<PAGE> 1
Filed pursuant to Rule 424(b)(2)
Registration Nos. 33-55047 and 33-55047-01
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 14, 1994
8,000,000 PREFERRED SECURITIES
TRANSAMERICA DELAWARE
9 1/8% CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES,
[LOGO] SERIES A ("MIPS"*)
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TRANSAMERICA CORPORATION
---------------------
The 9 1/8% Cumulative Monthly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), representing the limited partner interests
offered hereby, are being issued by Transamerica Delaware, L.P., a limited
partnership formed under the laws of the State of Delaware ("Transamerica
Delaware"). Transamerica Corporation, a Delaware corporation ("Transamerica"),
is the sole general partner in Transamerica Delaware. Transamerica Delaware
exists for the sole purpose of issuing its partnership interests and investing
the proceeds thereof in debt securities of Transamerica. The limited partner
interests represented by the Series A Preferred Securities will have a
preference with respect to cash distributions and amounts payable on liquidation
over the general partner's interest in Transamerica Delaware.
(Continued on next page)
---------------------
SEE "INVESTMENT CONSIDERATIONS" FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE SERIES A PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE SERIES A PREFERRED
SECURITIES AND SERIES A JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE
RELATED FEDERAL INCOME TAX CONSEQUENCES.
---------------------
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 SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING TRANSAMERICA
OFFERING PRICE COMMISSION(1) DELAWARE(2)(3)
--------------- --------------- ---------------
<S> <C> <C> <C>
Per Series A Preferred Security.................................. $25.00 (2) $25.00
Total............................................................ $200,000,000 (2) $200,000,000
</TABLE>
- ---------------
(1) Transamerica Delaware and Transamerica have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the Series A Preferred
Securities ultimately will be invested in Series A Junior Subordinated
Debentures (as hereinafter defined), the Underwriting Agreement provides
that Transamerica will pay to the Underwriters, as compensation
("Underwriters' Compensation") for their arranging the investment therein of
such proceeds, $0.7875 per Series A Preferred Security; provided, that such
compensation will be $0.50 per Series A Preferred Security sold to certain
institutions. Accordingly, the maximum aggregate amount of Underwriters'
Compensation will be $6,300,000, but the actual amount of Underwriters'
Compensation will be less than such amount to the extent that Series A
Preferred Securities are sold to such institutions. See "Underwriting".
(3) Expenses of the offering, which are payable by Transamerica, are estimated
to be $1,120,000.
---------------------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Series A Preferred Securities will be made only in
book-entry form through the facilities of The Depository Trust Company on or
about October 25, 1994.
- ---------------
* An application has been filed by Goldman, Sachs & Co. with the United States
Patent and Trademark Office for the registration of the MIPS servicemark.
GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES
INCORPORATED
SALOMON BROTHERS INC
The date of this Prospectus Supplement is October 18, 1994.
<PAGE> 2
(Continued from front cover)
Cash distributions on the Series A Preferred Securities will be cumulative
from the date of original issuance at an annual rate of 9 1/8% of the
liquidation preference of $25 per Series A Preferred Security, and will be
payable monthly in arrears on the last day of each calendar month of each year,
commencing October 31, 1994 ("dividends"), if and to the extent determined to be
payable ("declared") by Transamerica in its capacity as general partner of
Transamerica Delaware (the "General Partner"). The payment of dividends (if and
to the extent declared) and payments on liquidation of Transamerica Delaware and
the redemption of Series A Preferred Securities, as set forth below, are
guaranteed by Transamerica to the extent described herein and in the
accompanying Prospectus (the "Guarantee"). See "Description of the Guarantee" in
the accompanying Prospectus. The proceeds of the offering of the Series A
Preferred Securities will be used by Transamerica Delaware to purchase from
Transamerica its 9 1/8% Junior Subordinated Deferrable Interest Debentures,
Series A, Due 2024 (the "Series A Junior Subordinated Debentures"). Transamerica
has the right from time to time to defer the payment of interest on the Series A
Junior Subordinated Debentures for one or more Extension Periods (as hereinafter
defined) at the end of each of which all accrued and unpaid interest is required
to be paid in full. If Transamerica does not make interest payments on the
Series A Junior Subordinated Debentures, it is expected that Transamerica
Delaware will not declare or pay dividends on the Series A Preferred Securities.
The Guarantee is a full and unconditional guarantee from the time of issuance of
the Series A Preferred Securities, but does not apply to any payment of
dividends unless and until such dividends are declared.
The Series A Preferred Securities are redeemable at the option of
Transamerica Delaware, in whole or in part, from time to time, on or after
October 25, 1999, at $25 per Series A Preferred Security plus accrued and unpaid
dividends thereon to the date fixed for redemption, payable in cash (the
"Redemption Price"). See "Description of the Series A Preferred
Securities -- Optional Redemption". The Series A Preferred Securities have no
maturity date, although they are mandatorily redeemable upon the maturity or
earlier redemption or repurchase of the Series A Junior Subordinated Debentures.
See "Description of the Series A Preferred Securities -- Mandatory Redemption".
In addition, upon the occurrence of certain special events arising from a
change in law or a change in legal interpretation or other specified
circumstances, the Series A Preferred Securities are redeemable in whole at the
Redemption Price at the option of Transamerica, in its capacity as the General
Partner, or the General Partner may dissolve Transamerica Delaware and cause to
be distributed to the holders of the Series A Preferred Securities, on a pro
rata basis, the Series A Junior Subordinated Debentures in lieu of any cash
distribution. If the Series A Junior Subordinated Debentures are distributed to
the holders of the Series A Preferred Securities, Transamerica will use its best
efforts to have the Series A Junior Subordinated Debentures listed on the New
York Stock Exchange or on such other exchange as the Series A Preferred
Securities are then listed. The obligations of Transamerica under the Series A
Junior Subordinated Debentures are subordinate and junior in right of payment to
Senior Indebtedness (as defined in the accompanying Prospectus) of Transamerica.
At August 31, 1994, Senior Indebtedness of Transamerica (on an unconsolidated
basis) aggregated approximately $730 million. Because Transamerica is a holding
company, the Series A Junior Subordinated Debentures are also effectively
subordinated to all existing and future liabilities, including trade payables,
of Transamerica's subsidiaries, except to the extent that Transamerica is a
creditor of the subsidiaries recognized as such. See "Description of the Series
A Preferred Securities -- Special Event Redemption or Distribution" and
"Description of the Series A Junior Subordinated Debentures".
In the event of the dissolution of Transamerica Delaware, the holders of the
Series A Preferred Securities will be entitled to receive for each Series A
Preferred Security a liquidation preference of $25 plus accrued and unpaid
dividends thereon to the date of payment, subject to certain limitations,
unless, in connection with such dissolution, Series A Junior Subordinated
Debentures are distributed to the holders of the Series A Preferred Securities.
See "Description of the Series A Preferred Securities -- Liquidation
Distribution Upon Dissolution".
Application has been made to list the Series A Preferred Securities on the
New York Stock Exchange. See "Underwriting".
Prospective purchasers are urged to read the accompanying Prospectus for
certain additional material information regarding the Series A Preferred
Securities, the Series A Junior Subordinated Debentures and the Guarantee.
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
------------------------
FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF
THIS DOCUMENT.
S-2
<PAGE> 3
TRANSAMERICA DELAWARE
Transamerica Delaware is a limited partnership that was formed under the
Delaware Revised Uniform Limited Partnership Act (the "Partnership Act") on
August 9, 1994. The initial partners in Transamerica Delaware are Transamerica,
as general partner, and Transamerica LP Holdings Corp., a Delaware corporation
and a wholly-owned subsidiary of Transamerica ("Transamerica Holdings"), as
limited partner. Upon the issuance of the Series A Preferred Securities, which
securities represent limited partner interests in Transamerica Delaware,
Transamerica Holdings will remain as a limited partner, but will have no
interest in the profits and dividends or in the assets of Transamerica Delaware.
The General Partner will agree to contribute capital to the extent required to
maintain its capital at an amount equal to at least 3% of the total capital
contributions to Transamerica Delaware. Transamerica and Transamerica Holdings
entered into an agreement of limited partnership dated as of August 9, 1994.
Such agreement of limited partnership will be amended and restated in its
entirety (as so amended and restated, the "Limited Partnership Agreement"),
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus Supplement and the accompanying Prospectus form a part.
Transamerica Delaware is managed by the General Partner and exists for the
sole purpose of issuing its partnership interests and investing the proceeds
thereof in junior subordinated debentures of Transamerica ("Junior Subordinated
Debentures"). The rights of the holders of the Series A Preferred Securities,
including economic rights, rights to information and voting rights, are set
forth in the Limited Partnership Agreement (including the action of the General
Partner specifying the terms of the Series A Preferred Securities (the "Action")
taken in accordance with the Limited Partnership Agreement) and the Partnership
Act. See "Description of the Series A Preferred Securities".
The business address of Transamerica Delaware is c/o Transamerica
Corporation, 600 Montgomery Street, San Francisco, California 94111, telephone
number (415) 983-4000.
TRANSAMERICA CORPORATION
Transamerica Corporation is a diversified financial services company, whose
core businesses include consumer lending, commercial lending, leasing, real
estate services, life insurance and asset management. Transamerica was
incorporated in Delaware in 1928. At June 30, 1994, Transamerica had
consolidated assets of $39.0 billion and total shareholders' equity of $3.1
billion. For the year ended December 31, 1993, Transamerica had revenues of $4.8
billion and net income of $377 million.
Because Transamerica is a holding company, the Series A Junior Subordinated
Debentures are effectively subordinated to all existing and future liabilities,
including trade payables, of Transamerica's subsidiaries, except to the extent
that Transamerica is a creditor of the subsidiaries recognized as such.
The principal executive offices of Transamerica are located at 600
Montgomery Street, San Francisco, California 94111. Transamerica's telephone
number is (415) 983-4000.
S-3
<PAGE> 4
INVESTMENT CONSIDERATIONS
Prospective purchasers of Series A Preferred Securities should review
carefully the information contained elsewhere in this Prospectus Supplement and
in the accompanying Prospectus and should consider particularly the following
matters:
SUBORDINATION OF GUARANTEE AND SERIES A JUNIOR SUBORDINATED DEBENTURES;
DEPENDENCE ON TRANSAMERICA. Transamerica's obligations under the Guarantee are
subordinate and junior in right of payment to all other liabilities of
Transamerica except those made pari passu (that is, equal in priority) by their
terms. The obligations of Transamerica under the Series A Junior Subordinated
Debentures described under "Description of the Series A Junior Subordinated
Debentures" are subordinate and junior in right of payment to Senior
Indebtedness of Transamerica. At August 31, 1994, Senior Indebtedness of
Transamerica (on an unconsolidated basis) aggregated approximately $730 million.
Because Transamerica is a holding company, the Series A Junior Subordinated
Debentures are also effectively subordinated to all existing and future
liabilities, including trade payables, of Transamerica's subsidiaries, except to
the extent that Transamerica is a creditor of the subsidiaries recognized as
such. At June 30, 1994, Transamerica's subsidiaries had outstanding $8.0 billion
of indebtedness, $23.4 billion of life insurance policy liabilities and
approximately $3.7 billion of other liabilities. There are no terms in the
Series A Preferred Securities, the Series A Junior Subordinated Debentures or
the Guarantee that limit Transamerica's ability to incur additional
indebtedness, including indebtedness that ranks senior to the Series A Junior
Subordinated Debentures and the Guarantee or the ability of its subsidiaries to
incur additional indebtedness. See "Description of the Guarantee -- Status of
the Guarantee" and "Description of the Junior Subordinated
Debentures -- Subordination" in the accompanying Prospectus.
Transamerica Delaware's ability to pay dividends on the Series A Preferred
Securities is solely dependent upon Transamerica making interest payments on the
Series A Junior Subordinated Debentures as and when required. In the event that
Transamerica were for any reason to be unable to make payments on the Series A
Junior Subordinated Debentures as and when required, there is a substantial
likelihood that Transamerica, in its capacity as Guarantor, would be unable to
make payments on the Guarantee as and when required. Transamerica's obligations
under the Guarantee are unsecured and, on a liquidation or winding up of
Transamerica, its obligations under the Guarantee will rank junior to all of its
other liabilities except those made pari passu by their terms.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX IMPACT OF
EXTENSION. Transamerica has the right under the Indenture (as defined herein)
to extend the interest payment period from time to time on the Series A Junior
Subordinated Debentures to a period not exceeding 60 consecutive months (an
"Extension Period"), and, as a consequence, monthly dividends on the Series A
Preferred Securities would be deferred (but would continue to accrue with
interest thereon) by Transamerica Delaware during any such Extension Period. In
the event that Transamerica exercises this right, Transamerica may not during
such Extension Period declare or pay dividends on, or purchase or acquire, any
of its common stock. Prior to the termination of any such Extension Period,
Transamerica may further extend such Extension Period, provided that such
Extension Period together with all such previous and further extensions thereof
may not exceed 60 consecutive months. Upon the termination of any Extension
Period and the payment of all amounts then due, Transamerica may select a new
Extension Period, subject to the above requirements. The entire principal amount
of the Series A Junior Subordinated Debentures will become due and payable,
together with any accrued and unpaid interest thereon, including Additional
Interest (as hereinafter defined), if any, on October 25, 2024. See "Description
of the Series A Preferred Securities -- Dividends" and "Description of the
Series A Junior Subordinated Debentures -- Option to Extend Interest Payment
Period".
Should an Extension Period occur, Transamerica Delaware will continue to
accrue income for United States federal income tax purposes which will be
allocated, but not distributed by way of cash dividends, to holders of record of
Series A Preferred Securities. As a result, such a holder will
S-4
<PAGE> 5
include such interest in such holder's gross income for United States federal
income tax purposes in advance of the receipt of cash, and will not receive the
cash from Transamerica Delaware related to such income if such a holder disposes
of his or her Series A Preferred Securities prior to the record date for payment
of dividends. See "United States Taxation -- Potential Extension of Interest
Payment Period".
SPECIAL EVENT REDEMPTION OR DISTRIBUTION. Upon the occurrence of a Special
Event (as hereinafter defined), which may occur at any time, the General Partner
shall elect to either (i) redeem the Series A Preferred Securities in whole or
(ii) dissolve Transamerica Delaware and cause the Series A Junior Subordinated
Debentures to be distributed to the holders of the Series A Preferred Securities
in connection with the liquidation of Transamerica Delaware. In the case of a
Special Event which is a Tax Event (as hereinafter defined), however, the
General Partner may, as an alternative to electing to redeem the Series A
Preferred Securities or dissolving Transamerica Delaware, elect to cause the
Series A Preferred Securities to remain outstanding. There can be no assurance
as to the market prices for the Series A Preferred Securities or the Series A
Junior Subordinated Debentures which may be distributed in exchange for Series A
Preferred Securities were a dissolution and liquidation of Transamerica Delaware
to occur. Accordingly, the Series A Preferred Securities which an investor may
purchase, or the Series A Junior Subordinated Debentures which the investor may
receive, may trade at a discount to the price which the investor paid to
purchase the Series A Preferred Securities offered hereby. See "Description of
the Series A Preferred Securities -- Special Event Redemption or Distribution"
and "Description of the Series A Junior Subordinated Debentures -- General".
Under current United States federal income tax law and interpretation, a
distribution of the Series A Junior Subordinated Debentures upon a Special Event
would not be a taxable event to holders of the Series A Preferred Securities.
Under a change in law, a change in legal interpretation or the other
circumstances giving rise to a Special Event, however, the dissolution could be
a taxable event to holders of the Series A Preferred Securities. See "United
States Taxation -- Receipt of Series A Junior Subordinated Debentures Upon
Liquidation of Transamerica Delaware".
S-5
<PAGE> 6
SUMMARY CONSOLIDATED FINANCIAL DATA
This summary is qualified in its entirety by the detailed information and
financial statements included in the documents incorporated by reference herein,
including that for interim periods. The information furnished for the six months
ended June 30, 1994 and 1993 reflects all adjustments and accruals which are, in
the opinion of the management of Transamerica, necessary for a fair statement of
the results for such periods. The results of operations in the interim
statements are not necessarily indicative of the results that may be expected
for the full year. See "Incorporation of Certain Documents by Reference" in the
accompanying Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
--------------------------------------------------------- ---------------------
1989 1990 1991 1992 1993 1993 1994
--------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.............................. $ 4,476.1 $ 4,097.7 $ 4,175.2 $ 4,550.9 $ 4,813.3 $ 2,362.5 $ 2,598.4
Net income:
Income from continuing operations... 251.3 190.5 5.7 334.0 447.5 210.3 209.4
Income (loss) from discontinued
operations........................ 80.9 75.8 79.1 (90.8) (47.0) 5.4 (0.7)
Extraordinary loss on early
extinguishment of debt............ (23.1)
Cumulative effect of change in
accounting for post-employment
benefits other than pensions...... (34.7)
--------- --------- --------- --------- --------- --------- ---------
Net income............................ $ 332.2 $ 266.3 $ 50.1 $ 243.2 $ 377.4 $ 215.7 $ 208.7
========= ========= ========= ========= ========= ========= =========
Earnings per common share
Net Income:
Income from continuing
operations...................... $ 3.11 $ 2.30 $ (0.08) $ 4.00 $ 5.40 $ 2.50 $ 2.63
Income (loss) from discontinued
operations...................... 1.07 0.99 1.03 (1.17) (0.60) 0.07 (0.01)
Extraordinary loss on early
extinguishment of debt.......... (0.29)
Cumulative effect of change in
accounting for post-employment
benefits other than pensions.... (0.45)
--------- --------- --------- --------- --------- --------- ---------
Net income........................ $ 4.18 $ 3.29 $ 0.50 $ 2.83 $ 4.51 $ 2.57 $ 2.62
========= ========= ========= ========= ========= ========= =========
Average number of common shares
outstanding......................... 75.5 76.2 76.7 78.1 78.5 79.3 75.0
Balance sheet data (at period end):
Total assets.......................... $27,357.1 $29,260.9 $31,133.6 $33,290.9 $36,050.5 $35,101.6 $38,956.5
Notes and loans payable:
Short-term and current portion of
long-term debt.................... 1,038.2 869.1 715.4 1,062.6 2,023.0 1,277.6 1,647.0
Long-term debt...................... 6,897.2 6,602.5 6,975.6 6,510.5 5,681.0 6,293.1 7,111.3
Shareholders' equity(1)............... 2,928.7 3,016.7 3,025.8 3,300.1 3,363.5 3,415.9 3,106.1
Book value per common share........... $ 35.63 $ 36.56 $ 36.28 $ 36.31 $ 38.46 $ 38.02 $ 38.09
</TABLE>
- ---------------
(1) In the first quarter of 1994 Transamerica adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt
and Equity Securities, which resulted in all of Transamerica's investments
in debt securities being reported at fair value. As of June 30, 1994, the
net unrealized gain from investments marked to fair value included in
shareholders' equity has been reduced by $14.9 million as a result of
adopting this new accounting standard. There is no effect on the income
statement from the adoption of this new accounting standard, and prior
periods have not been restated.
S-6
<PAGE> 7
CAPITALIZATION OF TRANSAMERICA
The following table sets forth the consolidated short-term obligations and
capitalization of Transamerica as of June 30, 1994, and as adjusted to reflect
the application of the estimated net proceeds from the sale of the Series A
Preferred Securities. See "Use of Proceeds".
<TABLE>
<CAPTION>
JUNE 30, 1994
-------------------------
ACTUAL AS ADJUSTED
--------- -----------
<S> <C> <C>
(IN MILLIONS)
Short-term obligations, including current maturities............... $ 1,647.0 $ 1,647.0
Long-term debt (1)................................................. 7,111.3 7,111.3
Life insurance policy liabilities.................................. 23,410.3 23,410.3
Other liabilities.................................................. 3,681.9 3,681.9
Minority interest in equity of subsidiaries........................ 200.0
Shareholders' equity:
Preferred stock, par value $100 per share; 1,200,000 shares
authorized;
8.50% Preferred Stock, Series D ($500 liquidation preference)
400,000 shares issued....................................... 200.0 200.0(2)
Dutch Auction Rate Transferable Securities
Preferred Stock ("DARTS"), Series A-1
750 shares issued........................................... 75.0 75.0
DARTS, Series B-1
750 shares issued........................................... 75.0 75.0
DARTS, Series C-1
750 shares issued........................................... 75.0 75.0
Common stock, par value $1.00 per share; 150,000,000 shares
authorized; 70,393,675 shares outstanding, after deducting
9,344,787 shares in treasury.................................. 70.4 70.4
Additional paid-in capital....................................... 152.1 152.1
Retained earnings................................................ 2,421.8 2,421.8
Net unrealized gain from investments marked to fair value........ 72.7 72.7
Foreign currency translation adjustments......................... (35.9) (35.9)
--------- -----------
Total shareholders' equity............................... 3,106.1 3,106.1
--------- -----------
Total capitalization (excluding life insurance policy
liabilities, other liabilities and short-term
obligations)........................................... $10,217.4 $10,417.4
========= ==========
</TABLE>
- ---------------
(1) Senior Indebtedness of Transamerica, for purposes of the subordination
provisions of the Series A Junior Subordinated Debentures, includes only
indebtedness of Transamerica on an unconsolidated basis. As of August 31,
1994, such Senior Indebtedness aggregated approximately $730 million.
Because Transamerica is a holding company, the Series A Junior Subordinated
Debentures are also effectively subordinated to all other long-term debt
and short-term obligations set forth in the above table, as well as other
liabilities of Transamerica's subsidiaries.
(2) On October 14, 1994, Transamerica commenced a tender offer to purchase
depositary shares representing up to 320,000 shares of its 8.50% Preferred
Stock, Series D ("Series D Preferred Stock"), on the terms and subject to
the conditions set forth in Transamerica's Offer to Purchase dated October
14, 1994 and the related Letter of Transmittal. The purchase of such
depositary shares pursuant to the offer will reduce the aggregate
liquidation preference of Series D Preferred Stock which is outstanding. If
depositary shares representing the maximum of 320,000 shares of Series D
Preferred Stock are purchased in such offer, $40 million aggregate
liquidation preference of Series D Preferred Stock would remain outstanding
following the offer.
S-7
<PAGE> 8
USE OF PROCEEDS
The proceeds from the sale of the Series A Preferred Securities will be
invested in the Series A Junior Subordinated Debentures issued pursuant to the
Indenture described herein, and ultimately will be used by Transamerica for
general corporate purposes, which may include the repayment or repurchase of its
securities.
S-8
<PAGE> 9
DESCRIPTION OF THE SERIES A PREFERRED SECURITIES
GENERAL
All of the partnership interests in Transamerica Delaware are owned
directly or indirectly by Transamerica. The Limited Partnership Agreement
(including the Action) authorizes and creates the Series A Preferred Securities,
which represent limited partner interests in Transamerica Delaware ("Preferred
Securities"). Other Preferred Securities may be issued from time to time in one
or more series as described in the accompanying Prospectus. The limited partner
interests represented by the Series A Preferred Securities will have a
preference with respect to dividends and amounts payable on redemption or
liquidation over the General Partner's interest in Transamerica Delaware. The
Limited Partnership Agreement does not permit the issuance of any Preferred
Securities ranking, as to participation in profits and dividends and in the
assets of Transamerica Delaware, senior or junior to the Series A Preferred
Securities or the incurrence of any indebtedness by Transamerica Delaware. The
summary of certain material terms and provisions of the Series A Preferred
Securities set forth below does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the Limited Partnership Agreement
(including the Action) which has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement forms a part, and the Partnership
Act.
DIVIDENDS
The dividends payable on each Series A Preferred Security will be fixed at
a rate per annum of 9 1/8% of the stated liquidation preference of $25 per
Preferred Security. Dividends in arrears for more than one month will bear
interest thereon at the rate per annum of 9 1/8% thereof. The term "dividends"
as used herein includes any such interest payable unless otherwise stated. The
amount of dividends payable for any period will be computed on the basis of a
360-day year of twelve 30-day months.
Dividends on the Series A Preferred Securities will be cumulative, will
accrue from the date of initial issuance and will be payable monthly in arrears,
on the last day of each calendar month of each year, commencing October 31,
1994, when, as and if determined to be so payable by Transamerica, in its
capacity as General Partner, except as otherwise described below. Transamerica
has the right under the Indenture (as hereinafter defined) to extend the
interest payment period from time to time on the Series A Junior Subordinated
Debentures to a period not exceeding 60 consecutive months and, as a
consequence, monthly dividends on the Series A Preferred Securities would be
deferred (but would continue to accrue with interest thereon) by Transamerica
Delaware during any such Extension Period. In the event that Transamerica
exercises this right, Transamerica may not declare or pay dividends on, or
purchase or acquire, any of its common stock during such Extension Period. Prior
to the termination of any such Extension Period, Transamerica may further extend
such Extension Period, provided that such Extension Period together with all
such previous and further extensions thereof may not exceed 60 consecutive
months. Upon the termination of any Extension Period and the payment of all
amounts then due, Transamerica may select a new Extension Period, subject to the
above requirements. See "Description of the Series A Junior Subordinated
Debentures -- Interest" and "-- Option to Extend Interest Payment Period".
It is anticipated that Transamerica Delaware's earnings available for
distribution to the holders of the Series A Preferred Securities will be limited
to payments under the Series A Junior Subordinated Debentures in which
Transamerica Delaware will invest the proceeds from the issuance and sale of the
Series A Preferred Securities and the General Partnership Payment (as
hereinafter defined). See "Description of the Series A Junior Subordinated
Debentures". If Transamerica does not make interest payments on the Series A
Junior Subordinated Debentures, it is expected that Transamerica Delaware will
not declare or pay dividends on the Series A Preferred Securities. Under the
Limited Partnership Agreement, if and to the extent Transamerica does make
interest payments on the Series A Junior Subordinated Debentures, Transamerica
Delaware is
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obligated, to the extent funds are legally available therefor, to declare
dividends on the Series A Preferred Securities. The payment of dividends (if and
to the extent declared) is guaranteed by Transamerica as and to the extent set
forth under "Description of the Guarantee" in the accompanying Prospectus. The
Guarantee is a full and unconditional guarantee from the time of issuance of the
Series A Preferred Securities, but does not apply to any payment of dividends
unless and until such dividends are declared.
Dividends on the Series A Preferred Securities will be payable to the
holders thereof as they appear on the books and records of Transamerica Delaware
on the relevant record dates, which, as long as the Series A Preferred
Securities remain in book-entry-only form, will be one Business Day (as
hereinafter defined) prior to the relevant payment dates. Subject to any
applicable laws and regulations and the provisions of the Limited Partnership
Agreement, each such payment will be made as described under "Book-Entry-Only
Issuance -- The Depository Trust Company" below. In the event the Series A
Preferred Securities shall not continue to remain in book-entry-only form, the
General Partner shall have the right to select relevant record dates, which
shall be more than one Business Day prior to the relevant payment dates. In the
event that any date on which dividends are payable on the Series A Preferred
Securities is not a Business Day, then payment of the dividend payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. A "Business Day" shall mean any day other than a
day on which banking institutions in the City of New York are authorized or
required by law to close.
CERTAIN RESTRICTIONS ON TRANSAMERICA DELAWARE
If dividends have not been paid in full on the Series A Preferred
Securities, Transamerica Delaware shall not:
(i) declare, pay, or set aside for payment any dividends on any other
series of Preferred Securities, unless the amounts of any dividends
declared and paid on any other series of Preferred Securities and on the
Series A Preferred Securities are on a pro rata basis on the dates such
dividends are paid on such other series of Preferred Securities, so that
(x) the aggregate amount of dividends paid on the Series A
Preferred Securities bears to the aggregate amount of dividends paid on
such other series of Preferred Securities the same ratio as
(y) the aggregate of all accrued and unpaid dividends in respect of
the Series A Preferred Securities bears to the aggregate of all accrued
and unpaid dividends in respect of such other series of Preferred
Securities; or
(ii) redeem, purchase or otherwise acquire any other Preferred
Securities;
until, in each case, such time as all accrued and unpaid dividends on the Series
A Preferred Securities shall have been paid in full for all dividend periods
terminating on or prior to, in the case of clause (i), such payment and, in the
case of clause (ii), the date of such redemption, purchase or acquisition.
As of the date of this Prospectus Supplement, there are no series of
Preferred Securities outstanding.
OPTIONAL REDEMPTION
The Series A Preferred Securities are redeemable, at the option of
Transamerica Delaware, in whole or in part, from time to time, on or after
October 25, 1999, upon not less than 30 nor more than 60 days' notice, at the
Redemption Price. If Transamerica Delaware redeems Series A Preferred Securities
in accordance with the terms thereof, the Series A Junior Subordinated
Debentures will
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become due and payable in a principal amount equal to the aggregate stated
liquidation preference of the Series A Preferred Securities so redeemed,
together with any accrued and unpaid interest on such principal amount of Series
A Junior Subordinated Debentures. See "Description of Series A Junior
Subordinated Debentures -- Mandatory Prepayment". In the event that fewer than
all the outstanding Series A Preferred Securities are to be so redeemed, the
Series A Preferred Securities to be redeemed will be selected as described under
"Book-Entry-Only Issuance -- The Depository Trust Company" below. If a partial
redemption would result in the delisting of the Series A Preferred Securities,
Transamerica Delaware may only redeem the Series A Preferred Securities in
whole.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If a Tax Event or an Investment Company Event (each as hereinafter defined,
and each a "Special Event") shall occur and be continuing, the General Partner
shall elect to either (i) redeem the Series A Preferred Securities in whole (and
not in part), upon not less than 30 or more than 60 days' notice at the
Redemption Price, within 90 days following the occurrence of such Special Event;
provided that, if and as long as at the time there is available to the General
Partner the opportunity to eliminate, within such 90-day period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable such measure that has no
adverse effect on Transamerica Delaware or Transamerica, the General Partner
will pursue such measure in lieu of redemption, or (ii) dissolve Transamerica
Delaware and, after satisfaction of creditors as required by the Partnership
Act, cause Series A Junior Subordinated Debentures to be distributed to the
holders of the Series A Preferred Securities in liquidation of Transamerica
Delaware, within 90 days following the occurrence of such Special Event. In the
case of a Tax Event, the General Partner may, as an alternative to electing to
redeem the Series A Preferred Securities or dissolving Transamerica Delaware,
elect to cause the Series A Preferred Securities to remain outstanding.
"Tax Event" means that Transamerica shall have obtained an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that on or after the date of this Prospectus Supplement, as a result of
(a) any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of this Prospectus Supplement, there is more than an
insubstantial risk that (i) Transamerica Delaware is subject to federal income
tax with respect to interest accrued or received on the Series A Junior
Subordinated Debentures, (ii) Transamerica Delaware is subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii) interest
payable by Transamerica to Transamerica Delaware on the Series A Junior
Subordinated Debentures will not be deductible by Transamerica for federal
income tax purposes.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law") to the effect that Transamerica Delaware is or will be
considered an "investment company" which is required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), which Change in
1940 Act Law becomes effective on or after the date of this Prospectus
Supplement; provided that no Investment Company Event shall be deemed to have
occurred if the General Partner obtains a written opinion of nationally
recognized independent counsel to the Partnership experienced in practice under
the
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1940 Act to the effect that the General Partner has successfully issued an
additional or supplemental irrevocable and unconditional guarantee or taken such
other actions as may be necessary so that, in the opinion of such counsel,
notwithstanding such Change in 1940 Act Law, Transamerica Delaware is not
required to be registered as an "investment company" within the meaning of the
1940 Act. In case of any uncertainty regarding an Investment Company Event, the
good faith determination of the General Partner (based on the advice of counsel)
shall be conclusive.
After the date fixed for any distribution of Series A Junior Subordinated
Debentures, upon dissolution of Transamerica Delaware, (i) the Series A
Preferred Securities will no longer be deemed to be outstanding, (ii) The
Depository Trust Company (the "Depository" or "DTC") or its nominee, as the
record holder of the Series A Preferred Securities, will receive a registered
global certificate or certificates representing the Series A Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing Series A Preferred Securities not held by DTC or its nominee will
be deemed to represent Series A Junior Subordinated Debentures having a
principal amount equal to the stated liquidation preference of such Series A
Preferred Securities, and bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid dividends on such Series A Preferred Securities until
such certificates are presented to Transamerica or its agent for transfer or
reissuance.
There can be no assurance as to the market prices for the Series A
Preferred Securities or the Series A Junior Subordinated Debentures which may be
distributed in exchange for Series A Preferred Securities were a dissolution and
liquidation of Transamerica Delaware to occur. Accordingly, the Series A
Preferred Securities which an investor may purchase, or the Series A Junior
Subordinated Debentures which the investor may receive, may trade at a discount
to the price which the investor paid to purchase the Series A Preferred
Securities offered hereby.
MANDATORY REDEMPTION
Upon the repayment of the Series A Junior Subordinated Debentures, whether
at maturity or upon redemption, repurchase or otherwise, the proceeds from such
repayment will be applied first to redeem the Series A Preferred Securities, in
whole, upon not less than 30 nor more than 60 days' notice, at the Redemption
Price.
REDEMPTION PROCEDURES
Transamerica Delaware may not redeem fewer than all the outstanding Series
A Preferred Securities unless all accrued and unpaid dividends have been paid on
all Series A Preferred Securities for all monthly dividend periods terminating
on or prior to the date of redemption.
If Transamerica Delaware gives a notice of redemption in respect of Series
A Preferred Securities (which notice will be irrevocable) then, by 12:00 noon,
New York City time, on the redemption date, Transamerica Delaware will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of the Series A Preferred Securities. See "Book-Entry-Only
Issuance -- The Depository Trust Company". If notice of redemption shall have
been given and funds deposited as required, then upon the date of such deposit,
all rights of holders of such Series A Preferred Securities so called for
redemption will cease, except the right of the holders of such Series A
Preferred Securities to receive the Redemption Price, but without interest on
such Redemption Price. In the event that any date fixed for redemption of Series
A Preferred Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. In
the event that payment of the Redemption Price in respect of Series A Preferred
Securities is improperly withheld or refused and
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not paid either by Transamerica Delaware or by Transamerica pursuant to the
Guarantee described under "Description of the Guarantee" in the accompanying
Prospectus, dividends on such Series A Preferred Securities will continue to
accrue, from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), Transamerica or any of its subsidiaries,
including Transamerica Delaware, may at any time and from time to time purchase
outstanding Series A Preferred Securities by tender, in the open market or by
private agreement. If Transamerica Delaware purchases and cancels any Series A
Preferred Securities, the Series A Junior Subordinated Debentures may be repaid
in a principal amount equal to the aggregate stated liquidation preference of
the Series A Preferred Securities so purchased, together with any accrued and
unpaid interest on such principal amount of Series A Junior Subordinated
Debentures. See "Description of Series A Junior Subordinated
Debentures -- Optional Prepayment".
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, winding-up or
termination of Transamerica Delaware, the holders of the Series A Preferred
Securities at the time will be entitled to receive out of the assets of
Transamerica Delaware available for distribution to partners after satisfaction
of liabilities of creditors as required by the Partnership Act, before any
distribution of assets is made to the General Partner, but together with the
holders of every other series of Preferred Securities outstanding, an amount
equal to, in the case of holders of Series A Preferred Securities, the aggregate
of the stated liquidation preference of $25 per Series A Preferred Security plus
accrued and unpaid dividends thereon to the date of payment (such amount being
the "Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Series A Junior Subordinated Debentures in an
aggregate principal amount equal to the stated liquidation preference of such
Series A Preferred Securities, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid dividends on such Series A Preferred
Securities, shall be distributed on a pro rata basis to the holders of the
Series A Preferred Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because Transamerica Delaware has insufficient assets available to
pay in full the aggregate Liquidation Distribution and the aggregate maximum
liquidation distributions on any other series of Preferred Securities, then the
amounts payable directly by Transamerica Delaware on the Series A Preferred
Securities and on such other series of Preferred Securities shall be paid in
cash or in kind on a pro rata basis, so that
(x) the aggregate amount paid in respect of the Liquidation
Distribution bears to the aggregate amount paid as liquidation
distributions on the other series of Preferred Securities the same ratio as
(y) the aggregate Liquidation Distribution bears to the aggregate
maximum liquidation distributions on the other series of Preferred
Securities.
Pursuant to the Limited Partnership Agreement, Transamerica Delaware shall
be dissolved and its affairs shall be wound up: (i) on December 31, 2093, the
expiration of the term of Transamerica Delaware, (ii) upon the bankruptcy of the
General Partner, (iii) upon the assignment by the General Partner of its entire
interest in Transamerica Delaware when the assignee is not admitted to
Transamerica Delaware as a general partner of Transamerica Delaware in
accordance with the Limited Partnership Agreement, or the filing of a
certificate of dissolution or its equivalent with respect to the General
Partner, or the revocation of the General Partner's charter and the expiration
of 90 days after the date of notice to the General Partner of revocation without
a reinstatement of its charter, or if any other event occurs that causes the
General Partner to cease to be a general partner of Transamerica Delaware under
the Partnership Act, unless the business of Transamerica
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Delaware is continued in accordance with the Partnership Act, (iv) in accordance
with the provisions of the Series A Preferred Securities, (v) upon the entry of
a decree of judicial dissolution or (vi) upon the written consent of all
partners of Transamerica Delaware.
MERGER, CONSOLIDATION OR AMALGAMATION OF TRANSAMERICA DELAWARE
Transamerica Delaware may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. Transamerica Delaware may, without the consent of the holders
of the Series A Preferred Securities, consolidate, amalgamate, merge with or
into, or be replaced by a limited partnership, limited liability company or
trust organized as such under the laws of any state of the United States of
America provided that (i) such successor entity either (x) expressly assumes all
of the obligations of Transamerica Delaware under the Series A Preferred
Securities or (y) substitutes for the Series A Preferred Securities other
securities having substantially the same terms as the Series A Preferred
Securities (the "Successor Securities") so long as the Successor Securities are
not junior to any other equity securities of the successor entity, with respect
to participation in the profits and dividends, and in the assets, of the
successor entity, (ii) Transamerica expressly acknowledges such successor entity
as the holder of the Series A Junior Subordinated Debentures, (iii) the Series A
Preferred Securities or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Series A Preferred
Securities are then listed, (iv) such merger, consolidation, amalgamation or
replacement does not cause the Series A Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized statistical
rating organization, (v) such merger, consolidation, amalgamation or replacement
does not adversely affect the powers, preferences and other special rights of
the holders of the Series A Preferred Securities (including any Successor
Securities) in any material respect (other than with respect to any dilution of
the holders' interest in the new entity), (vi) such successor entity has a
purpose substantially identical to that of Transamerica Delaware, (vii) prior to
such merger, consolidation, amalgamation or replacement, Transamerica has
received an opinion of nationally recognized independent counsel to Transamerica
Delaware experienced in such matters to the effect that (x) such successor
entity will be treated as a partnership for federal income tax purposes, (y)
following such merger, consolidation, amalgamation or replacement, Transamerica
and such successor entity will be in compliance with the 1940 Act without
registering thereunder as an investment company and (z) such merger,
consolidation, amalgamation or replacement will not adversely affect the limited
liability of the holders of the Series A Preferred Securities and (viii)
Transamerica guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
VOTING RIGHTS
Except as provided below and under "Description of the
Guarantee -- Amendments and Assignment" in the accompanying Prospectus and as
otherwise required by law and the Limited Partnership Agreement, the holders of
the Series A Preferred Securities will have no voting rights.
If (i) arrearages on dividends on the Series A Preferred Securities shall
exist for 18 consecutive monthly dividend periods; (ii) an Event of Default (as
defined in the Indenture) occurs and is continuing on the Series A Junior
Subordinated Debentures; or (iii) Transamerica is in default on any of its
payment obligations under the Guarantee (as described under "Description of the
Guarantee -- Certain Covenants of Transamerica" in the accompanying Prospectus),
then the holders of the Series A Preferred Securities, together with the holders
of any other series of Preferred Securities having the right to vote for the
appointment of a special representative of Transamerica Delaware and the limited
partners (a "Special Representative") in such event, acting as a single class,
will be entitled by the vote of a majority in aggregate liquidation preference
of such holders to appoint and authorize a Special Representative to enforce
Transamerica Delaware's
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creditor rights under the Series A Junior Subordinated Debentures, to enforce
the rights of the holders of the Series A Preferred Securities under the
Guarantee and to enforce the rights of the holders of the Series A Preferred
Securities to receive dividends (if and to the extent declared) on the Series A
Preferred Securities. The Special Representative shall not, by virtue of acting
in such capacity, be admitted as a general partner in Transamerica Delaware or
otherwise be deemed to be a general partner in Transamerica Delaware and shall
have no liability for the debts, obligations or liabilities of Transamerica
Delaware. Not later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for the
purpose of appointing a Special Representative. If the General Partner fails to
convene such meeting within such 30-day period, the holders of 10% in
liquidation preference of the outstanding Preferred Securities will be entitled
to convene such meeting. The provisions of the Limited Partnership Agreement
relating to the convening and conduct of the meetings of the partners will apply
with respect to any such meeting. In the event that, at any such meeting,
holders of less than a majority in aggregate liquidation preference of Preferred
Securities entitled to vote for the appointment of a Special Representative vote
for such appointment, no Special Representative shall be appointed. Any Special
Representative appointed shall cease to be a Special Representative of
Transamerica Delaware and the limited partners if Transamerica Delaware (or
Transamerica pursuant to the Guarantee) shall have paid in full all accrued and
unpaid dividends on the Preferred Securities or such default or breach, as the
case may be, shall have been cured, and Transamerica, in its capacity as the
General Partner, shall continue the business of Transamerica Delaware without
dissolution. Notwithstanding the appointment of any such Special Representative,
Transamerica shall continue as General Partner and shall retain all rights under
the Indenture, including the right to extend the interest payment period from
time to time to a period not exceeding 60 consecutive months as provided under
"Description of the Series A Junior Subordinated Debentures -- Option to Extend
Interest Payment Period", and any such extension would not constitute a default
under the Indenture or enable a holder of Series A Preferred Securities to
require the payment of a dividend that has not theretofore been declared.
If any proposed amendment to the Limited Partnership Agreement provides
for, or the General Partner otherwise proposes to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the Series A
Preferred Securities, whether by way of amendment to the Limited Partnership
Agreement or otherwise (including, without limitation, the authorization or
issuance of any limited partner interests in Transamerica Delaware ranking, as
to participation in the profits or dividends or in the assets of Transamerica
Delaware, senior to the Series A Preferred Securities), or (ii) the dissolution,
winding-up or termination of Transamerica Delaware, other than (x) in connection
with the distribution of Series A Junior Subordinated Debentures upon the
occurrence of a Special Event or (y) as described under "Merger, Consolidation
or Amalgamation of Transamerica Delaware" above, then the holders of outstanding
Series A Preferred Securities will be entitled to vote on such amendment or
proposal of the General Partner (but not on any other amendment or proposal) as
a class with all other holders of series of Preferred Securities similarly
affected, and such amendment or proposal shall not be effective except with the
approval of the holders of 66 2/3% in liquidation preference of such outstanding
Preferred Securities having a right to vote on the matter; provided, however,
that no such approval shall be required if the dissolution, winding-up or
termination of Transamerica Delaware is proposed or initiated upon the
initiation of proceedings, or after proceedings have been initiated, for the
dissolution, winding-up, liquidation or termination of Transamerica.
The rights attached to the Series A Preferred Securities will be deemed not
to be adversely affected by the creation or issue of, and no vote will be
required for the creation or issue of, any further limited partner interests of
Transamerica Delaware ranking pari passu with the Series A Preferred Securities
with regard to participation in the profits or dividends or in the assets of
Transamerica Delaware. Holders of Series A Preferred Securities have no
preemptive rights.
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So long as any Series A Junior Subordinated Debentures are held by
Transamerica Delaware, the General Partner shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or executing any trust or power conferred on the Trustee with respect to such
series, (ii) waive any past default that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Series A Junior Subordinated Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Series A Junior Subordinated Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of at least 66 2/3% in liquidation preference of all series of Preferred
Securities who would be affected thereby if their Preferred Securities were to
be exchanged for Junior Subordinated Debentures, acting as a single class;
provided, however, that where a consent under the Indenture would require the
consent of each holder affected thereby, no such consent shall be given by the
General Partner without the prior consent of each holder of all series of
Preferred Securities who would be so affected thereby. The General Partner shall
not revoke any action previously authorized or approved by a vote of any series
of Preferred Securities. The General Partner shall notify all holders of the
Series A Preferred Securities of any notice of default received from the Trustee
with respect to the Series A Junior Subordinated Debentures.
Any required approval of holders of Series A Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the partners in Transamerica Delaware or
pursuant to written consent. Transamerica Delaware will cause a notice of any
meeting at which holders of Series A Preferred Securities are entitled to vote,
or of any matter upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of Series A Preferred Securities.
Each such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the holders of Series A Preferred Securities will be
required for Transamerica Delaware to redeem and cancel Series A Preferred
Securities in accordance with the Limited Partnership Agreement.
Notwithstanding that holders of Series A Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Series A Preferred Securities and any other series of Preferred Securities that
are entitled to vote or consent with such Series A Preferred Securities as a
single class at such time that are owned by Transamerica or by any entity more
than 50% of which is owned by Transamerica, either directly or indirectly, shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
Holders of the Series A Preferred Securities will have no rights to remove
or replace the General Partner.
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository for the Series A Preferred
Securities. The Series A Preferred Securities will be issued only as fully
registered securities registered in the name of Cede & Co. (DTC's nominee). One
or more fully registered global Series A Preferred Security certificates will be
issued, representing in the aggregate the total number of Series A Preferred
Securities, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
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participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc. (the "New York
Stock Exchange"), the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
Purchases of Series A Preferred Securities within the DTC system must be
made by or through Direct Participants, which will receive a credit for the
Series A Preferred Securities on DTC's records. The ownership interest of each
actual purchaser of each Series A Preferred Security ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the Beneficial Owners
purchased Series A Preferred Securities. Transfers of ownership interests in the
Series A Preferred Securities are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in Series A
Preferred Securities, except in the event that use of the book-entry system for
the Series A Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Series A
Preferred Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Series A Preferred Securities are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Series A Preferred Securities are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such series to
be redeemed.
Although voting with respect to the Series A Preferred Securities is
limited, in those instances in which a vote is required, neither DTC nor Cede &
Co. itself will consent or vote with respect to Series A Preferred Securities.
Under its usual procedures, DTC would mail an Omnibus Proxy to Transamerica
Delaware as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Series A Preferred Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Dividend payments on the Series A Preferred Securities will be made by
Transamerica Delaware to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participants and not of DTC,
Transamerica Delaware or Transamerica, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of dividends to DTC
is the responsibility of Transamerica Delaware, disbursement of such payments to
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Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository with
respect to the Series A Preferred Securities at any time by giving reasonable
notice to Transamerica Delaware. Under such circumstances, in the event that a
successor securities depository is not obtained, Series A Preferred Security
certificates are required to be printed and delivered. Additionally,
Transamerica Delaware (with the consent of Transamerica) may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depository). In that event, certificates for the Series A Preferred
Securities will be printed and delivered. In each of the above circumstances,
the General Partner will appoint a paying agent with respect to the Series A
Preferred Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Transamerica Delaware and Transamerica
believe to be reliable, but Transamerica Delaware and Transamerica take no
responsibility for the accuracy thereof.
REGISTRAR AND TRANSFER AGENT
In the event the book-entry system for the Series A Preferred Securities is
discontinued, it is anticipated that The First National Bank of Chicago, or one
of its affiliates, will act as registrar and transfer agent for the Series A
Preferred Securities.
Registration of transfers of Series A Preferred Securities will be effected
without charge by or on behalf of Transamerica Delaware, but upon payment (with
the giving of such indemnity as Transamerica Delaware or Transamerica may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it.
Transamerica Delaware will not be required to register or cause to be
registered the transfer of Series A Preferred Securities after such Series A
Preferred Securities have been called for redemption.
MISCELLANEOUS
Application has been made to list the Series A Preferred Securities on the
New York Stock Exchange. See "Underwriting".
The General Partner is authorized and directed to conduct its affairs and
to operate Transamerica Delaware in such a way that Transamerica Delaware will
not be deemed to be an "investment company" required to be registered under the
1940 Act or taxed as a corporation for federal income tax purposes and so that
the Series A Junior Subordinated Debentures will be treated as indebtedness of
Transamerica for federal income tax purposes. In this connection, the General
Partner is authorized to take any action, not inconsistent with applicable law,
the certificate of limited partnership of Transamerica Delaware or the Limited
Partnership Agreement, that the General Partner determines in its discretion to
be necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of the holders of the Series A Preferred
Securities.
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DESCRIPTION OF THE SERIES A JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of specific terms of the Series A Junior
Subordinated Debentures in which Transamerica Delaware will invest (i) the
proceeds of the issuance and sale of the Series A Preferred Securities and (ii)
the General Partner's capital contribution with respect to the Series A
Preferred Securities (the "General Partnership Payment"). This description
supplements the description of the general terms and provisions of the Junior
Subordinated Debentures set forth in the accompanying Prospectus under the
caption "Description of the Junior Subordinated Debentures". The following
description does not purport to be complete and is qualified in its entirety by
reference to the description in the accompanying Prospectus and the Indenture,
dated as of October 14, 1994, between Transamerica and The First National Bank
of Chicago, as Trustee (the "Indenture") which has been filed as an exhibit to
the Registration Statement of which this Prospectus Supplement forms a part.
Under certain circumstances involving the dissolution of Transamerica
Delaware following the occurrence of a Special Event, Series A Junior
Subordinated Debentures may be distributed to the holders of the Series A
Preferred Securities in liquidation of Transamerica Delaware. See "Description
of the Series A Preferred Securities -- Special Event Redemption or
Distribution".
GENERAL
The Series A Junior Subordinated Debentures will be issued as a series of
Junior Subordinated Debentures under the Indenture. The Series A Junior
Subordinated Debentures will be limited in aggregate principal amount to
approximately $206.0 million, such amount being the sum of the aggregate stated
liquidation preference of the Series A Preferred Securities and the General
Partnership Payment.
The entire principal amount of the Series A Junior Subordinated Debentures
will become due and payable, together with any accrued and unpaid interest
thereon, including Additional Interest (as hereinafter defined), if any, on
October 25, 2024.
The Series A Junior Subordinated Debentures, if distributed to holders of
Series A Preferred Securities in dissolution will initially be so issued as a
Global Security (as defined below). As described herein, under certain limited
circumstances Series A Junior Subordinated Debentures may be issued in
certificated form in exchange for a Global Security. See "Book-Entry and
Settlement" below. In the event that Series A Junior Subordinated Debentures are
issued in certificated form, such Series A Junior Subordinated Debentures will
be in denominations of $25 and integral multiples thereof and may be transferred
or exchanged at the offices described below.
Payments on Series A Junior Subordinated Debentures issued as a Global
Security will be made to DTC, as the depository for the Series A Junior
Subordinated Debentures. In the event Series A Junior Subordinated Debentures
are issued in certificated form, principal and interest will be payable, the
transfer of the Series A Junior Subordinated Debentures will be registrable, and
Series A Junior Subordinated Debentures will be exchangeable for Series A Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate trust office of the Trustee in The City of New York;
provided that payment of interest may be made at the option of Transamerica by
check mailed to the address of the persons entitled thereto.
If the Series A Junior Subordinated Debentures are distributed to the
holders of Series A Preferred Securities upon the dissolution of Transamerica
Delaware, Transamerica will use its best efforts to list the Series A Junior
Subordinated Debentures on the New York Stock Exchange or on such other exchange
as the Series A Preferred Securities are then listed.
MANDATORY PREPAYMENT
If Transamerica Delaware redeems Series A Preferred Securities in
accordance with the terms thereof, the Series A Junior Subordinated Debentures
will become due and payable in a principal
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amount equal to the aggregate stated liquidation preference of the Series A
Preferred Securities so redeemed, together with any accrued and unpaid interest
thereon, including Additional Interest, if any. Any payment pursuant to this
provision shall be made prior to 12:00 noon, New York City time, on the date of
such redemption or at such other time on such earlier date as the parties
thereto shall agree. The Series A Junior Subordinated Debentures are not
entitled to the benefit of any sinking fund or, except as set forth above, any
other provision for mandatory prepayment.
OPTIONAL REDEMPTION
If there shall be no Series A Preferred Securities outstanding,
Transamerica shall have the right to redeem the Series A Junior Subordinated
Debentures, in whole or in part, from time to time, on or after October 25,
1999, upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest, including Additional Interest, if any, to the redemption date. If
Transamerica or Transamerica Delaware purchases Series A Preferred Securities by
tender, in the open market or by private agreement, Transamerica shall have the
right to redeem Series A Junior Subordinated Debentures, in an amount not to
exceed the aggregate stated liquidation preference of the Series A Preferred
Securities so purchased, together with any accrued and unpaid interest thereon,
including Additional Interest, if any, to the redemption date.
INTEREST
Each Series A Junior Subordinated Debenture will bear interest at the rate
of 9 1/8% per annum from the original date of issuance, payable monthly in
arrears on the last day of each calendar month of each year (each, an "Interest
Payment Date"), commencing October 31, 1994, to the person in whose name such
Series A Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. In the event the Series A Junior Subordinated Debentures
shall not continue to remain in book-entry-only form, Transamerica shall have
the right to select record dates that shall be more than one Business Day prior
to the Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Series A Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Transamerica shall have the right at any time during the term of the Series
A Junior Subordinated Debentures to extend the interest payment period from time
to time to a period not exceeding 60 consecutive months (the "Extension
Period"), at the end of which Extension Period Transamerica shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Series A Junior Subordinated Debentures to the extent
permitted by applicable law); provided that, during any such Extension Period,
Transamerica shall not declare or pay any dividend on, or purchase, acquire or
make a liquidation payment with respect to, any of its common stock. Prior to
the termination of any such Extension Period, Transamerica may further extend
the interest payment period, provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 60 consecutive
months. Upon the termination of any Extension Period and the payment of all
amounts then due, Transamerica may select a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The failure by Transamerica to make interest
payments during an Extension Period would not constitute a default or an event
of default under Transamerica's
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currently outstanding indebtedness. If Transamerica Delaware shall be the sole
holder of the Series A Junior Subordinated Debentures, Transamerica shall give
Transamerica Delaware notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date the dividends on the Series A
Preferred Securities are payable or (ii) the date Transamerica Delaware is
required to give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Series A Preferred Securities
of the record date or the date such dividend is payable, but in any event not
less than one Business Day prior to such record date. Transamerica shall cause
Transamerica Delaware to give notice of Transamerica's selection of such
Extension Period to the holders of the Series A Preferred Securities. If
Transamerica Delaware shall not be the sole holder of the Series A Junior
Subordinated Debentures, Transamerica shall give the holders of the Series A
Junior Subordinated Debentures notice of its selection of such Extension Period
ten Business Days prior to the earlier of (i) the Interest Payment Date or (ii)
the date Transamerica is required to give notice to the New York Stock Exchange
or other applicable self-regulatory organization or to holders of the Series A
Junior Subordinated Debentures of the record or payment date of such related
interest payment, but in any event not less than two Business Days prior to such
record date.
ADDITIONAL INTEREST
If at any time Transamerica Delaware shall be required to pay any interest
on dividends in arrears in respect of the Series A Preferred Securities pursuant
to the terms thereof, then Transamerica will pay as interest to Transamerica
Delaware as the holder of the Series A Junior Subordinated Debentures
("Additional Interest") an amount equal to such interest on dividends in
arrears.
SET-OFF
Notwithstanding anything to the contrary in the Indenture, Transamerica
shall have the right to set-off any payment it is otherwise required to make
thereunder with and to the extent Transamerica has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
EVENTS OF DEFAULT
In the case that any Event of Default (as defined in the Indenture and as
described in the accompanying Prospectus) shall occur and be continuing,
Transamerica Delaware will have the right to declare the principal of and the
interest on the Series A Junior Subordinated Debentures (including any
Additional Interest) and any other amounts payable under the Indenture to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to the Series A Junior Subordinated Debentures. See "Enforcement of
Certain Rights by Special Representative" below for a discussion of certain
rights available to holders of the Series A Preferred Securities upon the
occurrence of an Event of Default.
ENFORCEMENT OF CERTAIN RIGHTS BY SPECIAL REPRESENTATIVE
If (i) arrearages on dividends on the Series A Preferred Securities shall
exist for 18 consecutive monthly dividend periods; (ii) an Event of Default
occurs and is continuing on the Series A Junior Subordinated Debentures; or
(iii) Transamerica is in default on any of its payment obligations under the
Guarantee, under the terms of the Series A Preferred Securities, the holders of
outstanding Series A Preferred Securities will have the rights referred to under
"Description of the Series A Preferred Securities -- Voting Rights", including
the right to appoint a Special Representative, which Special Representative
shall be authorized to exercise Transamerica Delaware's right to accelerate the
principal amount of the Series A Junior Subordinated Debentures upon an Event of
Default and to enforce Transamerica Delaware's other creditor rights under the
Series A Junior Subordinated Debentures. Notwithstanding the appointment of any
such Special Representative, Transamerica shall continue as General Partner and
shall retain all rights under the Indenture, including the right to extend the
interest payment period from time to time to a period not exceeding 60
consecutive months, and any such extension shall not constitute a default under
the Indenture, or enable a holder of Series A Preferred Securities to require
the payment of a dividend that has not theretofore been declared.
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BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Series A Preferred Securities in connection
with the dissolution of Transamerica Delaware as a result of the occurrence of a
Special Event, the Series A Junior Subordinated Debentures will be issued in the
form of one or more global certificates (each, a "Global Security") registered
in the name of the nominee of DTC. Except under the limited circumstances
described below, Series A Junior Subordinated Debentures represented by the
Global Security will not be exchangeable for, and will not otherwise be issuable
as, Series A Junior Subordinated Debentures in definitive form. The Global
Securities described above may not be transferred except by DTC to a nominee of
DTC or by a nominee of DTC to DTC or another nominee of DTC or to a successor
depository or its nominee.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Series A Junior
Subordinated Debentures in definitive form and will not be considered the
Holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Series A Junior Subordinated
Debentures shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of DTC or its nominee or to
a successor depository or its nominee. Accordingly, each beneficial owner must
rely on the procedures of DTC and, if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest, to
exercise any rights of a Holder under the Indenture.
The Depository. DTC will act as security depository for the Series A
Junior Subordinated Debentures. For a description of DTC and the specific terms
of the depository arrangements, see "Description of the Series A Preferred
Securities -- Book-Entry-Only Issuance -- The Depository Trust Company". As of
the date of this Prospectus Supplement, the description therein of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the Series A Preferred Securities apply in
all material respects to any debt obligations represented by one or more Global
Securities held by DTC.
None of Transamerica, the Trustee, any paying agent or any other agent of
Transamerica or the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Series A Junior Subordinated
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Discontinuance of the Depository's Services. A Global Security shall be
exchangeable for Series A Junior Subordinated Debentures registered in the names
of persons other than DTC or its nominee only if (i) DTC notifies Transamerica
that it is unwilling or unable to continue as a depository for such Global
Security and no successor depository shall have been appointed, or if at any
time DTC ceases to be a clearing agency registered under the Exchange Act at a
time when DTC is required to be so registered to act as such depository, (ii)
Transamerica in its sole discretion determines that such Global Security shall
be so exchangeable or (iii) there shall have occurred an Event of Default with
respect to such Series A Junior Subordinated Debentures. Any Global Security
that is exchangeable pursuant to the preceding sentence shall be exchangeable
for Series A Junior Subordinated Debentures registered in such names as the
Depository shall direct. It is expected that such instructions will be based
upon directions received by the Depository from its Participants with respect to
ownership of beneficial interests in such Global Security.
MISCELLANEOUS
For restrictions on certain actions of the General Partner with respect to
Series A Junior Subordinated Debentures held by Transamerica Delaware, see
"Description of the Series A Preferred Securities -- Voting Rights".
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RELATIONSHIP BETWEEN THE SERIES A PREFERRED SECURITIES, THE
SERIES A JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
As long as payments of interest and other payments are made when due on the
Series A Junior Subordinated Debentures, such payments will be sufficient to
cover dividends (if and to the extent declared) and other payments due on the
Series A Preferred Securities primarily because (i) the aggregate principal
amount of Series A Junior Subordinated Debentures will be equal to the sum of
the aggregate stated liquidation preference of the Series A Preferred Securities
and the General Partnership Payment; (ii) the interest rate and interest and
other payment dates on the Series A Junior Subordinated Debentures will match
the dividend rate and dividend and other payment dates for the Series A
Preferred Securities; (iii) the Limited Partnership Agreement provides that
Transamerica, as General Partner, shall pay for all, and Transamerica Delaware
shall not be obligated to pay, directly or indirectly, for any, costs and
expenses of Transamerica Delaware, including any income taxes, duties and other
governmental charges, and all costs and expenses with respect thereto, to which
Transamerica Delaware may become subject, except for United States withholding
taxes; and (iv) the Limited Partnership Agreement further provides that the
General Partner shall not cause or permit Transamerica Delaware, among other
things, to engage in any activity that is not consistent with the limited
purposes of Transamerica Delaware.
Payments of dividends (if and to the extent declared) and other payments
due on the Series A Preferred Securities are guaranteed by Transamerica as and
to the extent set forth under "Description of the Guarantee" in the accompanying
Prospectus. If Transamerica does not make interest payments on the Series A
Junior Subordinated Debentures purchased by Transamerica Delaware, it is
expected that Transamerica Delaware will not declare or pay dividends on the
Series A Preferred Securities. Under the Limited Partnership Agreement, if and
to the extent Transamerica does make interest payments on the Series A Junior
Subordinated Debentures, Transamerica Delaware is obligated, to the extent funds
are legally available therefor, to declare dividends on the Series A Preferred
Securities. The Guarantee is a full and unconditional guarantee from the time of
issuance of the Series A Preferred Securities, but does not apply to any payment
of dividends unless and until such dividends are declared.
If Transamerica fails to make interest or other payments on the Series A
Junior Subordinated Debentures when due, the Limited Partnership Agreement
provides a mechanism whereby the holders of the Series A Preferred Securities
may appoint a Special Representative to enforce the rights of Transamerica
Delaware under the Series A Junior Subordinated Debentures. The Limited
Partnership Agreement also provides, and Transamerica, under the Guarantee,
acknowledges, that a Special Representative may be appointed to enforce the
Guarantee if Transamerica is in default on any of its payment obligations under
the Guarantee. In addition, if the General Partner or the Special Representative
fails to enforce the Guarantee, a holder of a Series A Preferred Security may,
after a period of 30 days has elapsed from such holder's written request to the
General Partner or the Special Representative, as the case may be, to enforce
the Guarantee, institute a legal proceeding directly against Transamerica to
enforce its rights under the Guarantee without first instituting a legal
proceeding against Transamerica Delaware or any other person or entity.
If a Special Event shall occur and be continuing, the General Partner may
elect to dissolve Transamerica Delaware, and to cause Series A Junior
Subordinated Debentures to be distributed in exchange for the outstanding Series
A Preferred Securities. The Series A Preferred Securities represent limited
partner interests in Transamerica Delaware, a limited partnership which exists
for the sole purpose of issuing its partnership interests and investing the
proceeds thereof in debt securities of Transamerica, while the Series A Junior
Subordinated Debentures represent indebtedness of Transamerica, a diversified
financial services company (see "Transamerica Corporation"). A principal
difference between the rights of a holder of Series A Preferred Securities and a
holder of Series A Junior Subordinated Debentures is that the Series A Junior
Subordinated Debentures will accrue, and (subject to the permissible extension
of the interest period) a holder thereof will be entitled to receive, interest
on the principal amount of Series A Junior Subordinated Debentures
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held, while a holder of Series A Preferred Securities is only entitled to
receive dividends if and to the extent declared by the General Partner.
Upon any voluntary or involuntary dissolution, winding-up or termination of
Transamerica Delaware, the holders of Series A Preferred Securities will be
entitled to receive, out of assets legally available for distribution to
partners, the Liquidation Distribution in cash or Series A Junior Subordinated
Debentures and will be entitled to the benefits of the Guarantee with respect to
any such distribution. See "Description of the Series A Preferred
Securities -- Liquidation Distribution Upon Dissolution". Upon any voluntary or
involuntary liquidation or bankruptcy of Transamerica, the holders of Series A
Junior Subordinated Debentures would be subordinated creditors of Transamerica,
subordinated in right of payment to all Senior Indebtedness, but entitled to
receive payment in full of principal, premium, if any, and interest, before any
stockholders of Transamerica receive payments or distributions.
A default or event of default under any Senior Indebtedness would not
constitute a default or event of default under the Series A Junior Subordinated
Debentures. However, in the event of payment defaults under, or acceleration of,
Senior Indebtedness, the subordination provisions of the Series A Junior
Subordinated Debentures provide that no payments may be made in respect of the
Series A Junior Subordinated Debentures. Failure to make required payments on
the Series A Junior Subordinated Debentures would constitute an event of default
under the Indenture.
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UNITED STATES TAXATION
GENERAL
This section is a summary of certain United States federal income tax
considerations that may be relevant to prospective purchasers of Series A
Preferred Securities and represents the opinion of Wachtell, Lipton, Rosen &
Katz, special counsel to Transamerica and Transamerica Delaware, insofar as it
relates to matters of law and legal conclusions. This section is based upon
current provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), existing and proposed regulations thereunder and current administrative
rulings and court decisions, all of which are subject to change. Subsequent
changes may cause tax consequences to vary substantially from the consequences
described below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Series A
Preferred Securities. Moreover, the discussion generally focuses on holders of
Series A Preferred Securities who are individual citizens or residents of the
United States and who hold the Series A Preferred Securities as capital assets.
This discussion has only limited application to corporations, estates, trusts or
non-resident aliens. Accordingly, each prospective purchaser of Series A
Preferred Securities should consult, and should depend on, the purchaser's own
tax advisor in analyzing the federal, state, local and foreign tax consequences
of the purchase, ownership or disposition of Series A Preferred Securities.
OPINION OF COUNSEL
In the opinion of Wachtell, Lipton, Rosen & Katz, (i) Transamerica Delaware
will be a partnership for federal income tax purposes; and (ii) the Series A
Junior Subordinated Debentures will be classified as indebtedness of
Transamerica. Several recent pronouncements of the Internal Revenue Service (the
"IRS"), however, evidence increasing concern by the IRS over arrangements
similar in some respects to those involving Transamerica Delaware, the Series A
Preferred Securities, and the Series A Junior Subordinated Debentures. While
these pronouncements are not considered to apply to the arrangements described
herein, it is possible that future pronouncements or other developments could
adversely affect such arrangements. It should be noted in this connection that
Transamerica has the right to redeem the Series A Preferred Securities or
dissolve Transamerica Delaware upon the occurrence of a Tax Event (as defined
under "Description of the Series A Preferred Securities -- Special Event
Redemption or Distribution").
INCOME FROM SERIES A PREFERRED SECURITIES
Each holder of Series A Preferred Securities (a "Preferred Securityholder")
will be required to include in gross income the Preferred Securityholder's
distributive share of the net income of Transamerica Delaware. Such income
should not exceed the dividends received on such Series A Preferred Securities,
except in limited circumstances as described below under "Potential Extension of
Interest Payment Period". No portion of such income will be eligible for the
dividends received deduction.
Transamerica Delaware does not currently intend to make an election under
Section 754 of the Code. As a result, a subsequent purchaser of Series A
Preferred Securities in the secondary market will not be permitted or required
to adjust the tax basis in its allocable share of Transamerica Delaware's assets
so as to reflect any difference between its purchase price for the Preferred
Securities and the underlying tax basis of Transamerica Delaware in its assets.
As a result, a Preferred Securityholder may be allocated a larger or smaller
amount of Transamerica Delaware's income than would otherwise be appropriate
based upon such Preferred Securityholder's purchase price for the Preferred
Security.
Under Section 708 of the Code, Transamerica Delaware will be deemed to
terminate for federal income tax purposes if 50% or more of the capital and
profits interest in Transamerica Delaware is
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sold or exchanged within a 12-month period. If such a termination occurs, there
will be a closing of Transamerica Delaware's taxable year for all partners and
Transamerica Delaware will be considered to distribute its assets to the
partners, who would then be treated as recontributing those assets to a new
partnership. Those assets might have a basis higher or lower than their basis in
the hands of Transamerica Delaware prior to termination, which might alter the
tax consequences to Preferred Securityholders.
DISPOSITION OF SERIES A PREFERRED SECURITIES
Gain or loss will be recognized on a sale of Series A Preferred Securities,
including a redemption for cash, equal to the difference between the amount
realized and the Preferred Securityholder's tax basis for the Series A Preferred
Securities sold. Gain or loss recognized by a Preferred Securityholder on the
sale or exchange of a Series A Preferred Security held for more than one year
generally will be taxable as long-term capital gain or loss.
RECEIPT OF SERIES A JUNIOR SUBORDINATED DEBENTURES
UPON LIQUIDATION OF TRANSAMERICA DELAWARE
Under certain circumstances, as described under the caption "Description of
the Series A Preferred Securities -- Special Event Redemption or Distribution",
Series A Junior Subordinated Debentures may be distributed to the Preferred
Securityholders upon liquidation of Transamerica Delaware. Under current United
States federal income tax law, such a distribution would be treated as a
non-taxable exchange to each Preferred Securityholder and would result in the
Preferred Securityholder receiving an aggregate tax basis in the Series A Junior
Subordinated Debentures equal to such Preferred Securityholder's aggregate tax
basis in its Series A Preferred Securities. A Preferred Securityholder's holding
period in the Series A Junior Subordinated Debentures so received in liquidation
of Transamerica Delaware would include the period for which the Series A
Preferred Securities were held by such Preferred Securityholder. As a result, in
certain circumstances the Series A Junior Subordinated Debentures received in
liquidation might bear "market discount", "amortizable bond premium", or
"acquisition premium" which might alter the tax treatment of such Debentures in
the hands of the Preferred Securityholder as compared with the consequences of
holding Series A Preferred Securities. Under a change in law, a change in legal
interpretation or the other circumstances giving rise to a Special Event,
however, the dissolution could be a taxable event to Preferred Securityholders.
TRANSAMERICA DELAWARE INFORMATION RETURNS AND AUDIT PROCEDURES
Transamerica, as the General Partner in Transamerica Delaware, will furnish
each Preferred Securityholder with a Schedule K-1 each year setting forth such
Preferred Securityholder's allocable share of income for the prior calendar
year. Transamerica is required to furnish such Schedule K-1 as soon as
practicable following the end of the year, but in any event prior to March 31 of
the following year.
Any person who holds Series A Preferred Securities as a nominee for another
person is required to furnish to Transamerica Delaware (a) the name, address and
taxpayer identification number of each of the beneficial owner and the nominee;
(b) information as to whether the beneficial owner is (i) a person that is not a
United States person, (ii) a foreign government, an international organization
or any wholly-owned agency or instrumentality of either of the foregoing, or
(iii) a tax-exempt entity; (c) the amount and description of Series A Preferred
Securities held, acquired or transferred for the beneficial owner; and (d)
certain information including the dates of acquisitions and transfers, means of
acquisitions and transfers, and acquisition cost for purchases, as well as the
amount of net proceeds from sales. Brokers and financial institutions are
required to furnish additional information, including whether they are United
States persons and certain information on Series A Preferred Securities they
acquire, hold or transfer for their own accounts. A penalty of $50 per failure
(up to a maximum of $100,000 per calendar year) is imposed by the Code for
failure to report such information to Transamerica Delaware. The nominee is
required to supply
S-26
<PAGE> 27
the beneficial owners of the Series A Preferred Securities with the information
furnished to Transamerica Delaware.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD
Under the Indenture, Transamerica has the right to extend from time to time
the interest payment period on the Series A Junior Subordinated Debentures to a
period not exceeding 60 consecutive months. In the event that the interest
payment period is extended, Transamerica Delaware will continue to accrue income
equal to the amount of the interest payment due at the end of the Extension
Period, on an economic basis over the length of the Extension Period.
Accrued income will be allocated, but not distributed, to holders of record
on the Business Day preceding the last day of each calendar month. As a result,
holders of record during an Extension Period will include interest in their
gross income in advance of the receipt of cash, and any such holders who dispose
of Series A Preferred Securities prior to the record date for the payment of
dividends following such Extension Period will include interest in their gross
income but will not receive any cash related thereto from Transamerica Delaware.
The tax basis of a Series A Preferred Security will be increased by the amount
of any interest that is included in income without a receipt of cash, and will
be decreased again when and if such cash is subsequently received from
Transamerica Delaware.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
holder who or which is (i) a nonresident alien individual or (ii) a foreign
corporation, partnership or estate or trust, in either case not subject to
United States federal income tax on a net income basis in respect of a Series A
Preferred Security.
Under current United States federal income tax law, subject to the
discussion below with respect to backup withholding:
(i) payments by Transamerica Delaware or any of its paying agents to
any holder of a Series A Preferred Security who or which is a United States
Alien Holder should not be subject to United States federal withholding tax
provided that (a) the beneficial owner of the Series A Preferred Security
does not actually or constructively own 10% or more of the total combined
voting power of all classes of capital stock of Transamerica entitled to
vote, (b) the beneficial owner of the Series A Preferred Security is not a
controlled foreign corporation that is related to Transamerica through
stock ownership and (c) either (x) the beneficial owner of the Series A
Preferred Security certifies to Transamerica Delaware or its agent, under
penalties of perjury, that it is a United States Alien Holder and provides
its name and address or (y) the holder of the Series A Preferred Security
is a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (a "financial institution"), and such holder certifies to
Transamerica Delaware or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes
Transamerica Delaware or its agent with a copy thereof; and
(ii) a United States Alien Holder of a Series A Preferred Security
generally will not be subject to United States federal withholding tax on
any gain realized on the sale or exchange of a Series A Preferred Security
unless such holder is present in the United States for 183 days or more in
the taxable year of sale and either has a "tax home" in the United States
or certain other requirements are met.
In the event that the Series A Preferred Securities were characterized as
stock or other equity of Transamerica, payments to a holder characterized as
dividends could be subject to a 30% withholding tax or such lesser amount as may
be provided under an applicable treaty.
S-27
<PAGE> 28
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments to
noncorporate United States holders of the proceeds of the sale of Series A
Preferred Securities within the United States and "backup withholding" at a rate
of 31% will apply to such payments if the United States holder fails to provide
an accurate taxpayer identification number.
Payments of the proceeds from the sale by a United States Alien Holder of
Series A Preferred Securities made to or through a foreign office of a broker
generally will not be subject to information reporting or backup withholding,
except that, if the broker is a United States person, a controlled foreign
corporation for United States tax purposes, or a foreign person 50% or more of
whose gross income is effectively connected with a United States trade or
business for a specified three-year period, information reporting may apply to
such payments. Payments of the proceeds from the sale of Series A Preferred
Securities to or through the United States office of a broker is subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies as to its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
S-28
<PAGE> 29
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
Transamerica Delaware has agreed to sell to each of the Underwriters named
below, and each of the Underwriters, for whom Goldman, Sachs & Co., Smith Barney
Inc., Dean Witter Reynolds Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated,
Prudential Securities Incorporated and Salomon Brothers Inc are acting as
Representatives, has severally agreed to purchase from Transamerica Delaware,
the respective number of Series A Preferred Securities set forth opposite its
name below:
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITER SECURITIES
----------------------------------------------------------------- ---------
<S> <C>
Goldman, Sachs & Co.............................................. 725,000
Smith Barney Inc. ............................................... 725,000
Dean Witter Reynolds Inc. ....................................... 725,000
Donaldson, Lufkin & Jenrette Securities Corporation.............. 725,000
Morgan Stanley & Co. Incorporated................................ 725,000
PaineWebber Incorporated......................................... 725,000
Prudential Securities Incorporated............................... 725,000
Salomon Brothers Inc............................................. 725,000
Advest, Inc. .................................................... 45,000
Bear, Stearns & Co. Inc. ........................................ 115,000
CS First Boston Corporation...................................... 115,000
J.C. Bradford & Co. ............................................. 45,000
Commerzbank Capital Markets Corporation.......................... 45,000
Cowen & Company.................................................. 45,000
Crowell, Weedon & Co. ........................................... 45,000
Dain Bosworth Incorporated....................................... 45,000
A.G. Edwards & Sons, Inc. ....................................... 115,000
Fahnestock & Co. Inc. ........................................... 45,000
First of Michigan Corporation.................................... 45,000
Gruntal & Co., Incorporated...................................... 45,000
J.J.B. Hillard W.L. Lyons, Inc. ................................. 45,000
Interstate/Johnson Lane Corporation.............................. 45,000
Janney Montgomery Scott Inc. .................................... 45,000
Edward D. Jones & Co. ........................................... 45,000
Josephthal Lyon & Ross Incorporated.............................. 45,000
Kemper Securities, Inc. ......................................... 115,000
Kidder, Peabody & Co. Incorporated............................... 115,000
Legg Mason Wood Walker Incorporated.............................. 45,000
Lehman Brothers Inc. ............................................ 115,000
McGinn, Smith & Co., Inc. ....................................... 45,000
Morgan Keegan & Company, Inc. ................................... 45,000
The Ohio Company................................................. 45,000
Olde Discount Corporation........................................ 45,000
Oppenheimer & Co., Inc. ......................................... 115,000
Piper Jaffray Inc. .............................................. 45,000
Principal Financial Securities, Inc. ............................ 45,000
Pryor, McClendon, Counts & Co., Inc. ............................ 45,000
Rauscher Pierce Refsnes, Inc. ................................... 45,000
Raymond James & Associates, Inc. ................................ 45,000
Redwood Securities Group, Inc. .................................. 45,000
The Robinson-Humphrey Company, Inc. ............................. 45,000
</TABLE>
S-29
<PAGE> 30
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITER SECURITIES
----------------------------------------------------------------- ---------
<S> <C>
Sutro & Co. Incorporated......................................... 45,000
U.S. Clearing Corp. ............................................. 45,000
Van Kasper & Company............................................. 45,000
Wedbush Morgan Securities ....................................... 45,000
Wheat, First Securities, Inc. ................................... 45,000
---------
Total.................................................. 8,000,000
=========
</TABLE>
The Underwriters propose to offer the Series A Preferred Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement, and in part to certain securities
dealers at such price less a concession of $0.50 per Series A Preferred
Security. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $0.25 per Series A Preferred Security to certain brokers and
dealers. After the Series A Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.
In view of the fact that the proceeds of the sale of the Series A Preferred
Securities ultimately will be used to purchase the Series A Junior Subordinated
Debentures, the Underwriting Agreement provides that Transamerica will pay as
compensation ("Underwriters' Compensation"), for the Underwriters' arranging the
investment therein of such proceeds, an amount in New York Clearing House (next
day) funds of $0.7875 per Series A Preferred Security ($0.50 per Series A
Preferred Security sold to certain institutions) for the accounts of the several
Underwriters.
Transamerica and Transamerica Delaware have agreed, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the later of (i) the termination of trading restrictions for the
Series A Preferred Securities, as notified to Transamerica by the
Representatives and (ii) the latest time of delivery for such Series A Preferred
Securities, not to offer, sell, contract to sell or otherwise dispose of, except
in accordance with the Underwriting Agreement, any Preferred Securities, any
preferred stock or any other securities of Transamerica or Transamerica Delaware
that are substantially similar to the Series A Preferred Securities, including
but not limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, Preferred Securities, preferred stock or
substantially similar securities of Transamerica or Transamerica Delaware,
without the prior written consent of the Representatives.
Application has been made to list the Series A Preferred Securities on the
New York Stock Exchange. Prior to this offering, there has been no public market
for the Series A Preferred Securities. In order to meet one of the requirements
for listing the Series A Preferred Securities on the New York Stock Exchange,
the Underwriters will undertake to sell lots of 100 or more Series A Preferred
Securities to a minimum of 400 beneficial holders. Trading of the Series A
Preferred Securities on the New York Stock Exchange is expected to commence
within a seven-day period after the initial delivery of the Series A Preferred
Securities. The Representatives have advised Transamerica that they intend to
make a market in the Series A Preferred Securities prior to the commencement of
trading on the New York Stock Exchange, but are not obligated to do so and may
discontinue market making at any time without notice.
Transamerica Delaware and Transamerica have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, Transamerica and its subsidiaries in the
ordinary course of business.
S-30
<PAGE> 31
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Series A
Preferred Securities, the validity of the Limited Partnership Agreement and the
formation of Transamerica Delaware are being passed upon by Richards, Layton &
Finger, P.A., special Delaware counsel to Transamerica and Transamerica
Delaware. The validity of the Indenture, the Guarantee and the Series A Junior
Subordinated Debentures will be passed upon on behalf of Transamerica Delaware
and Transamerica by Christopher M. McLain, Esq., Senior Vice President and
General Counsel of Transamerica, and on behalf of the Underwriters by Cleary,
Gottlieb, Steen & Hamilton, counsel to the Underwriters. Statements as to United
States taxation in the Prospectus Supplement in the second paragraph under the
caption "Investment Considerations -- Special Event Redemption or Distribution",
and under the caption "United States Taxation", have been passed upon for
Transamerica and Transamerica Delaware by Wachtell, Lipton, Rosen & Katz,
special tax counsel to Transamerica and Transamerica Delaware, and are stated
herein on their authority.
S-31
<PAGE> 32
PROSPECTUS
$425,000,000
TRANSAMERICA CORPORATION
JUNIOR SUBORDINATED DEBENTURES
TRANSAMERICA DELAWARE
PREFERRED SECURITIES
------------------------
Transamerica Delaware, L.P. ("Transamerica Delaware"), a Delaware special
purpose limited partnership in which Transamerica Corporation, a Delaware
corporation ("Transamerica"), is the general partner, may offer, from time to
time, its preferred securities, representing limited partner interests (the
"Preferred Securities"), in one or more series. The payment of periodic cash
distributions ("dividends") with respect to Preferred Securities of any series
(if and to the extent determined to be payable ("declared") by Transamerica, in
its capacity as general partner in Transamerica Delaware) and payments on
liquidation or redemption with respect to the Preferred Securities are
guaranteed by Transamerica to the extent described herein (the "Guarantee").
Transamerica's obligations under the Guarantee are subordinate and junior in
right of payment to all other liabilities of Transamerica (except those made
pari passu (that is, equal in priority) by their terms) and senior to all
capital stock issued by Transamerica. Junior subordinated debentures of
Transamerica ("Junior Subordinated Debentures") also may be issued and sold from
time to time in one or more series by Transamerica to Transamerica Delaware in
connection with the investment of the proceeds from the offering of Preferred
Securities. The Junior Subordinated Debentures when issued will be unsecured and
subordinate and junior in right of payment to Senior Indebtedness (as defined
herein) of Transamerica. The Junior Subordinated Debentures subsequently may be
distributed pro rata to holders of Preferred Securities in connection with the
dissolution of Transamerica Delaware upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement (the "Prospectus
Supplement").
Specific terms of the particular Preferred Securities and Junior
Subordinated Debentures of any series in respect of which this Prospectus is
being delivered (the "Offered Securities") will be set forth in the accompanying
Prospectus Supplement with respect to such series, which will describe, without
limitation and where applicable, the following: (i) in the case of Preferred
Securities, the specific designation, number of Preferred Securities, dividend
rate (or the method of determining such rate), dates on which dividends will be
payable, liquidation preference, voting rights, any redemption provisions, terms
for any conversion or exchange into other securities, the initial public
offering price, any listing on a securities exchange, and any other rights,
preferences, privileges, limitations and restrictions, and (ii) in the case of
Junior Subordinated Debentures, the specific designation, aggregate principal
amount, denomination, maturity, premium, if any, interest rate (or the method of
determining such rate), if any, dates on which premium, if any, and interest, if
any, will be payable, any redemption provisions, any sinking fund provisions,
the initial public offering price, any listing on a securities exchange and any
other terms.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Offered Securities shall not exceed
$425,000,000.
The Prospectus Supplement relating to any series of Offered Securities will
contain information concerning certain United States federal income tax
considerations, if applicable to the Offered Securities.
------------------------
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.
------------------------
The Offered Securities will be sold directly, through agents, underwriters
or dealers as designated from time to time, or through a combination of such
methods. If agents or any dealers or underwriters are involved in the sale of
the Offered Securities in respect of which this Prospectus is being delivered,
the names of such agents, dealers or underwriters and any applicable commissions
or discounts will be set forth in or may be calculated from the Prospectus
Supplement with respect to such Offered Securities.
The date of this Prospectus is October 14, 1994.
<PAGE> 33
AVAILABLE INFORMATION
Transamerica is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, as well as at the following Regional Offices:
7 World Trade Center, New York, New York 10048; and 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street at prescribed rates and
can be inspected at the New York and Pacific Stock Exchanges on which certain
securities of Transamerica are listed.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (together with all amendments and exhibits
thereto, the "Registration Statement") filed by Transamerica Delaware and
Transamerica with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). Reference is made to the Registration Statement for
further information with respect to Transamerica, Transamerica Delaware and the
securities offered hereby. Statements contained or incorporated by reference
herein concerning the provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by reference to the
Registration Statement.
No separate financial statements of Transamerica Delaware have been
included herein. Transamerica and Transamerica Delaware do not consider that
such financial statements would be material to holders of Preferred Securities
because Transamerica Delaware is a newly formed special purpose entity, has no
operating history, has no independent operations and is not engaged in, and does
not propose to engage in, any activity other than as set forth below. Further,
Transamerica believes that financial statements of Transamerica Delaware are not
material to the holders of the Preferred Securities since the Preferred
Securities have been structured to provide a guarantee by Transamerica of the
Preferred Securities on the terms described herein, and an agreement by
Transamerica, as general partner of Transamerica Delaware, to pay costs and
expenses of Transamerica Delaware, such that the holders of the Preferred
Securities with respect to the payment of dividends and amounts upon redemption,
dissolution, liquidation and winding-up are at least in the same position
vis-a-vis the assets of Transamerica as they would be if they were preferred
stockholders of Transamerica. See "Transamerica Delaware", "Description of the
Preferred Securities", "Description of the Guarantee" and "Description of the
Junior Subordinated Debentures". Transamerica Delaware is a limited partnership
formed under the laws of the State of Delaware. Transamerica is the sole general
partner in Transamerica Delaware and, as of the date hereof, directly or
indirectly beneficially owns all of Transamerica Delaware's partnership
interests.
2
<PAGE> 34
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Transamerica's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 and its Quarterly Reports on Form 10-Q for the periods ended
March 31, 1994 and June 30, 1994, as filed with the Commission pursuant to the
Exchange Act, are incorporated herein by reference. All documents filed by
Transamerica pursuant to Sections 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 the
offering of the securities offered hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained herein or in a document all or a portion
of which is 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 that 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.
Transamerica hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, including any beneficial owner, a copy of any or all
of the documents referred to above which have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
the Prospectus incorporates. Requests for such copies should be directed to
Transamerica Corporation, Corporate Secretary's Office, 600 Montgomery Street,
San Francisco, California 94111, telephone (415) 983-4000.
TRANSAMERICA DELAWARE
Transamerica Delaware is a limited partnership formed under the laws of the
State of Delaware. Transamerica Delaware exists for the sole purpose of issuing
its partnership interests and investing the net proceeds thereof in Junior
Subordinated Debentures. All of its partnership interests, as of the date
hereof, are beneficially owned, directly or indirectly, by Transamerica.
Transamerica is the sole general partner in Transamerica Delaware (the "General
Partner"). Transamerica LP Holdings Corp., a Delaware corporation and
wholly-owned subsidiary of Transamerica ("Transamerica Holdings"), is, as of the
date hereof, the sole limited partner in Transamerica Delaware. Upon the
issuance of Preferred Securities, which securities represent limited partner
interests in Transamerica Delaware, Transamerica Holdings will remain as a
limited partner, but will have no interest in the profits and dividends or in
the assets of Transamerica Delaware. Transamerica Delaware has a term of
approximately 99 years, unless earlier dissolved. Transamerica Delaware's
registered office in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801, telephone: (302) 658-7581. All of Transamerica Delaware's
business and affairs will be conducted by Transamerica, as the sole general
partner. The business address of Transamerica Delaware is c/o Transamerica
Corporation, 600 Montgomery Street, San Francisco, California 94111, telephone
(415) 983-4000.
TRANSAMERICA CORPORATION
Transamerica Corporation is a diversified financial services company, whose
core businesses include consumer lending, commercial lending, leasing, real
estate services, life insurance and asset management. Transamerica was
incorporated in Delaware in 1928. At June 30, 1994, Transamerica had
consolidated assets of $39.0 billion and total shareholders' equity of $3.1
billion. For the year ended December 31, 1993, Transamerica had revenues of $4.8
billion and net income of $377 million.
3
<PAGE> 35
Because Transamerica is a holding company, the Junior Subordinated
Debentures are effectively subordinated to all existing and future liabilities,
including trade payables, of Transamerica's subsidiaries, except to the extent
Transamerica is a creditor of the subsidiaries recognized as such.
The principal executive offices of Transamerica are located at 600
Montgomery Street, San Francisco, California 94111. Transamerica's telephone
number is (415) 983-4000.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS OF TRANSAMERICA
The following table sets forth the consolidated ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock dividends for
the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, -------------------
-------------------------------- JUNE 30, JUNE 30,
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed charges
(unaudited)................................................ 1.45 1.37 1.06 1.90 2.09 2.20 2.19
Consolidated ratio of earnings to combined fixed charges and
preferred stock dividends (unaudited)...................... 1.43 1.34 1.04 1.83 2.00 2.11 2.11
</TABLE>
The consolidated ratios of earnings to fixed charges were computed by
dividing earnings before fixed charges and income taxes by the fixed charges.
The consolidated ratios of earnings to combined fixed charges and preferred
stock dividends were computed by dividing earnings before fixed charges,
preferred stock dividends and income taxes by the fixed charges and preferred
stock dividends. For computation of such ratios, earnings consist of income from
continuing operations, to which has been added fixed charges and income taxes of
Transamerica and its subsidiaries. Fixed charges consist of consolidated
interest and debt expense and one-third of consolidated rent expense, which
approximates the interest factor. Excluding the effects of a $130 million
special after tax charge recorded in the fourth quarter of 1991 by the
commercial lending operation to exit the rent-to-own finance business, reduce
lending to certain asset based lending lines, accelerate disposal of repossessed
assets and liquidate receivables remaining from previously sold businesses, the
consolidated ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends would have been 1.35 and
1.33 for 1991.
USE OF PROCEEDS
Transamerica Delaware will invest all proceeds received from the sale of
Preferred Securities in Junior Subordinated Debentures. Unless otherwise
specified in the Prospectus Supplement, the net proceeds to be received by
Transamerica from the sale of Junior Subordinated Debentures will be used for
general corporate purposes, which may include the repayment or repurchase of its
securities.
4
<PAGE> 36
DESCRIPTION OF THE PREFERRED SECURITIES
Transamerica Delaware may issue, from time to time, Preferred Securities,
in one or more series, having terms described in the Prospectus Supplement
relating thereto. The agreement of limited partnership of Transamerica Delaware
will be amended and restated (as so amended and restated, the "Limited
Partnership Agreement") to authorize the establishment of one or more series of
Preferred Securities, having such terms, including dividends, redemption,
voting, liquidation rights and such other preferred, deferred or other special
rights or such restrictions as shall be set forth therein or otherwise
established by the General Partner pursuant thereto. Reference is made to the
Prospectus Supplement relating to the Preferred Securities of a particular
series for specific terms, including (i) the distinctive designation of such
series that shall distinguish it from other series; (ii) the number of Preferred
Securities included in such series, which number may be increased or decreased
from time to time unless otherwise provided by the General Partner in creating
the series; (iii) the annual dividend rate (or method of determining such rate)
for Preferred Securities of such series and the date or dates upon which such
dividends shall be payable, provided, however, that dividends on any series of
Preferred Securities shall be payable on a monthly basis to holders of such
series of Preferred Securities as of a record date in each month during which
such series of Preferred Securities are outstanding, if and to the extent
declared by the General Partner; (iv) whether dividends on Preferred Securities
of such series shall be cumulative, and, in the case of Preferred Securities of
any series having cumulative dividend rights, the date or dates or method of
determining the date or dates from which dividends on Preferred Securities of
such series shall be cumulative; (v) the amount or amounts that shall be paid
out of the assets of Transamerica Delaware to the holders of Preferred
Securities of such series upon voluntary or involuntary dissolution, winding-up
or termination of Transamerica Delaware; (vi) the price or prices at which, the
period or periods within which, and the terms and conditions upon which,
Preferred Securities of such series may be redeemed or purchased, in whole or in
part, at the option of Transamerica Delaware or the General Partner; (vii) the
obligation, if any, of Transamerica Delaware to purchase or redeem Preferred
Securities of such series and the price or prices at which, the period or
periods within which, and the terms and conditions upon which, Preferred
Securities of such series shall be purchased or redeemed, in whole or in part,
pursuant to such obligation; (viii) the voting rights, if any, of Preferred
Securities of such series in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities of one or more
series, or of both, as a condition to specified action or amendments to the
Limited Partnership Agreement; and (ix) any other relative rights, preferences,
privileges, limitations or restrictions of Preferred Securities of the series
not inconsistent with the Limited Partnership Agreement or with applicable law.
All Preferred Securities offered hereby will be guaranteed by Transamerica to
the extent set forth below under "Description of the Guarantee". Any applicable
federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
5
<PAGE> 37
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by Transamerica for the benefit of the holders
from time to time of Preferred Securities. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the Guarantee, Transamerica will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Preferred Securities of each series, the Guarantee Payments (as
defined below) (without duplication of amounts theretofore paid by Transamerica
Delaware), as and when due, regardless of any defense, right of set-off or
counterclaim that Transamerica Delaware may have or assert. The following
payments with respect to any series of Preferred Securities to the extent not
paid by Transamerica Delaware (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accrued and unpaid dividends that have
theretofore been declared on the Preferred Securities of such series, (ii) the
redemption price, including all accrued and unpaid dividends (the "Redemption
Price"), with respect to any Preferred Securities called for redemption by
Transamerica Delaware and (iii) upon a liquidation of Transamerica Delaware, the
lesser of (a) the aggregate of the liquidation preference and all accrued and
unpaid dividends on the Preferred Securities of such series to the date of
payment and (b) the amount of assets of Transamerica Delaware remaining
available for distribution to holders of Preferred Securities of such series in
liquidation of Transamerica Delaware, payable in kind. Transamerica's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by Transamerica to the holders of Preferred Securities or by causing
Transamerica Delaware to pay such amounts to such holders.
If Transamerica does not make interest payments on the Junior Subordinated
Debentures purchased by Transamerica Delaware, it is expected that Transamerica
Delaware will not declare or pay dividends on the Preferred Securities. See
"Description of the Junior Subordinated Debentures -- Certain Covenants of
Transamerica". The Guarantee will be a full and unconditional guarantee with
respect to each series of Preferred Securities from the time of issuance of such
series of Preferred Securities, but will not apply to any payment of dividends
unless and until such dividends are declared.
CERTAIN COVENANTS OF TRANSAMERICA
In the Guarantee, Transamerica will covenant that, so long as any Preferred
Securities remain outstanding, Transamerica will not declare or pay any dividend
on, or purchase, acquire or make a liquidation payment with respect to, any of
its common stock or make any guarantee payment with respect thereto if at such
time Transamerica shall be in default with respect to its payment obligations
under the Guarantee or there shall have occurred any Event of Default under the
Indenture.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent will be required),
the Guarantee may be amended only with the prior approval of the holders of not
less than 66 2/3% in liquidation preference of the outstanding Preferred
Securities. The manner of obtaining any such approval of holders of the
Preferred Securities of each series will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
Transamerica and shall inure to the benefit of the holders of the Preferred
Securities then outstanding.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect as to
the Preferred Securities of any series upon full payment of the Redemption Price
of all Preferred Securities of such series, and will terminate completely upon
full payment of the amounts payable in accordance with the Limited Partnership
Agreement upon liquidation of Transamerica Delaware. See "Description of the
Junior Subordinated Debentures -- Events of Default" for a description of the
events of default and enforcement rights of the holders of Junior Subordinated
Debentures. The Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of Preferred Securities of any
series must, in accordance with the Partnership Act, restore payment of any sums
paid under such series of Preferred Securities or the Guarantee. The Partnership
Act provides that a limited partner of a limited partnership who wrongfully
receives a distribution, may be liable to the limited partnership for the amount
of such distribution.
STATUS OF THE GUARANTEE
Transamerica's obligations under the Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of Transamerica and will rank
(i) subordinate and junior in right of payment to all other liabilities of
Transamerica, including the Series A Junior Subordinated Debentures, except
those made pari passu by their terms, and (ii) senior to all capital stock now
or hereafter issued by Transamerica and to any guarantee now or hereafter
entered into by Transamerica in respect of any of its capital stock. The Limited
Partnership Agreement provides that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
Guarantee.
The Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
guarantor to enforce its rights under the guarantee without first instituting a
legal proceeding against any other person or entity). The Guarantee will be
deposited with the General Partner to be held for the benefit of the holders of
each series of the Preferred Securities. In the event of the appointment of a
Special Representative to, among other things, enforce the Guarantee, the
Special Representative may take possession of the Guarantee for such purpose. If
no Special Representative has been appointed to enforce the Guarantee, the
General Partner has the right to enforce the Guarantee on behalf of the holders
of each series of the Preferred Securities. The holders of not less than a
majority in aggregate liquidation preference of the Preferred Securities have
the right to direct the time, method and place of conducting any proceeding for
any remedy available in respect of the Guarantee, including the giving of
directions to the General Partner or the Special Representative, as the case may
be. If the General Partner or the Special Representative fails to enforce the
Guarantee as above provided, any holder of Preferred Securities may, after a
period of 30 days has elapsed from such holder's written request to the General
Partner or the Special Representative, as the case may be, to enforce the
Guarantee, institute a legal proceeding directly against Transamerica to enforce
its rights under the Guarantee, without first instituting a legal proceeding
against Transamerica Delaware or any other person or entity. The Guarantee will
not be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by Transamerica Delaware).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Junior Subordinated Debentures may be issued from time to time in one or
more series under an Indenture, dated as of October 14, 1994 (the "Indenture"),
between Transamerica and The First National Bank of Chicago, as Trustee (the
"Trustee"). The following summary does not purport to be complete and is subject
in all respects to the provisions of, and is qualified in its entirety by
reference to, the Indenture, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Whenever particular provisions
or defined terms in the Indenture are referred to herein, such provisions or
defined terms are incorporated by reference herein. Section and Article
references used herein are references to provisions of the Indenture unless
otherwise noted.
GENERAL
The Junior Subordinated Debentures will be unsecured, subordinated
obligations of Transamerica. The Indenture does not limit the aggregate
principal amount of Junior Subordinated Debentures that may be issued thereunder
and provides that the Junior Subordinated Debentures may be issued thereunder
from time to time in one or more series.
The Junior Subordinated Debentures are issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of
Transamerica's Board of Directors or a special committee thereof (each, a
"Supplemental Indenture") (Section 2.01). The aggregate principal amount of
Junior Subordinated Debentures relating to Preferred Securities of any series
will be set forth in the Prospectus Supplement for such series and will be equal
to the sum of the aggregate liquidation preference of the Preferred Securities
for such series and the General Partner's capital contribution with respect to
the Preferred Securities for such series. Junior Subordinated Debentures
relating to Preferred Securities of any series subsequently may be distributed
pro rata to holders of Preferred Securities of such series in connection with
the dissolution of Transamerica Delaware upon the occurrence of certain events
described in the Prospectus Supplement relating to the Preferred Securities of
such series.
Reference is made to the Prospectus Supplement that will accompany this
Prospectus for the following terms of the series of Junior Subordinated
Debentures being offered thereby: (i) the specific title of such Junior
Subordinated Debentures; (ii) any limit on the aggregate principal amount of
such Junior Subordinated Debentures; (iii) the date or dates on which the
principal of such Junior Subordinated Debentures is payable; (iv) the rate or
rates at which such Junior Subordinated Debentures will bear interest or the
method of determination of such rate or rates; (v) the date or dates from which
such interest shall accrue, the interest payment dates on which such interest
will be payable or the manner of determination of such interest payment dates
and the record dates for the determination of holders to whom interest is
payable on any such interest payment dates; (vi) the right, if any, to extend
the interest payment periods and the duration of such extension; (vii) the
period or periods within which, the price or prices at which and the terms and
conditions upon which, such Junior Subordinated Debentures may be redeemed, in
whole or in part, at the option of Transamerica; (viii) the obligation, if any,
of Transamerica to redeem or purchase such Junior Subordinated Debentures
pursuant to any sinking fund or analogous provisions or at the option of the
holder thereof and the period or periods within which, the price or prices at
which, and the terms and conditions upon which, such Junior Subordinated
Debentures shall be redeemed or purchased, in whole or part, pursuant to such
obligation; (ix) the form of such Junior Subordinated Debentures; (x) if other
than denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debentures shall be issuable; (xi) any and all
other terms with respect to such series; and (xii) whether such Junior
Subordinated Debentures are issuable as a global security, and in such case, the
identity of the depositary. (Section 2.01).
The Indenture does not contain any provisions that afford holders of Junior
Subordinated Debentures protection in the event of a highly leveraged
transaction involving Transamerica.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of Transamerica as provided in the Indenture. No payment of
principal of (including redemption and sinking fund payments), premium, if any,
or interest on, the Junior Subordinated Debentures may be made if any Senior
Indebtedness is not paid when due or if the maturity of any Senior Indebtedness
has been accelerated because of a default. Upon any distribution of assets of
Transamerica to creditors upon any dissolution, winding-up, liquidation or
reorganization, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, premium, if any, and
interest due on, all Senior Indebtedness must be paid in full before the holders
of the Junior Subordinated Debentures are entitled to receive or retain any
payment. The rights of the holders of the Junior Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions applicable to Senior Indebtedness until all amounts
owing on the Junior Subordinated Debentures are paid in full. (Sections 14.01 to
14.04).
The term "Senior Indebtedness" shall mean the principal of, premium, if
any, interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of Transamerica evidenced by notes, debentures,
bonds or other securities sold by Transamerica for money or other
obligations for money borrowed;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) assumed by or guaranteed in any manner by Transamerica or in
effect guaranteed by Transamerica; and
(c) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a) and (b);
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari passu
with the Junior Subordinated Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness and entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness. (Section 1.01).
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued. As of August 31, 1994, Senior Indebtedness of Transamerica
(on an unconsolidated basis) aggregated approximately $730 million, all of which
is unsecured. Because Transamerica is a holding company, the Junior Subordinated
Debentures are also effectively subordinated to all existing and future
liabilities, including trade payables, of Transamerica's subsidiaries, except to
the extent Transamerica is a creditor of the subsidiaries recognized as such.
CERTAIN COVENANTS OF TRANSAMERICA
Pursuant to the Indenture, Transamerica will covenant that it will not
declare or pay any dividend on, or purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock, if at such time
(i) there shall have occurred any event that would constitute an Event of
Default under the Indenture, (ii) Transamerica shall be in default with respect
to its payment of any obligations under the Guarantee or (iii) Transamerica
shall have given notice of its selection of an extended interest payment period
as provided in the Indenture and such period, or any extension thereof, shall be
continuing. (Section 4.06). Transamerica will also covenant (i) to remain the
sole general partner of Transamerica Delaware and maintain 100% ownership of the
general partner interests thereof; provided that any permitted successor of
Transamerica under the Indenture may succeed to Transamerica's duties as General
Partner, (ii) to contribute capital to the extent required to maintain its
capital at an amount equal to at least 3% of the total capital contributions to
Transamerica Delaware, (iii) not to voluntarily dissolve, wind-up or terminate
Transamerica Dela-
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ware, except in connection with the distribution of Junior Subordinated
Debentures to the holders of Preferred Securities in liquidation of Transamerica
Delaware and in connection with certain mergers, consolidations or amalgamations
permitted by the Limited Partnership Agreement, (iv) to perform all of its
duties as the general partner in Transamerica Delaware in a timely manner and
(v) to use its reasonable efforts to cause Transamerica Delaware to remain a
limited partnership and otherwise continue to be treated as a partnership for
United States federal income tax purposes. (Section 4.07).
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Junior Subordinated Debentures of each series will be issued in registered
form and in either certificated form or will be represented by one or more
global securities. If not represented by one or more global securities, Junior
Subordinated Debentures may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed) or exchange, at the office of
the Debenture Registrar or at the office of any transfer agent designated by
Transamerica for such purpose with respect to any series of Junior Subordinated
Debentures and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be effected upon the
Debenture Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request.
Transamerica has appointed the Trustee as Debenture Registrar with respect to
the Junior Subordinated Debentures. (Section 2.05). If a Prospectus Supplement
refers to any transfer agents (in addition to the Debenture Registrar) initially
designated by Transamerica with respect to any series of Junior Subordinated
Debentures, Transamerica may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that Transamerica will be required to maintain a
transfer agent in each Place of Payment for such series. (Section 4.02).
Transamerica may at any time designate additional transfer agents with respect
to any series of Junior Subordinated Debentures.
In the event of any redemption in part, Transamerica shall not be required
to (i) issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures of like tenor and
of the series of which such Junior Subordinated Debenture is a part, and ending
at the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures of like tenor and of such series to be redeemed and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debenture being redeemed in part. (Section 2.05).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium (if any) on any Junior Subordinated Debenture will
be made only against surrender to the Paying Agent of such Junior Subordinated
Debenture. Unless otherwise indicated in an applicable Prospectus Supplement,
principal of and any premium and interest, if any, on Junior Subordinated
Debentures will be payable, subject to any applicable laws and regulations, at
the office of such Paying Agent or Paying Agents as Transamerica may designate
from time to time, except that at the option of Transamerica payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Debenture Register with respect to
such Junior Subordinated Debentures. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on a Junior Subordinated Debenture on
any Interest Payment Date will be made to the person in whose name such Junior
Subordinated Debenture (or Predecessor Security) is registered at the close of
business on the Regular Record Date for such interest payment. (Section 2.03).
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Transamerica will act as Paying Agent with respect to the Junior
Subordinated Debentures. Transamerica may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts, except that
Transamerica will be required to maintain a Paying Agent in each Place of
Payment for each series of the Junior Subordinated Debentures. (Sections 4.02
and 4.03).
All moneys paid by Transamerica to a Paying Agent for the payment of the
principal of or premium or interest, if any, on any Junior Subordinated
Debenture of any series that remain unclaimed at the end of two years after such
principal, premium, if any, or interest shall have become due and payable will
be repaid to Transamerica and the holder of such Junior Subordinated Debenture
will thereafter look only to Transamerica for payment thereof. (Section 11.05).
GLOBAL DEBENTURES
If any Junior Subordinated Debentures of a series are represented by one or
more global securities, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in any such
Global Debenture may exchange such interests for Junior Subordinated Debentures
of such series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a Global Debenture
will be payable in the manner described in the applicable Prospectus Supplement.
(Section 2.11).
The specific terms of the depository arrangement with respect to any
portion of a series of Junior Subordinated Debentures to be represented by a
Global Debenture will be described in the applicable Prospectus Supplement.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting Transamerica and the Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Junior Subordinated Debentures of each series that are affected by the
modification, to modify the Indenture or any supplemental indenture affecting
that series or the rights of the holders of that series of Junior Subordinated
Debentures; provided, that no such modification may, without the consent of the
holder of each outstanding Junior Subordinated Debenture affected thereby, (i)
extend the fixed maturity of any Junior Subordinated Debentures of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Junior Subordinated Debenture
so affected or (ii) reduce the percentage of Junior Subordinated Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Junior Subordinated Debenture then
outstanding and affected thereby. (Section 9.02).
In addition, Transamerica and the Trustee may execute, without the consent
of any holder of Junior Subordinated Debentures, any supplemental indenture for
certain other usual purposes including the creation of any new series of Junior
Subordinated Debentures. (Sections 2.01, 9.01 and 10.01).
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to each series of Junior Subordinated Debentures:
(a) failure for 10 days to pay interest on the Junior Subordinated
Debentures of that series when due; provided that a valid extension of the
interest payment period by Transamerica shall not constitute a default in
the payment of interest for this purpose; or
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(b) failure to pay principal or premium, if any, on the Junior
Subordinated Debentures of that series when due whether at maturity, upon
redemption, by declaration or otherwise, or to make any required sinking
fund payment with respect to that series; or
(c) failure to observe or perform any other covenant (other than those
specifically relating to another series) contained in the Indenture for 90
days after written notice to Transamerica from the Trustee or the holders
of at least 25% in principal amount of the outstanding Junior Subordinated
Debentures of that series; or
(d) the dissolution, winding-up or termination of Transamerica
Delaware, except in connection with the distribution of Junior Subordinated
Debentures to the holders of Preferred Securities in liquidation of
Transamerica Delaware and in connection with certain mergers,
consolidations or amalgamations permitted by the Limited Partnership
Agreement; or
(e) certain events in bankruptcy, insolvency or reorganization of
Transamerica. (Section 6.01).
The holders of a majority in aggregate outstanding principal amount of any
series of the Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee for that series. (Section 6.06). The Trustee or the holders of not less
than 25% in aggregate outstanding principal amount of any particular series of
the Junior Subordinated Debentures may declare the principal due and payable
immediately upon an Event of Default with respect to such series, but the
holders of a majority in aggregate outstanding principal amount of such series
may annul such declaration and waive the default with respect to such series if
the default has been cured and a sum sufficient to pay all matured installments
of interest and principal otherwise than by acceleration and any premium has
been deposited with the Trustee. (Sections 6.01 and 6.06).
The holders of a majority in aggregate outstanding principal amount of any
series of the Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Junior Subordinated Debentures of such series, waive any
past default, except a default in the payment of principal, premium, if any, or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal otherwise than by acceleration
and any premium has been deposited with the Trustee) or a call for redemption of
Junior Subordinated Debentures of such series. (Section 6.06). Transamerica is
required to file annually with the Trustee a certificate as to whether or not
Transamerica is in compliance with all the conditions and covenants under the
Indenture. (Section 5.03(d)).
CONSOLIDATION, MERGER AND SALE
The Indenture does not contain any covenant that restricts Transamerica's
ability to merge or consolidate with or into any other corporation, sell or
convey all or substantially all of its assets to any person, firm or corporation
or otherwise engage in restructuring transactions. (Section 10.01).
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, Transamerica will be discharged from any
and all obligations in respect of the Junior Subordinated Debentures of any
series (except in each case for certain obligations to register the transfer or
exchange of Junior Subordinated Debentures, replace stolen, lost or mutilated
Junior Subordinated Debentures, maintain paying agencies and hold moneys for
payment in trust) if Transamerica deposits with the Trustee, in trust, moneys or
Government Obligations, in an amount sufficient to pay all the principal of, and
interest on, the Junior Subordinated Debentures of such series on the dates such
payments are due in accordance with the terms of such Junior Subordinated
Debentures. (Sections 11.01 and 11.02).
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GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York. (Section
13.05).
INFORMATION CONCERNING THE TRUSTEE
The Trustee, prior to default, undertakes to perform only such duties as
are specifically set forth in the Indenture and, after default, shall exercise
the same degree of care as a prudent individual would exercise in the conduct of
his or her own affairs. (Section 7.01). Subject to such provision, the Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities that might be incurred thereby. (Section 7.02). The Trustee is not
required to expand or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Trustee reasonably believes
that repayment or adequate indemnity is not reasonably assured to it. (Section
7.01).
Transamerica has a credit relationship with the Trustee. The Trustee also
serves as transfer agent and registrar for Transamerica's common stock and 8.5%
Series D Preferred Stock. In addition, the Trustee serves as trustee for
asset-backed certificates issued by one of Transamerica's subsidiaries.
MISCELLANEOUS
Transamerica will have the right at all times to assign any of its rights
or obligations under the Indenture to a direct or indirect wholly-owned
subsidiary of Transamerica; provided, that, in the event of any such assignment,
Transamerica will remain liable for all such obligations. Subject to the
foregoing, the Indenture will be binding upon and inure to the benefit of the
parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto. (Section
13.11).
PLAN OF DISTRIBUTION
Transamerica Delaware may sell any series of Preferred Securities being
offered hereby in one or more of the following ways from time to time: (i) to
underwriters for resale to the public or to institutional investors; (ii)
directly to institutional investors; or (iii) through agents to the public or to
institutional investors. The Prospectus Supplement with respect to each series
of Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters or agents, the
purchase price of such Offered Securities and the proceeds to Transamerica
Delaware from such sale, any underwriting discounts or agency fees and other
items constituting underwriters' or agents' compensation, any initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which such Offered Securities may be
listed.
If underwriters participate in the sale, such Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase any series of Offered Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of such series of Offered Securities, if any are purchased. In the event of
a default of one or more of the underwriters involving not more than one-
eleventh of the aggregate number or aggregate principal amount of Offered
Securities offered for sale, the non-defaulting underwriters would be required
to purchase the Offered Securities agreed to be purchased by such defaulting
underwriter or underwriters. In the event of a default in excess of
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<PAGE> 45
one-eleventh of the aggregate number or aggregate principal amount of Offered
Securities, then Transamerica Delaware may, at its option, sell to the
non-defaulting underwriters, and the non-defaulting underwriters may, at their
option, purchase, all of the Offered Securities that such underwriters had
committed to purchase.
Underwriters and agents may be entitled under agreements entered into with
Transamerica and/or Transamerica Delaware to indemnification by Transamerica
and/or Transamerica Delaware against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribution with respect to
payments that the underwriters or agents may be required to make in respect
thereof. Underwriters and agents may be customers of, engage in transactions
with, or perform services for Transamerica in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom Offered
Securities are sold by Transamerica Delaware for public offering and sale may
make a market in such Offered Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. The Offered Securities may or may not be listed on a national securities
exchange.
EXPERTS
The consolidated financial statements of Transamerica Corporation appearing
in Transamerica Corporation's Annual Report on Form 10-K for the year ended
December 31, 1993, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference, which is based in part on the report of Coopers & Lybrand,
independent auditors for Sedgwick Group plc. The financial statements referred
to above are included in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.
LEGAL OPINIONS
Certain legal matters in connection with the Offered Securities will be
passed upon for Transamerica and Transamerica Delaware by Christopher M. McLain,
Senior Vice President and General Counsel of Transamerica, and for the
purchasers or underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New
York. Certain matters of Delaware law relating to the validity of the Series A
Preferred Securities, the validity of the Limited Partnership Agreement and the
formation of Transamerica Delaware will be passed upon by Richards, Layton &
Finger, P.A., Wilmington, Delaware, as special Delaware counsel for Transamerica
and Transamerica Delaware. As of October 7, 1994, Mr. McLain was the beneficial
owner of 990 shares of Transamerica common stock.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Transamerica Delaware.................... S-3
Transamerica Corporation................. S-3
Investment Considerations................ S-4
Summary Consolidated Financial Data...... S-6
Capitalization of Transamerica........... S-7
Use of Proceeds.......................... S-8
Description of the Series A Preferred
Securities............................. S-9
Description of the Series A Junior
Subordinated Debentures................ S-19
Relationship Between the Series A
Preferred Securities, the Series A
Junior Subordinated Debentures and the
Guarantee.............................. S-23
United States Taxation................... S-25
Underwriting............................. S-29
Legal Matters............................ S-31
PROSPECTUS
Available Information.................... 2
Incorporation of Certain Documents by
Reference.............................. 3
Transamerica Delaware.................... 3
Transamerica Corporation................. 3
Consolidated Ratios of Earnings to Fixed
Charges and Earnings to Combined Fixed
Charges and Preferred Stock Dividends
of Transamerica........................ 4
Use of Proceeds.......................... 4
Description of the Preferred
Securities............................. 5
Description of the Guarantee............. 6
Description of the Junior Subordinated
Debentures............................. 8
Plan of Distribution..................... 13
Experts.................................. 14
Legal Opinions........................... 14
</TABLE>
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8,000,000 PREFERRED SECURITIES
TRANSAMERICA DELAWARE
9 1/8% CUMULATIVE MONTHLY INCOME
PREFERRED SECURITIES, SERIES A
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
TRANSAMERICA CORPORATION
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[LOGO]
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GOLDMAN, SACHS & CO.
SMITH BARNEY INC.
DEAN WITTER REYNOLDS INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON BROTHERS INC
REPRESENTATIVES OF THE UNDERWRITERS
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