<PAGE>
As filed with the Securities and Exchange Commission on May 31, 2000.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------
OVERSEAS PARTNERS LTD.
(Exact name of issuer as specified in its charter)
---------------
<TABLE>
<C> <S>
Islands of Bermuda Not Applicable
(I.R.S. Employer
(State of Incorporation) Identification Number)
</TABLE>
Mintflower Place
8 Par-la-Ville Road
Hamilton HM 08, Bermuda
(441) 295-0788
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices and principal place of business)
---------------
Michael J. Molletta
115 Perimeter Center Place
Suite 940
Atlanta, GA 30346
Telephone: (770) 913-6750
Facsimile: (770) 913-6756
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<C> <S>
Jeffrey L. Schulte,
Mark R. Bridges Esquire
Morris, Manning & Martin,
Vice President LLP
1600 Atlanta Financial
Overseas Partners Ltd. Center
Mintflower Place 3343 Peachtree Road, N.E.
8 Par-la Ville Road Atlanta, Georgia 30326
Hamilton, HM 08, Bermuda Telephone: (404) 233-7000
Telephone: (441) 295-0788
</TABLE>
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared 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 offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
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, please 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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed
Proposed maximum
Title of each class of maximum aggregate Amount of
securities to be Amount to be offering price offering registration
registered registered per share(1) price(1) fee
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.10 per share........ 6,000,000 $21.50 $129,000,000 $34,056
</TABLE>
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(1) Estimated pursuant to Rule 457(h) of the Securities Act of 1933, as
amended, solely for purposes of calculating the registration fee, on the
basis of the fair value of the Registrant's Common Stock.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until 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 Section 8(a), may
determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
6,000,000 Shares
Overseas Partners Ltd.
Common Stock
This Prospectus relates to the sale of 6,000,000 shares of our Common Stock,
par value $.10 per share, to our existing shareowners. The offering price of
each share will be the fair value of a share of our Common Stock, as determined
from time to time by our Board of Directors. At the date of this prospectus,
the fair value per share, as determined by our Board of Directors, is $21.50.
There is no public market for our Common Stock, and none is likely to
develop. Investors should not purchase our Common Stock unless they are
prepared to hold it for an indefinite period of time.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
-----------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES OR
INSURANCE COMMISSION OF ANY STATE OR OTHER JURISDICTION NOR HAS ANY SUCH
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
-----------
THE DATE OF THIS PROSPECTUS IS JUNE , 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Forward Looking Statements.................................................. ii
Prospectus Summary.......................................................... 1
Risk Factors................................................................ 2
Use of Proceeds............................................................. 6
The Company................................................................. 7
Periodic Reports Distributed to Shareowners................................. 7
Offering.................................................................... 7
Description of OPL Common Stock............................................. 12
Taxation.................................................................... 16
Experts..................................................................... 18
Legal Matters Concerning OPL Common Stock................................... 18
Where You Can Find More Information......................................... 18
Incorporation of Certain Documents By Reference............................. 18
</TABLE>
Overseas Partners Ltd. has not authorized any dealer, salesperson or other
person to give any information or represent anything not contained in this
prospectus. You should not rely on any unauthorized information. This
prospectus does not offer to sell or buy any shares in any jurisdiction in
which it is unlawful. The information in this prospectus is current as of the
date on the cover.
i
<PAGE>
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus contain forward-looking
information. Forward-looking statements are statements other than historical
information or statements of current condition. Some forward looking statements
can be identified by the use of such words as "expect," "believe," "goal,"
"plan," "intend," "estimate," "may" and "will" or similar words. These forward-
looking statements relate to our plans and objectives for future operations
including our growth and operating strategy, trends in our industry and our
policy on future dividends.
You should be aware that these statements are subject to risks,
uncertainties and other factors, including those discussed in the section
entitled "Risk Factors," that could cause the actual results to differ
materially from those suggested by the forward-looking statements. Accordingly,
there can be no assurance that those indicated results will be realized. Among
the important factors that could cause actual results to differ materially from
those indicated by our forward-looking statements are:
. our ability to replace, with profitable business, the revenues that we
derived in the past from reinsurance of excess value package insurance
associated with the business of United Parcel Service of America, Inc.
("UPS")
. pricing pressure resulting from the competitive environment in which we
operate
. ability to collect reinsurance recoverables
. the uncertainties of the reserving process
. the occurrence of catastrophic events with a frequency or severity
exceeding our estimates
. loss of the services of any of the Company's executive officers
. uncertainties relating to government and regulatory policies (such as
subjecting us to insurance regulation or taxation in certain
jurisdictions)
. losses due to interest rate fluctuations
. developments in global financial markets which could affect our
investment portfolio
. the resolution of any pending or future tax assessments by the IRS
against us
. the resolution of other pending litigation
. losses due to foreign exchange rate fluctuations
. the impact of mergers and acquisitions
We do not undertake to update these forward-looking statements in any
manner.
ii
<PAGE>
PROSPECTUS SUMMARY
This prospectus relates to the sale by us of shares of our Common Stock,
solely to our current shareowners.
This offering will continue for an indefinite period, and we may terminate
it at any time. All of the shares of Common Stock being offered are shares
which we have purchased or shares we anticipate being able to purchase or newly
issued shares.
We have a right to acquire our Common Stock (a "right of first refusal")
upon an attempted transfer for value of any shares. We have historically
exercised this right of first refusal. However, on November 23, 1999 our Board
imposed a temporary limit on the number of shares we are willing to purchase
under our right of first refusal. This temporary limit will be reviewed and may
be changed by our Board from time to time. In addition we have the right under
our Bye-Laws to purchase (or "recall") shares of our Common Stock from
shareowners following their retirement, death or other termination of
employment with UPS, OPL, or any of their respective subsidiaries. The Company
has historically exercised this right of recall each year. However our Board
decided to defer the recall of our shares that was previously scheduled to take
place in January 2000 and 2001 and we currently do not anticipate exercising
our right of recall for the foreseeable future. We have no current intention to
repurchase any shares of Common Stock subscribed for under this offering. Our
repurchase rights are described in more detail later in this prospectus.
The offering price of each share of Common Stock is its current price at the
time we accept a subscription for shares. As used in this prospectus, the
current price of a share of Common Stock means the price at which our Board of
Directors has most recently authorized us to purchase Common Stock from
shareowners. The current price of Common Stock is reviewed, and may be changed,
by the Board of Directors at meetings held in February and August of each year.
We communicate the current price of our Common Stock to our shareowners by
letter following these meetings.
You may pay the aggregate purchase price of the Common Stock to which you
have subscribed by check or money order. A current shareowner may subscribe to
the purchase of not less than 50 shares at anytime nor more than 10,000 shares
of Common Stock annually, by delivering to us a fully executed subscription
agreement in the form accompanying this prospectus, together with a check or
money order for the aggregate price of the total number of shares of Common
Stock subscribed to at the date of transmittal of the request. All sales of
Common Stock subscribed to will be made at the current price of Common Stock at
the time of acceptance.
This offering is being made only to existing shareowners and may only be
accepted by existing shareowners. The right to participate in this offering is
not transferable. Neither this prospectus nor any copy of it may be distributed
or given to any person other than the shareowner to whom it was sent.
This offering has not been registered by, nor has any prospectus been filed
with the Registrar of Companies and Businesses in Singapore in respect of the
shares of Common Stock being offered pursuant to this offering. Shares of
Common Stock may not be offered for subscription or purchased or sold nor may
any document or other material be circulated in connection with the shares of
Common Stock either directly or indirectly to persons in Singapore except under
circumstances that do not amount to an offer of shares to the public or a
section of the public in Singapore.
This document has been prepared for the purposes of a public offer of the
Common Stock in Germany in accordance with the Securities Selling Prospectus
Act (Verkaufsprospektgesetz) (the "SPA") and not been submitted to the Federal
Securities Trading Supervisory Office (Bundesaufsichtsamt fur den
Wertpapierhandel). Therefore, the Common Stock shall not be offered in Germany
by way of a public offer and this document shall not be passed on in Germany
unless in accordance with the restrictions or applicable exemption under the
SPA.
<PAGE>
RISK FACTORS
You should carefully consider the following factors and other information in
this prospectus before deciding to purchase shares of our Common Stock.
Our Future Success Depends on our Ability to Replace the Revenue and Profit
that We Derived in the Past From our Excess Value Reinsurance Program
UPS recently cancelled the shipper's risk insurance program under which we
provided reinsurance of coverage on the loss of or damage to packages shipped
by UPS. This had been our largest and most profitable line of business since
our inception, and has been responsible for nearly all of our underwriting
profits and retained earnings to date. We are currently evaluating new
insurance and reinsurance programs, but if we are unable to replace the revenue
and profits formerly generated by our excess value program, our financial
performance will be materially and adversely affected.
We Face a Risk of Non-Collection of Reinsurance Recoverables
In order to minimize the impact of catastrophic losses on our financial
results, we purchase protection on particular reinsurance programs and / or
lines of business. We initially pay the claims on the programs that we
participate in and seek to recover the reinsured losses from our reinsurers. In
accordance with generally accepted accounting principles, we report as assets,
the amount of claims paid which we expect to recover from reinsurers. However,
there is a risk that we will not be able to collect those amounts due to the
reinsurers inability to pay or due to a dispute over the calculation of the
amount recoverable. If reinsurers cannot or do not pay the amounts which we
believe are recoverable under our reinsurance contracts, our financial
performance will be materially affected.
A significant portion of our assets relates to premiums due to us on
reinsurance contracts we have entered into with brokers or ceding companies.
Similar to any business, collection of receivables is dependent on the
financial performance of the customer. To the extent that a broker or ceding
company cannot pay the premiums owed to us, our financial results will be
negatively impacted.
Loss Reserves are Estimates, and Adverse Development May Harm our Results of
Operations
Like all reinsurers, we maintain reserves to cover our estimated ultimate
liability for losses and loss adjustment expenses with respect to reported and
unreported insured events. Reserves are estimates involving actuarial and
statistical projections at a given time based on facts and circumstances then
known, estimates of future trends in claims severity and other variable factors
such as inflation. If reserves prove to be inadequate in the future, we would
have to increase our reserves and incur a charge to earnings in the period the
reserves are increased, which could have a material adverse effect on our
results of operations and financial condition. We incurred such a charge in
1999. The establishment of appropriate reserves is an uncertain process and
there can be no assurance that ultimate losses will not exceed our loss
reserves.
Our Success Depends on Our Key Executives and the Loss of Any of Our Executives
Could Adversely Affect Our Future Results of Operations
Our success will depend significantly on the efforts and abilities of our
Chief Executive Officer and President, Ms. Mary R. Hennessy, our Vice President
and Chief Underwriting Officer, Mr. Michael J. Cascio, and our Chief Financial
Officer and Treasurer, Mr. Mark R. Bridges. Under Bermuda law, non-Bermudians
may not engage in any gainful occupation in Bermuda without the specific
permission of the appropriate Bermuda government authority. Such permission, or
a work permit for a specific period of time, can be granted upon showing that,
after proper public advertisement, no Bermudian or spouse of a Bermudian is
available who meets the minimum standards for the advertised position. Of our
executive officers, Ms. Hennessy and Mr. Bridges are working under Bermuda work
permits. There can be no assurance that their work permits will be extended or
that, if they were to leave the Company, qualified Bermudians could be
identified or work permits, if necessary, for new executive officers would be
granted. Our future results of operations could be adversely affected if we are
unable to retain our current executives or to attract new executives.
2
<PAGE>
Laws and Regulations Could Have an Adverse Effect on Our Results of Operations
if those Laws and Regulations are Significantly Changed
Reinsurance companies are generally regulated by the jurisdictions in which
they operate. Our reinsurance subsidiaries conduct their reinsurance business
from our principal offices in Bermuda and are subject to regulation under
Bermuda law, which, among other things requires them to register and comply
with certain requirements as to capitalization. These reinsurance entities are
not admitted or authorized to conduct business in any jurisdictions except
Bermuda. We strive to avoid conducting insurance activities in any jurisdiction
that does not provide an exemption for such activities.
However, insurance laws adopted by the jurisdictions which regulate the
companies to which our subsidiaries provide life, property and casualty and
other reinsurance, and U.S. federal tax laws applicable to those companies,
affect us indirectly. Any new legislation subjecting us to supervision and
regulation in the United States or affecting our customers' ability to deal
with us, or the tax treatment of premiums that they pay to us, could have an
adverse effect on our business. In addition, no assurance can be given that if
we were to become subject to regulation in the United States or any state
thereof or of any other country at any time in the future, we would be able to
comply with such laws.
Our Investment Results Could Suffer as a Result of Fluctuation in Interest
Rates
We maintain a portfolio of fixed income investments as well as an investment
in a strategic income mutual fund. The value of these investments can
fluctuate, depending on changes in prevailing interest rates. Our general
strategy is to invest in high quality securities while maintaining
diversification to avoid significant concentrations to individual issuers and
industry segments and countries. We generally do not hedge our investments
against interest rate risk. Accordingly, changes in interest rates may result
in fluctuations in the income derived from, and the valuation of, our fixed
income investments which could have an adverse effect on our reported results.
Our Portfolio May be Adversely Affected by Changes in Global Equity Markets
We invest in equity securities to diversify our exposure to interest rate
risk and to enhance our total return. Our equity portfolios are subject to
changes in value due to movements in equity prices. In addition, a portion of
the strategic income mutual fund is invested in convertible debt securities,
whose values are exposed to similar equity price risk. Fluctuations in the
market price of a security may result from perceived changes in the underlying
economic characteristics of the issuer or its country of operation, the
relative price of alternative investments or general market conditions. As a
result, our portfolio may be negatively affected by changes in global financial
markets.
If the IRS Determines That We are Subject to U.S. Income Tax, Such a
Determination Could Have a Negative Impact on Our Financial Condition
We and certain of our subsidiaries are incorporated outside the United
States and, as foreign corporations, we are not obligated to file United States
tax returns. We believe that we operate in such a manner that does not subject
us to U.S. tax (other than U.S. excise tax on reinsurance premiums and
withholding tax on certain investment income from U.S. sources) because we do
not engage in business in the United States. There can be no assurance,
however, that we will not become subject to U.S. tax in the future. If we are
deemed to be engaged in business in the United States we would be subject to
U.S. tax at regular corporate rates on our income that is related to our U.S.
business.
3
<PAGE>
The United States Internal Revenue Service ("IRS") previously asserted that
we were subject to U.S. taxation in the amounts of approximately $53 million
for our 1984 taxable year and $240 million for our 1985 through 1987 taxable
years, plus additions to tax and interest, for those years. On February 13,
1998, the IRS indicated that it no longer intended to pursue its position
against us for 1984. On January 4, 1999, the IRS indicated that it no longer
intended to pursue its position against us for 1985 through 1987.
On December 22, 1998, the IRS issued a Notice of Deficiency with respect to
our 1988 through 1990 taxable years in which it asserted that we were subject
to U.S. taxation in the aggregate amount of approximately $170 million, plus
additions to tax and interest, for those years. The IRS has also asserted that
we were subject to U.S. taxation for our 1991 through 1994 taxable years and
has proposed an aggregate assessment of $319 million of tax, plus additions to
tax and interest, for those years. These claims by the IRS have not been
resolved. The IRS has not proposed an assessment for years subsequent to 1994.
These claims and any future claims by the IRS may be resolved in a manner that
negatively affects our financial condition and results of operations.
If Current Legal Proceedings are not Resolved in our Favor, We Would be Harmed
Financially
On November 19, 1999 and January 27, 2000 we were named as a defendant in
two class action lawsuits, filed on behalf of customers of UPS. The lawsuits
allege, amongst other things, that UPS told its customers that they were
purchasing insurance for coverage of loss or damage to goods shipped by UPS,
but a recent opinion by the United States Tax Court found that the insurance
program, offered through UPS, several domestic insurance companies, and their
related reinsurance agreement with us, was not adequate for UPS to avoid
liability for federal income tax. We believe that we have meritorious factual
and legal defenses to the actions and we intend to defend them vigorously. We
have sought and will seek dismissal of the actions, as to OPL, on various
grounds, including, among others, lack of personal jurisdiction by the Court
over OPL. However, there can be no assurance that an adverse determination of
the lawsuit would not have a material effect on our financial results.
You Will Not Have a Market in Which to Sell Your Securities
An investment in our stock is a long-term commitment. The Common Stock will
not be listed on any securities exchange and is not traded in an organized
over-the-counter market. In the past, we have purchased Common Stock from those
shareowners wishing to sell shares, and recalled Common Stock from time to time
from our shareowners, pursuant to purchase rights set forth in our Bye-Laws.
Our Board of Directors has placed a temporary limit of ten percent (10%) on the
amount of shares of Common Stock we can repurchase from any shareowner. We are
currently prepared to purchase up to 10% of the shares of Common Stock held by
any shareowner of record on November 23, 1999 from that date through to
November 1, 2000. These limitations will be reviewed and may be changed by the
Board of Directors from time to time. As a result, investors must be prepared
to hold the securities for an indefinite period of time.
Our Results Could Suffer as a Result of Fluctuations in Foreign Exchange Rates
We are exposed to foreign currency risk arising from foreign exchange rate
fluctuations against the U.S. dollar on both the global fixed income portfolio
and the IFC emerging markets equity portfolio. The principal currencies
creating foreign exchange rate risk are the euro and United Kingdom pound
sterling. Although the IFC portfolio does not expose us to material
concentration in any one currency, there is some correlation amongst the
currencies of emerging market countries. Our reinsurance operations also have
exposure to foreign currency rates, particularly the United Kingdom pound
sterling and euro. This exposure is mitigated by the fact that our reinsurance
premiums and related receivables are partially offset by claims incurred and
claims liabilities, respectively, denominated in the same currency. We do not
hedge against the exchange rate risk associated with assets or liabilities
denominated in foreign currencies as we believe that the direct and opportunity
costs associated with a hedging program exceed any benefits in the long term.
As a result, our financial performance may be materially affected by changes in
foreign exchange rates.
4
<PAGE>
Failure to Successfully Integrate Acquisitions and Reduce Our Operating
Expenses Could Adversely Affect Our Future Financial Results
In order to re-establish profitable operations, we may acquire other
companies, or lines of business from other companies. The successful
integration of any business we acquire would be critical to our future success
Integrating the management and operations of any business we acquire is time
consuming, and we cannot guarantee that we will achieve any of the anticipated
synergies and other benefits expected to be realized from acquisitions. We may
face any one or more of the following difficulties:
. difficulty integrating the financial, operational and administrative
functions of acquired businesses;
. difficulty integrating the products of acquired businesses;
. delays in realizing the benefits of our strategies for an acquired
business;
. diversion of management's attention from our existing operations;
. difficulty operating in markets in which we have little prior
experience;
. inability to retain key employees necessary to continue the operations
of the acquired businesses; or
. acquiring businesses with unknown liabilities.
Any failure to successfully integrate our acquisitions and reduce their
operating expenses could have a material adverse effect on our future financial
results and could negatively affect our ability to acquire other businesses or
otherwise execute our business strategy.
5
<PAGE>
USE OF PROCEEDS
We will receive net proceeds from this offering of approximately
$128,928,444. For purposes of this calculation, we have assumed an offering
price of $21.50 per share, although the price may change from time to time as
determined by our Board of Directors. We intend to use the proceeds for general
corporate purposes, which may include strategic investments and acquisitions.
We may use all or a portion of the proceeds to repurchase our shares from
shareowners who offer shares to us for repurchase. The Board of Directors has
imposed a temporary limit of 10% on the number of shares that the company would
repurchase from any shareowner, exclusive of shares purchased in this offering.
These limitations will be reviewed and may be changed by the Board of Directors
from time to time. We have no intention at the present time to re-acquire any
shares that you purchase in this offering.
6
<PAGE>
THE COMPANY
Overseas Partners Ltd. ("OPL") is a multi-line reinsurance company
headquartered in Bermuda. We were organized as a company under the laws of
Bermuda in 1983. Our Common Stock is currently owned by approximately 97,000
shareowners. A majority of our shareowners are either current or former
employees of OPL or UPS.
Our primary business segment is reinsurance. Shipper's risk reinsurance has
historically been our principal source of revenue and underwriting income.
Note, however, that this program was cancelled effective October 1, 1999 and
has not been replaced as of the date of this prospectus.
We have a number of wholly-owned subsidiaries through which we conduct our
reinsurance business. Our wholly-owned subsidiary, Overseas Partners Re Ltd.,
or OP Re, was incorporated in 1995 and has expanded the lines of reinsurance
offered to include accident and health, automobile, aviation, financial
reinsurance, marine, property, workers' compensation, and other specialty
reinsurance products.
In November 1999, we established a wholly-owned subsidiary, Overseas
Partners Cat Ltd., or OP Cat, to provide an opportunity to further diversify
the portfolio of reinsurance risk. OP Cat has entered into an underwriting
services agreement with RenaissanceRe Holdings Ltd. to write worldwide property
catastrophe reinsurance business.
We established another wholly-owned subsidiary, Overseas Partners Assurance
Ltd., or OPAL, during 1998 to further enhance and broaden our reinsurance
relationships. OPAL provides rent-a-captive facilities to reinsurance clients,
allowing them to participate in the underwriting and investment profits
associated with their programs.
In December 1997, we acquired Parcel Insurance Plan, Inc., or PIP, an
independent insurance agent that manages the general underwriting of excess
value packages for shippers of small parcels. PIP serves commercial shippers
across the United States from its St. Louis headquarters. The Fireman's Fund
Insurance Company, one of the largest commercial insurers in the U.S., is the
underwriter of PIP's policies.
Our other business segment is U.S. real estate and leasing, which is
conducted through our wholly-owned subsidiary, Overseas Partners Capital Corp.,
or OPCC. OPCC's subsidiaries own and manage our real estate assets located in
major centers such as Atlanta, Boston and Chicago.
Our address is Mintflower Place, 8 Par-La-Ville Road, Hamilton HM 08,
Bermuda. Our telephone number is (441) 295-0788.
PERIODIC REPORTS DISTRIBUTED TO SHAREOWNERS
We prepare and distribute an annual report containing audited financial
statements to our shareowners. We also prepare and distribute to our
shareowners quarterly reports containing financial data for the first three
quarters of each fiscal year. All currency amounts contained in these reports
prepared by us are reported in United States dollars. We are subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, and
we will, upon written or oral request, provide without charge to any person to
whom this prospectus is delivered a copy of any and all information relating to
it which has been incorporated by reference in this prospectus.
OFFERING
The Offering
The information below describes the terms of this offering and discusses the
methods by which current shareowners may subscribe to purchase shares of Common
Stock.
7
<PAGE>
Reasons for the Offering
Prior to July 21, 1999, our Common Stock had been bundled in units with
shares of UPS Common Stock and sold and provided as stock compensation awards
to UPS employees under the UPS Managers' Incentive and UPS Stock Purchase
Plans. Shareowners who had terminated employment with UPS, OPL, or any of their
respective subsidiaries were unable to purchase additional shares in OPL, even
though they may have been desirous of doing so. On July 21, 1999, we suspended
the sale of our Common Stock under these Plans following the announcement by
UPS of an initial public offering. Since that date we have not been authorized
to issue additional shares to any of our shareowners, although some of our
shareowners have expressed such an interest. Consequently, we are offering our
shareowners the opportunity to subscribe for additional shares in accordance
with the terms of this offering.
Administration of the Offering
The offering will be administered by our Board of Directors, or by a
committee of the Board to which it may delegate such responsibility from time
to time. Shareowners may obtain additional information about the offering and
direct questions concerning the offering to First Union National Bank at:
First Union National Bank
Employee Shareholder Services
Corporate Trust Department
P.O. Box 41784
23 South Broad Street
Philadelphia, PA 19101-1784
(www.firstunion.com\ess\)
Phone: 1-888-663-8325
Term of the Offering
We expect to continue the offering for an indefinite period, subject to
continued availability of shares of our Common Stock in excess of the number of
shares needed to meet our anticipated corporate needs, including awards under
the Overseas Partners Ltd. Incentive Compensation Plan. While our long range
needs for shares are difficult to predict and depend upon a number of factors,
including future growth in our business and earnings and the level of the
current price of our shares (as determined by our Board of Directors) in
relation to earnings, we plan to continue the offering and we will attempt to
fill subscriptions on a relatively prompt basis over the near term. However, no
assurance can be given that sufficient shares will be available to fill all
subscriptions.
In the registration statement to which this prospectus relates, there are
registered a total of 6,000,000 shares of Common Stock, subject to adjustments
to reflect stock splits, stock dividends or similar events, for sale pursuant
to the offering. We consider the total number of registered shares to be
adequate to meet anticipated subscriptions for shares for a period of two years
from the date of this prospectus. We may seek to cause additional shares to be
registered for sale as the need arises in the future.
Note that we may terminate the offering at any time in our discretion.
Use of Proceeds
The funds derived from the sale of shares of Common Stock in this offering
will be added to our cash and used for the general purposes of business.
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Eligibility to Subscribe to Purchase Shares of Common Stock
The offering of Common Stock is being made only to our current shareowners.
Current shareowners may subscribe to Common Stock only for their own account
and not for the account of any other person.
How to Subscribe to Common Stock
A current shareowner may subscribe to purchase not less than 50 shares at
any time nor more than 10,000 shares annually by delivering to our transfer
agent, First Union National Bank ("FUNB"), a fully executed Subscription
Agreement in the form accompanying this prospectus, together with a check or
money order payable to our transfer agent, First Union National Bank, for the
aggregate purchase price of the Common Stock subscribed to.
Provisions of the Subscription Agreement for Common Stock
Each current shareowner who wishes to subscribe to purchase Common Stock
must sign a Subscription Agreement to evidence such subscriber's agreement to
purchase Common Stock, to facilitate recordkeeping with respect to the offering
and to evidence such subscriber's agreement to certain terms on which our
willingness to accept the subscription is conditioned. The Subscription
Agreement, which you should read in full, includes an authorization to us to
deliver certificates for the Common Stock to FUNB, as custodian for you, in
lieu of physical delivery to you of share certificates.
How to Calculate the Price of Common Stock
The price of a share of our Common Stock in this offering equals the current
price at the time we accept a subscription, as most recently determined by our
Board of Directors. The subscription price will change from time to time, to
reflect changes in the current price of Common Stock. The total subscription
price will equal the product of the current price of a share of Common Stock
multiplied by the number of shares for which you subscribe.
Acceptance of Subscriptions
No subscription for the purchase of shares of Common Stock will become
binding upon us until it has been accepted by us. We reserve the right, in our
sole discretion, to accept or reject any subscription in part or in its
entirety.
Our acceptance of a subscription takes place when we mail to you a notice of
acceptance, confirming acceptance of the subscription and showing the number
and current prices of the shares of Common Stock sold to you ("Notice of
Acceptance").
We will not accept a subscription until your check or money order has been
collected. If any check or money order submitted as payment cannot be
collected, we may, in our sole discretion, return the subscription documents or
request you to forward cash or wire funds in the amount of your payment.
Normal Processing and Acceptance of Subscriptions
The process of reviewing subscriptions to determine acceptability and
mailing notices of acceptance as provided herein, may normally require up to 15
days after we receive the subscription. Current shareowners whose subscriptions
for shares of Common Stock are received less than 15 days prior to a change in
the current price of Common Stock may incur an increase in the current price of
the Common Stock to which they subscribe. Similarly, subscriptions for shares
of Common Stock received less than 15 days prior to the record date of a
dividend on our shares may not be processed in time to enable you to receive
the dividend. We shall in no event be liable for any costs or damages to you
due to such changes in price or the failure to receive such dividends.
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Delayed Acceptance of Subscriptions, Unavailability of Shares
From time to time, delays in our ability to accept subscriptions within the
normal processing period may arise from either (i) the concurrent receipt of
unexpectedly large numbers of subscriptions or (ii) occasional circumstances
under which we may not have sufficient numbers of shares of Common Stock
immediately available to fill subscriptions after taking into account our
corporate needs for shares such as for awards under the Overseas Partners Ltd.
Incentive Compensation Plan. In the event that we determine, in our sole
discretion, that there are not a sufficient number of shares of Common Stock
available to satisfy all subscriptions for shares of Common Stock which we have
accepted or which we anticipate accepting in any period, we will first fill
subscriptions for Common Stock with shares of Common Stock available as
subscriptions for such shares are received.
Delays may also arise from circumstances relating to the acceptability of an
individual subscription. The subscription will be returned to the subscriber
without interest if a subscription is rejected or withdrawn. If the
subscription is ultimately accepted, the shares of Common Stock will be
delivered to FUNB but no interest will be paid on the subscription payment.
Common Stock will be sold at the current price in effect when we accept the
subscription. If you remit payment with your Subscription Agreement, but we
have not accepted your subscription at the time of an increase or decrease in
the current price of the Common Stock, you will be notified of the increase or
decrease. FUNB will return your Subscription Agreement along with your check or
money order and you may prepare a new subscription.
Subscribers will not be entitled to receive, and no adjustments will be made
on account of, any cash or stock dividend made payable to shareowners of record
on a date preceding acceptance of subscriptions. In the event of a distribution
characterized by our Board as a stock split prior to acceptance of
subscriptions, which have been received, the price and number of shares subject
to the subscription will be adjusted proportionately.
We retain the right to accept or reject any subscription until the
subscription has been accepted. Since the primary purpose of the offering is to
enhance the ownership relationship of current shareowners with OPL, events such
as changes in a subscriber's employment status or the personal financial
circumstances of the subscriber or conditions or activities which suggest that
the subscriber is seeking to purchase shares with a view to short-term
speculation rather than investment may result in rejection. Similarly, changes
in applicable federal or local law or regulation which make it impracticable to
continue the offering generally or in particular areas may require the
rejection of subscriptions or suspension of solicitations. These examples are
intended to illustrate reasons why we must reserve the right to reject any
subscription or group of subscriptions and are not intended to limit our
discretion to reject any subscription. In addition, we expect that we will
reject subscriptions which fail to comply with the terms of the offering as
described in this prospectus and in the subscription agreement, although we may
alternatively, from time to time, provide a subscriber with the opportunity to
conform to the subscription agreement before doing so. Upon the rejection of a
subscription, we will refund to you, or if applicable will cause FUNB to refund
to you, without interest, any monies paid by you on account of your
subscription.
Delivery of Shares for the Account of Purchasers Upon Acceptance
As soon as practicable after we accept a subscription, we will deliver to
FUNB, as custodian of the Common Stock, for your benefit, the Common Stock you
subscribed to. An acknowledgement for the Common Stock will be sent to you by
FUNB.
The Common Stock will be deposited with FUNB as custodian for you. FUNB will
register the shares in its name and will sell or otherwise dispose of the
shares upon your instruction and in conformity with the restrictions contained
in our Bye-Laws. Any cash dividends and other distributions, which may be paid
on the Common Stock, will be promptly remitted by FUNB, as custodian, to you.
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Owners of Common Stock held by FUNB receive periodic statements of the
number of shares of Common Stock held for their account and of dividends paid
on those shares. Notice of any regular or special meeting of shareowners of OPL
are forwarded to shareowners by FUNB, which votes the shares as directed by you
or, on request, furnishes you with a proxy thus permitting you to vote your
shares of Common Stock at the meeting.
Until instructions are received by FUNB requesting that the certificates for
Common Stock be delivered to a purchaser, FUNB will continue to hold such
shares, as custodian for the purchaser.
Our Rights to Repurchase Shares Sold Pursuant to the Offering
Our Bye-Laws provide us with the right to purchase all or a portion of the
shares of Common Stock which a shareowner seeks to sell or otherwise attempts
to transfer for value to a third party at the lower of the fair value per share
or the price at which they are to be offered to the proposed transferee, and on
the same terms upon which they are to be offered to the proposed transferee. In
addition, all shares of Common Stock sold in this offering will be subject to
our right to purchase such shares at their current price following the
shareowner's death, retirement from or other termination of employment with us,
with UPS, or with any of their respective subsidiaries.
Change in the Offering; Interpretation
We reserve the right, in our sole discretion, to change any term or
condition of, or terminate in its entirety, the offering at any time, or from
time to time. The interpretation of the terms and conditions of the offering
shall be in the sole discretion of the Board of Directors, or any committee of
the Board of Directors to which the Board of Directors has delegated such
responsibility, and any such interpretation which may be made by the Board of
Directors or any such committee from time to time is final and binding upon all
offerees and subscribers in the offering.
If, at any time or from time to time, there shall occur a change in the
nature of a share of Common Stock as a result of a combination or
reclassification of such shares, a subdivision of such shares characterized by
our Board of Directors, as a stock split or stock dividend, or other similar
event, then, unless the Board of Directors shall otherwise expressly determine,
the number or type of shares of Common Stock shall automatically be changed and
adjusted to reflect such combination, reclassification, subdivision or other
event.
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DESCRIPTION OF OPL COMMON STOCK
We are currently authorized to issue 900,000,000 shares of our Common Stock
of par value $0.10 per share, of which 127,500,000 shares were issued and
outstanding as of May 31, 2000. We are also authorized to issue 200,000,000
shares of preference stock of par value $.10 per share. At present no shares of
preference stock have been issued or are outstanding, nor are there any plans
to issue any preference stock in the foreseeable future.
Our Common Stock is not listed on a securities exchange and is not traded in
the organized over-the-counter markets. Prior to July 21, 1999, our Common
Stock had been bundled in units with shares of UPS Common Stock and sold and
provided as stock compensation awards to UPS employees under the UPS Managers'
Incentive and UPS Stock Purchase Plans ("the UPS Plans"). On July 21, 1999, we
suspended the sale of our Common Stock under these Plans following the
announcement by UPS of an initial public offering.
There were approximately 97,000 record holders of our Common Stock as of May
31, 2000.
Voting Rights
Each share of our Common Stock is entitled to one vote in the election of
directors and on other matters, except that the record holders of shares
beneficially owned by any Substantial Stockholder, as defined in our Bye-Laws,
is entitled to only one one-hundredth of a vote with respect to each vote which
is in excess of 10 percent of our outstanding voting stock. The term
Substantial Stockholder is defined to mean any shareowner or shareowners acting
as a group, other than United Parcel Service, Inc. or any employee benefit plan
of ours or UPS or our subsidiaries, who is the beneficial owner of more than 10
percent of the voting power of our outstanding shares entitled to vote
generally in the election of directors. There are no limitations imposed by
foreign law, or by our Memorandum of Association and Bye-Laws, or by any
agreement or other instrument to which we are a party or to which we are
subject, on the right of shareowners, solely by reason of their citizenship or
domicile, to vote our Common Stock. Upon liquidation, our shareowners are
entitled to share on a pro rata basis in our assets legally available for
distribution to shareowners.
Transferability of Common Stock--Our Right of First Refusal
Our Bye-Laws provide that no outstanding shares of our voting stock,
including shares of our Common Stock, may be transferred, except by bona fide
gift or inheritance, unless the shares shall have first been offered, by
written notice, for sale to us at the lower of their fair value, or the price
at which they are to be offered to the proposed transferee and on the same
terms upon which they are to be offered to the proposed transferee. Notices of
proposed transfers must be sent to our Assistant Secretary, must set forth the
number of shares proposed to be sold, the proposed price per share, the name
and address of the proposed transferee and the terms of the proposed sale and
must contain a statement by the proposed transferee that the information
contained in the notice is true and correct. We have the option, within 30 days
after receipt of the notice, to purchase all or a portion of the offered
shares. If we fail to exercise or waive the option, the shareowner may, within
a period of 20 days thereafter, sell to the proposed transferee all, but not
part, of the shares which were previously offered to us and not purchased by us
pursuant to our option, for the price and on the terms described in the notice.
All transferees of shares hold their shares subject to the same restrictions.
Shares previously offered to us but not transferred within the 20-day period
remain subject to the initial restrictions.
Under our Bye-Laws, we have the right to purchase shares of our Common Stock
that may be issued as stock dividends, or in stock splits, recapitalizations or
reorganizations similar to the rights that we have to purchase the shares on
which the dividend, split, recapitalization or reorganization shares were
issued. We also have the right to purchase our Common Stock in a number of
other circumstances under our Bye-Laws.
Shares of our Common Stock may be pledged, but they may not be transferred
upon foreclosure unless they have first been offered to us in the manner
described above.
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In addition, any shareowner who is our "affiliate" for purposes of the
Securities Act of 1933, could effect a public resale of their shares to a
purchaser other than us only upon delivery of an effective prospectus
applicable to the resale as permitted by applicable securities laws or upon
other compliance with applicable securities laws.
We have historically exercised our right of first refusal and held such
purchased shares in treasury, pending future distributions. However, as
discussed further below, the Board decided to impose a temporary limit on the
number of shares we are willing to purchase from any shareowner that seeks to
sell such shares subsequent to November 23, 1999.
Our Purchase Rights--Recall
We have the right under our Bye-Laws to purchase (or "recall") shares of our
Common Stock from shareowners following their retirement, death or other
termination of employment with UPS, OPL, or any of their respective
subsidiaries. We may exercise this right to recall all or a portion of the
shares of a former employee at any time within a period of three years or
thirteen years following the holder's termination of employment. The purchase
price will be the current price of the shares at the time of purchase.
The Company has historically exercised this right of recall each year and
held such purchased shares in treasury, pending future distributions. However
as discussed further below, our Board decided to defer the recall of our shares
that was previously scheduled to take place in January 2000 and 2001. We do not
expect to exercise our right of recall for the foreseeable future.
Shares purchased in this offering by any investor who is not employed by
UPS, OPL or one of their respective subsidiaries may be recalled by us at any
time although we have no present intent to recall such shares.
Our Willingness to Purchase and Recall Shares
Prior to July 21, 1999, our Common Stock had been bundled in units with
shares of UPS Common Stock and had been sold and provided as stock compensation
awards to UPS employees under the UPS Plans. Previously, we purchased shares
from those shareowners wishing to sell and recalled shares from those
shareowners that had ceased to be employees of UPS or OPL. We held such shares
as treasury pending distribution.
On July 21, 1999, we suspended the sale of our Common Stock under the UPS
Plans following the announcement by UPS of an initial public offering. This
suspension reduced the amount of our Common Stock that we required for our
treasury. As a result, on October 12, 1999, our directors decided to defer the
recall of our shares that was scheduled to take place in January 2000. This
deferral does not affect our rights to recall those or other shares in
subsequent years.
Further, on November 23, 1999 our Board imposed a temporary limit on the
number of shares we are willing to purchase under our right of first refusal.
We are currently prepared to purchase up to 10% of the shares of Common Stock
held by any shareowner of record on November 23, 1999 from that date through to
November 1, 2000. This means that in the aggregate we are willing to purchase
approximately $270 million worth of our shares during this period. This
temporary limit will be reviewed and may be changed by our Board from time to
time. We do not presently intend to purchase any of the shares that we sell in
this offering.
The Board may reconsider these limits on our purchases from time to time.
However, there can be no assurance of any revision to this policy or of the
continuation of our willingness to purchase shares. The feasibility of purchase
is subject to the future supply and demand for our Common Stock and our
earnings and financial condition, liquidity and capital requirements.
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Dividend Policy
The declaration and payment of dividends is at the discretion of our Board
of Directors and depends on many factors, including our earnings, financial
condition, business needs, capital and surplus requirements of our operating
subsidiaries and legal and regulatory considerations. The ability of our
reinsurance subsidiaries to pay dividends to us and our ability to pay
dividends to our shareowners are subject to the maintenance of minimum solvency
and liquidity margins as required by Bermuda insurance law.
It is the intent of our Board to consider the payment of a dividend in an
amount to be determined on the basis of our earnings, financial condition and
capital needs. We declared and paid cash dividends in 1999 and 1998 of $1.20
and $1.04 per share, respectively. On February 9, 2000 the Board determined
that it would commence paying dividends on a semi-annual basis and declared a
semi-annual dividend of $0.60 per share for shareowners of record on February
10, 2000.
Dividends paid by us on shares of our Common Stock to persons residing in
the United States will be subject to United States federal income taxes to the
same extent that the dividends would be taxable if paid by a domestic
corporation, but without the dividend received deduction available to
corporations. Similar treatment is likely to be accorded under applicable state
law.
There are no applicable tax treaties or Bermuda laws, decrees or regulations
which would limit payment or remittance of dividends, require withholding for
tax purposes or restrict the export or import of capital.
Determination of Fair Value
We currently purchase shares from our shareowners at their fair value as
determined by the Board of Directors semiannually in February and August of
each year. Our Board of Directors determined the current fair value of $21.50
per share on February 9, 2000. Prior to November 23, 1999 we purchased,
recalled and issued shares at book value as determined by our annual audited
consolidated balance sheet.
In determining the fair value, the Board considers a variety of factors,
including past and current earnings and cash flow, the present value of
discounted projected future earnings and cash flow, the stock price, earnings
and book value of comparable companies, industry considerations, liquidity,
debt-to-equity ratios and industry multiples, as well as opinions furnished
from time to time by investment counselors acting as independent appraisers. In
its determination of the price to be paid for our stock, the Board has not
followed any predetermined formula. It has considered a number of formulas
commonly used in the evaluation of securities of closely held and publicly held
companies, but its decisions have been based primarily on the judgment of the
Board as to our long-range prospects rather than what the Board considers to be
short-range trends relating to our company or to the values of comparable
companies. The Board does consider factors generally affecting the market
prices of publicly traded securities within the reinsurance market, and
prolonged changes in those prices could have an effect on the prices offered by
us. One factor in determining the price at which securities trade in the
organized securities markets is that of supply and demand. When demand is high
in relation to the shares that investors seek to sell, prices tend to increase,
while prices tend to decrease when demand is low in relation to shares being
sold. Our Board of Directors has not given weight to supply-demand
considerations in determining the price to be paid by us for our shares.
The following table reflects the price at which we have purchased shares of
Common Stock since January 8, 1998:
<TABLE>
<CAPTION>
Date Price
---- ------
<S> <C>
January 8, 1998 to January 7, 1999 (Book Value)................... $17.00
January 8, 1999 to November 23, 1999 (Book Value)................. $19.84
November 23, 1999 to present (Fair Value)......................... $21.50
</TABLE>
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Custody Arrangements for Shares of Our Common Stock
Each shareowner may elect to have First Union National Bank hold his or her
certificates as custodian without cost to the shareowner. FUNB's Employee
Shareholder Service Department is located in Philadelphia, PA and can be
contacted at the following address:
First Union National Bank
Employee Shareholder Services Corporate
Trust Department
P.O. Box 41784
123 South Broad Street
Philadelphia, PA 19101-1784
(www.firstunion.com\ess\)
If the shareowner elects to have FUNB hold the shares of Common Stock in
custody, FUNB will have the shares registered in its name and will sell or
otherwise dispose of the shares only upon the shareowner's instruction and in
conformity with our Bye-Laws. Dividends and other distributions on Common Stock
held in custody will be promptly remitted by FUNB to the shareowner.
Shareowners will receive periodic statements of the number of shares held by
FUNB for their account and of dividends paid on those shares. Notice of any
regular or special meeting of our shareowners will be forwarded to shareowners
by FUNB, which will vote the shares as directed by the shareowner or, on
request, furnish the shareowner with a proxy thus permitting the shareowner to
vote the number of shares of Common Stock held for him or her at the meeting.
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TAXATION
Various provisions of the United States Internal Revenue Code of 1986 ("the
Code") provide rules designed to approximate current taxation at the
shareholder level of certain kinds of income earned by foreign enterprises
owned in whole or part by United States residents. Among such provisions are
those in Subpart F of the Code, concerned with "controlled foreign
corporations," and those concerned with "passive foreign investment companies."
If OPL were to be subject to one or more of these provisions, some or all,
depending upon the applicable provisions, of the United States shareowners of
OPL would be liable for federal income taxes with respect to certain of the
earnings of OPL, whether or not an amount equal to such earnings was
distributed to such shareowners as a dividend. Such liability is referred to
herein as "current taxation."
Under Subpart F of the Code, the United States shareowners of OPL would be
subject to current taxation on income of OPL derived from insuring or
reinsuring the risks of its United States shareowners and persons related
thereto, but only if (i) such insured or reinsured United States shareowners
and related persons were to own at least 20% of the Common Stock of OPL and
(ii) such income from the insurance or reinsurance of the risks of its United
States shareowners and related persons were to represent at least 20% of OPL's
reinsurance income. The reinsurance underwritten by OPL does not currently
exceed these limits, and management does not expect that these limits will be
exceeded in the future.
Furthermore, any United States person owning directly or indirectly 10% of
the Common Stock of OPL (a United States 10% Shareowner) would be subject to
current taxation on their proportionate share of the Subpart F insurance income
of OPL if United States 10% Shareowners were to own, in the aggregate, more
than 25% of the Common Stock of OPL. A United States 10% Shareowner would also
be subject to current taxation on his proportionate share of all Subpart F
income of OPL, and of certain other items, if United States 10% Shareowners
were to own, in the aggregate, more than 50% of the Common Stock of OPL. OPL
does not believe that any OPL shareowner is currently subject to any of the tax
provisions described in this paragraph.
Code section 1248 provides that if a U.S. person owns 10% or more of the
voting shares of a corporation that is a Controlled Foreign Corporation
("CFC"), any gain from the sale or exchange of the shares may be treated as
ordinary income to the extent of the CFC's earnings and profits during the
period that the shareholder held the shares (with certain adjustments). Code
section 953(c)(7) generally provides that Code section 1248 will also apply to
the sale or exchange of any shares in a foreign corporation, regardless of
whether the shareholder is a 10% Shareowner, if the foreign corporation would
be taxed as an insurance company if it were a domestic corporation and if the
foreign corporation were subject to section 953(c)(1) without regard to whether
Related Person Insurance Income ("RPII") constitutes 20% or more of the
corporation's gross insurance income. OPL would be subject to section
953(c)(1), without regard to the 20% de minimis test, only to the extent of its
RPII. Therefore, OPL believes that any potential application of Code section
1248 should be limited to each shareholder's proportionate share of any RPII.
Under the passive foreign investment company ("PFIC") rules, all United
States shareowners of OPL would be subject to rules designed to approximate
current taxation of the earnings of OPL if at least 75% of the gross income of
OPL were "passive income", or if at least 50% (calculated by value) of the
average assets of OPL were to produce, or were held for the production of,
"passive income." Except as may be provided in future regulations promulgated
by the Secretary of the Treasury, income derived by OPL in the active conduct
of its reinsurance business does not constitute "passive income," and assets
held by OPL that produce solely or are held solely for the production of such
income do not constitute "passive assets." The opinion issued by the United
States Tax Court against UPS, discussed in the Reinsurance Activities section
hereinbefore, taxes the shipper's risk premiums to UPS and does not address
whether the shipper's risk reinsurance premiums received by OPL are income of
OPL. We understand that the IRS is considering whether for 1999 and prior years
OPL's stock would be subject to PFIC rules because the shipper's risk premiums
were not active income for OPL. We believe that our business has changed
substantially since the issuance of the Tax Court decision, and that OPL is not
a PFIC for the year 2000. Accordingly, we believe that stock purchased pursuant
to this prospectus should not be subject to the PFIC rules, and if we continue
our current business plan, shareowners who purchase stock in this offering will
not become subject to the PFIC rules in the future with respect to that stock.
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If we were to be characterized as a PFIC currently or during the investor's
holding period of these shares, shares purchased would be subject to a penalty
tax at the time of their sale (or receipt of an "excess distribution" with
respect to them) and a portion of the gain may be recharacterized as ordinary
income. In general, a shareholder receives an "excess distribution" if the
amount of the distribution is more than 125% of the average distribution with
respect to the stock during the three preceding taxable years (or shorter
period during which the taxpayer held the stock). In general, the penalty tax
is equivalent to an interest charge on taxes that are deemed due during the
period the United States shareowner owned the shares, computed by assuming the
excess distribution or gain (in the case of a sale) with respect to the shares
was taxed in equal portions throughout the holder's period of ownership at the
highest marginal tax rate. The interest charge is equal to the applicable rate
imposed on underpayments of U.S. federal income tax for such period.
Each person who is considering an investment in our Common Stock should
consult with a tax advisor as to the effects of uncertainties regarding the
RPII and PFIC rules.
It should be noted that Congress has historically sought to broaden the
taxation of foreign enterprises owned by United States residents, and future
legislation could affect the United States federal tax treatment of OPL and its
shareowners.
There is imposed on foreign insurers a United States federal excise tax on
the reinsurance of United States risks equal to 1% of the reinsurance premiums,
payable by the United States company ceding the reinsurance. Under OPL's
reinsurance agreements, OPL reimburses the ceding company for such tax, as well
as for premium taxes payable under state law, if any.
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EXPERTS
The financial statements incorporated in this Prospectus by reference from
our Annual Report on Form 10-K for the year ended December 31, 1999 have been
audited by Deloitte & Touche, independent auditors, as stated in their report,
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
LEGAL MATTERS CONCERNING THE OPL COMMON STOCK
The due issuance of the shares being distributed as described herein has
been reviewed and approved by Appleby Spurling & Kempe, Hamilton, Bermuda.
WHERE YOU CAN FIND MORE INFORMATION
Overseas Partners Ltd. files reports, proxy statements and other information
with the SEC. Overseas Partners Ltd. has filed with the SEC a registration
statement on Form S-3 under the Securities Act of 1933, as amended, to register
the offering of the shares of Common Stock offered hereby. This prospectus,
which constitutes a part of the registration statement, does not contain all of
the information set forth in the registration statement. Prospective investors
may read and copy the registration statement and its exhibits and schedules
without charge at the Public Reference Room maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. Prospective investors may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. In addition, Overseas Partners Ltd. is required to file
electronic versions of these documents with the SEC through the SEC's
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. The SEC
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Commission are incorporated
herein by reference:
(1) Our Annual Report on Form 10-K for the year ended December 31, 1999;
(2) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;
(3) Our Report on Form 8-K dated March 30, 2000;
(4) The Description of Securities contained in Item 11 of our Form 10 dated
January 31, 1984, as amended and restated by our Form 8 dated April 18,
1984 and as updated by Item 5 of our Form 10-K for the year ended
December 31, 1999;
(5) All other reports filed by us pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the year covered by our Annual Report
referred to in (1) above.
All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of this offering shall, to the extent required by law, be deemed to
be incorporated by reference in this 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 subsequently filed document which also
is or is deemed to be incorporated by reference 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.
We will, upon written or oral request, provide without charge to each
participant in the Plan a copy of any and all of the information relating to it
which has been incorporated by reference in this Prospectus, other than
exhibits to such information if such exhibits are not themselves specifically
incorporated by reference in such information. In addition, we will, upon
written or oral request, provide without charge to each participant in the Plan
a copy of such other documents as are required to be delivered under Rule
428(b) of the Securities Act of
18
<PAGE>
1933, as amended. Such request should be directed to: Assistant Secretary,
Overseas Partners Ltd., Mintflower Place, 8 Par-La-Ville Road, Hamilton HM 08,
Bermuda, (441) 295-0788. In addition, we will provide without charge to each
participant in the Plan a copy of our Annual Reports to shareowners and copies
of all future reports, proxy statements, and other communications distributed
by us to our shareowners generally.
We are a Bermuda company with offices in Hamilton, Bermuda, and certain of
our directors are residents of Bermuda. A substantial portion of our assets and
all or substantially all of the assets of these directors are located outside
the United States. Accordingly, it may be difficult for our shareowners to
effect service of process upon us or such persons within the United States and
to enforce against them any judgments based upon the civil liability provisions
of the Securities Act of 1933 or the Exchange Act (collectively, the "Federal
securities laws") which may be obtained in courts in the United States. We have
been advised by our counsel that it is not certain that courts in Bermuda would
(i) enforce judgments, based upon the civil liability provisions of the Federal
securities laws, obtained from courts in the United States against us or any
such directors or (ii) recognize actions based upon such provisions against us
or any of such directors.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses relating to the registration of shares will be borne by us.
Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................... $34,056
Accountants' Fees and Expenses........................................ 3,000
Legal Fees and Expenses............................................... 15,000
Transfer Agent's Fees and Expenses.................................... 3,500
Printing and Engraving Expenses....................................... 15,000
Miscellaneous......................................................... 1,000
-------
Total Expenses....................................................... $71,556
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Our Bye-Laws provide:
(1) Our directors, secretary and other officers and all of their heirs,
executors, and administrators, shall be indemnified and secured harmless
out of our assets and profits from and against all actions, costs, charges,
losses, damages and expenses which they or any of them, their or any of
their heirs, executors or administrators, shall or may incur or sustain by
or by reason of any act done, concurred in or omitted in or about the
execution of their duty, or supposed duty, in their respective offices or
trusts. In addition, none of these people shall be answerable for the acts,
receipts, neglects or defaults of the other or others of them or for
joining in any receipts for the sake of conformity, or for any bankers or
other persons with whom any moneys or effects belonging to us shall or may
be lodged or deposited for safe custody, or for insufficiency or deficiency
or any security upon which any of our moneys shall be placed out on or
invested, or for any other loss, misfortune or damages that may happen in
the execution of their respective offices or trusts, or in relation
thereto. Notwithstanding the foregoing, this indemnity shall not extend to
any matter in respect of any willful negligence, willful default, fraud or
dishonesty which may attach to any of said persons.
(2) Each Member agrees to waive any claim or right of action he or she
might have, whether individually or by or in our right, against any of our
directors on account of any action taken by such director, or the failure
of such director to take any action in the performance of his duties with
us. Such waiver shall not extend to any matter in respect of any willful
negligence, willful default, fraud or dishonesty which may attach to any
such director.
Item 16. List of Exhibits.
The exhibits required by Rule 601 of Regulation S-K and this Item are
included following the Exhibit Index at Page II-5.
Item 17. Undertakings.
(a) We hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
20
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) To file a post-effective amendment to the registration statement to
include any financial statements required by 17 C.F.R. sec. 210.3-19 at the
start of any delayed offering or throughout a continuous offering.
(b) We hereby undertake that, for purposes of determining any liability
under the Securities Act of 1933, each filing of our 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 the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
OPL pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by
any of our directors, officers or controlling persons 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, we 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 Act and
will be governed by the final adjudication of such issue.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated May 31, 2000 OVERSEAS PARTNERS LTD.
/s/ Mary R. Hennessy
By: _________________________________
Mary R. Hennessy
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Mary R. Hennessy and Mark R. Bridges, and each
of them, his/her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution for him/her and in his/her name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and any subsequent
registration statements pursuant to Rule 462 of the Securities Act 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/she might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact or his/her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Mary R. Hennessy President and May 31, 2000
_________________________________ Chief Executive Officer
Mary R. Hennessy (Principal Executive Officer)
/s/ Mark R. Bridges Vice President and Treasurer May 31, 2000
_________________________________ (Principal Financial and
Mark R. Bridges Accounting Officer)
/s/ Robert J. Clanin Director May 31, 2000
_________________________________
Robert J. Clanin
/s/ D. Scott Davis Director May 31, 2000
_________________________________
D. Scott Davis
/s/ Joseph M. Pyne Director May 31, 2000
_________________________________
Joseph M. Pyne
/s/ Cyril E. Rance Director May 31, 2000
_________________________________
Cyril E. Rance
/s/ Edwin H. Reitman Chairman of the Board of May 31, 2000
_________________________________ Directors and Director
Edwin H. Reitman
/s/ Walter A. Scott Chairman of the Board of May 31, 2000
_________________________________ Directors and Director
Walter A. Scott
/s/ Michael J. Molletta Authorized Representative in May 31, 2000
_________________________________ the United States
Michael J. Molletta
</TABLE>
22
<PAGE>
EXHIBIT INDEX
Exhibits Incorporated Herein By Reference
<TABLE>
<CAPTION>
Document with Exhibit Designation of
Designation Previously Filed with Such Exhibit
of Exhibit Description of Exhibit Commission in that Document
----------- ------------------------------- ----------------------- ----------------
<C> <C> <S> <C>
4(a) Specimen Certificate of Registrant's Exhibit 4(c)
Overseas Partners Ltd. Common Registration Statement
Stock on Form S-3
(Registration Statement
No. 333-20545)
4(b) Certificate of Incorporation Registrant's Exhibit 3(a)
Registration Statement
on Form S-1
(Registration Statement
No. 2-95460)
4(c) Bye-Laws, as amended to date Registrant's Annual Exhibit 3(b)
Report on Form 10-K for
the year ended
December 31, 1999
</TABLE>
Exhibits Filed Herewith
<TABLE>
<C> <S>
5 Opinion of Appleby Spurling & Kempe
10.1 Subscription Agreement
23(a) Consent of Deloitte & Touche Re: Overseas Partners Ltd.
23(b) Consent of Appleby Spurling & Kempe (included in Exhibit 5)
</TABLE>
23
