-----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, Kqp+A0im9xj8LLXjcicEMmDVcpETlp4RsLfcZramhkNOXgNbRUycP+GjfLKEn1Ho JGZD6A8IAu0LJoD/g1c9jQ== 0000950130-96-002118.txt : 19960606 0000950130-96-002118.hdr.sgml : 19960606 ACCESSION NUMBER: 0000950130-96-002118 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960605 SROS: NYSE 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: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-04111 FILM NUMBER: 96576807 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 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1996 REGISTRATION NO. 333-4111 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 --------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- SUNAMERICA INC. MARYLAND 86-0176061 (EXACT NAME OF (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER REGISTRANT INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) AS SPECIFIED IN ITS CHARTER) 1 SUNAMERICA CENTER LOS ANGELES, CALIFORNIA 90067-6022 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) SUSAN L. HARRIS, ESQ. SENIOR VICE PRESIDENT AND GENERAL COUNSEL--CORPORATE AFFAIRS SUNAMERICA INC. 1 SUNAMERICA CENTER LOS ANGELES, CALIFORNIA 90067-6022 (310) 772-6000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) --------------- COPIES TO: JEFFREY SMALL, ESQ. GREGG A. NOEL, ESQ. DAVIS POLK & WARDWELL SKADDEN, ARPS, SLATE, MEAGHER & FLOM 450 LEXINGTON AVENUE 300 SOUTH GRAND AVENUE, SUITE 3400 NEW YORK, NEW YORK 10017 LOS ANGELES, CALIFORNIA 90071 (212) 450-4000 (213) 687-5000 --------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this registration statement becomes effective. --------------- If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities being offered only in connection with dividend or interest reinvestment plans, please check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED JUNE 5, 1996 PROSPECTUS LOGO SunAmerica 3,000,000 SHARES SUNAMERICA INC. COMMON STOCK ----------- This Prospectus relates to 3,000,000 shares of Common Stock, par value $1 per share (the "Common Stock"), of SunAmerica Inc., a Maryland corporation (the "Company"), which may be delivered by Merrill Lynch & Co., Inc. ("ML & Co.") upon payment and discharge of the Structured Yield Product Exchangeable for StockSM, % STRYPESSM Due , 1999 (each a "STRYPES") of ML & Co. at maturity or upon earlier redemption (subject to ML & Co.'s right to deliver an amount in cash). ML & Co. has granted the underwriter of the STRYPES an option for 30 days to purchase up to an additional 450,000 STRYPES, solely to cover over-allotments, which additional STRYPES may be paid and discharged by ML & Co. by delivery of up to an additional 450,000 shares of Common Stock, to which this Prospectus also relates. The Company will not receive any of the proceeds from the sale of the STRYPES or from the sale of such Common Stock. All of the shares of Common Stock covered hereby are beneficially owned by Mr. Eli Broad, Chairman, Chief Executive Officer and President of the Company, who may deliver such Common Stock to a subsidiary of ML & Co. (the "ML & Co. Subsidiary") pursuant to an agreement (the "Stock Agreement") among Mr. Broad, ML & Co. and the ML & Co. Subsidiary (subject to Mr. Broad's right to deliver an amount in cash). The STRYPES are offered by a separate prospectus of ML & Co. (the "STRYPES Prospectus"). This Prospectus relates only to the Common Stock covered hereby and does not relate to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY INFORMATION INCLUDED IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN. Because the STRYPES are a separate security issued by ML & Co. for which the Company has no responsibility, an investment in the STRYPES may have materially different characteristics from an investment in the Common Stock. The Common Stock is traded on the New York Stock Exchange, Inc. ("NYSE") under the trading symbol "SAI". On June 3, 1996, the last reported sale price of the Common Stock on the NYSE was $56.50 per share. See "Common Stock Price Ranges and Dividends." ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ----------- SM Service mark of Merrill Lynch & Co., Inc. The date of this Prospectus is , 1996. IN CONNECTION WITH THIS OFFERING, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, ON THE PACIFIC STOCK EXCHANGE, IN THE OVER-THE- COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSION OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. 2 THE COMPANY The Company is a diversified financial services company specializing in retirement savings products and services. At March 31, 1996, the Company held $34.37 billion of assets throughout its businesses, including $22.01 billion of assets on its balance sheet, $2.14 billion of assets managed in mutual funds and private accounts and $10.22 billion under custody in retirement trust accounts. Together, the Company's life insurance companies rank among the largest U.S. issuers of annuities. Complementing these annuity operations are the Company's asset management operations; its three broker-dealer subsidiaries, which the Company believes, based on industry data, represent the largest network of independent registered representatives in the nation; and its trust company, which provides administrative and custodial services to qualified retirement plans. Through these subsidiaries, the Company specializes in the sale of tax-deferred long-term savings products and investments to the expanding preretirement savings market. The Company markets fixed annuities and fee-generating variable annuities, mutual funds and trust services, as well as guaranteed investment contracts. The Company's products are distributed through a broad spectrum of financial services distribution channels, including independent registered representatives of the Company's broker-dealer subsidiaries, unaffiliated broker-dealers, independent general insurance agents and other financial institutions. Since the beginning of fiscal 1996, the Company has made several acquisitions that have added a total of $4.6 billion in annuity reserves and enhanced its position in the financial institution and qualified teachers markets. On December 29, 1995, the Company purchased CalFarm Life Insurance Company, which on such date had approximately $640 million in annuity reserves. On February 29, 1996, the Company acquired Ford Life Insurance Company, which had annuity reserves of approximately $3 billion on such date and on April 1, 1996, purchased approximately $950 million in annuity reserves from the Central National Life Insurance Company of Omaha. On January 2, 1996, the Company purchased Houston-based broker-dealer Advantage Capital Corp., further strengthening its distribution network. This acquisition added more than 1,000 representatives to the Company's broker-dealer network, bringing its number of independent registered representatives to more than 6,500. The Company's net income increased to $133.0 million ($1.90 per share) in the first six months of fiscal 1996 from $92.5 million ($1.34 per share) in the first six months of fiscal 1995, or 43.8%. The principal executive offices of the Company are located at 1 SunAmerica Center, Los Angeles, California 90067-6022, telephone number (310) 772-6000. USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the STRYPES or from the sale of the Common Stock. All of the shares of Common Stock covered hereby are beneficially owned by Mr. Eli Broad, who may deliver such Common Stock to the ML & Co. Subsidiary pursuant to the Stock Agreement (subject to Mr. Broad's right to deliver an amount in cash). 3 STOCK OWNERSHIP BY MR. BROAD Mr. Broad is the Chairman, Chief Executive Officer and President of the Company. At April 30, 1996, Mr. Broad beneficially owned an aggregate of 11,026,274 shares of Common Stock and Class B Stock (as defined under "Description of Capital Stock") and controlled 59.2% of the total number of votes entitled to be cast by holders of Common Stock and Class B Stock, voting together as a single class, at a general meeting of shareholders. Of these shares, 1,363,734 represent shares of Common Stock that Mr. Broad has the right to purchase, at prices ranging from $4.33 per share to $44.92 per share, pursuant to vested stock options. In addition, Mr. Broad will have the right to purchase up to an additional 108,000 shares of Common Stock at prices ranging from $7.04 per share to $21.46 per share pursuant to stock options that will be fully vested on various dates during the period July 25, 1996 through July 29, 1998. Such options require Mr. Broad to be employed by the Company on the date of vesting. Pursuant to the Company's Long-Term Performance-Based Incentive Compensation Plan, Mr. Broad may be granted by September 30, 1998, up to an additional 348,372 shares of restricted Common Stock and options to purchase up to an additional 1,045,116 shares of Common Stock, depending upon the achievement of specified performance objectives established at the outset of such plan. Of the 11,026,274 shares beneficially owned by Mr. Broad, 2,902,500 shares are registered in the name of Stanford Ranch, Inc. ("Stanford Ranch"), as to which Mr. Broad exercises voting and investment control. On January 12, 1996, the Company, Stanford Ranch, Mr. Broad and the other stockholders of Stanford Ranch entered into an agreement providing for a share exchange (the "Share Exchange") pursuant to which the stockholders of Stanford Ranch will receive an aggregate of 2,862,500 shares of Common Stock in exchange for their ownership interests in Stanford Ranch, the sole asset of which at the time of the consummation of the Share Exchange will be 2,902,500 shares of Class B Stock. In addition, prior to the consummation of the Share Exchange, Mr. Broad is obligated to convert or cause the conversion of a sufficient number of shares of Class B Stock into Common Stock such that, after giving effect to such conversion and the Share Exchange, the total number of votes entitled to be cast by holders of Class B Stock will be less than 50% of the total number of votes entitled to be cast by holders of Common Stock, Class B Stock and the Company's Adjustable Rate Cumulative Preferred Stock, Series C, no par value, voting together as a single class (the "Conversion Commitment"). See "Description of Capital Stock--Common Stock and Class B Stock--Voting Rights" and "--Class B Conversion Rights." After giving effect to the Share Exchange and the Conversion Commitment (assuming conversion of all of the Class B Stock held by the Donald B. Kaufman Marital Trust) as if such transactions had occurred on April 30, 1996, Mr. Broad would have controlled 51.9% of the total number of votes entitled to be cast by holders of Common Stock and Class B Stock, voting together as a single class. The Share Exchange is expected to be consummated in June 1996. Pursuant to the Stock Agreement, Mr. Broad may deliver up to 3,000,000 shares (3,450,000 shares if the over-allotment option granted to the underwriter of the STRYPES is exercised in full) of Nontransferable Class B Stock to the ML & Co. Subsidiary (subject to Mr. Broad's right to deliver an amount in cash). Mr. Broad has the right at any time to modify the Stock Agreement so that he may deliver Common Stock (or cash) instead of Class B Stock (or cash). Until such shares are delivered, Mr. Broad will retain the right to vote such shares and receive dividends thereon. 4 COMMON STOCK PRICE RANGES AND DIVIDENDS The Common Stock sale prices (as quoted on the NYSE Composite Tape) and per share dividend data for each full quarter during fiscal years ended September 30, 1994 and 1995, for the first and second fiscal quarters of 1996 and for the third fiscal quarter of 1996 through June 3, 1996 are set forth below. The payment of future dividends on the Common Stock and the amounts thereof will depend on business conditions, earnings and financial requirements of the Company and other relevant factors. The sale prices and dividend amounts set forth below have been restated to reflect a three-for-two stock split paid in the form of a stock dividend on November 10, 1995. The Company's Common Stock trades under the symbol SAI.
COMMON STOCK PRICES DIVIDENDS PAID ------------------- ----------------------- COMMON NONTRANSFERABLE HIGH LOW STOCK CLASS B STOCK(1) ------------------- ------ ---------------- FISCAL YEAR 1994 First Quarter..................... $31 $22 $.067 $.06 Second Quarter.................... 29 1/8 22 3/8 .067 .06 Third Quarter..................... 29 1/2 22 7/8 .067 .06 Fourth Quarter.................... 30 7/8 26 7/8 .067 .06 1995 First Quarter..................... $27 7/8 $22 7/8 $.10 $.09 Second Quarter.................... 29 1/2 24 .10 .09 Third Quarter..................... 37 28 1/4 .10 .09 Fourth Quarter.................... 42 33 1/2 .10 .09 1996 First Quarter..................... $49 3/4 $40 53/64 $.15 $.135 Second Quarter.................... 57 1/2 44 1/8 .15 .135 Third Quarter (through June 3, 1996)............................ 58 1/8 45 5/8 .15 .135
- -------- (1) Holders of Nontransferable Class B Stock are entitled to receive cash dividends equal to 90% of any cash dividends paid to holders of the Common Stock. For a description of the rights of holders of Nontransferable Class B Stock, see "Description of Capital Stock--Common Stock and Class B Stock." 5 CAPITALIZATION The following table sets forth the unaudited consolidated capitalization of the Company at March 31, 1996. The table should be read in conjunction with the Company's consolidated financial statements and notes thereto included in the documents incorporated by reference herein. See "Incorporation of Certain Documents by Reference."
MARCH 31, 1996 (IN THOUSANDS) -------------- Indebtedness (interest rates are as of March 31, 1996): Short-term indebtedness.................................... $ 63,359 ---------- Long-term notes and debentures: Medium-term notes due 1998 through 2025 (5 1/2% to 7 3/8%)................................................... 248,335 8 1/8% debentures due April 28, 2023..................... 100,000 9.95% debentures due February 1, 2012.................... 100,000 9% notes due January 15, 1999............................ 125,000 ---------- Total long-term notes and debentures................... 573,335 ---------- Total indebtedness......................................... 636,694 ---------- Company-obligated mandatorily redeemable preferred securities of subsidiary grantor trusts................... 237,631(1) ---------- Shareholders' equity: Preferred Stock.......................................... 384,549 Nontransferable Class B Stock............................ 10,240 Common Stock............................................. 49,440 Additional paid-in capital............................... 357,295 Retained earnings........................................ 757,525 Net unrealized losses on debt and equity securities available for sale...................................... (32,173) ---------- Total shareholders' equity............................... 1,526,876 ---------- Total capitalization....................................... $2,401,201 ==========
- -------- (1) Represents the Company-obligated mandatorily redeemable preferred securities of (1) SunAmerica Capital Trust I, the sole asset of which is $54.26 million principal amount of 9.95% Junior Subordinated Debentures due 2044 of the Company and (2) SunAmerica Capital Trust II, the sole asset of which is $191.22 million principal amount of 8.35% Junior Subordinated Debentures due 2044 of the Company. 6 SELECTED CONSOLIDATED FINANCIAL DATA Reference is made to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995 (the "Form 10-K"), which is incorporated by reference herein and which contains the Company's audited consolidated financial statements, including the consolidated income statement for the Company's three fiscal years in the period ended September 30, 1995, consolidated balance sheets as of September 30, 1994 and 1995, and the related notes. Selected unaudited financial information as of and for the six months ended March 31, 1995 and 1996 should be read in conjunction with the audited consolidated financial statements and related notes contained in the Form 10-K and the unaudited consolidated financial statements contained in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, which report is also incorporated by reference herein. Such unaudited information reflects, in the opinion of management, all adjustments, consisting of only normal accruals, necessary for a consistent presentation with the audited financial information. Results of operations for the six months ended March 31, 1995 and 1996 may not necessarily be indicative of the results to be expected for the full fiscal year. Per share amounts and dividends have been restated to reflect a three-for-two stock split paid in the form of a stock dividend on November 10, 1995.
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30, MARCH 31, ----------------------------------------------------- ------------------ 1991 1992 1993 1994 1995 1995 1996 --------- --------- --------- --------- --------- -------- -------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) RESULTS OF OPERATIONS Net investment income... $ 162,412 $ 219,384 $ 263,791 $ 294,454 $ 365,555 $164,825 $214,420 Net realized investment losses................. (46,060) (56,364) (21,287) (21,124) (33,012) (15,575) (2,185) Fee income.............. 92,689 112,831 134,305 150,736 179,288 83,636 104,642 General and administrative expenses............... (120,475) (133,058) (135,790) (132,743) (166,540) (74,224) (94,340) Provision for future guaranty fund assessments............ -- -- (22,000) -- -- -- -- Amortization of deferred acquisition costs...... (40,088) (48,375) (51,860) (66,925) (80,829) (37,414) (40,516) Other income, net....... 24,903 16,673 16,852 15,603 15,144 9,040 8,006 --------- --------- --------- --------- --------- -------- -------- Pretax income........... 73,381 111,091 184,011 240,001 279,606 130,288 190,027 Income tax expense...... (25,900) (34,300) (57,000) (74,700) (85,400) (37,800) (57,000) --------- --------- --------- --------- --------- -------- -------- Income before cumulative effect of change in accounting for income taxes.................. 47,481 76,791 127,011 165,301 194,206 92,488 133,027 Cumulative effect of change in accounting for income taxes....... -- -- -- (33,500) -- -- -- --------- --------- --------- --------- --------- -------- -------- Net income.............. $ 47,481 $ 76,791 $ 127,011 $ 131,801 $ 194,206 $ 92,488 $133,027 ========= ========= ========= ========= ========= ======== ======== EARNINGS PER SHARE: INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES.................. $ 0.88 $ 1.20 $ 1.83 $ 2.39 $ 2.84 $ 1.34 $ 1.90 Cumulative effect of change in accounting for income taxes....... -- -- -- (0.54) -- -- -- --------- --------- --------- --------- --------- -------- -------- Net income.............. $ 0.88 $ 1.20 $ 1.83 $ 1.85 $ 2.84 $ 1.34 $ 1.90 ========= ========= ========= ========= ========= ======== ======== CASH DIVIDENDS PER SHARE PAID TO COMMON SHAREHOLDERS: Nontransferable Class B Stock(1).............. $ 0.120 $ 0.120 $ 0.168 $ 0.240 $ 0.360 $ .180 $ .270 ========= ========= ========= ========= ========= ======== ======== Common Stock........... $ 0.133 $ 0.133 $ 0.187 $ 0.268 $ 0.400 $ .200 $ .300 ========= ========= ========= ========= ========= ======== ========
- -------- (1) Holders of Nontransferable Class B Stock are entitled to receive cash dividends equal to 90% of any cash dividends paid to holders of the Common Stock. For a description of the rights of holders of Nontransferable Class B Stock, see "Description of Capital Stock--Common Stock and Class B Stock." 7 SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED)
AT SEPTEMBER 30, AT MARCH 31, ----------------------------------------------------------- ----------------------- 1991 1992 1993 1994 1995 1995 1996 ----------- ----------- ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) FINANCIAL POSITION Investments............. $ 7,596,275 $ 9,428,266 $10,364,952 $ 9,280,390 $10,808,959 $ 9,798,381 $15,182,399 Variable annuity assets................. 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,535,622 5,779,699 Deferred acquisition costs.................. 392,278 436,209 475,917 581,874 526,415 573,152 714,740 Other assets............ 279,007 245,833 231,582 280,868 245,787 323,121 332,127 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total assets............ $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $15,230,276 $22,008,965 =========== =========== =========== =========== =========== =========== =========== Reserves for fixed annuity contracts...... $ 5,359,757 $ 5,143,339 $ 4,934,871 $ 4,519,623 $ 4,862,250 $ 4,798,893 $ 8,730,750 Reserves for guaranteed investment contracts... 1,598,963 2,023,048 2,216,104 2,783,522 3,607,192 2,949,632 3,865,895 Trust deposits.......... -- 367,458 378,986 442,320 426,595 448,174 456,778 Variable annuity liabilities............ 2,746,685 3,293,343 4,194,970 4,513,093 5,263,006 4,535,622 5,779,699 Other payables and accrued liabilities.... 344,789 1,372,010 1,828,153 860,763 747,733 842,121 699,881 Long-term notes and debentures............. -- 225,000 380,560 472,835 524,835 472,835 573,335 Collateralized mortgage obligations and reverse repurchase agreements.. 299,343 182,784 112,032 28,662 -- -- 63,359 Other senior indebtedness........... 38,035 25,919 15,119 -- -- -- -- Subordinated notes...... 117,985 -- -- -- -- -- -- Deferred income taxes... 58,779 40,682 96,599 74,319 146,847 101,169 74,761 Company-obligated mandatorily redeemable preferred securities of subsidiary grantor trusts(1).............. -- -- -- -- 52,631 -- 237,631 Shareholders' equity.... 449,909 730,068 1,110,027 961,088 1,213,078 1,081,830 1,526,876 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities and shareholders' equity... $11,014,245 $13,403,651 $15,267,421 $14,656,225 $16,844,167 $15,230,276 $22,008,965 =========== =========== =========== =========== =========== =========== =========== BOOK VALUE PER SHARE.... $ 8.16 $ 9.69 $ 15.09 $ 12.60 $ 17.78 $ 14.44 $ 21.16 =========== =========== =========== =========== =========== =========== ===========
- -------- (1) Represents the Company-obligated mandatorily redeemable preferred securities, at September 30, 1995, of SunAmerica Capital Trust I, the sole asset of which is $54.26 million principal amount of 9.95% Junior Subordinated Debentures due 2044 of the Company and, at March 31, 1996, of (1) SunAmerica Capital Trust I and (2) SunAmerica Capital Trust II, the sole asset of which is $191.22 million principal amount of 8.35% Junior Subordinated Debentures due 2044 of the Company. 8 DESCRIPTION OF CAPITAL STOCK Under the Articles of Incorporation of the Company, as amended and restated and including any Articles Supplementary (the "Articles of Incorporation"), the Company has authority to issue 175,000,000 shares of Common Stock, 25,000,000 shares of Nontransferable Class B Stock, par value $1.00 per share (the "Nontransferable Class B Stock"), 15,000,000 shares of Transferable Class B Stock, par value $1.00 per share (the "Transferable Class B Stock," and, together with the Nontransferable Class B Stock, the "Class B Stock") and 20,000,000 shares of Preferred Stock, without par value ("Preferred Stock"). At April 30, 1996, there were outstanding 49,446,557 shares of Common Stock, 10,235,524 shares of Nontransferable Class B Stock and 8,001,565 shares of Preferred Stock. After giving effect to the Share Exchange and Conversion Commitment as if it had occurred on April 30, 1996, there would have been outstanding 54,220,157 shares of Common Stock and 5,421,924 shares of Nontransferable Class B Stock. There are no shares of Transferable Class B Stock outstanding. The outstanding series of Preferred Stock rank pari passu with each other and senior to the Common Stock and Class B Stock. COMMON STOCK AND CLASS B STOCK Dividends. Except as provided below, holders of Common Stock and Class B Stock are entitled to receive dividends and other distributions in cash, stock or property of the Company, when, as and if declared by the Board of Directors out of assets or funds of the Company legally available therefor and shall share equally on a per share basis in all such dividends and other distributions (subject to the rights of holders of Preferred Stock). If a cash dividend is paid on any of the Common Stock, the Nontransferable Class B Stock or the Transferable Class B Stock, a cash dividend also will be paid on the Common Stock, the Nontransferable Class B Stock and the Transferable Class B Stock, as the case may be. The amount of the cash dividend paid on each share of Class B Stock will be equal to 90% of the amount of the cash dividend paid on each share of Common Stock. In addition if holders of Common Stock receive shares of Common Stock in connection with stock dividends or stock splits, holders of Transferable Class B Stock will receive a proportionate number of shares of Transferable Class B Stock and holders of Nontransferable Class B Stock will receive a proportionate number of shares of Nontransferable Class B Stock. Voting Rights. At every meeting of shareholders, every holder of Common Stock is entitled to one vote per share and every holder of Class B Stock is entitled to 10 votes per share. All actions submitted to a vote of shareholders are voted upon by holders of Common Stock and Class B Stock voting together as a single class (subject to any voting rights which may be granted to holders of Preferred Stock) and a majority of the votes cast by such holders is required to approve any such action, except where other provision is made by law. In addition to any vote required by law, the holders of Common Stock and Class B Stock each vote separately as a class (i) on any merger or consolidation of the Company with or into any other corporation, or any sale, lease, exchange or other disposition of all or substantially all of the Company's assets to or with any other person or any dissolution of the Company (unless the other party to such merger or other transaction is a majority- owned subsidiary of the Company) and (ii) on any additional issuances of Class B Stock other than in connection with stock splits and stock dividends and exchanges of Nontransferable Class B Stock for Transferable Class B Stock. A majority of votes cast by the Common Stock and Class B Stock, each voting separately as a class, is required to approve any matters described above as to which holders of such shares have a separate class vote, unless, in the case of the events described in clause (i) above, a greater vote is required by law. In addition to any vote required by law, the affirmative vote of the holders of a majority of the shares of the Common Stock and the Nontransferable Class B Stock, each voting separately as a class, is required to approve any amendments to the Articles of Incorporation. Liquidation Rights. In the event of any liquidation, the holders of Common Stock and Class B Stock are entitled to share equally in the assets available for distribution after payment of all liabilities and provision for the liquidation preference of any shares of Preferred Stock then outstanding. 9 Class B Stock Conversion Rights. Each share of Class B Stock is convertible into one share of Common Stock at any time at the option of the holder. In addition, any transfer of shares of Nontransferable Class B Stock not permitted under the Articles of Incorporation will result in the conversion of such shares into shares of Common Stock. Subsequent to the Share Exchange, the Articles of Incorporation will provide that if at any time the number of outstanding shares of Nontransferable Class B Stock represents less than 5% of the aggregate number of issued and outstanding shares of Common Stock and Nontransferable Class B Stock, all of the outstanding shares of Nontransferable Class B Stock will immediately convert into shares of Common Stock. Exchange of Nontransferable Class B Stock. The Nontransferable Class B Stock is exchangeable in whole at the option of the Company at any time for Transferable Class B Stock. Holders of Nontransferable Class B Stock will receive one share of Transferable Class B Stock for each share of Nontransferable Class B Stock held by them at the time of the exchange. Miscellaneous. The holders of Common Stock and Class B Stock have no preemptive rights, cumulative voting rights or subscriptions rights. Except as described above, the Common Stock and Class B Stock have no conversion rights and are not subject to redemption. The transfer agent and registrar with respect to the Common Stock is The Bank of New York. All of the outstanding shares of Common Stock and Nontransferable Class B Stock are validly issued, fully paid and non-assessable. PLAN OF DISTRIBUTION The Company is advised that under the terms of the STRYPES, the ML & Co. Subsidiary is obligated to pay and discharge the STRYPES at maturity or redemption by delivering to the holders thereof a specified number of shares of Common Stock (or an amount in cash). The Company is advised that pursuant to the terms of the Stock Agreement, Mr. Eli Broad is obligated to deliver to the ML & Co. Subsidiary on , 1999, a specified number of shares of Nontransferable Class B (which Class B Stock would convert into Common Stock upon such delivery--see "Description of Capital Stock--Common Stock and Class B Stock--Class B Conversion Rights") (subject to Mr. Broad's right to deliver an amount in cash). Mr. Broad has the right at any time to modify the Stock Agreement so that he may deliver Common Stock (or cash) instead of Class B Stock (or cash). The Company is not a party to the Stock Agreement and has no obligations thereunder or with respect to the STRYPES, which are securities of ML & Co. and are not securities of the Company. Mr. Broad and the Company have agreed to indemnify the underwriter of the STRYPES against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the information in this Prospectus (including the documents incorporated by reference herein). In addition, Mr. Broad has agreed to indemnify the Company against certain liabilities, including liabilities under the Securities Act. SunAmerica has agreed that, subject to certain limited exceptions, it will not, and will cause its subsidiaries not to, without the prior written consent of the underwriter of the STRYPES, directly or indirectly, for a period of 60 days after the date of this Prospectus, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, or enter into any agreement to sell, any Common Stock or any securities convertible into or exchangeable or exercisable for any Common Stock. The Selling Stockholder has similarly agreed, subject to certain limited exceptions, not to sell, for a period of 60 days of this Prospectus, any shares by the Selling Stockholder without the prior written consent of the underwriter of the STRYPES. LEGAL MATTERS The validity of the Common Stock will be passed upon for the Company by Piper & Marbury L.L.P., 10 Baltimore, Maryland. Certain other legal matters will be passed upon for the Company by Susan L. Harris, Senior Vice President and General Counsel-- Corporate Affairs of the Company and by Davis Polk & Wardwell. Ms. Harris holds stock, restricted stock and options to purchase stock granted under the Company's employee stock plans, which in the aggregate represent less than 1% of the outstanding Common Stock. David W. Ferguson, a partner of Davis Polk & Wardwell, is a director of First SunAmerica Life Insurance Company, a subsidiary of the Company. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Form 10-K, have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. ERISA MATTERS The Company and certain affiliates of the Company, including Anchor National Life Insurance Company and SunAmerica Life Insurance Company, may each be considered a "party in interest" within the meaning of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a "disqualified person" within the meaning of the Internal Revenue Code of 1986, as amended (the "Code") with respect to many employee benefit plans. Prohibited transactions within the meaning of ERISA or the Code may arise, for example, if the Common Stock is acquired by a pension or other employee benefit plan with respect to which the Company or any of its affiliates is a service provider, unless such Common Stock is acquired pursuant to an exemption for transactions effected on behalf of such plan by a "qualified professional asset manager" or pursuant to any other available exemption. Any such pension or employee benefit plan proposing to invest in the Common Stock should consult with its legal counsel. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, or at the public reference facilities of the regional offices in Chicago and New York. The addresses of these regional offices are as follows: 500 West Madison Street, Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such material also can be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington D.C. 20549, upon payment of the fees prescribed by the rules and regulations of the Commission. Reports, proxy statements, and other information concerning the Company may also be inspected at the offices of the New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005 and at the offices of the Pacific Stock Exchange at 301 Pine Street, San Francisco, California 94104. The Company's Common Stock is listed on both exchanges. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act with respect to the Common Stock offered by this Prospectus. This Prospectus does not contain all the information set forth in the Registration Statement and exhibits thereto. In addition, certain documents filed by the Company with the Commission have been incorporated in this Prospectus by reference. See "Incorporation of Certain Documents by Reference." Statements contained herein concerning the provisions of any document do not purport to be complete and, in each instance, are qualified in all respects by reference to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is subject to and qualified in its entirety by such reference. For further information with respect to the Company and the securities offered hereby, reference is made to the Registration Statement, including the exhibits thereto, and the documents incorporated herein by reference. 11 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated by reference in the Prospectus the following documents previously filed by the Company with the Commission pursuant to the 1934 Act: 1. Annual Report on Form 10-K for the fiscal year ended September 30, 1995. 2. Quarterly Reports on Form 10-Q for the quarters ended December 31, 1995 and March 31, 1996. 3. Current Reports on Form 8-K filed on October 6, 1995, October 19, 1995, October 31, 1995, November 9, 1995, December 12, 1995, as amended by Amendment No. 2 on Form 8-K/A, filed May 7, 1996, January 29, 1996, March 15, 1996, as amended by Amendment No. 1 on Form 8-K/A, filed May 7, 1996, April 24, 1996, and April 27, 1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference in the Prospectus and to be part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any and all of the information that has been incorporated by reference in the Prospectus (not including exhibits to the information that is incorporated by reference unless such exhibits are specifically incorporated by reference into the information that this Prospectus incorporates). Requests for such document shall be directed to SunAmerica Inc., 1 SunAmerica Center, Los Angeles, California 90067-6022, Attention: Vice President, Investor Relations (telephone (310) 772-6000). 12 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 1. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses in connection with the issuance and distribution of the securities being registered. All of the amounts shown are estimates, except the SEC registration fee. All of the following expenses will be paid by Mr. Eli Broad. SEC registration fee......................................... $ 66,471.98 Legal fees and expenses...................................... 350,000.00 Printing expenses............................................ 75,000.00 Fees of accountants.......................................... 40,000.00 Blue sky fees and expenses................................... 10,000.00 Miscellaneous................................................ 3,528.02 ----------- Total...................................................... $545,000.00 ===========
- -------- ITEM 2. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 2-418 of the Maryland General Corporation law permits the indemnification of directors, officers, employees and agents of Maryland corporations. Article Eighth of the Company's Restated Articles of Incorporation, as amended and restated (the "Articles") authorizes the indemnification of directors and officers to the full extent required or permitted by the General Laws of the State of Maryland, now or hereafter in force, whether such persons are serving the Company, or, at its request, any other entity, which indemnification shall include the advance of expenses under the procedures and to the full extent permitted by law. Article Eighth of the Articles of Incorporation, as amended and restated, further provides that the foregoing rights of indemnification shall not be exclusive of any other rights to which those seeking indemnification may be entitled and that no amendment or repeal of Article Eighth shall apply to or have any effect on any right to indemnification provided thereunder with respect to acts or omissions occurring prior to such amendment or repeal. In addition, the Company's officers and directors are covered by certain directors' and officers' liability insurance policies maintained by the Company. Reference is made to section 2-418 of the Maryland General Corporation Law and Article Eighth of the Articles, which are incorporated herein by reference. Reference is made to Exhibits 1 and 10.1, pursuant to which Merrill Lynch, Pierce, Fenner and Smith Incorporated and Eli Broad, respectively, will agree to indemnify the directors and certain officers of the Company against certain liabilities, including liabilities under the Securities Act. ITEM 3. LIST OF EXHIBITS.
EXHIBIT ------- 1 Form of Registration Agreement among the Company, Eli Broad, ML & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated 4.1 Amendment to the Company's Restated Articles of Incorporation, dated February 1, 1993 (incorporated herein by reference to Exhibit 1 to the Company's Form 8-K, filed February 3, 1993) 4.2 Bylaws of the Company as revised on October 23, 1987 (incorporated herein by reference to Exhibit 3(b) to the Company's 1987 Annual Report on Form 10-K, filed February 26, 1988) 4.3+ Form of specimen certificate for the Common Stock 5 Opinion of Piper & Marbury L.L.P. 10 Form of Indemnification and Reimbursement Agreement between Eli Broad and the Company 23.1 Consent of Price Waterhouse LLP 23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5) 24 Power of Attorney for the Company (included on signature pages hereto)
- -------- + Previously filed II-1 ITEM 4. UNDERTAKINGS. The undersigned registrant hereby undertakes: (a) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered thereby, and for the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referred to in Item 2 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-2 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON JUNE 4, 1996. SunAmerica Inc. /s/ Jay S. Wintrob By: _________________________________ NAME: JAY S. WINTROB TITLE: VICE CHAIRMAN POWER OF ATTORNEY PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED. SIGNATURE TITLE DATE Chairman, President * and Chief Executive June 4, 1996 - ------------------------------------- Officer (Principal ELI BROAD Executive Officer) Executive Vice * President June 4, 1996 - ------------------------------------- (Principal JAMES R. BELARDI Financial Officer) Senior Vice * President and June 4, 1996 - ------------------------------------- Controller SCOTT L. ROBINSON (Principal Accounting Officer) II-3 SIGNATURE TITLE DATE Director - ------------------------------------ June 4, 1996 RONALD J. ARNAULT Director * June 4, 1996 - ------------------------------------ KAREN HASTIE-WILLIAMS Director * June 4, 1996 - ------------------------------------ DAVID O. MAXWELL Director * June 4, 1996 - ------------------------------------ BARRY MUNITZ Director June 4, 1996 - ------------------------------------ LESTER POLLACK Director * June 4, 1996 - ------------------------------------ CARL E. REICHARDT Director * June 4, 1996 - ------------------------------------ RICHARD D. ROHR Director * June 4, 1996 - ------------------------------------ SANFORD C. SIGOLOFF Director * June 4, 1996 - ------------------------------------ HAROLD M. WILLIAMS /s/ Susan L. Harris June 4, 1996 *By____________________________ SUSAN L. HARRIS ATTORNEY-IN-FACT II-4 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF LOS ANGELES, STATE OF CALIFORNIA, ON MAY 21, 1996. SunAmerica Inc. By: _________________________________ NAME: JAMES R. BELARDI TITLE: EXECUTIVE VICE PRESIDENT POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS ELI BROAD, JAY S. WINTROB AND SUSAN L. HARRIS HIS OR HER TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, WITH FULL POWERS OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS TO THIS REGISTRATION STATEMENT, INCLUDING POST-EFFECTIVE AMENDMENTS, AS WELL AS ANY RELATED REGISTRATION STATEMENT (OR AMENDMENT THERETO) FILED PURSUANT TO RULE 462 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE OR SHE MIGHT OR COULD DO IN PERSON, AND HEREBY RATIFIES AND CONFIRMS ALL HIS OR HER SAID ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM IN PERSON, AND HEREBY RATIFIES AND CONFIRMS ALL HIS OR HER SAID ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM OR HIS OR HER SUBSTITUTE OR SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE THEREOF. THIS POWER OF ATTORNEY MAY BE EXECUTED IN MULTIPLE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT WHICH TAKEN TOGETHER SHALL CONSTITUTE ONE INSTRUMENT. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED. SIGNATURE TITLE DATE Chairman, President and Chief Executive - ------------------------------------- Officer (Principal ELI BROAD Executive Officer) Executive Vice President - ------------------------------------- (Principal JAMES R. BELARDI Financial Officer) Senior Vice President and - ------------------------------------- Controller SCOTT L. ROBINSON (Principal Accounting Officer) II-5 EX-1 2 REGISTRATION AGREEMENT EXHIBIT 1 ______________________________________________________________________________ ______________________________________________________________________________ SUNAMERICA INC. (a Maryland corporation) REGISTRATION AGREEMENT ---------------------- Dated: June __, 1996 ______________________________________________________________________________ ______________________________________________________________________________ SUNAMERICA INC. (a Maryland corporation) REGISTRATION AGREEMENT ---------------------- June __, 1996 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 MERRILL LYNCH & CO., INC. North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: SunAmerica Inc., a Maryland corporation (the "Company"), and Mr. Eli Broad (the "Selling Stockholder") confirm their respective agreements with Merrill Lynch & Co., Inc., a Delaware corporation ("ML&Co."), and with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), in connection with the proposed issue and sale by ML&Co. to the Underwriter, pursuant to an underwriting agreement, dated the date hereof (the "Underwriting Agreement"), among ML&Co. and the Underwriter, of an aggregate of 3,000,000 of ML&Co.'s Structured Yield Product Exchangeable for Stock/SM/, ___% STRYPES/SM/ due ___________, 1999 (each, a "STRYPES"), payable at maturity or upon redemption by delivery of shares of Common Stock, par value $1.00 per share (the "SunAmerica Common Stock"), of the Company, and, at the option of the Underwriter, all or any part of 450,000 additional STRYPES to cover over- allotments, if any. The aforesaid 3,000,000 STRYPES (the "Initial Securities") to be purchased by the Underwriter and all or any part of the 450,000 STRYPES subject to the option described in Section 2(b) of the Underwriting Agreement (the "Option Securities") are hereinafter called, collectively, the "Securities." Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Underwriting Agreement. The Company understands that the Underwriter proposes to make a public offering of the Securities as soon as the Underwriter deems advisable after this Agreement and the Underwriting Agreement have been executed and delivered. The Company acknowledges that the execution and delivery of this Agreement is a condition to the execution and delivery of the Underwriting Agreement by the Underwriter and ML&Co. and that, in consideration of the execution and delivery of the Underwriting Agreement by the Underwriter and ML&Co., the Company is willing to make the representations, warranties and covenants herein contained. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-4111) covering the registration of 3,450,000 shares of SunAmerica Common Stock that may be delivered at maturity or upon redemption of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Each prospectus used before such registration statement became effective is herein called a "SunAmerica preliminary prospectus." Such registration statement, including the exhibits thereto, the schedules thereto, if any, and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became effective, is herein called the "SunAmerica Registration Statement." Any registration statement filed pursuant to Rule 462(b) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") is herein referred to as the "SunAmerica Rule 462(b) Registration Statement," and after such filing the term "SunAmerica Registration Statement" shall include the SunAmerica Rule 462(b) Registration Statement. The final prospectus, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for use in connection with the offering of the Securities is herein called the "SunAmerica Prospectus." For purposes of this Agreement, all references to the SunAmerica Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the SunAmerica Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the SunAmerica Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the SunAmerica Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by reference in the SunAmerica Registration Statement, such SunAmerica preliminary prospectus or the SunAmerica Prospectus, as the case may be. 2 Prior to the closing under the Underwriting Agreement, the Company, Merrill Lynch Capital Services, Inc., a wholly owned subsidiary of ML&Co. (the "ML&Co. Subsidiary"), and the Selling Stockholder have entered into an agreement (the "Stock Agreement"), pursuant to which the Selling Stockholder is obligated to deliver to the ML&Co. Subsidiary, on _____, 1999 or immediately prior to a redemption of his obligations under the Stock Agreement, a specified number of shares of SunAmerica Common Stock, subject to the Selling Stockholder's option, exercisable in his sole discretion, to satisfy his obligations under the Stock Agreement by delivering immediately prior to such maturity or redemption a specified amount of cash in lieu of such shares. 1. Representations and Warranties. (A) The Company represents and ------------------------------ warrants to each of the Underwriter and to ML&Co. as of the date hereof, as of the Closing Time referred to in Section 2(c) of the Underwriting Agreement, and as of each Date of Delivery (if any) referred to in Section 2(b) of the Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as follows: (a) The SunAmerica Registration Statement (including the most recent post-effective amendment thereto, if any) has been declared effective by the Commission; no stop order suspending the effectiveness of the SunAmerica Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document filed or to be filed pursuant to the Exchange Act and incorporated by reference in the SunAmerica Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the SunAmerica Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the SunAmerica Registration Statement, since the later of the date it became effective and the date of the most recent post-effective amendment, if any, will not fail to reflect any facts or events which individually or in the aggregate represent a fundamental change in the information set forth in the SunAmerica Registration Statement as of such date, (iii) the SunAmerica Registration Statement and the SunAmerica Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the SunAmerica Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this Section 1(b) do not apply to statements or omissions in the SunAmerica Registration Statement or the SunAmerica Prospectus based upon information relating to the Underwriter or ML&Co. furnished to the Company in writing by the Underwriter or ML&Co. expressly for use therein. 3 (c) This Agreement and the transactions contemplated hereby have been duly authorized, and this Agreement has been duly executed and delivered by the Company. (d) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the SunAmerica Registration Statement and SunAmerica Prospectus; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (e) Each of SunAmerica Life Insurance Company, First SunAmerica Life Insurance Company, Anchor National Life Insurance Company, SunAmerica Asset Management Corp., Resources Trust Company, Royal Alliance Associates, Inc., SunAmerica Securities, Inc., Ford Life Insurance Company and CalFarm Life Insurance Company (together, the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the SunAmerica Registration Statement and SunAmerica Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the owner-ship or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned (except for directors qualifying shares) directly or through subsidiaries, by the Company, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. (f) The authorized, issued and outstanding capital stock of the Company is as set forth in the SunAmerica Registration Statement and SunAmerica Prospectus (except for subsequent issuances, if any, pursuant to reservations, stock option agreements, employee benefit plans or the exercise of convertible securities which may be referred to in the SunAmerica Registration Statement and SunAmerica Prospectus); all of the issued and outstanding shares of capital stock have been duly authorized and validly issued and are fully paid, nonassessable and not subject to any preemptive or similar rights. 4 (g) None of the Company nor any of the Subsidiaries is in violation of its respective charter or bylaws, as applicable, or in default in the performance of any material obligation, agreement, covenant or condition contained in any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or of any of the Subsidiaries is subject, or in violation of any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the registration of the SunAmerica Common Stock, will not conflict with or constitute a breach of, or a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries pursuant to, any material contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company or any of the Subsidiaries is subject, except for a conflict, breach, default, lien, charge or encumbrance which would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries considered as one enterprise, nor will such action result in any violation of the provisions of the articles of incorporation or by-laws of the Company or any of the Subsidiaries or any applicable law, administrative regulation or administrative or court decree and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company of its obligations under this Agreement or the issuance and sale of the Securities, except such as may be required by the securities or Blue Sky laws or insurance securities laws of the various states in connection with the offer and sale of the Securities. (h) There are no legal or governmental proceedings pending or, to the knowledge of the Company threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the SunAmerica Registration Statement or the SunAmerica Prospectus and are not so described or which are reasonably likely to result in any material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, or which would be reasonably likely to materially and adversely affect a material portion of the properties or assets thereof or which is reasonably likely to materially and adversely affect the consummation of this Agreement; all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective property or assets is the subject which are not described in the SunAmerica Registration Statement or the SunAmerica Prospectus, including ordinary routine litigation incidental to the business of the Company or any of its subsidiaries, are, considered in the aggregate, not material; 5 and there are no contracts or documents that are required to be filed as exhibits to the SunAmerica Registration Statement by the Securities Act, the Exchange Act or the rules and regulations thereunder, that have not been filed as required. (i) Price Waterhouse LLP, the accountants who certified the financial statements and supporting schedules of the Company included or incorporated by reference in the SunAmerica Registration Statement and SunAmerica Prospectus, are independent public accountants with respect to the Company and the subsidiaries of the Company as required by the Securities Act and the rules and regulations promulgated thereunder. (j) The financial statements of the Company included or incorporated by reference in the SunAmerica Registration Statement or SunAmerica Prospectus present fairly the financial position of the Company and the consolidated subsidiaries of the Company as of the dates indicated and the results of their operations for the periods specified; except as otherwise stated in the SunAmerica Registration Statement and SunAmerica Prospectus, said financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; and the supporting schedules included or incorporated by reference in the SunAmerica Registration Statement or SunAmerica Prospectus present fairly the information required to be included therein. (k) Since the respective dates as of which information is given in the SunAmerica Registration Statement and SunAmerica Prospectus, and except as otherwise stated or contemplated therein, (i) there has been no material adverse change and no development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) there have been no transactions entered into by the Company or any of the Subsidiaries which are material to the Company and its subsidiaries, considered as one enterprise, other than those entered into in the ordinary course of business and (iii) except for regular quarterly dividends, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (l) The Company and the Subsidiaries possess such certificates, authorizations or permits issued by the appropriate state or federal regulatory agencies or bodies as are necessary to conduct the business as now conducted by them and as described in the SunAmerica Registration Statement or SunAmerica Prospectus, except where the failure to so possess such certificates, authorizations or permits would not have a material adverse effect on the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise; and neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, is reasonably likely to have a material adverse effect on the condition, financial or otherwise, or the 6 earnings or business affairs of the Company and its subsidiaries, considered as one enterprise. (m) Neither the Company nor any of its affiliates is presently doing business with the government of Cuba or with any person or affiliate located in Cuba. (n) There are no holders of securities of the Company with currently exercisable registration rights to have any securities registered as part of the SunAmerica Registration Statement or included in the offering contemplated by this Agreement. (o) The SunAmerica Common Stock conforms in all material respects to the statements relating thereto contained in the SunAmerica Prospectus and the SunAmerica Registration Statement. (p) The Company is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (q) All of the SunAmerica Stock currently held by the Selling Stockholder is, and the SunAmerica Common Stock which will be issued upon conversion of shares of the Company's Nontransferable Class B Stock, par value $1.00 per share ("Class B Stock"), currently held by the Selling Stockholder will be, validly issued, fully paid and non-assessable and not be subject to any preemptive or other right to subscribe for or purchase Class B Stock or SunAmerica Common Stock. (B) The Selling Stockholder represents and warrants to each of the Underwriter and ML&Co. as of the date hereof, as of the Closing Time referred to in Section 2(c) of the Underwriting Agreement, and as of each Date of Delivery (if any) referred to in Section 2(b) of the Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as follows: (a) At the date hereof, the Selling Stockholder is the sole registered owner of and has all rights in and to at least 3,450,000 shares of Class B Stock, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. If and when the Selling Stockholder delivers to the ML&Co. Subsidiary shares of Class B Stock or SunAmerica Common Stock pursuant to the Stock Agreement, upon delivery by the Selling Stockholder to the ML&Co. Subsidiary of such shares of SunAmerica Stock pursuant to the Stock Agreement, the ML&Co. Subsidiary will be the sole registered owner of an equivalent number of shares of SunAmerica Common Stock and, assuming the ML&Co. Subsidiary purchased for value in good faith and without notice of any adverse claim, the ML&Co. Subsidiary will have acquired all rights in and to such shares of SunAmerica Common Stock, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity. The delivery of shares of SunAmerica Class B Stock or Common Stock to the ML&Co. Subsidiary in accordance with the Stock Agreement is not, and at the time 7 of delivery of such shares will not be, subject to any right of first refusal or similar rights of any person pursuant to any contract to which the Selling Stockholder is a party or by which he is bound. (b) This Agreement has been duly executed and delivered by the Selling Stockholder. (c) The Stock Agreement at the Closing Time, will have been duly executed and delivered by the Selling Stockholder and (assuming the due authorization, execution and delivery by the ML&Co. Subsidiary) will constitute a valid and binding agreement of the Selling Stockholder, enforceable against the Selling Stockholder in accordance with its terms, except (x) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally, (y) as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and (z) that the Selling Stockholder makes no representation or warranty as to the application of the Commodities Exchange Act or the rules and regulations of the Commodities Futures Trading Commission promulgated thereunder (collectively, the "CEA"), to the matters set forth in this paragraph (c). Amounts received by the Selling Stockholder at Closing Time and at each Date of Delivery, if any, pursuant to the Stock Agreement will not be used by the Selling Stockholder for the purpose, whether immediate, incidental or ultimate, of buying or carrying a margin stock, as such terms are defined in Regulation G promulgated by the Board of Governors of the Federal Reserve System. (d) The execution, delivery and performance by the Selling Stockholder of this Agreement and the Stock Agreement and the consummation by the Selling Stockholder of the transactions contemplated herein and therein and compliance by the Selling Stockholder with its obligations hereunder and thereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Selling Stockholder Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Selling Stockholder pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument to which the Selling Stockholder is a part or by which he may be bound, or to which any of the property or assets of the Selling Stockholder is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not, singly or in the aggregate, materially and adversely affect the ability of the Selling Stockholder to perform his obligations under this Agreement or the Stock Agreement), nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Selling Stockholder or any of his assets, properties or operations (except for (x) such violations that would not, singly or in the aggregate, materially and adversely affect the ability of the Selling 8 Stockholder to perform his obligations under this Agreement or the Stock Agreement and (y) violations of the CEA, as to which the Selling Stockholder makes no representation or warranty). As used herein, a "Selling Stockholder Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Selling Stockholder. (e) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the execution, delivery or performance by the Selling Stockholder of this Agreement or the Stock Agreement or the consummation by the Selling Stockholder of the transactions contemplated by this Agreement or the Stock Agreement, except (x) such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws, and (y) that the Selling Stockholder makes no representation or warranty as to the application of the CEA to the matters set forth in this paragraph (e). (f) The Selling Stockholder is familiar with the representations and warranties of SunAmerica contained in Section 1(A) of this Agreement and the information included or incorporated by reference in the SunAmerica Registration Statement and the SunAmerica Prospectus and has no reason to believe that (x) the representations and warranties of SunAmerica contained in Section 1(A) of this Agreement are not true and correct, (y) the SunAmerica Registration Statement, any SunAmerica Rule 462(b) Registration Statement or any post-effective amendments thereto, at the respective times the SunAmerica Registration Statement, any SunAmerica Rule 462(b) Registration Statement or any post-effective amendments thereto became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (z) the SunAmerica Prospectus or any amendment or supplement thereto, at the time the SunAmerica Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time (and, if any Option Securities are purchased, at the Date of Delivery), included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Any certificate signed by the Selling Stockholder delivered to the Underwriter or the Company shall be deemed a representation and warranty by the Selling Stockholder to the Underwriter or the Company, as the case may be, as to the matters covered thereby. 2. Covenants of the Company. In further consideration of the ------------------------ agreements of the Underwriter and ML&Co. contained herein, the Company covenants as follows: (a) To furnish the Underwriter, without charge, a signed copy of the SunAmerica Registration Statement (including exhibits thereto) and, during the period mentioned in paragraph (c) below, as many copies of the SunAmerica Prospectus, any docu- 9 ments incorporated by reference therein and any supplements and amendments thereto or to the SunAmerica Registration Statement as the Underwriter may reasonably request. (b) Before amending or supplementing the SunAmerica Registration Statement or the SunAmerica Prospectus with respect to the SunAmerica Common Stock, to furnish to the Underwriter a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Underwriter reasonably objects. (c) If, during such period after the first date of the public offering of the Securities as the SunAmerica Prospectus is required by law to be delivered in connection with sales by the Underwriter or any dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the SunAmerica Prospectus in order to make the statements therein, in the light of the circumstances when the SunAmerica Prospectus is delivered to a purchaser, not misleading, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriter, and to any dealers (whose names and addresses the Underwriter will furnish to the Company) to which Securities may have been sold by the Underwriter and to any other dealer upon request, either amendments or supplements to the SunAmerica Prospectus so that the statements in the SunAmerica Prospectus as so amended or supplemented will not, in the light of the circumstances when the SunAmerica Prospectus is delivered to a purchaser, be misleading or so that the SunAmerica Prospectus, as so amended or supplemented, will comply with law. (d) To endeavor to qualify the SunAmerica Common Stock for offer and sale under the securities or Blue Sky laws or insurance securities laws of such jurisdictions as the Underwriter shall reasonably request. (e) To make generally available to the Company's security holders and to the Underwriter as soon as practicable an earning statement covering a twelve month period beginning on the first day of the first full fiscal quarter after the date of this Agreement, which earning statement shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. (f) During the period mentioned in paragraph (c) above, to advise the Underwriter promptly of the issuance by the Commission of any stop order suspending the effectiveness of the SunAmerica Registration Statement or the initiation or threatening of any proceeding for that purpose. (g) Not to, and to cause its subsidiaries not to, without the prior written consent of the Underwriter, directly or indirectly, for a period of 60 days after the date of the ML&Co. Prospectus, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, or enter into any agreement to sell, any SunAmerica Common Stock or any securities convertible into or exchangeable or exercisable for any SunAmerica Common Stock; provided, however, that such restriction shall not affect the ability of SunAmerica or its subsidiaries to take any such action (i) as a consequence of obligations under securities outstanding prior to the date of the ML&Co. Prospectus, (ii) in connection with any 10 employee benefit or incentive plan of SunAmerica or its subsidiaries, (iii) in connection with the offering of the Securities or (iv) in connection with the transactions contemplated as of the date hereof by the Share Exchange Agreement dated as of January 12, 1996, by and among the Company, Stanford Ranch, Inc. and the stockholders of Stanford Ranch, Inc. listed in the signature pages thereto. (h) To make timely filings of periodic reports under the 1934 Act and to take all other actions reasonably requested by the ML&Co. Subsidiary which request shall be based on an opinion of Brown & Wood, and which opinion shall state that it is based on a change in law, regulation or judicial or regulatory interpretation since the date hereof, to ensure the availability of Rule 144 under the 1933 Act in connection with resales of SunAmerica Common Stock by the ML&Co. Subsidiary. (i) If the bank or trust company (the "Custodian") acting as collateral agent and custodian for the ML&Co. Subsidiary delivers to the Company (or its transfer agent) for transfer shares of Class B Stock together with duly executed stock transfer powers therefor, to (or cause its transfer agent to) deliver immediately an equivalent number of shares of SunAmerica Common Stock to the transferees named in such stock powers. (j) So long as any Securities remain outstanding, not to amend its charter in any way that would adversely affect the rights, preferences and privileges of the holders of Class B Stock including, without limitation, (i) the combination or reclassification of Class B Stock; (ii) the convertibility of Class B Stock into SunAmerica Common Stock including but not limited to the conversion of Class B Stock into shares of SunAmerica Common Stock upon a transfer of shares of Class B Stock not permitted under SunAmerica's charter; (iii) the exchange of Class B Stock for shares of Transferable Class B Stock; (iv) the ability to pledge shares of Class B Stock as collateral security for indebtedness and the ability of pledgees to register such pledged shares in "street" or "nominee" name; and (v) the reservation and availability of SunAmerica Common Stock for issuance upon conversion of outstanding shares of Class B Stock. The amendment (as described at pages 14 and 15 of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement dated January 15, 1996) to the Company's charter that was approved by the Company's shareholders at the Company's Annual Meeting on February 16, 1996 shall not be deemed to adversely affect the Nontransferable Class B Stock in any way. 3. Covenants of the Selling Stockholder. ------------------------------------ (a) The Selling Stockholder covenants with the Underwriter that, during a period of 60 days from the date of this Agreement, the Selling Stockholder will not, without the prior written consent of the Underwriter, (x) offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any shares of SunAmerica Common Stock, securities convertible into, exchangeable for or exercisable for or repayable with shares of SunAmerica Common Stock or any rights or warrants to acquire shares of SunAmerica Common Stock, or (y) cause to be filed any registration statement under the 1933 Act with respect to any shares of SunAmerica Common Stock, securities convertible into, exchangeable for or exercisable for or repayable with 11 shares of SunAmerica Common Stock, or any rights or warrants to acquire shares of SunAmerica Common Stock; provided, however, that such restriction shall not affect the ability of the Selling Stockholder to transfer SunAmerica Common Stock (i) upon his death, (ii) in a bona fide gift where the donee agrees to a similar restriction on transfer and (iii) pursuant to the Share Exchange Agreement dated as of January 31, 1996 by and among the Company, Stanford Ranch, Inc., the Selling Stockholder and other Stanford Ranch Stockholders listed in the signature pages thereto. (b) At or prior to Closing Time, the Selling Stockholder will deliver to the ML&Co. Subsidiary a duly executed purpose statement on Form FR, G-3 of the Board of Governors of the Federal Reserve System with respect to the Stock Agreement. 4. Indemnification and Contribution. The Company and the Selling -------------------------------- Stockholder jointly and severally agree to indemnify and hold harmless the Underwriter, ML&Co. and each person, if any, who controls the Underwriter or ML&Co. within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, expense and liabilities, joint or several (including, without limitation, any legal or other expenses reasonably incurred by any Underwriter or any such controlling person in connection with defending or investigating any such action or claim) (collectively, "Losses"), caused by any untrue statement or alleged untrue statement of a material fact contained in the SunAmerica Registration Statement or any amendment thereof, any SunAmerica preliminary prospectus or the SunAmerica Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Losses are caused by any such untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished to the Company by the Underwriter or ML&Co. in writing expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any SunAmerica preliminary prospectus shall not inure to the benefit of the Underwriter or ML&Co., or any person controlling the Underwriter or ML&Co., if a copy of the SunAmerica Prospectus (as then amended or supplemented, if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of the Underwriter to the person asserting such Losses, if required by law so to have been delivered, at or prior to the purchase of Securities by such person, and if the SunAmerica Prospectus (as so amended or supplemented) would have cured the defect giving rise to such Losses. This indemnity will be in addition to any liability which the Company and the Selling Stockholder may otherwise have. The obligations and liabilities of the Company under the immediately preceding paragraph shall be subject to the following terms and conditions: (i) the indemnified party shall have previously requested indemnification for the Losses from the Selling Stockholder under this Section 4; (ii) the Company shall have received from the indemnified party notice of the indemnified party's request for indemnification from the Selling Stockholder; and (iii) 12 the Selling Stockholder shall have failed to pay or reimburse such indemnified party, within 60 days from the date such request was made, in accordance with such request. The Underwriter agrees to indemnify and hold harmless the Company, its directors, its officers who sign the SunAmerica Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and the Selling Stockholder to the same extent as the foregoing indemnity from the Company and the Selling Stockholder to such Underwriter, but only to the extent that any untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with information furnished to the Company by the Underwriter or ML&Co. in writing expressly for use in the SunAmerica Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica Prospectus or any amendments or supplements thereto. This indemnity will be in addition to any liability which the Underwriter may otherwise have. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Underwriter, in the case of parties indemnified pursuant to the second preceding paragraph, and by the Company and the Selling Stockholder, in the case of parties indemnified pursuant to the first preceding paragraph. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. 13 If the indemnification provided for in the first or second paragraph in this Section 4 is unavailable to an indemnified party or insufficient in respect of any Losses referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholder on the one hand and the Underwriter and ML&Co. on the other hand, from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholder on the one hand and of the Underwriter and ML&Co. on the other hand in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. The relative benefits received by the offering of the Securities shall be deemed to be such that the Underwriter and ML&Co. shall be responsible for that portion of the aggregate amount of such Losses, represented by the percentage that the total underwriting discount received by the Underwriter, as set forth on the cover of the ML&Co. Prospectus, bears to the aggregate initial public offering price of the Securities as set forth on such cover and the Company and the Selling Stockholder shall be responsible for the balance. The relative fault of the Company and the Selling Stockholder on the one hand and of the Underwriter and ML&Co. on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Stockholder, on the one hand, or by the Underwriter or ML&Co., on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Selling Stockholder, the Underwriter and ML&Co. agree that it would not be just or equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the Losses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4, the Underwriter and ML&Co. shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities distributed to the public were offered to the public exceeds the amount of any damages that the Underwriter and ML&Co. has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 4 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 4 and the representations and warranties of the Company and the Selling Stockholder, respectively, 14 contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Underwriter or ML&Co. or any person controlling the Underwriter or ML&Co. or by or on behalf of the Company, its directors or officers or any person controlling the Company or by or on behalf of the Selling Stockholder and (iii) acceptance of and payment for any of the Securities. 5. Termination. In the event that the Underwriter terminates the ----------- Underwriting Agreement as provided in Section 9 thereof, this Agreement shall simultaneously terminate, except that the provisions of Sections 2 and 3, the indemnity agreements and the contribution provisions set forth in Section 4, and the provisions of Section 6 shall remain in effect. 6. Notices. All notices and other communications hereunder shall be ------- in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be directed to it at North Tower, World Financial Center, New York, New York 10281- 1209, attention of Douglas W. Squires, Managing Director; notices to ML&Co. shall be directed to it at 100 Church St., 12th Floor, New York, New York 10007, attention of the Secretary, with a copy to the Treasurer at World Financial Tower, South Tower, New York, New York 10080-6107; notices to the Company shall be directed to it at 1 SunAmerica Center, 1999 Avenue of the Stars, Century City, California 90067-6022, attention of Susan L. Harris, Esq., Senior Vice President and General Counsel -- Corporate Affairs. 7. Parties. This Agreement shall inure to the benefit of and be ------- binding upon each of the Underwriter, ML&Co. and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriter, ML&Co. and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 4 and 5 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriter, ML&Co. and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from the Underwriter shall be deemed to be a successor by reason merely of such purchase. 8. Expenses. The Company and the Selling Stockholder, jointly and -------- severally, will pay all expenses incident to the performance of their obligations under this Agreement including, without limitation, the expenses of printing all documents relating to the offering and of the mailing and delivering of copies thereof to the Underwriter, any fees charged by investment rating agencies for rating the Securities, and the fees and disbursements of their counsel and advisers. 15 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED ------------- IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. 10. Effect of Headings. The Article and Section headings herein and ------------------ the Table of Contents are for convenience only and shall not affect the construction hereof. 11. Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same agreement. 16 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriter, ML&Co., Mr. Eli Broad and the Company in accordance with its terms. Very truly yours, SUNAMERICA INC. By___________________________ Name: Title: ELI BROAD -------------------------------- CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By ______________________________________ Authorized Signatory MERRILL LYNCH & CO., INC. By ______________________________________ Name: Title: 17 EX-5 3 OPINION OF PIPER & MARBURY L.L.P. EXHIBIT 5 [LETTERHEAD OF PIPER & MARBURY L.L.P.] May 20, 1996 SunAmerica Inc. 1 SunAmerica Center Century City Los Angeles, California 90067-6022 Re: Registration Statement filed May 20, 1996 ----------------------------------------- Ladies and Gentlemen: We have acted as Maryland counsel to SunAmerica Inc. (the "Corporation") in connection with its Registration Statement on Form S-3 filed on the date hereof with the Securities and Exchange Commission (the "Commission") relating to the sale and transfer by Merrill Lynch & Co., Inc. ("ML&Co.") of up to 3,450,000 shares of Class A Common Stock, par value $1.00 (the "Common Stock") of the Company. We have reviewed the Charter and By-Laws of the Corporation, the Registration Statement and the proceedings heretofore taken by the Corporation in connection with the authorization, issuance and sale of the shares of Common Stock and Non-Transferable Class B Stock beneficially owned by Mr. Eli Broad. In addition, we have examined such other documents, instruments and matters of law as we have deemed necessary to the rendering of the opinions expressed below. We have assumed, for purposes of this opinion, that the shares of Common Stock to be sold by ML&Co. pursuant to the Registration Statement will consist of shares of Common Stock beneficially owned, directly or indirectly, by Mr. Eli Broad as of the date of this opinion by virtue of his ownership of shares of Class B Stock acquired by him at the time of the Corporation's recapitalization in 1985, and that the number of such shares of Class B Stock owned by him is as set forth in the Company's most recent annual proxy statement. Based on the foregoing, we are of the opinion that the shares of Common Stock to be sold by ML&Co. pursuant to the Registration Statement have been duly authorized for issuance, and when sold and transferred as contemplated by the Registration Statement, will be duly issued, fully paid and nonassessable. Piper & Marbury L.L.P. SunAmerica Inc. May 20, 1996 Page 2 We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the reference to our firm in the Registration Statement. Very truly yours, /s/ Piper & Marbury L.L.P. EX-10 4 INDEMNIFICATION AND REIMBURSEMENT AGRMNT EXHIBIT 10 INDEMNIFICATION AND REIMBURSEMENT AGREEMENT ____________, 1996 SunAmerica Inc. 1 SunAmerica Center Century City Los Angeles, CA 90067-6022 Dear Ladies and Gentlemen: Mr. Eli Broad (the "Selling Stockholder") confirms his agreement with SunAmerica Inc., a Maryland corporation (the "Company"), in connection with the proposed issue and sale by Merrill Lynch & Co., Inc., a Delaware corporation ("ML & Co."), to Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), pursuant to an underwriting agreement (the "Underwriting Agreement") to be entered into between ML & Co. and the Underwriter of an aggregate of 3,000,000 of ML & Co.'s Structured Yield Product Exchangeable for Stock (each, a "STRYPES"), payable at maturity or upon redemption by the delivery of shares of Common Stock, par value $1.00 per share (the "SunAmerica Common Stock"), of the Company, subject to ML & Co.'s right to deliver an amount in cash. In addition, the Underwriting Agreement will provide for the issue and sale by ML & Co. to the Underwriter up to 450,000 additional STRYPES solely to cover over-allotments, if any. The Selling Stockholder understands that the Underwriter proposes to make a public offering (the "Offering") of the STRYPES as soon as the Underwriter deems advisable after the Underwriting Agreement and a registration agreement (the "Registration Agreement") to be entered into among the Company, the Selling Stockholder, the Underwriter and ML & Co., have been executed and delivered. The Selling Stockholder acknowledges that the execution and delivery of this Agreement is a condition to the execution and deliver of the Registration Agreement by the Company and that, in consideration of the execution and delivery of the Registration Agreement by the Company, the Selling Stockholder is willing to make the representations, warranties and covenants herein contained. The Selling Stockholder understands that the Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-4111) covering the registration of 3,450,000 shares of SunAmerica Common Stock that may be delivered at maturity or upon redemption of the STRYPES under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Each prospectus used before such registration statement becomes effective is herein called a "SunAmerica Preliminary Prospectus." Such registration statement, including the exhibits thereto, the schedules thereto, if any, and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it becomes effective, is herein called the "SunAmerica Registration Statement." Any registration statement filed pursuant to 462(b) of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") is herein referred to as the "SunAmerica Rule 462(b) Registration Statement," and after such filing the term "SunAmerica Registration Statement" shall include the SunAmerica Rule 462(b) Registration Statement. The final prospectus, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for use in connection with the offering of the Securities is herein called the "SunAmerica Prospectus." For purposes of this Agreement, all references to the SunAmerica Registration Statement, any Sunamerica Preliminary Prospectus, the SunAmerica Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to he Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in the Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the SunAmerica Registration Statement, any SunAmerica Preliminary Prospectus or the SunAmerica Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the SunAmerica Registration Statement, any SunAmerica Preliminary Prospectus or the SunAmerica Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Sunamerica Registration Statement, any SunAmerica Preliminary Prospectus or the SunAmerica Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by reference in the SunAmerica Registration Statement, such SunAmerica Preliminary Prospectus or the SunAmerica Prospectus, as the case may be. 2 Prior to the closing under the Underwriting Agreement, Merrill Lynch Capital Services Inc., a wholly-owned subsidiary of ML & Co. (the "ML & Co. Subsidiary"), and the Selling Stockholder will enter into a contract (the "Stock Agreement"), pursuant to which the Selling Stockholder will be obligated to deliver to the ML & Co. Subsidiary, upon maturity or redemption of the Stock Agreement, a specified number of shares of stock of the Company, subject to the Selling Stockholder's option, exercisable in his sole discretion, to satisfy his obligation under the Stock Agreement by delivering upon maturity or redemption a specified amount of cash in lieu of such shares. 1. Representations and Warranties. The Selling Stockholder ------------------------------ represents and warrants to the Company as follows: (i) Execution and Delivery of the Agreement. This Agreement has been --------------------------------------- duly executed and delivered by the Selling Stockholder. (ii) Absence of Defaults and Conflicts. The execution, delivery and --------------------------------- performance by the Selling Stockholder of this Agreement and the consummation by the Selling Stockholder of the transactions contemplated herein and compliance by the Selling Stockholder with its obligations hereunder do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Selling Stockholder pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument to which the Selling Stockholder is a party or by which he may be bound, or to which any of the property or assets of the Selling Stockholder is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not, singly or in the aggregate, materially and adversely affect the ability of the Selling Stockholder to perform his obligations under this Agreement), nor will such action result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Selling Stockholder or any of his assets, properties or operations (except for such violations that would not singly or in the aggregate, materially and adversely affect the ability of the Selling Stockholder to perform his obligations under this Agreement). 3 2. Indemnification and Contribution. The Selling Stockholder agrees -------------------------------- to indemnify and hold harmless the Company, its directors, its officers who sign the SunAmerica Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities, joint or several (including, without limitation, any legal or other expenses reasonably incurred by the Company, its directors, its officers who sign the SunAmerica Registration Statement or any such controlling person in connection with defending or investigating any such action or claim) arising in connection with the Offering, including without limitation any such claims, damages or liabilities (i) caused by any untrue statement or alleged untrue statement of a material fact contained in the SunAmerica Registration Statement (or any amendment thereto), any SunAmerica Preliminary Prospectus or the SunAmerica Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) initiated by or owed to the Underwriter or ML & Co. pursuant to the Registration Agreement (including, without limitation, any such claims, damages or liabilities (A) caused by a breach by the Company of any representation or warranty of the Company contained in the Registration Agreement or (B) pursuant to the indemnification or contribution provisions of the Registration Agreement). This indemnity will be in addition to any liability which the Selling Stockholder may otherwise have. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to the preceding paragraph, such person (the "indemnified party") shall promptly notify the person against who such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, and the fees and expenses of such counsel shall be at the expense of such indemnifying party. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same 4 jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgement for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first paragraph of this Section 2 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then the indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Selling Stockholder on the one hand and the Company on the other hand from the Offering or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Selling Stockholder on the one hand and of the Company on the other hand in connection with such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The Selling Stockholder and the Company agree that it would not be just or equitable if contribution pursuant to this Section 2 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection 5 with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 2 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 2 and the representations and warranties of the Selling Stockholder contained herein shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Company, its directors or officers or any person controlling the Company or on behalf of the Selling Stockholder and (iii) acceptance of and payment for any of the STRYPES by the Underwriter. 3. Expenses. The Selling Stockholder will pay all expenses incident -------- to the performance of his obligations in connection with the Offering. In addition, the Selling Stockholder will reimburse the Company for all out-of- pocket expenses incurred in connection with the Offering, including, without limitation, all expenses incident to the performance by the Company of its obligations under the Registration Agreement and the expenses of printing all documents relating to the Offering and of the mailing and delivering of copies thereof to the Underwriter and any fees charged by investment rating agencies for rating the Securities. The Selling Stockholder's obligations set forth in this Section 3 shall be without regard to whether the Underwriting Agreement or the Registration Agreement is executed or the Offering is consummated. 4. Miscellaneous. This Agreement may be signed in any number of ------------- counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon thereto and hereto were upon the same instrument. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 6 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Selling Stockholder a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Selling Stockholder and the Company in accordance with its terms. Very truly yours, __________________ Eli Broad CONFIRMED AND ACCEPTED, as of the date first above written: SUNAMERICA INC. By____________________ Name: Title: 7 EX-23.1 5 CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS ---------------------------------- We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated November 6, 1995 appearing on page F-2 of SunAmerica Inc.'s Annual Report on Form 10-K for the year ended September 30, 1995. We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appears on page S-2 of such Annual Report on Form 10-K. We also consent to the reference to us under the heading "Experts". /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP Los Angeles, California June 4, 1996 -----END PRIVACY-ENHANCED MESSAGE-----