.62-2(c)), and excluding the
following:
a. Employer contributions to a plan of deferred compensation which
are not includible in the employee's gross income for the taxable
year in which contributed, or employer contributions under a
simplified employee pension plan to the extent such contributions
are deductible by the employee, or any distributions from a plan
of deferred compensation;
b. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
c. Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of the
employee).
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of such amendment, Compensation means
compensation determined pursuant to the Plan then in effect.
2. Section 1.14 is amended in its entirety to read as follows:
33
<PAGE>
"Elective Contribution" means the Employer's contributions to the Plan that
are made pursuant to the Participant's deferral election pursuant to Section
11.2, excluding any such amounts distributed as "excess annual additions"
pursuant to Section 4.4. In addition, if selected in E3 of the Adoption
Agreement, the Employer's matching contribution shall or shall not be considered
an Elective Contribution for purposes of the Plan, as provided in Section
11.1(b). Elective Contributions shall be subject to the requirements of Sections
11.2(b) and 11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(3), the provisions of which are
specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year of
a Participant, the excess of the aggregate amount of such Participant's Deferred
Compensation and the elective deferrals pursuant to Section 11.2(f) actually
made on behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as an "annual addition"
pursuant to Section 4.4 when contributed to the Plan unless distributed to the
affected Participant not later than the first April 15th following the close of
the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section, Compensation
shall be Compensation paid and, if selected in the Adoption Agreement, shall
only be recognized as of an Employee's effective date of participation. If, in
connection with the adoption of this or any other amendment, the definition of
"414(s) Compensation" has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of such amendment, "414(s) Compensation"
means compensation determined pursuant to the Plan then in effect.
5. Section 1.27 ("415 Compensation") is amended by the addition of the following
paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then in effect.
6. Section 4.4(a)(4) and 4.4(a)(4)(i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or Section
4.5, the excess will be disposed of in one of the following manners,
as uniformly determined by the Plan Administrator for all Participants
similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess
Amount will be distributed to the Participant;
7. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the Adoption
Agreement. However, regardless of any selection made in the Adoption Agreement,
"415 Compensation" shall exclude compensation which is not currently includible
in the Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B), or 403(b).
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation year is
the compensation actually paid or made available during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant in a
defined contribution plan who is permanently and totally disabled (as defined
in section 22(e)(3) of the Internal Revenue Code) is the compensation such
participant would have received for the limitation year if the participant had
been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
8. Section 4.5(a) is amended in its entirety to read as follows:
34
<PAGE>
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
9. Sections 6.11 (a)(1) and (a)(4) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(4) Payment of tuition and related educational fees for the next 12 months
of post-secondary education for the Participant, his spouse, children, or
dependents;
10. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with respect
to distributions made after December 31, 1992, a Participant shall be permitted
to elect to have any "eligible rollover distribution" transferred directly to an
"eligible retirement plan" specified by the Participant. The Plan provisions
otherwise applicable to distributions continue to apply to the direct transfer
option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover distribution"
means any distribution other than a distribution of substantially equal periodic
payments over the life or life expectancy of the Participant (or joint life or
joint life expectancies of the Participant and the designated beneficiary) or a
distribution over a period certain of ten years or more. Amounts required to be
distributed under Code Section 401(a)(9) are not eligible rollover
distributions. The direct transfer option described in subsection (a) applies
only to eligible rollover distributions which would otherwise be includible in
gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan" means
an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section 501
(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the surviving
spouse after the Participant's death; however, distributions to the surviving
spouse may only be transferred to an individual retirement account or individual
retirement annuity. For purposes of subsection (a), a spouse or former spouse
who is the alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
11. Section 11.2(d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a Participant's
Deferred Compensation made under this Plan and all other plans, contracts or
arrangements of the Employer maintaining this Plan shall not exceed the
limitation imposed by Code Section 402(g), as in effect for the calendar year in
which such Plan Year began. If such dollar limitation is exceeded solely from
elective deferrals made under this Plan or any other Plan maintained by the
Employer, a Participant will be deemed to have notified the Administrator of
such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
12. Section 11.2(f) is amended by the addition of the following paragraph after
paragraph (f)(3) to read as follows:
Any distribution, under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred Compensation
which is matched and matching contributions which relate to such Deferred
Compensation. However, any such matching contributions which are not Vested
shall be forfeited in lieu of being distributed.
13. Section 11.2(f) is amended by the addition of the following paragraph as the
second to the last paragraph of such subsection:
35
<PAGE>
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
14. Section 11.5(c) is amended by the addition of the following paragraph as the
second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
15. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage" and the
amount of Excess Aggregate Contributions pursuant to Section 11.7(d), only
Employer matching contributions (excluding matching contributions forfeited or
distributed pursuant to Section 11.2(f), 11.5(a), or 11.7(a)) contributed to the
Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
16. Section 11.7(i) is amended by the addition of the following paragraph as the
second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section which is
made after August 15, 1991, such distribution shall not include any Income for
the "gap period". Further provided, for any distribution under this Section
which is made after August 15, 1991, the amount of Income may be computed using
a reasonable method that is consistent with Section 4.3(c), provided such method
is used consistently for all Participants and for all such distributions for the
Plan Year.
17. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12 months
of postsecondary education for the Participant, his spouse, children, or
dependents; or
18. Section 11.8(c)(1) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate and
heavy financial need of the Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
distribution.
19. Article XI is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as of
the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
36
<PAGE>
20. Section Ela. of the Adoption Agreement is amended in its entirety to read as
follows:
Compensation with respect to any Participant means:
1.( ) Wages, Tips and other Compensation (Box 10 on Form W2).
2 ( ) Section 3401(a) wages (wages for withholding purposes).
3 ( ) 415 Safe-harbor compensation.
AND Compensation
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits.
21. Section E3 of the 401(k) Adoption Agreement(s) is amended by the addition of
the following:
( ) Notwithstanding anything in the Plan to the contrary, all matching
contributions which relate to distributions of Excess Deferred
Compensation, Excess Contributions and Excess Aggregate Contributions
shall be Forfeited. (Select this option only if it is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE PLAN
IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION E1 OR E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be executed
on this__________________day of________________________________________________,
19_____________.
EMPLOYER: PARTICIPATING EMPLOYER:
____________________________ __________________________
(enter name) (enter name)
By:_________________________ By:_______________________
37
<PAGE>
CERTIFICATE OF CORPORATE RESOLUTION
- --------------------------------------------------------------------------------
The undersigned Secretary of_______________________________
_____________________________(the Corporation) hereby
certifies that the following resolutions were duly adopted
by the board of directors of the Corporation
on___________________________ and that such resolutions
have not been modified or rescinded as of the date hereof:
RESOLVED, that the amendment to the________________________
_____________________ (Name of Plan) is hereby approved and
adopted.
The undersigned further certifies that attached hereto as
Exhibit A is a true copy of the amendment approved and
adopted in the foregoing resolution.
____________________________________
(Secretary)
Date:______________________________
38
<PAGE>
THE EMPLOYER SHOULD MAINTAIN THIS FOR HIS FILES.
<TABLE>
<S> <C>
INTERNAL REVENUE SERVICE Department of the Treasury
Plan Description: Prototype Standardized Profit Sharing Plan with CODA
FFN: S0249410703-006 CASE: 9011226 EIN: 13-3155066
BPD: 03 Plan: 006 Letter Serial No: D248029a Washington, DC 20224
Person to Contact: Mr. Welby
RESOURCES TRUST COMPANY
Telephone Number: (202) 566-4111
8051 EAST MAPLEWOOD AVENUE
Refer Reply to: E:EP:Q:2
ENGLEWOOD CO 80111
Date: 06/13/90
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for officers, owners, or highly compensated
employees than for other employees. Except as stated below, the key District
Director will not issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if (1) an employer ever maintained another qualified plan for one or
more employees who are covered by this plan, other than a specified paired plan
within the meaning of section 7 of Rev. Proc. 89-9, 1989-6 I.R.B. 14; or (2)
after December 31, 1985, the employer maintains a welfare benefit fund defined
in Code section 419(e), which provides postretirement medical benefits allocated
to separate accounts for key employees as defined in Code section 419A(d)(3).
In such situations, the employer should request a determination as to whether
the plan, considered with all related qualified plans and, if appropriate,
welfare benefit funds, satisfies the requirements of Code section 401(a)(16) as
to limitations on benefits and contributions in Code section 415.
The plan identified above is not a replacement plan as defined in section 3.10
of Rev. Proc. 89-9, 1989-6 I.R.B 14. Therefore, an adopting employer may not
rely on this opinion letter to extend the remedial amendment period under
section 401(b) of the Code and regulations thereunder.
If you, the plan sponsor, have any questions concerning the IRS processing of
this case, please call the above telephone number. This number is only for use
of the plan sponsor. Individual participants and/or adopting employers with
questions concerning the plan should contact the plan sponsor. The plan's
adoption agreement must include the sponsor's address and telephone number for
inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief, Employee Plans Qualifications Branch
39
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY.]
40
<PAGE>
RESOURCES TRUST COMPANY
ADVANTAGE-PLUS 401(K) PLAN
CONTRIBUTION TRANSMITTAL FORM
<TABLE>
<CAPTION>
Name of Employer:______________________________________
For Payroll Period Ending:__________Pay Date:__________
Existing Participants:
____________________________________________________________________________________________________________________________________
Participant's Name Social Security Number Salary Employer Loan Payment Total Payroll
Deferral Matching Deduction
Contribution Contribution
<S> <C> <C> <C> <C> <C>
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
Sub Totals 1 __________ __________ + __________ + __________ = __________
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
Contribution Transmittal Form (continued)
____________________________________________________________________________________________________________________________________
Participant's Name Social Security Number Salary Employer Loan Payment Total Payroll
Deferral Matching Deduction
Contribution Contribution
<S> <C> <C> <C> <C> <C>
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
Sub Totals 2 __________ __________ + __________ + __________ = __________
</TABLE>
42
<PAGE>
Contribution Transmittal Form (Continued)
New Participants This Payroll Period:
<TABLE>
____________________________________________________________________________________________________________________________________
Participant's Name Social Security Date Date Salary Employer Loan Total
Number of of Deferral Matching Payment Payroll
Birth Employment Contribution Contribution Deduction
<S> <C> <C> <C> <C> <C> <C> <C>
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
Sub Totals 1 __________ __________ + __________ + __________ = __________
Sub Totals 2 __________ __________ + __________ + __________ = __________
Totals __________ __________ + __________ + __________ = __________
Total
amount
of check
Submitted by: ________________________________________________
Date: ________________________________________________________
</TABLE>
43
<PAGE>
IMPORTANT: PLEASE READ CAREFULLY
INSTRUCTIONS FOR TRANSFERRING YOUR EXISTING QUALIFIED PLAN TO
RESOURCES TRUST COMPANY
1. Complete and sign the Transfer Letter. A separate letter should be completed
for EACH plan participant if the plan is participant-directed. (If there is more
than one custodian of plan assets, a separate letter for each custodian should
be provided.) Pay special attention to completion of the asset section: your
instructions regarding liquidation and transfer in kind of plan assets. Sign,
date and signature guarantee the letter. Many trustees/custodians require your
signature be guaranteed by a commercial bank, New York Stock Exchange member
firm or a member of the Medallion Program. We require you to have your signature
guaranteed to avoid any delay due to this requirement by the current
trustee/custodian.
2. Attach a copy of the most recent statement from the current plan
trustee/custodian (for EACH participant's account if the plan is
participant-directed) listing all assets in the account to be transferred. Our
follow-up is based on the assets itemized in the Transfer Letter and statement.
3. Mail the Transfer Letter to Resources Trust Company with the plan
establishment documents. We will review and sign the letter, and forward it to
the current trustee/custodian. Do not mail the letter directly to the current
trustee/custodian as they will require RTC's acceptance of the transfer. Please
make a photocopy of the Transfer letter for your records; we will not return a
copy to you.
4. Allow at least 60 days for your current plan to be transferred to Resources
Trust Company. Please be patient, as transfers, especially reregistration of
assets, can take as long as six months. A request for liquidation of assets (in
which cash is sent to us) may take only a few weeks. This time element depends
on the current trustee's/custodian's transfer procedures. We will, of course,
follow up on a transfer every 30 days if it is not received in a timely manner.
If you are concerned about the present trustee's/custodian's processing time,
please contact them, as RTC has no authority on the account until we take
receipt of the assets. Your call may act as reinforcement to RTC's efforts to
facilitate the transfer.
5. Acknowledgment of our receipt of your transferred assets will be given to you
and your registered representative by means of a quarterly statement. Resources
Trust Company cannot be responsible for discrepancies between the information
provided and the assets received. Please advise us of any discrepancies in the
account within 30 days of receipt of our statement.
6. Note that any deviation from this transfer procedure may result in
considerable delay and possibly the return of the Transfer Letter. If you have
questions about transferring your plan, please contact our customer service
group for assistance before submitting the plan and Transfer Letter.
7. Note the following special considerations which may apply to your plan:
a.) If your plan has been self-trusteed, you may have to complete additional
documents in order to transfer your plan. You also may be in possession of stock
certificates, insurance or annuity policies or other physical assets which you
will need to turn over to Resources Trust Company for transfer. Please call our
customer service group if your plan has been self-trusteed or you have acted as
custodian for any of your plan's assets.
b.) Resources Trust Company will not accept custody of the following
investments:
. collectibles
. call and put options
. private placements
. commodities and futures contracts
. deeds of trust
. church bonds
. real estate, except through an acceptable investment
. foreign securities and currencies
. margin accounts
8. Resources Trust Company is a member of Midwest Securities Trust Company
(MSTC). MSTC-eligible securities can be delivered to Resources Trust Company by
the Automated Customer Account Transfer System (ACATS). When we receive your
completed RTC Transfer Letter with your original signature, we will determine if
your assets are MSTC-eligible and we will submit a Transfer Initiation Form to
Midwest for an ACATS transfer, if applicable. Please include a most recent
statement from the current plan trustee/custodian listing all assets in the
account to be transferred.
44
<PAGE>
TTEE TL
CODE
------------------
ACCT.#
ADVANTAGE-PLUS 401(k) PLAN TRANSFER LETTER
(Retain a copy for your files.)
- -----------------------------------------------------------------------------
Plan Name
- -----------------------------------------------------------------------------
Current Trustee/Custodian Current Trustee/Custodian Telephone Number
- -----------------------------------------------------------------------------
Street Address City State ZIP Code
- -----------------------------------------------------------------------------
Current Trustee/Custodian Account Number Participant Name
I have established a Qualified Plan Custodial Account with Resources Trust
Company and wish to terminate administration of the above-mentioned account with
you. Please transfer my account in accordance with the following instructions.
ASSETS TO BE TRANSFERRED
All assets to be transferred must be listed individually below. Please attach
copies of account statements showing assets to be transferred. If the assets are
certificates in your possession, you must send the actual certificates to RTC in
negotiable form with this letter.
<TABLE>
<CAPTION>
TRANSFER LIQUIDATE LIQUIDATE AT
IN KIND MATURITY MAT. DATE COMPLETE NAME OF ISSUE BALANCE
<S> <C> <C> <C> <C> <C> <C>
CERTIFICATES OF [ ] [ ] [ ]
DEPOSIT/SAVINGS [ ] [ ] [ ]
ACCOUNT [ ] [ ] [ ]
I understand that an early withdrawal penalty may be assessed if I request the
premature liquidation of a certificate of deposit and agree to accept the
penalty.
<CAPTION>
LIQUIDATE TRANSFER IN KIND COMPLETE NAME OF ISSUE NO. OF SHARES
<S> <C> <C> <C> <C>
[ ] [ ]
TRADED [ ] [ ]
SECURITIES OR [ ] [ ]
MUTUAL FUNDS* [ ] [ ]
[ ] [ ]
<CAPTION>
NAME OF ISSUE NO. OF SHARES
LIQUIDATE RE-REGISTER
<S> <C> <C> <C> <C>
LIMITED [ ] [ ]
PARTNERSHIPS [ ] [ ]
[ ] [ ]
<CAPTION>
SURRENDER CHANGE OF
OWNER/BENEFICIARY COMPLETE DESCRIPTION NO. OF SHARES
<S> <C> <C> <C> <C>
INSURANCE/ [ ] [ ]
ANNUITY [ ] [ ]
POLICIES [ ] [ ]
<CAPTION>
LIQUIDATE REREGISTER COMPLETE DESCRIPTION NO. OF UNITS
<S> <C> <C> <C> <C>
OTHERS (PLEASE [ ] [ ]
DESCRIBE) [ ] [ ]
[ ] [ ]
CASH
ACCOUNT $
</TABLE>
*Dividends and capital gains options should remain the same.
I certify that this is an accurate and complete listing of all assets held in
the above-referenced account. I acknowledge that RTC reserves the right to
review all assets being transferred prior to final acceptance as custodian of
this account. I acknowledge that penalties may be incurred due to the premature
liquidation of any assets listed above.
- -------- -----------------------------------------
Date Employer's Signature
- -------- -----------------------------------------
Date Participant's Signature (if applicable)
SIGNATURE GUARANTEE. Your resigning trustee/custodian may require your signature
be guaranteed by a member of the Medallion Program.
<PAGE>
TTEE TL
CODE
------------------
ACCT.#
DELIVERY INSTRUCTIONS
All Midwest Depository--eligible securities should be transferred via the
institutional delivery system to Resources Trust Company through Midwest
Securities Trust Company. Please reference the client's name and RTC account
number.
MIDWEST DEPOSITORY--ELIGIBLE SECURITIES:
Midwest Securities Trust Company
DTC #942
Agent ID #94099
Institutional ID #94099
Symbol c/o RSRCOG
FINS #90025
F/C Resources Trust Company
FBO: Client Name
Account #:
ADDRESS PHYSICAL
DELIVERIES, CHECKS AND
OVERNIGHT MAIL TO:
Resources Trust Company
8051 East Maplewood Avenue
Englewood, CO 80111
Tax ID #13-3155066
CATs, TIGRS, AND OTHER U.S.
GOVERNMENT BONDS, CDs AND
OTHER SAME-DAY FUNDS:
First Interstate Bank of Denver
Checking Account #1003115
DTC #2360
FR/CR Resources Trust Company
FBO: Client Name
Account #: Client RTC Account #
GNMA (PLEASE CONTACT RTC
PRIOR TO DELIVERY):
State Street Bank and Trust
PTC #SSCLR
For further credit to:
First Interstate Bank of Denver
QJ93
FR/CR Resources Trust Company
Account #: Client RTC Account #
(TO BE COMPLETED BY RESOURCES TRUST COMPANY)
RESOURCES TRUST COMPANY
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ACCEPTANCE: Resources Trust Company has established a Qualified Plan Custodial
Account for the above-named client and agrees to accept the assets of the said
plan. Should you have any questions or require further direction regarding this
transfer, please contact our customer service group at 800/525-9054 or
303/694-2917. Resources Trust Company (Tax ID# 13-3155066) is exempt from backup
withholding described in section 3406(a)(1)(c) of the Internal Revenue Code.
Authorized Signature:
----------------------------------------------------------
For Resources Trust Company Date
46
<PAGE>
[LOGO] RESOURCES TRUST
A SunAmerica Company
Qualified Plans Division
P.O. Box 3485
Englewood, CO 80155-3485
800/525-9054
303/694-2917
option 1, extension 401k
<PAGE>
EXHIBIT 99(B)16
SUNAMERICA MONEY MARKET FUND CLASS A
(FORMERLY, SUNAMERICA MONEY MARKET SECURITIES, INC.)
PERFORMANCE CALCULATION
-----------------------
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
YIELD:
Yield = d x 365
--- ---
7
Where: d = 7 days dividends
Yield = .000458229 x 365 = 4.89%
---------- ---
7
EFFECTIVE YIELD:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) /(365/7)/] - 1
Effective Yield = 5.01%
<PAGE>
SUNAMERICA MONEY MARKET FUND CLASS B
(FORMERLY, SUNAMERICA CASH FUND)
PERFORMANCE CALCULATION
-----------------------
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
YIELD:
Yield = d x 365
--- ---
7
Where: d = 7 days dividends
Yield = .000350671 x 365 = 4.19%
---------- ---
7
EFFECTIVE YIELD:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) /(365/7)/] - 1
Effective Yield = 4.28%
