-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CvubPtya3PUp6WgKDK+axrK/ufCAfZMy/kvP6WEPgCWJaKzcKYL7gS8WsqmMO/6u ffQwegVVouO98vKJCao2Vw== 0000054727-98-000037.txt : 19980604 0000054727-98-000037.hdr.sgml : 19980604 ACCESSION NUMBER: 0000054727-98-000037 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980603 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNAMERICA INC CENTRAL INDEX KEY: 0000054727 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 860176061 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-04618 FILM NUMBER: 98641349 BUSINESS ADDRESS: STREET 1: 1 SUNAMERICA CENTER CITY: LOS ANGELES STATE: CA ZIP: 90067-6022 BUSINESS PHONE: 3107726000 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD INC DATE OF NAME CHANGE: 19890515 FORMER COMPANY: FORMER CONFORMED NAME: KAUFMAN & BROAD BUILDING CO DATE OF NAME CHANGE: 19711006 11-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------- FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One): /X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996). For the fiscal year ended December 31, 1997 ------------------------------------------------ OR / / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED). For the transition period from____________________ to____________________ Commission File No. 1-4618 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: SunAmerica Profit Sharing and Retirement Plan ---------------------------------------------------------------- B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: SunAmerica Inc. 1 SunAmerica Center Los Angeles, CA. 90067-6022 ---------------------------------------------------------------- SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN ---------------------------- FINANCIAL STATEMENTS, SUPPLEMENTAL SCHEDULES AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 1997 AND 1996 ----------------------- SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN ----------------------------------- INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES PAGE - -------------------------------------------------------- ------ Report of Independent Accountants 2 Financial Statements: Statement of Net Assets Available for Plan Benefits with Fund 3 Information at December 31, 1997 and 1996 Statement of Changes in Net Assets Available for Plan Benefits 4-8 with Fund Information for the Year Ended December 31, 1997 Notes to the Financial Statements - December 31, 1997 and 1996 9-15 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes 16 Item 27d - Schedule of Reportable Transactions 17 All other schedules have been omitted because the required information is not applicable. REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Participants and Administrator of the SunAmerica Profit Sharing and Retirement Plan We have audited the accompanying statement of net assets available for benefits of the SunAmerica Profit Sharing and Retirement Plan (the Plan) as of December 31, 1997 and 1996, and the related statement of changes in net assets available for benefits for the year ended December 31, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1997 and 1996, and the changes in net assets available for benefits for the year ended December 31, 1997 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The additional information included in the supplemental schedules is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. Price Waterhouse LLP Los Angeles, California May 22, 1998 SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION AT DECEMBER 31, 1997 AND 1996 _______________________________ Assets: Investments, at fair value: 1997 1996 ----------- ------------ SUNAMERICA COMMON STOCK FUND $ 8,169,658 $ 4,982,626 SUNAMERICA SMALL COMPANY GROWTH FUND 728,701 143,131 SUNAMERICA BALANCED ASSETS FUND 349,443 9,952 FIDELITY MAGELLAN FUND 9,096,917 7,566,696 FIDELITY CONTRAFUND 3,208,330 1,405,879 FIDELITY EQUITY-INCOME FUND 5,518,328 3,951,394 FIDELITY GROWTH COMPANY FUND 10,848,574 9,583,848 FIDELITY INVESTMENT GRADE BOND FUND 1,196,767 1,027,884 FIDELITY GROWTH & INCOME PORTFOLIO 9,185,833 5,803,738 FIDELITY INTERMEDIATE BOND FUND 911,597 843,639 FIDELITY CAPITAL & INCOME FUND 108,387 42,947 FIDELITY MORTGAGE SECURITIES PORTFOLIO 849,764 858,902 FIDELITY OTC PORTFOLIO 1,200,128 911,079 FIDELITY U.S. EQUITY INDEX PORTFOLIO 1,693,848 487,023 FIDELITY OVERSEAS FUND 2,419,821 1,132,759 FIDELITY ASSET MANAGER 995,457 862,066 FIDELITY EMERGING MARKETS FUND 573,959 416,044 FIDELITY EMERGING GROWTH FUND 540,297 65,430 FIDELITY MANAGED INCOME PORTFOLIO 2,584,167 2,691,745 RETIREMENT MONEY MARKET PORTFOLIO 2,819,077 2,710,067 Participant loans 811,088 415,496 ----------- ------------- Net assets available for Plan benefits $63,810,141 $ 45,912,345 =========== ============= The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997
SunAmerica SunAmerica SunAmerica Small Company Balanced Fidelity Fidelity Common Stock Growth Assets Magellan Contra- Fund Fund Fund Fund Fund -------------- -------------- ------------- ----------- ----------- Participants' Contributions $ 817,998 $ 165,730 $ 20,784 $ 677,184 $ 257,618 Employer's Contributions 236,912 68,748 9,786 247,071 96,366 Interest & Dividends 59,894 75,490 35,566 587,580 290,081 Realized Gain (Loss) (18,751) (5,465) 1,323 154,898 24,164 Unrealized Gain (Loss) 2,425,375 (31,240) (21,201) 1,194,555 183,095 Loan Repayment 16,986 2,873 -- 21,739 2,551 Transfers Among Funds 51,624 330,038 297,804 (914,922) 1,041,480 ------------ ------------- ------------ ---------- ----------- Total Additions 3,590,038 606,174 344,062 1,968,105 1,895,355 Benefit Payments (403,006) (10,700) (4,520) (370,899) (71,104) Participant Loans -- (9,904) (51) (66,765) (21,756) Administrative Fee -- -- -- (220) (44) ------------ -------------- ------------ ---------- ----------- Net Change in Net Assets 3,187,032 585,570 339,491 1,530,221 1,802,451 Net Assets at Beginning of Year 4,982,626 143,131 9,952 7,566,696 1,405,879 ------------ ------------- ------------ ----------- ----------- Net Assets at End of Year $ 8,169,658 $ 728,701 $ 349,443 $9,096,917 $ 3,208,330 ============ ============================ ========== ===========
[FN] The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
Fidelity Fidelity Fidelity Fidelity Fidelity Equity Growth Investment Growth & Intermediate Income Company Grade Bond Income Bond Fund Fund Fund Portfolio Fund ------------ ------------- ------------- ---------- ----------- Participants' Contributions $ 428,149 $ 607,745 $ 61,224 $ 709,970 $ 96,698 Employer's Contributions 125,340 223,776 28,315 266,419 35,522 Interest & Dividends 296,465 1,046,559 63,189 395,226 55,590 Realized Gain (Loss) 90,779 199,260 (1,588) 220,621 (449) Unrealized Gain (Loss) 843,151 428,643 21,374 1,266,257 8,598 Loan Repayment 8,940 22,447 1,881 19,912 2,890 Transfers Among Funds 60,070 46,622 26,521 991,749 (91,810) ------------ ------------ ------------ ---------- ----------- Total Additions 1,852,894 2,575,052 200,916 3,870,154 107,039 Benefit Payments (248,375) (1,226,372) (29,055) (402,568) (16,086) Participant Loans (37,333) (83,896) (2,924) (85,056) (22,837) Administrative Fee (252) (58) (54) (435) (158) ------------ ------------ ------------ ----------- ----------- Net Change in Net Assets 1,566,934 1,264,726 168,883 3,382,095 67,958 Net Assets at Beginning of Year 3,951,394 9,583,848 1,027,884 5,803,738 843,639 ------------ ------------ ------------ ----------- ----------- Net Assets at End of Year $ 5,518,328 $ 10,848,574 $ 1,196,767 $ 9,185,833 $ 911,597 ============ ============ ============ =========== ===========
[FN] The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
Fidelity Fidelity Fidelity Capital & Mortgage Fidelity US Equity Fidelity Income Securities OTC Index Overseas Fund Portfolio Portfolio Portfolio Fund ------------ ------------- ------------- ---------- ----------- Participants' Contributions $ 70,534 $ 41,963 $ 229,222 $ 287,863 $ 250,765 Employer's Contributions 13,710 23,502 89,674 112,565 87,314 Interest & Dividends 5,331 58,015 83,546 30,067 131,774 Realized Gain (Loss) 609 (4,147) 8,742 47,207 183,564 Unrealized Gain (Loss) 4,905 11,463 (5,323) 199,395 (74,565) Loan Repayment 1,493 410 2,259 4,519 7,047 Transfers Among Funds (11,850) (2,396) (92,310) 563,368 787,419 ------------ ------------ ------------ ---------- ---------- Total Additions 84,732 128,810 315,810 1,244,984 1,373,318 Benefit Payments (5,800) (134,540) (23,096) (26,880) (70,814) Participant Loans (13,168) (3,378) (3,654) (11,163) (15,442) Administrative Fee (324) (30) (11) (116) -- ------------ ------------ ------------ ----------- ----------- Net Change in Net Assets 65,440 (9,138) 289,049 1,206,825 1,287,062 Net Assets at Beginning of Year 42,947 858,902 911,079 487,023 1,132,759 ------------ ------------ ------------ ----------- ----------- Net Assets at End of Year $ 108,387 $ 849,764 $ 1,200,128 $ 1,693,848 $ 2,419,821 ============ ============ ============ =========== ===========
[FN] The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
Fidelity Fidelity Fidelity Retirement Fidelity Emerging Emerging Managed Money Asset Markets Growth Income Market Manager Fund Fund Portfolio Portfolio ------------ -------------- --------------------------- ------------ Participants' Contributions $ 118,679 $ 68,001 $ 121,367 $ 154,339 $ 508,880 Employer's Contributions 49,327 28,282 43,114 82,964 112,184 Interest & Dividends 93,268 13,586 102,542 161,914 155,655 Realized Gain (Loss) 24,709 25,357 2,889 -- -- Unrealized Gain (Loss) 78,492 (143,514) (57,054) -- -- Loan Repayment 1,048 1,474 286 3,554 26,602 Transfers Among Funds (202,873) 184,824 270,701 (83,508) 49,249 ------------ ------------ ------------ ---------- ---------- Total Additions 162,650 178,010 483,845 319,263 852,570 Benefit Payments (21,301) (1,794) (6,764) (402,378) (651,338) Participant Loans (7,878) (12,552) (2,156) (23,969) (91,454) Administrative Fee (80) (5,749) (58) (494) (768) ------------ ------------ ------------ ----------- ----------- Net Change in Net Assets 133,391 157,915 474,867 (107,578) 109,010 Net Assets at Beginning of Year 862,066 416,044 65,430 2,691,745 2,710,067 ------------ ------------ ------------ ----------- ----------- Net Assets at End of Year $ 995,457 $ 573,959 $ 540,297 $ 2,584,167 $ 2,819,077 ============ ============ ============ =========== ===========
[FN] The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
Participant Loans TOTALS ------------ -------------- Participants' Contributions $ -- $ 5,694,713 Employer's Contributions -- 1,980,891 Interest & Dividends -- 3,741,338 Realized Gain (Loss) -- 953,722 Unrealized Gain (Loss) -- 6,332,406 Loan Repayment (94,632) 54,279 Transfers Among Funds 5,916 3,307,716 ------------ ------------ Total Additions (88,716) 22,065,065 Benefit Payments (31,028) (4,158,418) Participant Loans 515,336 -- Administrative Fee -- (8,851) ------------ ------------ Net Change in Net Assets 395,592 17,897,796 Net Assets at Beginning of Year 415,496 45,912,345 ------------ ------------ Net Assets at End of Year $ 811,088 $ 63,810,141 ============ ============
[FN] The accompanying notes are an integral part of these financial statements. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN - -------------------------------- The following brief description of the SunAmerica Profit Sharing and Retirement Plan (the Plan) is provided for general information purposes. Participants should refer to the Plan document for more complete information. 1. General - The Plan, as established July 1, 1982 and amended January 1, 1987, April 1, 1989, April 4, 1989, April 1, 1993, April 1, 1995, September 1, 1995, and November 1, 1996, is a defined contribution plan covering employees of SunAmerica Inc. and its subsidiaries (the "Company"). The Plan is written to be qualified under sections 401(a) and 401(k) of the Internal Revenue Code. 2. Participation - All individuals actively (including part-time employees, except those hired on a temporary basis) employed by the Company are eligible to participate in the Plan (the "Participants") on the first day of the month following completion of three months of service. 3. Contributions - Active Participants in the Plan may contribute from 1% to 10% of their eligible earnings to the Plan on a pretax basis. The Company makes a 100% matching contribution to the account of each Participant who contributes to the Plan, up to 4% of the Participant's eligible earnings. An active Participant may also contribute amounts received from another qualified plan ("Rollover Contributions"). In addition, at the end of the calendar year, the Board of Directors of the Company may, at its sole discretion, elect to make a contribution (the "Elective Employer Contribution") to the accounts of some or all of the Participants. 4. Vesting - Participants are fully vested in their own contributions to the Plan, Rollover Contributions, Elective Employer Contributions, and all income earned thereon. Participants become vested in employer matching contributions allocated to their accounts in accordance with the following rules: a. With respect to employer matching contributions made prior to January 1, 1986, Participants become fully vested upon reaching normal retirement age, becoming permanently disabled, completing 10 years of service, death, Plan termination, or being employed by the Company on or after January 1, 1989. b. With respect to employer matching contributions made on or after January 1, 1986, but before January 1, 1989, Participants are fully vested. c. With respect to employer matching contributions made on or after January 1, 1989, Participants become fully vested upon reaching normal retirement age, becoming permanently disabled, completing five years of service, death, or Plan termination. In addition, in connection with the reorganization of the Company, employer matching contributions for certain Participants employed by the Company in Atlanta, Georgia became fully vested as a result of the Participant having remained actively employed until their termination by the Company. d. With respect to Participants employed by certain subsidiaries on the respective dates such companies were acquired by the Company, the following apply: SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED) - ------------------------------------------- i. Financial Service Corporation (FSC) - All FSC Participants are fully vested in employer matching contributions as of November 1, 1997. With respect to employer matching contributions made after November 1, 1997, FSC Participants become fully vested upon reaching normal retirement age, becoming permanently disabled, completing five years of service, death, or Plan termination; ii. Imperial Premium Finance (IPF) - All IPF Participants follow the vesting schedule which applies to employer matching contributions made after January 1, 1989. In addition, each IPF Participant has a service start date of December 1, 1994; iii. John Alden New York (JANY) - All JANY Participants follow the Company's vesting schedule which applies to employer matching contributions made after January 1, 1989. In addition, each JANY Participant retains his or her original service start date; iv. Keogler Investment Advisory, Inc. (Keogler) - All Keogler Participants are fully vested at December 31, 1997. 5. Distribution of Benefits - The normal method of payment to terminated Participants with vested account balances is either a lump sum distribution or direct transfer to outside IRA or qualified plan provider or Fidelity IRA. Other options include Qualified Joint and Survivor Annuity, a Life annuity or an annuity with 10 years certain. In-service withdrawals are permitted by Participants suffering a financial hardship. Amounts needed to satisfy the hardship may only be taken from the Participant's pretax contributions and Rollover Contributions. Vested employer matching contributions are not available for hardship withdrawals. Participants withdrawing under the financial hardship provision will be suspended from further contributions to the Plan for a period of one year. Employee after-tax contributions to the Plan are eligible for withdrawal at any time. Currently, after-tax contributions are not permitted under the Plan. 6. Participant Loan Program - Actively employed Participants may apply for a loan from their accounts. All loans are subject to the following terms: . Loans are permitted only for the purchase of a principal residence (excluding mortgage payments); medical expenses; tuition payments for post-secondary education; prevention of eviction or foreclosure on principal residence; and funeral expenses incurred for a family member. . The funds available for loans include Rollover Contributions, pre-tax contributions, after-tax contributions, vested company match, elective employer contributions and account earnings. Elective employer contributions made with shares of SunAmerica common stock are not available for lending. . The lesser of the amount of the loan or 50% of the vested account balance is pledged as security for the loan. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED) - ------------------------------------------- . The minimum loan amount is $1,000. The maximum loan amount is the lesser of 50% of the Participant's vested account balance or $50,000 (reduced by any outstanding loan balance and certain other prior loan amounts). Only one loan may be outstanding at any time. . Loans must be repaid within five years, unless the loan is for the purchase of principal residence, in which case the maximum loan period is fifteen years. The interest rate is adjusted quarterly, and is the sum of the prime rate published in the Wall Street Journal on the first business day of each quarter, plus one percentage point. . Loan payments are made by payroll deductions and are reinvested in the Participant's account according to current investment choices. All loans can be prepaid at any time, provided that the total outstanding balance is repaid in a single lump sum. . If employment is terminated with the Company for any reason, any loan outstanding becomes due and payable within 90 days of termination. Any loan that is 90 days overdue is automatically considered in default and is treated as a withdrawal of funds and taxed accordingly. 7. Forfeitures - A Participant who terminates his or her employment with the Company forfeits the unvested value of his or her employer matching contributions and the earnings thereon at the time the first of the following events occurs: 1) the date on which the Participant incurs his first break in service; 2) the date on which the Participant receives a distribution from the Plan; or 3) the date of the Participant's death. However, for Participants who are not vested at the time they terminate employment, employer matching contributions and the earnings thereon are forfeited as soon as administratively possible. Forfeitures are used to reduce contributions made by the Company. 8. Investment funds - The administration and investment of the Plan's assets is pursuant to a trust agreement with Fidelity Management Trust Company ("Fidelity" or "the Trustee"). Each Participant directs the investment of contributions made on his or her behalf to one of several fund alternatives. The following are the available fund alternatives: SunAmerica Common Stock Fund ---------------------------- SunAmerica Common Stock (the "Stock") is considered a growth stock. The value of an investment can go up or down depending on general factors affecting the stock market and specific factors affecting the Company's business. Investment in the Stock does not constitute a diversified investment program or a managed investment, such as a mutual fund, and, therefore, its value and returns may fluctuate more than diversified investment options. Investment in this fund is limited to a maximum of 25% of a Participant's payroll contributions to the Plan. A Participant may not transfer money into this fund from other funds. The Stock currently pays a quarterly cash dividend. SunAmerica Small Company Growth Fund ------------------------------------ SunAmerica Small Company Growth Fund is an aggressive growth fund. It seeks long term capital growth by investing primarily in stocks of small, lesser known companies or industries, such as telecommunications, media and biotechnology. Such small cap companies generally have market capitalizations of under $1 billion. The stocks of smaller companies may have more abrupt or erratic price movements than stocks of larger companies. The Fund may also invest in debt securities. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED) - -------------------------------------------- Share price and return will vary. Class Z shares are available through the Plan. The Fund is managed by SunAmerica Asset Management Corp. and distributed by SunAmerica Capital Services, Inc. SunAmerica Balanced Assets Fund ------------------------------- SunAmerica Balanced Assets Fund is a balanced fund. It tries to provide a combination of capital growth and capital preservation by investing in a broad variety of common and preferred stocks, as well as long-term bonds and other debt securities. The Fund's portfolio may be altered as economic and market trends change. This is known as a "fully-managed" investment policy. The Fund will have at least 25% of its assets in fixed-income securities. Share price and return will vary. Class Z shares are available through the Plan. The Fund is managed by SunAmerica Asset Management Corp. and distributed by SunAmerica Capital Services, Inc. Fidelity Magellan Fund ---------------------- Fidelity Magellan Fund is an aggressive growth fund. It seeks long-term capital appreciation. It invests in the stocks of both well-known and lesser-known companies with above-average growth potential and a correspondingly higher level of risk. The fund's share price and return will vary. Fidelity Contrafund ------------------- Contrafund is a growth fund. It seeks capital appreciation by investing mainly in the securities of companies whose value is not fully recognized by the public. The fund invests in domestic and foreign common stocks and securities convertible into common stock, but it may purchase other securities that may produce capital appreciation. Investing in undervalued stocks, out of favor stocks or stocks of companies experiencing positive fundamental change can lead to investments in small companies which are not well known. The stock of small companies may be subject to more frequent and greater price changes than other companies. The fund's share price and return will fluctuate. Fidelity Equity-Income Fund --------------------------- Fidelity Equity-Income Fund is a growth and income fund. It seeks a yield that exceeds the composite yield of the S&P 500, and it considers the potential for capital appreciation when selecting fund investments. It invests primarily in common stocks but can also invest in bonds and convertible securities. The fund's share price and return will fluctuate. Dividend amounts will vary. Fidelity Growth Company Fund ---------------------------- Fidelity Growth Company Fund is an aggressive growth fund. It seeks long- term capital appreciation. It invests primarily in common stocks and securities convertible into common stocks. It may invest in small, younger companies with an above-average growth potential or larger companies that appear undervalued relative to their potential return. The fund's share price and return will vary. Fidelity Investment Grade Bond Fund ----------------------------------- Fidelity Investment Grade Bond Fund is an income fund. It seeks a high rate of current income consistent with reasonable risk. It invests in a broad range of fixed-income securities. The fund also seeks to protect investors' capital as well as to take advantage of opportunities to realize capital appreciation, where appropriate. The fund's share price and return will fluctuate. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED) - -------------------------------------------- Fidelity Growth & Income Portfolio ---------------------------------- Fidelity Growth & Income Portfolio is a growth and income fund. It seeks long-term capital growth, current income, and growth of income consistent with reasonable investment risk. It invests in common stocks of companies offering growth of earnings potential while paying current dividends. The portfolio's share price and return will fluctuate. Dividend amounts will vary. Fidelity Intermediate Bond Fund ------------------------------- Fidelity Intermediate Bond Fund is an income fund. It seeks a high level of current income. It invests in high and upper-medium grade corporate bonds rated Baa or better with intermediate maturities, mortgage securities, bank obligations, and U.S. government and agency securities. The fund's average portfolio maturity ranges between three and ten years. The fund's share price and return will fluctuate. Fidelity Capital & Income Fund ------------------------------ Fidelity Capital & Income Fund is an aggressive income fund. Its goal is to seek current income and capital growth. The fund may invest in any combination of debt and equity securities, but focuses on lower quality debt securities and securities of companies with uncertain financial positions. These investments may provide greater potential for higher earnings but they present comparatively higher risks of untimely payment of principal and interest, default, and greater price volatility, and may present problems as to liquidity and valuation. Shares held less than 365 days will be subject to a 1.5% redemption fee. The fund's share price and return will fluctuate. Fidelity Mortgage Securities Portfolio -------------------------------------- Fidelity Mortgage Securities Portfolio is an income fund and seeks a high level of current income consistent with prudent investment risk by investing primarily in mortgage-related securities. These include Ginnie Maes, Fannie Maes, and Freddie Macs. The portfolio's share price and return will fluctuate. Fidelity OTC Portfolio ---------------------- Fidelity OTC Portfolio is a growth fund. It seeks long-term capital appreciation by investing primarily in securities traded on the over-the- counter securities market. Securities in which the portfolio may invest include common stocks, preferred stocks, securities convertible into common stocks and debt securities. Companies whose securities trade on the OTC market generally are smaller or newer companies than those on the New York and American Stock Exchanges. These securities may be subject to more abrupt or erratic market movements than securities of larger companies and involve greater investment risk than more well-known companies. The portfolio's share price and return will fluctuate. Fidelity U.S. Equity Index Portfolio ------------------------------------ Fidelity U.S. Equity Index Portfolio is a growth and income fund which seeks to provide returns consistent with those of the Standard & Poor's 500 index. This index is comprised of common stocks. Dividend amounts will vary. The portfolio's share price and return will fluctuate. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 1 - DESCRIPTION OF THE PLAN (CONTINUED) - -------------------------------------------- Fidelity Overseas Fund ---------------------- Fidelity Overseas Fund is a broadly diversified fund which seeks long-term growth of capital. It invests mainly in equity securities outside the United States. It may also invest in debt securities of any quality. The performance of the fund depends upon currency values, political and regulatory environment, and overall economic factors in the countries in which the fund invests. The fund's share price and return will vary. Fidelity Asset Manager ---------------------- Fidelity Asset Manager is an asset allocation fund. It seeks high total return with reduced risk over the long term by allocating its assets among domestic and foreign equities, bonds and short-term instruments. In order to achieve its investment objective, the fund gradually shifts its assets among and across these groups as market or other conditions change. Dividend amounts will vary. The fund's share price and return will fluctuate. Fidelity Emerging Markets Fund ------------------------------ Fidelity Emerging Markets Fund seeks capital appreciation from emerging markets around the world. The Fund emphasizes countries with relatively low gross national product (GNP) per capita compared to the world's major economies, and with the potential for rapid economic growth. Many investments in emerging markets can be considered speculative, and therefore may offer higher potential for gains and losses than the developed markets of the world. Investments in emerging markets can involve significant risks. Share price and return will fluctuate. Fidelity Emerging Growth Fund ----------------------------- Fidelity Emerging Growth Fund is a growth mutual fund whose goal is to increase the value of investment over the long term through capital growth. It invests primarily in stocks of small and medium sized developing companies that the fund's manager believes have potential to grow rapidly in earnings of revenues. Such stocks may be subject to abrupt or erratic price changes. A redemption fee of .75% is charged on shares held less than 90 days. Share price and return will vary. Fidelity Managed Income Portfolio --------------------------------- Fidelity Managed Income Portfolio pools the assets of many qualified retirement plans to purchase a portfolio of fixed income investments, primarily consisting of GICs. In addition, for purposes of liquidity, the Portfolio purchases units in one or more money market portfolios which may invest in investments backed by the U.S. government. The GICs are purchased from approved insurance carriers and banks and include Index GICs, whose rate and maturity are reset periodically, and longer-term GICs with fixed rates of interest. The issuer of the contract guarantees the payment of interest and the return of principal at maturity. While the portfolio's return will fluctuate, management will strive to maintain a stable dollar unit value. Retirement Money Market Portfolio --------------------------------- Retirement Money Market Portfolio is a money market fund. It seeks as high a level of current income as is consistent with the preservation of capital and liquidity. It invests in high-quality, U.S. dollar-denominated money market instruments of U.S. and foreign issuers. While the portfolio's return will fluctuate, management strives to maintain a stable dollar share price. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - --------------------------------------------------- Basis of presentation ---------------------- The financial statements of the Plan are prepared on the accrual basis of accounting. Investment income is recorded as earned. Expenses -------- Expenses incurred in the administration of the Plan, except for fees related to participant loans, are absorbed by the Company. Withdrawals and benefits ------------------------ Withdrawals and benefits are recorded when paid. As of December 31, 1997 and 1996, the account balances of terminated Participants amounted to $8,804,736 and $11,922,285, respectively. Investments ----------- Investments are valued at fair market value based upon quoted market prices of the respective funds. Income tax status ----------------- Effective December 12, 1996, the Company received a favorable determination letter from the Internal Revenue Service. Plan termination ---------------- Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, Participants will become 100 percent vested in their accounts. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1997
FUND NAME SHARES COST MARKET VALUE -------------------------------------- ------------- -------------- ---------------- *SUNAMERICA COMMON STOCK FUND 191,117 $ 3,146,785 $ 8,169,658 *SUNAMERICA SMALL COMPANY GROWTH FUND 32,107 765,562 728,701 *SUNAMERICA BALANCED ASSETS FUND 20,399 370,919 349,443 *FIDELITY MAGELLAN FUND 95,485 7,208,289 9,096,917 *FIDELITY CONTRAFUND 68,808 3,073,139 3,208,330 *FIDELITY EQUITY-INCOME FUND 105,291 3,887,205 5,518,328 *FIDELITY GROWTH COMPANY FUND 250,435 8,329,118 10,848,574 *FIDELITY INVESTMENT GRADE BOND FUND 164,388 1,191,476 1,196,767 *FIDELITY GROWTH & INCOME PORTFOLIO 241,095 6,794,555 9,185,833 *FIDELITY INTERMEDIATE BOND FUND 89,635 917,540 911,597 *FIDELITY CAPITAL & INCOME FUND 10,828 103,132 108,387 *FIDELITY MORTGAGE SECURITIES PORTFOLIO 77,181 829,994 849,764 *FIDELITY OTC PORTFOLIO 35,876 1,189,319 1,200,128 *FIDELITY U.S. EQUITY INDEX PORTFOLIO 48,421 1,433,824 1,693,848 *FIDELITY OVERSEAS FUND 74,363 2,392,809 2,419,821 *FIDELITY ASSET MANAGER 54,246 876,277 995,457 *FIDELITY EMERGING MARKETS FUND 59,788 706,725 573,959 *FIDELITY EMERGING GROWTH FUND 22,755 595,339 540,297 *FIDELITY MANAGED INCOME PORTFOLIO 2,584,167 2,584,167 2,584,167 *RETIREMENT MONEY MARKET PORTFOLIO 2,819,077 2,819,077 2,819,077 PARTICIPANT LOANS -- -- 811,088 ------------ ------------- TOTAL $ 49,215,251 $ 63,810,141 ============ ============= *Party in Interest
SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997
DESCRIPTION NUMBER OF PURCHASE SELLING COST OF NET OF ASSET TRANSACTIONS PRICE PRICE ASSET GAIN - ------------------------------ ----------------- -------------- ------------- ------------- -------------- *FIDELITY MAGELLAN FUND 274 $ 1,823,273 $ 1,642,507 $ 1,374,245 $ 268,262 *FIDELITY GROWTH COMPANY FUND 287 3,311,495 2,674,672 2,041,687 632,985 *FIDELITY GROWTH & INCOME PORTFOLIO 288 3,716,027 1,820,809 1,540,090 280,719 *FIDELITY OVERSEAS FUND 255 15,153,925 13,975,863 13,847,408 128,455 *RETIREMENT MONEY MARKET PORTFOLIO 371 17,277,048 17,168,038 17,168,038 -- *Party in Interest
SIGNATURES THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. SUNAMERICA PROFIT SHARING AND RETIREMENT PLAN Date June 2, 1998 By /s/ SCOTT L. ROBINSON ------------------- ------------------------------------------- Scott L. Robinson Senior Vice President and Controller and Member of Employee Benefits Committee of SunAmerica Inc. SUNAMERICA NC. LIST OF EXHIBITS FILED - ---------------------- 23 Consent of Independent Accountants EX-23 2 CONSENT OF INDEPENDENT ACCOUNTANTS --------------------------------- We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-60244) of SunAmerica Inc. of our report dated May 22, 1998 which appears on page 2 of this Annual Report on Form 11-K for the year ended December 31, 1997. Price Waterhouse LLP Los Angeles, California June 2, 1998 -----END PRIVACY-ENHANCED MESSAGE-----