<PAGE> 1
PROSPECTUS SUPPLEMENT
(To Prospectus dated August 30, 1991)
$200,000,000
LOGO
Transamerica Corporation
6 3/4% NOTES DUE NOVEMBER 15, 2006
------------------
Interest payable May 15 and November 15
------------------
The Notes are not redeemable prior to maturity. The Notes will be represented by
one or more global securities ("Global Notes") registered in the name of a
nominee of The Depositary Trust Company, as depositary (the "Depositary").
Beneficial interests in the Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described herein, Notes
in definitive form will not be issued. The Notes will trade in the
Depositary's Same-Day Funds Settlement System. All payments of
principal and interest on global securities will be made by the
Company in immediately available funds. See "Description of
the Notes."
------------------
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.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
PRICE 99.741% AND ACCRUED INTEREST
------------------
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2) Company(1)(3)
------------- --------------- -------------------
<S> <C> <C> <C>
Per Note............................... 99.741% .650% 99.091%
Total.................................. $199,482,000 $1,300,000 $198,182,000
</TABLE>
- ---------------
(1) Plus accrued interest from November 15, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deduction of estimated expenses of $338,000 payable by the
Company.
------------------
The Notes are offered by the Underwriters named below, subject to prior
sale, when, as and if accepted by the Underwriters, and subject to approval of
certain legal matters by Cleary, Gottlieb, Steen & Hamilton, counsel for the
Underwriters. It is expected that delivery of the Notes will be made on or about
November 19, 1996 through the book-entry facilities of the Depositary against
payment therefor in immediately available funds.
------------------
MORGAN STANLEY & CO.
Incorporated
LEHMAN BROTHERS
J.P. MORGAN & CO.
November 13, 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TRANSAMERICA
CORPORATION OR BY ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
S-2
<PAGE> 3
TRANSAMERICA CORPORATION
Transamerica Corporation ("Transamerica" or the "Company") is one of the
world's largest financial services companies providing specialized financial and
life insurance products and services to individuals and organizations. The
Company had consolidated assets of $48.5 billion at September 30, 1996. The
Company's businesses include life insurance, consumer lending, commercial
lending, leasing and real estate services.
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 nine
months ended September 30, 1995 and 1996 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 for
the interim periods 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>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1991 1992 1993 1994 1995 1995 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.............................. $ 4,175.2 $ 4,550.9 $ 4,813.3 $ 5,354.5 $ 6,101.1 $ 4,582.7 $ 4,601.0
Net income:
Income from continuing operations... $ 5.6 $ 334.0 $ 447.5 $ 427.9 $ 470.5 $ 361.1 $ 335.1
Income (loss) from discontinued
operations........................ 79.2 (90.8) (47.0) (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............................ $ 50.1 $ 243.2 $ 377.4 $ 427.2 $ 470.5 $ 361.1 $ 335.1
========= ========= ========= ========= ========= ========= =========
Earnings per common share
Net income:
Income from continuing operations... $ (0.08) $ 4.00 $ 5.40 $ 5.46 $ 6.58 $ 5.04 $ 4.82
Income (loss) from discontinued
operations........................ 1.03 (1.17) (0.60) (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............................ $ 0.50 $ 2.83 $ 4.51 $ 5.45 $ 6.58 $ 5.04 $ 4.82
========= ========= ========= ========= ========= ========= =========
Average number of common shares
outstanding......................... 76.7 78.0 78.5 72.6 68.8 68.9 66.8
Ratio of earnings from continuing
operations to fixed charges(1)...... 1.06 1.90 2.09 2.14 1.95 1.96 1.74
At period end:
Total assets.......................... $ 31,133.6 $ 33,290.9 $ 36,050.5 $ 40,393.8 $ 47,944.5 $ 46,349.1 $ 48,508.2
Notes and loans payable:
Short-term and current portion of
long term debt.................... $ 715.4 $ 1,062.6 $ 2,023.0 $ 1,684.0 $ 996.3 $ 1,092.1 $ 1,793.7
Long-term debt...................... 6,975.6 6,510.5 5,681.0 7,489.1 9,341.5 9,081.2 8,748.4
Stockholders' equity(2)............... 3,025.8 3,300.1 3,363.5 2,735.8 4,299.9 4,093.3 3,669.3
Book value per common share(2)........ $ 36.28 $ 36.31 $ 38.46 $ 34.87 $ 58.61 $ 55.29 $ 51.84
</TABLE>
- ---------------
(1) The consolidated ratios of earnings from continuing operations to fixed
charges were computed by dividing income from continuing operations before
fixed charges and income taxes by the fixed charges. Fixed charges consist
of interest and debt expense and one-third of rent expense, which
approximates the interest factor.
(2) 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. There is no effect on the
income statement from the adoption of this accounting standard, and prior
periods have not been restated.
S-3
<PAGE> 4
USE OF PROCEEDS
The net proceeds to be received from the sale of the Notes will be used by
the Company for general corporate purposes, which may include repayment of debt
and repurchase of its securities.
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of Debt
Securities set forth in the accompanying Prospectus, to which description
reference is hereby made.
GENERAL
The Notes will mature on November 15, 2006. The Notes will be issued under
an Indenture, dated as of August 1, 1991 (the "Indenture"), between Transamerica
and Wells Fargo Bank, N.A. (as successor trustee by merger to First Interstate
Bank of California) (the "Trustee"), which is more fully described in the
accompanying Prospectus. The Notes will be issued in fully registered form only
and in denominations of $1,000 and integral multiples thereof.
The Notes will bear interest at the rate of 6 3/4% per annum and will be
payable semi-annually on each May 15 and November 15, beginning May 15, 1997, to
the persons in whose names the Notes are registered at the close of business on
the May 1 or November 1 next preceding the Interest Payment Date. Except as
provided under "Book-Entry System," payments of principal and interest will be
payable at the corporate trust office of the Trustee in San Francisco,
California, provided that payment of interest may be made by checks mailed to
the registered holders, at the option of the Company. The Notes may be presented
for registration of transfer or exchange at the corporate trust office of the
Trustee in San Francisco, California. In the event the Notes are no longer
represented by Global Notes, the Company will designate a Paying Agent and a
transfer agent in New York, New York.
Because Transamerica is a holding company, the rights of its creditors,
including the holders of the Notes, to participate in the assets of any
subsidiary upon the latter's liquidation or reorganization will be effectively
subordinate to the claims of the subsidiary's creditors, which will take
priority except to the extent that Transamerica may itself be a creditor with
recognized claims against the subsidiary.
REDEMPTION
The Notes are not redeemable prior to maturity and will not be subject to
any sinking fund.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered Global
Notes which will be deposited with, or on behalf of, the Depositary, as
depository, and registered in the name of the Depositary's nominee. Except as
set forth below, the Global Notes may be transferred, in whole and not in part,
only by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any nominee to a successor depository or any other nominee of such
successor.
The Depositary has advised as follows: it 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
Depositary holds securities that its participants ("Participants") deposit with
the Depositary. The Depositary 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. The Depositary is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and
the
S-4
<PAGE> 5
National Association of Securities Dealers, Inc. Access to the Depositary 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 the Depositary and its Participants are on file with the
Securities and Exchange Commission.
Purchases of interests in the Global Notes under the Depositary system must
be made by or through Direct Participants, which will receive a credit for such
interests on the Depositary's records. The ownership interest of each actual
purchaser of interests in the Global Notes ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Global
Notes 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 the Global Notes, except as described
below.
To facilitate subsequent transfers, all Global Notes deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Global Notes with the Depositary
and their registration in the name of Cede & Co. effect no change in beneficial
ownership. The Depositary has no knowledge of the actual Beneficial Owners of
the interests in the Global Notes; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts interests in the Global
Notes 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 the Depositary 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.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Notes. Under its usual procedures, the Depositary mails an Omnibus
Proxy to the issuer 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 interests in the Global Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Notes will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the payable date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payable date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as in
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not the Depositary, the Paying Agent, or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to the Depositary is the responsibility of the
Company or the Paying Agent, disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
The Depositary may discontinue providing its services as depository with
respect to the Notes at any time by giving reasonable notice to the Company or
the Paying Agent. Under such circumstances, in the event that a successor
depository is not obtained, definitive Note certificates are required to be
printed and delivered. The Company may decide to discontinue use of the system
of book-entry transfers through the Depositary (or a successor depository).
Global Notes representing all but not part of the Notes offered hereby are
exchangeable for Notes in definitive form of like tenor and terms if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
depository for such Global Notes or if at any time the Depositary ceases to be a
clearing agency
S-5
<PAGE> 6
registered as such under the Securities Exchange Act of 1934, as amended, and
the Company does not appoint a successor depository within 90 days of receipt by
the Company of such notice or of the Company becoming aware of such
ineligibility or (ii) the Company executes and delivers to the Trustee a Company
Order that such Global Notes shall be exchangeable. The Global Notes
exchangeable pursuant to the preceding sentence shall be exchangeable for Notes
issuable in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depositary shall direct. In the event of such
exchange, interest and principal on the Notes will be payable in the manner
provided for Notes in definitive form. See "Description of Debt
Securities -- General" in the accompanying Prospectus.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
UNDERWRITING
Under the terms of and subject to the conditions contained in an
Underwriting Agreement dated November 13, 1996, the Underwriters named below
have severally agreed to purchase from the Company, and the Company has agreed
to sell to them, the respective principal amount of the Notes set forth below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
--------------------------------------------------------------- ------------
<S> <C>
Morgan Stanley & Co. Incorporated.............................. $ 68,000,000
Lehman Brothers Inc. .......................................... 66,000,000
J.P. Morgan Securities Inc. ................................... 66,000,000
------------
Total................................................ $200,000,000
===========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to take and pay for all of the Notes
if any are taken.
The Underwriters propose to offer the Notes in part directly to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement and in part to certain dealers at such price less a concession of
.40% of their principal amount. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of .25% of the principal amount of the Notes
to certain other dealers. After the initial public offering, the offering price
and other selling terms may be changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company does not intend to list the Notes on a national securities
exchange. The Company has been advised by Morgan Stanley & Co. Incorporated,
Lehman Brothers Inc. and J.P. Morgan Securities Inc. that each of them intends
to make a market in the Notes, but they are not obligated to do so and may
discontinue such market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Notes.
From time to time, the Underwriters may perform investment banking,
commercial banking and other financial services for the Company and its
affiliates.
S-6
<PAGE> 7
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed upon for the
Company by Orrick, Herrington & Sutcliffe LLP, San Francisco, California.
Certain legal matters will be passed upon for the Underwriters by Cleary,
Gottlieb, Steen & Hamilton, New York, New York.
S-7
<PAGE> 8
PROSPECTUS
$500,000,000
TRANSAMERICA CORPORATION
DEBT SECURITIES
Transamerica Corporation ("Transamerica") may offer from time to time its
unsecured debt securities consisting of senior notes, debentures or other
evidences of indebtedness (the "Senior Securities") and/or subordinated notes,
debentures, or other evidences of indebtedness (the "Subordinated Securities";
the Senior Securities and Subordinated Securities being herein collectively
referred to as "Debt Securities") at an aggregate initial offering price of not
more than $500,000,000 or, if applicable, the equivalent thereof in one or more
foreign currencies or composite currencies. The Subordinated Securities may be
offered in a form convertible, at the option of the holder and subject to
certain conditions, into common stock of Transamerica (the "Subordinated
Convertible Securities") and in a form payable at maturity only by exchange for,
or from designated proceeds from the sale of, common stock, perpetual preferred
stock or other capital securities of Transamerica (the "Subordinated Capital
Securities"). The Debt Securities may be offered as separate series in amounts,
at prices and on terms to be determined in light of market conditions at the
time of sale and as set forth in a Prospectus Supplement or Prospectus
Supplements. The Debt Securities may be sold for United States dollars, one or
more foreign currencies or amounts determined by reference to an index and the
principal of and any interest on the Debt Securities may likewise be payable in
United States dollars, one or more foreign currencies or amounts determined by
reference to an index.
The Senior Securities will be unsecured obligations of Transamerica and
will rank on a parity with other unsecured indebtedness of Transamerica. The
Subordinated Securities will be unsecured obligations of Transamerica and will
rank on a parity with other Subordinated Indebtedness of Transamerica and,
together with such Subordinated Indebtedness, will be subordinated in right of
payment to all Prior Indebtedness of Transamerica. See "Description of Debt
Securities--Subordination" and "--Definition of Prior Indebtedness."
The terms of each series of Debt Securities, including, where applicable:
the specific designation; aggregate principal amount; currency; authorized
denominations; maturity; premium; interest rate or rates (which may be fixed or
variable) and time or times of payment of any interest; any terms for optional
or mandatory redemption at the option of Transamerica or repayment at the option
of the Holder; payment of additional amounts for sinking fund payments; whether
any Subordinated Securities will be Subordinated Convertible Securities and/or
Subordinated Capital Securities; whether any interest on the Subordinated
Securities may be payable at the option of Transamerica in the form of its
common stock; the initial public offering price; the net proceeds to
Transamerica and any other specific terms in connection with the offering and
sale of such series will be set forth in a Prospectus Supplement or Prospectus
Supplements. As used herein, Debt Securities shall include securities
denominated in United States dollars or, at the option of Transamerica and if so
specified in an applicable Prospectus Supplement, in any other currency or in
composite currencies or in amounts determined by reference to an index.
The Debt Securities may be sold directly by Transamerica or to or through
underwriters or dealers or through agents designated from time to time. See
"Plan of Distribution." If any underwriters or agents of Transamerica are
involved in the sale of any Debt Securities in respect of which this Prospectus
is being delivered, the names of such underwriters or agents and any applicable
underwriter's discounts, agent's commissions or dealer's purchase price will be
set forth, or will be calculable from the information set forth, in a Prospectus
Supplement.
The Debt Securities may be issued in registered form or bearer form with
coupons attached or both. In addition, all or a portion of the Debt Securities
of a series may be issuable in temporary or permanent global form. Securities in
bearer form may be offered only to non-United States persons and to offices
located outside the United States of certain United States financial
institutions.
------------------------
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 DATE OF THIS PROSPECTUS IS AUGUST 30, 1991.
<PAGE> 9
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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference room of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., and the public reference facilities in the New York Regional
Office, Room 1400, 75 Park Place, New York, New York and the Chicago Regional
Office, Room 3190, 230 South Dearborn Street, Chicago, Illinois. Copies of such
material can be obtained at prescribed rates by writing to the Commission,
Public Reference Section, Washington, D.C. 20549. In addition, certain
securities of Transamerica are listed on the New York Stock Exchange and the
Pacific Stock Exchange and such material can also be inspected at the offices of
the New York and Pacific Stock Exchanges.
Transamerica has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), relating to the Debt Securities. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Transamerica with the Commission are
incorporated by reference in this Prospectus.
1. Transamerica's annual report on Form 10-K for the year ended December
31, 1990.
2. Transamerica's quarterly reports on Form 10-Q for the quarters ended
March 31, 1991 and June 30, 1991.
3. Transamerica's current report on Form 8-K dated August 30, 1991.
All documents filed by Transamerica pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, in the accompanying Prospectus
Supplement or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute part of this Prospectus.
Transamerica hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, 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 which are
not specifically incorporated by reference in the information that this
Prospectus incorporates. Requests should be directed to the office of the
Corporate Secretary, Transamerica Corporation, 600 Montgomery Street, San
Francisco, California 94111 (telephone: (415) 983-4182).
------------------
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
2
<PAGE> 10
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and any accompanying Prospectus
Supplement in connection with the offer contained in this Prospectus and any
accompanying Prospectus Supplement, and, if given or made, such information or
representations must not be relied upon as having been authorized by
Transamerica or by any agent or underwriter. This Prospectus and any
accompanying Prospectus Supplement shall not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus and any
accompanying Prospectus Supplement at any time does not imply that the
information herein is correct as of any time subsequent to the date hereof or
that there has been no change in the affairs of Transamerica since such date.
This Prospectus shall not be used unless accompanied by a Prospectus Supplement.
------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars", "U.S.
dollars" or "U.S. $").
TRANSAMERICA CORPORATION
Transamerica Corporation is a financial services organization which engages
through its subsidiaries in two primary businesses: finance and insurance.
Finance consists of consumer lending, commercial lending, leasing and real
estate services operations. Insurance comprises life insurance, property and
casualty insurance, insurance brokerage and asset management operations.
Transamerica was incorporated in Delaware in 1928 and its principal executive
offices are located at 600 Montgomery Street, San Francisco, California 94111
(telephone (415) 983-4000).
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the net
proceeds of the sale of the Debt Securities will be used by Transamerica for
general corporate purposes which may include the refinancing of indebtedness and
the repurchasing of preferred stock.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to fixed
charges and to combined fixed charges and preferred stock dividends of
Transamerica for each of the years 1986 through 1990 and for the six months
ended June 30, 1991.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------------------- JUNE 30,
1986 1987 1988 1989 1990 1991
----- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 1.96 2.30 1.54 1.54 1.46 1.48
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends........ 1.90 2.23 1.51 1.51 1.43 1.45
</TABLE>
The consolidated ratios of earnings to fixed charges were computed by
dividing earnings before fixed charges and income taxes by fixed charges. The
consolidated ratios of earnings to combined fixed charges and preferred stock
dividends were computed by dividing earnings before fixed charges and income
taxes by the fixed charges and preferred stock dividends. For computation of
such ratios, earnings consist of operating 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.
3
<PAGE> 11
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be described
in the Prospectus Supplement relating to such Debt Securities.
The Senior Securities are to be issued under an Indenture dated as of
August 1, 1991 (the "Senior Indenture") between Transamerica and Bankers Trust
Company, as Trustee (in such capacity, the "Senior Trustee"). The Subordinated
Securities are to be issued under an Indenture to be entered into (the
"Subordinated Indenture") between Transamerica and Bankers Trust Company, as
Trustee (in such capacity, the "Subordinated Trustee"; together with the Senior
Trustee, the "Trustees"). The Senior Indenture and the Subordinated Indenture
(collectively, the "Indentures") have been filed as exhibits to the Registration
Statement of which this Prospectus is a part. The following summaries of certain
provisions of the Indentures do not purport to be complete and are qualified in
their entirety by reference to the provisions of the Indentures. Numerical
references in parentheses below are to sections of the Indentures and, unless
otherwise indicated, capitalized terms shall have the meanings ascribed to them
in the Indentures.
GENERAL
Debt Securities offered by this Prospectus will be limited to an aggregate
initial public offering price of $500,000,000 or the equivalent thereof in one
or more foreign currencies or composite currencies. The Indentures provide that
Debt Securities in an unlimited amount may be issued thereunder from time to
time in one or more series. The Senior Securities will be unsecured obligations
of Transamerica and will rank on a parity with other unsecured indebtedness of
Transamerica. The Subordinated Securities will be unsecured obligations of
Transamerica and will rank on a parity with other Subordinated Indebtedness of
Transamerica and, together with such Subordinated Indebtedness, will be
subordinated in right of payment to all Prior Indebtedness of Transamerica, all
as described under "Subordination" and "Definition of Prior Indebtedness."
Because Transamerica is a holding company, the rights of its creditors,
including the holders of the Debt Securities, to participate in the assets of
any subsidiary upon the latter's liquidation or reorganization will be
effectively subordinate to the claims of the subsidiary's creditors, which will
take priority except to the extent that Transamerica may itself be a creditor
with recognized claims against the subsidiary.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities: (1) the title of the Debt
Securities; (2) any limit on the aggregate principal amount of the Debt
Securities; (3) whether the Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, whether Securities of the series are to
be issuable with or without coupons or both, whether any of the Debt Securities
are to be issuable initially in temporary global form and whether any of the
Debt Securities are to be issuable in permanent global form; (4) the price or
prices (expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which the
Debt Securities will mature; (6) the rate or rates at which the Debt Securities
will bear interest, if any, or the formula pursuant to which such rate or rates
shall be determined, and the date or dates from which any such interest will
accrue; (7) the Interest Payment Dates on which any such interest on the Debt
Securities will be payable, the Regular Record Date for any interest payable on
any Debt Securities which are Registered Securities on any Interest Payment
Date, and the extent to which, or the manner in which, any interest payable on a
temporary global Security on an Interest Payment Date will be paid if other than
in the manner described under "Temporary Global Securities" below; (8) the
Person to whom any interest on any Debt Securities that are Registered
Securities will be payable if other than the Person in whose name such
Registered Securities are registered at the close of business on the Regular
Record Date for such interest as described under "Payment and Paying Agents"
below, and the manner in which any interest on any Debt Securities that are
Bearer Securities will be paid if other than in the manner described under
"Payment and Paying Agents" below; (9) in the case of Subordinated Convertible
Securities, any terms by which the Subordinated Convertible Securities will be
convertible into Common Stock, $1.00 par value (the "Common
4
<PAGE> 12
Stock"), of Transamerica at the option of the Holders thereof; (10) any
mandatory or optional sinking fund or analogous provisions; (11) in the case of
Subordinated Capital Securities, any terms by which the principal of the
Subordinated Capital Securities will be exchangeable for Capital Securities (see
"Description of Capital Securities") and any terms and conditions creating
available funds pursuant to which the proceeds from the sales of Capital
Securities may be designated by notice to the Subordinated Trustee in accordance
with the Subordinated Indenture as available for the payment of any of the
principal of the Subordinated Securities (the "Available Funds"); (12) in the
case of Subordinated Securities, any terms by which interest on the Debt
Securities may be paid at the option of Transamerica in the form of Common
Stock; (13) each office or agency where, subject to the applicable terms of the
applicable Indenture as described below under "Payment and Paying Agents," the
principal of and any premium and interest on the Debt Securities will be payable
and each office or agency where, subject to the terms of the applicable
Indenture as described below under "Form, Exchange, Registration and Transfer,"
the Debt Securities may be presented for registration or transfer or exchange;
(14) the date, if any, after which and the price or prices at which the Debt
Securities may be, in whole or in part, redeemed at the option of Transamerica
or repaid at the option of the Holder, or pursuant to mandatory redemption
provisions, and the other detailed terms and provisions of any such optional or
mandatory redemption or repayment provisions; (15) the denominations in which
any Debt Securities that are Registered Securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which any Debt Securities that are Bearer
Securities will be issuable, if other than the denomination of $5,000; (16) the
currency or currencies of payment of principal of and any premium and interest
on the Debt Securities and the ability, if any, of Transamerica or the Holder to
have such payments made in any currency or currencies other than those in which
the Debt Securities are stated to be payable; (17) any index used to determine
the amount of payments of principal of and any premium and interest on the Debt
Securities; (18) the portion of the principal amount of the Debt Securities, if
other than the principal amount thereof, payable upon acceleration of the
maturity thereof; (19) the application, if any, of either or both of the
defeasance or covenant defeasance sections of the Indentures as described below
under "Defeasance and Covenant Defeasance" to the Debt Securities; (20) the
Person who shall be the Security Registrar for Debt Securities issuable as
Registered Securities, if other than the Trustee; the Person who shall be the
initial Paying Agent and the Person who shall be the initial Common Depositary
or the depositary, as the case may be; (21) any additional Events of Default
with respect to such Debt Securities; and (22) any other terms of the Debt
Securities not inconsistent with the provisions of the applicable Indenture. Any
such Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Debt Securities and any
Federal income tax consequences and other special considerations applicable to
any series of Debt Securities.
Transamerica may elect to structure a series of Subordinated Capital
Securities to qualify as capital under guidelines of certain statistical rating
agencies the names of which will be set forth in the applicable Prospectus
Supplement (the "Rating Agencies"). In such event, the applicable Prospectus
Supplement will describe the terms and conditions of the Subordinated Capital
Securities which will limit a Holder's right to accelerate the maturity of the
security upon default to certain events involving the bankruptcy, insolvency or
reorganization of Transamerica and will provide that under certain circumstances
such securities will be payable at maturity or earlier only from Available Funds
from the sale of, or by exchange for, common stock, perpetual preferred stock or
certain other securities of Transamerica. See "Description of Capital
Securities."
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in an applicable
Prospectus Supplement, Bearer Securities other than Bearer Securities in
temporary or permanent global form will have interest coupons attached. (Section
201) Each Indenture also will provide that Bearer Securities of a series may be
issuable in permanent global form. (Section 201) See "Permanent Global
Securities." If Bearer Securities are being offered, the applicable Prospectus
Supplement will set forth various limitations on their offering, sale and
distribution.
5
<PAGE> 13
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of authorized denominations and of a
like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder upon request confirmed in writing, and subject to the
terms of the applicable Indenture, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of such
series will be exchangeable into Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Bearer Securities surrendered in exchange for Registered Securities between the
close of business on a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest and interest will not be payable
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the terms of the applicable Indenture. Bearer Securities will
not be issued in exchange for Registered Securities. (Section 305) Each Bearer
Security other than a temporary global Bearer Security will bear the following
legend: "Any United States Person who holds this obligation will be subject to
limitations under the United States income tax laws including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code."
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a satisfactory written instrument of transfer), at
the office of the Security Registrar or at the office of any transfer agent
designated by Transamerica for such purpose with respect to any series of Debt
Securities, without service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture. Such transfer or
exchange will be effected upon the Security 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. (Section 305) If a Prospectus Supplement refers to
any transfer agent (in addition to the Security Registrar) initially designated
by Transamerica with respect to any series of Debt Securities, 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 (or Security
Registrar) acts, except that, if Debt Securities of a series are issuable solely
as Registered Securities, Transamerica will be required to maintain a transfer
agent in each Place of Payment for such series and, if Debt Securities of a
series are issuable as Bearer Securities, Transamerica will be required to
maintain (in addition to the Security Registrar) a transfer agent in a Place of
Payment for such series located in Europe. Transamerica may at any time
designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002)
Transamerica shall not be required to (i) issue, register the transfer of
or exchange Debt Securities of any series during a period beginning at the
opening of business 15 days before (A) if Debt Securities of the series are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption or exchange and ending at the close of business on the day
of such mailing and (B) if Debt Securities of the series are issuable as either
Bearer Securities or Registered Securities, the earlier of the day of the first
publication of the relevant notice of redemption or exchange or the mailing of
the relevant notice of redemption or exchange and ending on the close of
business of such earlier day; (ii) register the transfer of or exchange any
Registered Security, or portion thereof, called for redemption or exchange,
except any portion of such Registered Security not being redeemed or exchanged
in part; or (iii) exchange any Bearer Security called for redemption, except to
exchange such Bearer Security for a Registered Security of that series and like
tenor which is immediately surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable, subject to any applicable laws and regulations, at the offices of such
Paying Agents outside the United States as Transamerica may designate from time
to time or, at the option of the Holder, by a check or by transfer to an account
maintained by the Holder with a bank located outside the United States. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of interest
on Bearer Securities on any Interest Payment Date will be made only against
surrender outside the United States, to the Paying Agent, of the coupon relating
to such Interest Payment Date. (Section 1001) No payment with respect to any
Bearer Security will be made at any office or agency of
6
<PAGE> 14
Transamerica in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located in the
United States. Notwithstanding the foregoing, payments of principal of and any
premium and interest on Bearer Securities denominated and payable in U.S.
dollars will be made at the office of Transamerica's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made 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 Security Register or, if so
provided in the applicable Prospectus Supplement, by wire transfer to a bank
account maintained by the Holder. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on Registered
Securities will be made to the Person in whose name such Registered Security is
registered at the close of business on the Regular Record Date for such
interest. (Section 307)
Any Paying Agents outside the United States and any other Paying Agents in
the United States initially designated by Transamerica for the Debt Securities
will be named in an applicable Prospectus Supplement. Transamerica may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable solely as Registered
Securities, Transamerica will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, Transamerica will be required to maintain (i) a
Paying Agent in the Borough of Manhattan, The City of New York for payments with
respect to any Registered Securities of the series (and for payments with
respect to Bearer Securities of the series in the circumstances described above,
but not otherwise), and (ii) a Paying Agent in a Place of Payment located
outside the United States where Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment; provided that
if the Debt Securities of such series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland or the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, Transamerica will maintain a Paying Agent
in London or Luxembourg or any other required city located outside the United
States, as the case may be, for the Debt Securities of such series. (Section
1002)
All moneys paid by Transamerica to a Paying Agent or held by Transamerica
in trust for the payment of principal of and any premium or interest on any Debt
Security, which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable, will be discharged from
trust and repaid to Transamerica at its request and the Holder of such Debt
Security or any coupon will thereafter look only to Transamerica for payment
thereof. (Section 1003)
TEMPORARY GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary global Securities, without
interest coupons, to be deposited with a common depositary for Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euroclear System
("Euroclear") and CEDEL S.A. ("CEDEL") for credit to the designated accounts. On
and after the date determined as provided in any such temporary global Security
and described in an applicable Prospectus Supplement, but within a reasonable
period of time, each such temporary global Security will be exchangable for
definitive Bearer Securities, definitive Registered Securities or all or a
portion of a permanent global Bearer Security, or any combination thereof, as
specified in an applicable Prospectus Supplement, only under the circumstances
set forth in the accompanying pricing supplement to such Prospectus Supplement.
No definitive Bearer Security delivered in exchange for a portion of a temporary
global Security shall be mailed or otherwise delivered to any location in the
United States or its possessions in connection with such exchange. (Section 304)
Any special
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<PAGE> 15
restrictions on delivery of a Debt Security issued in permanent global form will
be set forth in a Prospectus Supplement relating thereto.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent global Security
may exchange such interests for Debt Securities of such series and of like tenor
and principal amount of any authorized form and denomination. (Section 305) A
Person having a beneficial interest in a permanent global Security will, except
with respect to payment of principal of and any premium and interest on such
permanent global Security, be treated as a Holder of such principal amount of
Outstanding Securities represented by such permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security. (Section 203) Principal of and any premium and interest on a permanent
global Security will be payable in the manner described in the applicable
Prospectus Supplement.
SUBORDINATION
The indebtedness evidenced by the Subordinated Securities is subordinate to
the prior payment when due of the principal of and premium, if any, and interest
on all Prior Indebtedness (as defined below). (Subordinated Indenture Section
1501) During the continuance of any payment default with respect to Prior
Indebtedness or any other default with respect to Prior Indebtedness or if any
such default would be caused by any payment upon or in respect of the
Subordinated Securities, no payment in cash or Capital Securities (other than
upon conversion, if applicable) may be made by Transamerica upon or in respect
of the principal, premium, if any, or interest on the Subordinated Securities of
any series. Upon any receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, whether or not pursuant to bankruptcy
laws, sale of all or substantially all of the assets, dissolution, liquidation
or any other marshaling of the assets and liabilities of Transamerica, no amount
shall be paid in cash or Capital Securities (other than upon conversion, if
applicable) by Transamerica, in respect of the principal, premium, if any, or
interest on the Subordinated Securities of any series unless and until all Prior
Indebtedness has been paid in full together with all interest thereon and all
other amounts payable in respect thereof. (Subordinated Indenture Section 1501)
By reason of such subordination, in the event of Transamerica's insolvency,
holders of Prior Indebtedness may receive more, ratably, and Holders of the
Subordinated Securities may receive less, ratably, than the other creditors of
Transamerica. Such subordination will not prevent the occurrence of any Event of
Default.
DEFINITION OF PRIOR INDEBTEDNESS
The term "Prior Indebtedness" is defined in the Subordinated Indenture as
the principal of and premium, if any, and interest on the following, whether
outstanding at the date of execution of the Subordinated Indenture or thereafter
incurred or created: (a) indebtedness of Transamerica for money borrowed by
Transamerica (including purchase money obligations with an original maturity in
excess of one year and noncontingent obligations to reimburse any bank or other
person in respect of amounts paid under letters of credit) or evidenced by
debentures, bonds, notes or other corporate debt securities or similar
instruments issued by Transamerica; (b) leases for real property, equipment or
other assets used in Transamerica's business, which leases are capitalized in
Transamerica's consolidated financial statements in accordance with generally
accepted accounting principles; (c) commitment or standby fees due and payable
to lending institutions with respect to credit facilities available to
Transamerica; (d) obligations under interest rate and currency exchanges,
floors, caps or other similar arrangements; (e) indebtedness secured by any
mortgage, pledge, lien or other encumbrance existing on property which is owned
or held by Transamerica subject to such mortgage, pledge, lien or other
encumbrance, whether or not the indebtedness secured thereby shall have been
assumed by Transamerica; (f) obligations of Transamerica constituting a
guarantee of indebtedness of or joint obligation with another or others which
would be included in the preceding clauses (a), (b), (c), (d) or (e) if an
obligation of Transamerica; or (g) renewals, extensions or refundings of any of
the indebtedness, leases, fees or obligations referred to in the preceding
clauses (a), (b), (c), (d), (e) or (f); provided that
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<PAGE> 16
Prior Indebtedness shall not include (i) any particular indebtedness, lease,
fee, obligation, renewal, extension or refunding if, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness, lease, fee or obligation or
such renewal, extension or refunding thereof is stated to be not superior in
right of payment to the Subordinated Securities, (ii) indebtedness of
Transamerica owing, directly or indirectly, to any person under or in respect of
any employee benefit plan of Transamerica or any affiliate of Transamerica or
owing, directly or indirectly, to any employee of Transamerica or any affiliate
of Transamerica, (iii) indebtedness representing the maximum fixed repurchase
price of any capital stock of Transamerica which by its terms or otherwise is or
may be required to be redeemed or repurchased prior to the Stated Maturity of
the Securities or at the option of the Holder thereof, (iv) obligations owing
under judgments arising out of obligations that are not indebtedness for
borrowed money, (v) accounts payable or any other indebtedness to trade
creditors created or assumed by Transamerica, (vi) any liability for federal,
state, local or other taxes owed or owing by Transamerica and (vii) the
Subordinated Securities. (Subordinated Indenture Section 101) At July 31, 1991,
Transamerica's Prior Indebtedness was approximately $1.0 billion. The
Subordinated Indenture does not limit the amount of Prior Indebtedness which
Transamerica may incur, through direct borrowings, guarantees of existing or
future indebtedness of subsidiaries or otherwise, nor does the Subordinated
Indenture prohibit Transamerica from creating liens on its property for any
purpose.
CONVERSION OF SUBORDINATED CONVERTIBLE SECURITIES
The Holders of Subordinated Convertible Securities of a specified series
will be entitled at certain times specified in the applicable Prospectus
Supplement, subject to prior redemption, repayment or repurchase, to convert any
Subordinated Convertible Securities of such series (in denominations set forth
in the applicable Prospectus Supplement) into Common Stock, at the Conversion
Price set forth in the applicable Prospectus Supplement, subject to adjustment
as described below and in the applicable Prospectus Supplement. Except as
described below and in the applicable Prospectus Supplement, no adjustment will
be made on conversion of any Subordinated Convertible Securities for interest
accrued thereon or for dividends on any Common Stock issued. (Subordinated
Indenture Section 1603) If any Subordinated Convertible Securities not called
for redemption are converted between a Regular Record Date for the payment of
interest and the next succeeding Interest Payment Date, such Subordinated
Convertible Securities must be accompanied by funds equal to the interest
payable on such succeeding Interest Payment Date on the principal amount so
converted. (Subordinated Indenture Section 1603) Transamerica is not required to
issue fractional shares of Common Stock upon conversion of Subordinated
Convertible Securities and, in lieu thereof, will pay a cash adjustment based
upon the Market Value of the Common Stock on the last business day prior to the
date of conversion. (Subordinated Indenture Section 1604) In the case of
Subordinated Convertible Securities called for redemption, conversion rights
will expire at the close of business on the Redemption Date, and no interest
will be payable on any such Subordinated Convertible Securities converted
between a Regular Record Date for the payment of interest and the next
succeeding Interest Payment Date. (Subordinated Indenture Section 1603)
The Conversion Price is subject to adjustment under formulas set forth in
the Subordinated Indenture in certain events, including: the issuance of capital
stock as a dividend or distribution on the Common Stock; subdivisions and
combinations of the Common Stock; the issuance to all holders of Common Stock of
certain rights or warrants entitling them to subscribe for or purchase Common
Stock (or securities convertible into Common Stock) within 45 days after the
date fixed for the determination of the stockholders entitled to receive such
rights or warrants, at less than the current market price (as defined); and the
distribution to all holders of Common Stock of evidences of indebtedness or
assets of Transamerica (excluding certain cash dividends and distributions
described below) or rights or warrants (excluding those referred to above).
(Subordinated Indenture Section 1606) In the event that Transamerica shall
distribute any rights or warrants to acquire capital stock ("Rights") pursuant
to which separate certificates representing such Rights will be distributed
subsequent to the initial distribution of such Rights (whether or not such
distribution shall have occurred prior to the date of the issuance of a series
of Subordinated Convertible Securities), such subsequent distribution shall be
deemed to be the distribution of such Rights; provided that Transamerica may, in
lieu of making any adjustment in the Conversion Price upon a distribution of
separate certificates representing such Rights, make proper provision so that
each holder of such a Security who converts such Security (or any
9
<PAGE> 17
portion thereof) (a) before the record date for such distribution of separate
certificates shall be entitled to receive upon such conversion shares of Common
Stock issued with Rights and (b) after such record date and prior to the
expiration, redemption or termination of such Rights shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock issuable
upon such conversion, the same number of such Rights as would a holder of the
number of shares of Common Stock that such Security so converted would have
entitled the holder thereof to acquire in accordance with the terms and
provisions applicable to the Rights if such Security were converted immediately
prior to the record date for such distribution. Common Stock owned by or held
for the account of Transamerica or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment.
No adjustment in the Conversion Price will be made for cash dividends or
distributions to the extent paid from retained earnings. No adjustment in the
Conversion Price will be required unless such adjustment would require a change
of at least 1% in the Conversion Price then in effect; provided, that any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment. Transamerica reserves the
right to make such reductions in the Conversion Price in addition to those
required in the foregoing provisions as Transamerica in its discretion shall
determine to be advisable in order that certain stock-related distributions
hereafter made by Transamerica to its stockholders shall not be taxable.
(Subordinated Indenture Section 1606) Except as stated above, the Conversion
Price will not be adjusted for the issuance of Common Stock or any securities
convertible into or exchangeable for Common Stock, or securities carrying the
right to purchase any of the foregoing.
In the case of (i) any reclassification or change of the Common Stock, or
(ii) a consolidation or merger involving Transamerica, or (iii) a sale or
conveyance to another corporation of the property and assets of Transamerica as
an entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in exchange for such
Common Stock, the Holders of the Subordinated Convertible Securities then
outstanding will be entitled thereafter to convert such Subordinated Convertible
Securities into the kind and amount of shares of stock and other securities or
property which they would have received upon such reclassification, change,
consolidation, merger, combination, sale or conveyance had such Subordinated
Convertible Securities been converted into Common Stock immediately prior to
such reclassification, change, consolidation, merger, combination, sale or
conveyance. (Subordinated Indenture Section 1607)
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the Conversion Price, the
Holders of Subordinated Convertible Securities may, in certain circumstances, be
deemed to have received a distribution subject to United States income tax as a
dividend; in certain other circumstances, the absence of such an adjustment may
result in a taxable dividend to the holders of Common Stock or the Subordinated
Convertible Securities.
CERTAIN COVENANTS WITH RESPECT TO SENIOR SECURITIES
Limitations on Liens
The Senior Indenture provides that neither Transamerica nor any Restricted
Subsidiary is permitted to incur, issue, assume or suffer to exist any
Indebtedness or any guarantees of Indebtedness secured by a mortgage, pledge or
lien ("Mortgage") on any property of Transamerica or any Restricted Subsidiary
or on any shares of stock or Indebtedness of any Restricted Subsidiary, without
effectively providing that the Senior Securities shall be secured (together, at
the option of Transamerica, with any other Indebtedness of Transamerica or such
Restricted Subsidiary not subordinate to the Senior Securities), equally and
ratably with (or prior to) such secured Indebtedness, provided that such secured
Indebtedness may be incurred if, immediately after giving effect thereto, the
aggregate amount of all secured Indebtedness of Transamerica and its Restricted
Subsidiaries does not exceed 15% of Transamerica's Consolidated Net Worth. This
restriction does not, however, apply to, among other things, Indebtedness
secured by (a) Mortgages existing on the date of the Senior Indenture or, as to
each series of Senior Securities, on the date of initial issuance of such Senior
Securities; (b) Mortgages on property of, or on shares of stock of, or
Indebtedness of, any corporation existing at the time such corporation becomes a
Restricted Subsidiary and securing Indebtedness of such corporation
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outstanding at the time; (c) purchase money Mortgages or other purchase money
liens upon any property acquired after the date of the Senior Indenture by
Transamerica or any Restricted Subsidiary, including Mortgages securing the
payment of any part of or all the purchase price of such property or securing
any Indebtedness incurred or committed to prior to, at the time of or within 90
days after the acquisition of such property for the purpose of financing any
part of the purchase price thereof; (d) Mortgages on property existing at the
date of acquisition thereof and acquired by Transamerica or any Restricted
Subsidiary after the date of the Senior Indenture whether or not the
Indebtedness secured by any such Mortgage is assumed or guaranteed by
Transamerica or any Restricted Subsidiary, provided that no such Mortgage shall
extend to or cover any other property of Transamerica or of such Restricted
Subsidiary, as the case may be; (e) Mortgages to secure the extension, renewal
or replacement of any Indebtedness secured by any Mortgage referred to in
Clauses (a) through (d) above, provided that there shall not be an increase in
the aggregate principal amount of Indebtedness secured by such extension,
renewal or replacement other than on account of any premium or fee payable in
connection with such renewal, extension or replacement; (f) Mortgages in favor
of Transamerica or any Restricted Subsidiary; (g) liens in favor of governmental
bodies to secure certain statutory obligations; (h) mechanics, materialmen's or
similar liens; (i) judgment liens currently being contested; (j) landlords'
liens; (k) tax deposits and (l) similar liens which do not materially impair the
use or value of the affected property in the operation of the business of
Transamerica or a Restricted Subsidiary. (Senior Indenture Section 1008)
"Indebtedness" is defined to include, among other things, all indebtedness
representing money borrowed, all indebtedness secured by a lien on property, the
present value of the aggregate rentals payable under certain Financing Leases
and, with respect to any Restricted Subsidiary, Preferred Stock of such
Restricted Subsidiary. "Consolidated Net Worth" is defined to include the
shareholders' equity of Transamerica and its Subsidiaries as it appears on their
consolidated balance sheet, prepared in accordance with generally accepted
accounting principles. "Restricted Subsidiary" means Transamerica Insurance
Corporation of California and each of its Subsidiaries and any successor
Subsidiary to any of the foregoing Subsidiaries by way of merger, consolidation
or purchase of any substantial part of its assets.
Limitations Upon Dispositions of Voting Stock of Restricted Subsidiaries
Transamerica is restricted from disposing of any shares of Voting Stock of
a Restricted Subsidiary (other than directors' qualifying shares or sales to a
wholly-owned Restricted Subsidiary) and Restricted Subsidiaries are restricted
from disposing of any shares of Voting Stock of any other Restricted Subsidiary
(other than to Transamerica or to a wholly-owned Restricted Subsidiary or for
directors' qualifying shares) unless (a) at the time of such disposition either
(i) the consideration received by Transamerica and the Restricted Subsidiaries
is, in the opinion of the Board of Directors, at least equal to the fair value
of such stock or (ii) in the opinion of the Board of Directors, the disposition
is in the best interests of Transamerica and the Restricted Subsidiaries; (b)
such Restricted Subsidiary does not own any Voting Stock of any other Restricted
Subsidiary not being sold or disposed of simultaneously; and (c) immediately
after such transaction there will not have occurred an Event of Default or an
event which, after notice or lapse of time or both, would become an Event of
Default. (Senior Indenture Section 1009)
"Voting Stock," as applied to the stock of a Restricted Subsidiary, means
stock (or such equivalent) of a class or classes, however designated, having
voting power for the election of directors of such Restricted Subsidiary,
whether at all times or only so long as no senior class or stock has such voting
power because of default in dividends or other default.
Prepayment of Senior Securities
The Senior Securities of each series are, from time to time, subject to
prepayment, in whole or in part, of the principal amount thereof, together with
interest accrued to the date of prepayment, at the option of the Holder, if,
over the term of such series, the book value of the Voting Stock of Restricted
Subsidiaries disposed of (pursuant to the provisions for dispositions described
under "Limitations Upon Dispositions of Voting Stock of Restricted
Subsidiaries") for less than fair value exceeds 20% of Consolidated Net Worth,
as determined at the time of the most recent disposition. Notice to Holders of
such Securities shall be given not more than five Business Days after the date
of such disposition and shall specify the date (not less than 20
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days nor more than 60 days after such disposition) by which the Holders of such
Securities must give written notice of election to receive such prepayment and
the date (not less than 60 days nor more than 90 days after such disposition) on
which such Securities will be prepaid. (Senior Indenture Section 1010)
ABSENCE OF RESTRICTIVE COVENANTS
The Indentures do not contain any provision which will restrict
Transamerica in any way from paying dividends or making other distributions on
its capital stock or purchasing or redeeming any of its capital stock, or from
incurring, assuming or becoming liable upon Prior Indebtedness or Subordinated
Indebtedness or any other type of debt or other obligations or from selling
assets of any Restricted Subsidiary. The Indentures do not contain any financial
ratios or specified levels of net worth or liquidity to which Transamerica must
adhere. In addition, the Subordinated Indenture does not restrict Transamerica
from creating liens on its property for any purpose.
DEFAULTS AND CERTAIN RIGHTS ON DEFAULT
Senior Securities
Any one of the following events will constitute an Event of Default under
the Senior Indenture with respect to Senior Securities of any series: (a)
failure to pay any interest on any Senior Security of that series when due,
continued for 30 days; (b) failure to pay principal of or any premium on any
Senior Security of that series when due; (c) failure to deposit any sinking fund
payment, when due, in respect of any Senior Security of that series; (d) failure
to perform any other covenant or warranty of Transamerica in the Senior
Indenture (other than a covenant included in the Senior Indenture solely for the
benefit of a series of Senior Securities other than that series), continued for
60 days after written notice by the Senior Trustee or the Holders of 10% of the
Outstanding Securities as provided in the Indenture; (e) failure to pay at
maturity or the acceleration of the maturity of any indebtedness for money
borrowed or guaranteed by Transamerica with a then outstanding aggregate
principal amount in excess of $10,000,000, which acceleration is not annulled or
indebtedness discharged within 30 days after written notice by the Senior
Trustee or Holders of 25% of the Outstanding Securities as provided in the
Indenture, provided that if such failure shall have been cured or waived by the
holders of such indebtedness prior to the acceleration of the Senior Securities,
the Event of Default will be deemed likewise to have been cured or waived; (f)
certain events of bankruptcy, insolvency or reorganization involving
Transamerica; and (g) any other Event of Default provided with respect to
Securities of that series. (Senior Indenture Section 501)
If an Event of Default with respect to Senior Securities of any series at
the time Outstanding occurs and is continuing, either the Senior Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding Senior
Securities of that series by notice as provided in the Indenture may declare the
principal amount (or, if the Senior Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all the Senior Securities of that series to be due
and payable immediately. At any time after a declaration of acceleration with
respect to Senior Securities of any series has been made, but before a judgment
or decree for payment of money has been obtained by the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the Holders of a
majority in aggregate principal amount of the Outstanding Senior Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. (Senior Indenture Section 502)
Subordinated Securities
Any one of the following events will constitute an Event of Default under
the Subordinated Indenture with respect to Subordinated Securities of any
series: (a) failure to pay any interest on any Subordinated Security of that
series when due, continued for 30 days; (b) failure to pay principal of or any
premium on any Subordinated Security of that series when due; (c) failure to
deposit any sinking fund payment, when due, in respect of any Subordinated
Security of that series; (d) failure to perform any other covenant or warranty
of Transamerica in the Subordinated Indenture (other than a covenant included in
the Subordinated Indenture solely for the benefit of a series of Subordinated
Securities other than that series), continued for 60 days after written notice
by the Subordinated Trustee or the Holders of 10% of the Outstanding Securities
as provided in
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the Indenture; (e) failure to pay at maturity or the acceleration of the
maturity of any Subordinated Indebtedness with a then outstanding aggregate
principal amount in excess of $10,000,000 which acceleration is not annulled or
such Subordinated Indebtedness discharged within 30 days after written notice by
the Senior Trustee or Holders of 25% of the Outstanding Securities as provided
in the Subordinated Indenture, provided that if such failure shall have been
cured or waived by the holders of such Subordinated Indebtedness prior to the
acceleration of the Subordinated Securities, the Event of Default will be deemed
likewise to have been cured or waived; (f) certain events of bankruptcy,
insolvency or reorganization involving Transamerica; and (g) any other Event of
Default provided with respect to Subordinated Securities of that series.
(Subordinated Indenture Section 501)
If (a) an Event of Default shall have occurred and is continuing with
respect to Subordinated Securities of any series at the time Outstanding (other
than Subordinated Securities structured as Subordinated Capital Securities), or
(b) certain events of bankruptcy, insolvency or reorganization with respect to
Transamerica shall have occurred and be continuing with respect to Subordinated
Securities of any series at the time Outstanding that have been structured as
Subordinated Capital Securities, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Subordinated Securities of that
series by notice as provided in the Subordinated Indenture may declare the
principal amount of (or, if the Outstanding Subordinated Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) and all accrued but
unpaid interest on all Outstanding Subordinated Securities of that series to be
due and payable immediately in cash. At any time after a declaration of
acceleration with respect to Subordinated Securities of any series has been
made, but before a judgment or decree for payment of money has been obtained by
the Subordinated Trustee, and subject to applicable law and certain other
provisions of the Subordinated Indenture, the Holders of a majority in aggregate
principal amount of the Outstanding Subordinated Securities of that series may,
under certain circumstances, rescind and annul such acceleration. (Subordinated
Indenture Section 502)
General
Each Indenture will provide that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holder shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603) Subject to
such provisions for the indemnification of the Trustee, and subject to
applicable law and certain other provisions of the Indenture, the Holders of a
majority in aggregate principal amount of the Outstanding Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 512)
Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to any series of Debt Securities
thereunder known to it, give to the Holders of Debt Securities and coupons of
such series notice of such default, unless such default shall have been cured or
waived; but, except in the case of a default in the payment of the principal of
(and premium, if any) or any interest on any Debt Security or of any coupon of
such series or in the payment of any sinking fund installment with respect to
Debt Securities of such series, the Trustee shall be protected in withholding
such notice if it determines in good faith that the withholding of such notice
is in the interest of the Holders of such Debt Securities and coupons. (Section
602)
Transamerica will be required to furnish to the Trustees annually a
statement as to the performance by Transamerica of certain of its obligations
under the Indentures and as to any default in such performance. Transamerica
will give the Trustee prompt written notice of any event known to it that with
the giving of notice by the Holders of 25% or more of the Securities of any
series or such Trustee and the lapse of time would become an Event of Default
under clause (e) in the first paragraph under "Senior Securities" or
"Subordinated Securities", above. (Senior Indenture Section 1011, Subordinated
Indenture Section 1006)
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MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by Transamerica
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such modification or amendment; provided, however, that no such modification
or amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on any Security or related coupon, (b)
reduce the principal amount of, or premium or interest on, any Security or
related coupon or, in the case of Subordinated Capital Securities, impair the
right to delivery of Capital Securities, if any, (c) change any obligation of
Transamerica to pay additional amounts, (d) reduce the amount of principal of an
Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (e) change the coin or currency in which any Security or any premium or
interest thereon is payable, (f) impair the right to institute suit for the
enforcement of any payment on or with respect to any Security, (g) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults, (h) reduce the requirements contained in the
Indenture for quorum or voting, (i) change any obligation of Transamerica to
maintain an office or agency in the places and for the purposes required by the
Indenture, (j) adversely affect the right to repayment, (k) with respect to the
Subordinated Indenture, modify the terms relating to subordination in a manner
adverse to the Holders of Subordinated Securities issued under that Indenture or
impair the rights of Holders to convert Subordinated Convertible Securities or
(l) modify any of the above provisions. (Section 902)
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of each series may, on behalf of the Holders of all
the Debt Securities of that series, waive, insofar as that series is concerned,
compliance by Transamerica with certain restrictive provisions of the Indenture.
(Senior Indenture Section 1012, Subordinated Indenture Section 1007) The Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of Securities of that
series and any coupons appertaining thereto, waive any past default and its
consequences under the Indenture with respect to Debt Securities of that series,
except a default (a) in the payment of principal of (or premium, if any) or any
interest on any Debt Security of such series, and (b) in respect of a covenant
or provision of the Indenture which cannot be modified or amended without the
consent of the Holder of each Outstanding Security of such series affected.
(Section 513)
Each Indenture will provide that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or
whether a quorum is present at a meeting of Holders of Debt Securities or the
number of votes entitled to be cast by the Holder of any Debt Security (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof, and (ii) the principal amount of a Debt Security denominated
in a foreign currency or a composite currency shall be the U.S. dollar
equivalent, determined as of the date of original issuance of such Security by
Transamerica in good faith, of the principal amount of such Debt Security (or,
in the case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined on the date of original issuance of such Debt Security, of the amount
determined as provided in (i) above). (Section 101)
Each Indenture will contain provisions for convening meetings of the
Holders of Debt Securities of a series. (Section 1301) A meeting may be called
at any time by the Trustee, and also, upon request, by Transamerica or the
Holders of at least 10% in principal amount of the Outstanding Securities of
such series, in any such case upon notice given in accordance with "Notices"
below. (Section 1302) Except for any consent which must be given by the Holder
of each Outstanding Security affected thereby, as described above, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except for any consent which must be given by the
Holder of each Outstanding Security affected thereby, as described above, any
resolution with respect to any consent or waiver which may be given by the
Holders of not less than 66 2/3% in principal amount of the Outstanding
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Securities of a series may be adopted at a meeting or an adjourned meeting duly
convened at which a quorum is present only by the affirmative vote of the
Holders of 66 2/3% in principal amount of the Outstanding Securities of that
series; and provided, further, that, except for any consent that must be given
by the Holder of each Outstanding Security affected thereby, as described above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series. Any resolution passed or decision
taken at any meeting of Holders of Debt Securities of any series duly held in
accordance with the Indenture will be binding on all Holders of Debt Securities
of that series and the related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Securities of a
series; provided, however, that if any action is to be taken at such meeting
with respect to a consent or waiver which may be given by the Holders of not
less than 66 2/3% in principal amount of the Outstanding Securities of a series,
the persons holding or representing 66 2/3% in principal amount of the
Outstanding Securities of such series will constitute a quorum. (Section 1304)
DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides that, unless Transamerica elects otherwise pursuant
to Section 301 of the Indenture with respect to the Debt Securities of any
series, Transamerica may elect with respect to any series of Debt Securities
either (A) to defease and be discharged from any and all obligations with
respect to such Debt Securities (except for the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Securities, to maintain an office or agency in respect
of the Debt Securities and to hold moneys for payment in trust) ("defeasance")
or (B) to be released from its obligations with respect to such Debt Securities
under Sections 1005 through 1010 of the Senior Indenture and Section 1005 of the
Subordinated Indenture ("covenant defeasance"), upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money,
and/or U.S. Government Obligations (as defined) which through the payment of
principal and interest in accordance with their terms will provide money, in an
amount sufficient to pay the principal of and any premium and interest on such
Securities, and any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates therefor. Such a trust may only be established if, among
other things, Transamerica has delivered to the Trustee an opinion of counsel
(as specified in the Indenture) to the effect that the Holders of such Debt
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred and, in the case of Bearer Securities, there will be no adverse
federal tax consequences to the Holders of such Bearer Securities as a result of
such defeasance or covenant defeasance. Such opinion, in the case of defeasance
under clause (A) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax law occurring after
the date of the Indenture. In the case of covenant defeasance, such termination
will not relieve Transamerica of its obligations to pay when due the principal
of and interest on the Debt Securities of such series if the Debt Securities of
such series are not paid from the money or Government Obligations held by the
Trustee for payment thereof. The Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance with
respect to the Securities of a particular series. (Article Fourteen)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Transamerica, without the consent of the Holders of any of the Outstanding
Securities under either of the Indentures, may consolidate or merge with or
into, or transfer or lease substantially all of its assets to, any Person that
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, or may permit any such Person to consolidate
with or merge into Transamerica or convey, transfer or lease substantially all
of its assets to Transamerica, provided that any successor Person assumes
Transamerica's obligations on the Outstanding Securities and under the
Indentures, that after giving effect to
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the transaction no Event of Default, and no event which after notice or lapse of
time, would become an Event of Default, shall have occurred and be continuing,
and that certain other conditions are met. (Section 801)
NOTICES
Except as otherwise provided in the applicable Indenture, notices to
Holders of Bearer Securities will be given by publication at least twice in a
daily newspaper in The City of New York and in such other city or cities as may
be specified in such Debt Securities. Notices to Holders of Registered
Securities will be given by mail to the addresses of such Holders as they appear
in the Security Register. (Sections 101 and 106)
TITLE
Title to any Bearer Securities (including Bearer Securities in permanent
global form), and any coupons appertaining thereto will pass by delivery.
Transamerica, the Trustee and any agent of Transamerica or the Trustee may treat
the bearer of any Bearer Security and the bearer of any coupon and the
registered owner of any Registered Security as the absolute owner thereof
(whether or not such Security or coupon shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by Transamerica at the expense of the
Holder upon surrender of such Debt Security to the Trustee. Debt Securities or
coupons that become destroyed, stolen or lost will be replaced by Transamerica
at the expense of the Holder upon delivery to the Trustee of the Debt Security,
coupon or coupons or evidence of the destruction, loss or theft thereof
satisfactory to Transamerica and the Trustee; in the case of any coupon which
becomes destroyed, stolen or lost, such coupon will be replaced by issuance of a
new Debt Security in exchange for the Debt Security to which such coupon
appertains. In the case of a destroyed, lost or stolen Debt Security or coupon
an indemnity satisfactory to the Trustee and Transamerica may be required at the
expense of the Holder of such Debt Security or coupon before a replacement Debt
Security will be issued. (Section 306)
GOVERNING LAW
The Indentures, the Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of California. (Section 113)
REGARDING THE TRUSTEES
Bankers Trust Company ("BTC") will be the Senior Trustee and the
Subordinated Trustee. BTC provides a line of credit to Transamerica and a line
of credit to Transamerica Finance Corporation, a wholly owned subsidiary of
Transamerica ("Transamerica Finance Corporation"). Transamerica and Transamerica
Finance Corporation have outstanding interest rate exchange agreements with BTC.
BTC is the trustee for certain senior securities issued by Transamerica Finance
Corporation. BT Securities Corporation, an affiliate of BTC, is a commercial
paper placement agent for Transamerica. BTC is a subsidiary of Bankers Trust New
York Corporation.
The Senior Trustee or the Subordinated Trustee may from time to time make
loans to Transamerica or its subsidiaries and perform other services for
Transamerica or its subsidiaries in the normal course of business. Under the
provisions of the Trust Indenture Act of 1939, as recently amended (the "Trust
Indenture Act"), upon the occurrence of a default under an indenture, if a
trustee has a conflicting interest (as defined in the Trust Indenture Act) the
trustee must, within 90 days, either eliminate such conflicting interest or
resign. Under the provisions of the Trust Indenture Act, an indenture trustee
shall be deemed to have a conflicting interest if the trustee is a creditor of
the obligor. If the trustee fails either to eliminate the conflicting interest
or to resign within 10 days after the expiration of such 90-day period, the
trustee is required to notify security
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holders to this effect and any security holder who has been a bona fide holder
for at least six months may petition a court to remove the trustee and to
appoint a successor trustee.
DESCRIPTION OF COMMON STOCK
All issued and outstanding shares of Common Stock of Transamerica,
including any shares offered hereby in lieu of interest on, in exchange for, or
upon the maturity of, Subordinated Securities, are or will be fully paid and
nonassessable. Holders of Common Stock have no preemptive, subscription or
conversion rights and are not liable for further calls or assessments. There are
no redemption or sinking fund provisions in effect with respect to the Common
Stock. Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and
to share ratably in the assets available for distribution upon liquidation. Each
share of Common Stock is entitled to one vote, and each one-half share of Common
Stock is entitled to one-half vote, at all meetings of stockholders. The holders
of Common Stock are not entitled to cumulative voting rights in the election of
directors. As of July 31, 1991, Transamerica had 76,681,434 shares of Common
Stock outstanding.
Transamerica is party to several agreements which place certain
restrictions on it as to the purchase of Transamerica's Common Stock and the
payment of dividends. These limitations are not considered to have a practical
effect on the ability of Transamerica to pay dividends to its stockholders.
The transfer agent and registrar for the Common Stock is First Chicago
Trust Company of New York.
RIGHTS
On July 17, 1986, the Board of Directors of Transamerica declared a
dividend distribution of one Right for each outstanding share of Common Stock of
Transamerica to stockholders of record at the close of business on August 8,
1986. Pursuant to a Rights Agreement, dated as of July 17, 1986, between
Transamerica and First Interstate Bank of California (the "Rights Agreement"),
each Right entitles the registered holder to purchase from Transamerica a unit
consisting of one one-hundredth of a share (a "Unit") of Series A Participating
Preference Stock, without par value (the "Preference Stock"), at a Purchase
Price of $135 per Unit, subject to adjustment. The Purchase Price may be paid,
at the option of the holder, in cash or shares of Common Stock having a value at
the time of exercise equal to the Purchase Price. Transamerica Common Stock
issued pursuant to this Prospectus will be issued with the Rights at the rate of
one Right for each share of Common Stock issued, provided that such Common Stock
is issued prior to the Distribution Date (as defined below).
The Preference Stock purchasable upon exercise of the Rights will rank pari
passu with other series of preference stock, but senior to the Common Stock.
Each share of Preference Stock will have a preferential quarterly dividend equal
to the greater of $10 per share or 100 times the dividend declared on the Common
Stock. In the event of liquidation, the holders of the Preference Stock will
receive a preferred liquidation payment equal to the greater of $100 per share
or 100 times the payment made per share of Common Stock. The Preference Stock is
not redeemable. Each share of Preference Stock will vote together with the
Common Stock and will be entitled to 100 votes per share. The rights of the
Preference Stock as to dividends, voting and liquidation are protected by
customary anti-dilution provisions.
Prior to a Distribution Date (as defined in the next sentence) the Rights
will be evidenced by shares of Common Stock and cannot be traded separately from
such shares. The Rights will separate from the Common Stock and a Distribution
Date (the "Distribution Date") will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days following
the commencement of a tender offer or exchange offer that could result, if
successful, in a person or group beneficially owning 30% or more of such
outstanding shares of Common Stock.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on August 8, 1996, unless earlier redeemed by
Transamerica as described below. Until a Right is exercised the
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holder thereof, as such, will have no rights as a stockholder of Transamerica,
including without limitation the right to vote or to receive dividends.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) Transamerica is the surviving corporation in a merger
with an Acquiring Person and its Common Stock is not changed or exchanged (other
than a merger described in the subsequent paragraph), (ii) a Person becomes the
beneficial owner of more than 30% of the then outstanding shares of Common Stock
(except pursuant to a cash tender offer for all shares at a fair price), or
(iii) during such time as there is an Acquiring Person, an event involving
Transamerica occurs which results in such Acquiring Person's ownership interest
being increased by more than 1% (e.g., a reverse stock split), each holder of a
Right will thereafter have the right to receive, upon exercise of such Right,
Common Stock (or, in certain circumstances, cash, property or other securities
of Transamerica) having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following the occurrence of any of
the events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person or certain transferees thereof will be null and void.
In the event that, at any time following the Stock Acquisition Date, (i)
Transamerica is acquired in a merger or other business combination transaction
in which Transamerica is not the surviving corporation (other than a merger at
the same price as a prior cash tender offer for all shares at a fair price),
(ii) a Person consolidates or merges with or into Transamerica (other than a
merger at the same price as a prior cash tender offer for all shares at a fair
price) and all or part of Transamerica's outstanding shares are changed into or
exchanged for stock or securities of any other Person or cash or other property
or (iii) 50% or more of the assets or earning power of Transamerica and its
subsidiaries, taken as a whole, is sold or transferred, each holder of a Right
shall thereafter have the right to receive, upon exercise of such Right, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right.
At any time until the earlier of ten days following the Stock Acquisition
Date and the date of termination of the Rights Agreement, Transamerica may
redeem the Rights in whole, but not in part, at a price of $0.05 per Right.
After the redemption period has expired, Transamerica's right of redemption may
be reinstated if each Acquiring Person reduces his beneficial ownership to 10%
or less of the outstanding shares of Common Stock in a transaction or series of
transactions not involving Transamerica. Immediately upon the action of the
Board of Directors ordering redemption of the rights, the Rights will terminate
and the only right of the holders of Rights will be to receive the $0.05
redemption price.
While the distribution of the Rights was not taxable to stockholders or to
Transamerica, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common Stock
(or other consideration) of Transamerica or for common stock of the acquiring
company as set forth above.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Transamerica
other than pursuant to a cash tender offer for all shares at a fair price or
pursuant to an offer conditional on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors of Transamerica since the Board
of Directors may, at its option, at any time prior to the close of business on
the earlier of (i) the tenth day following the Stock Acquisition Date or (ii)
August 8, 1996, redeem all but not less than all of the then outstanding Rights
at the redemption price. It should be noted, however, that Transamerica's
Certificate of Incorporation requires a vote of a majority of the stockholders
who are not interested parties for certain business transactions with a 20% or
greater stockholder, provides for a classified Board of Directors, prohibits
stockholder action by written consent and requires a vote of 80% of the
outstanding shares to amend Transamerica's By-Laws.
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The foregoing summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Shareholder Rights
Agreement, a copy of which was filed with the Commission on July 28, 1986 as
Exhibit 4.1 to Transamerica's Current Report on Form 8-K.
DESCRIPTION OF PREFERRED AND PREFERENCE STOCK
Under Transamerica's Certificate of Incorporation, the Board of Directors
is authorized to issue shares of preferred stock and the preference stock from
time to time in one or more series and to determine the designation and number
of shares of each series and the relative rights, preferences and limitations
with respect to dividends, redemption (including sinking fund provisions),
liquidation, dissolution or winding up, voting rights and conversion, all in
accordance with the laws of the State of Delaware. When shares of preferred
stock or preference stock are issued, certain rights of the holders thereof may
materially affect the rights of the holders of Common Stock, including voting
rights and preferences in respect of dividends and liquidation.
As of July 31, 1991, Transamerica had issued and outstanding 750 shares of
Series A-1, 750 shares of Series B-1 and 750 shares of Series C-1 Dutch Auction
Rate Transferable Securities (TM) Preferred Stock ("DARTS" (TM)). The DARTS are
entitled to receive, when, as and if declared by the Board of Directors of
Transamerica out of funds legally available therefor, cumulative cash dividends.
Dividends are payable approximately every 49 days. The dividend rate for each
series of DARTS for each approximately 49-day dividend period is determined by
an auction which is held on the business day preceding each dividend period;
provided that in no event will such rate be greater than a rate multiple
(ranging from 110% to 250%, based on the prevailing rating of the DARTS)
multiplied by the 60-day "AA" Composite Commercial Paper Rate or lower than 58%
of the 60-day "AA" Composite Commercial Paper Rate in each case in effect on the
date of auction. The DARTS have a liquidation preference of $100,000 per share
plus an amount equal to accrued and unpaid dividends. The DARTS are not
convertible into shares of Common Stock or other capital stock of Transamerica
and have no preemptive rights. The DARTS are not subject to any sinking fund,
but are subject to redemption at the option of Transamerica on any dividend
payment date for the DARTS. The redemption price is equal to $100,000 per share
plus an amount equal to accrued and unpaid dividends on such shares (whether or
not earned or declared) to the redemption date. The holders of the DARTS have no
voting rights, except in certain limited circumstances relating to the failure
of Transamerica to pay accumulated dividends, or the alteration of the rights of
preferred shareholders, or as expressly required by applicable law. The holders
of any series of DARTS are entitled to vote when the dividends payable on a
given outstanding issue shall be accumulated and unpaid for six calendar
quarters (whether declared or not and whether consecutive or not). The holders
of record of all series of DARTS shall have the rights, as a single class, to
elect two directors at the next annual meeting of stockholders. At such meetings
where DARTS holders are entitled to vote, the holder of each DARTS share shall
be entitled to one vote for every dollar ($1.00) of the stated liquidation
preference of each share ($100,000). The consent of the holders of at least
two-thirds of the outstanding voting power of the DARTS of all series is also
necessary to effect the authorization of any class of shares which would rank
prior to shares of the DARTS as to dividends or upon liquidation or to authorize
any amendment of the Certificate of Incorporation or the By-Laws of Transamerica
that would adversely affect the rights of the DART holders.
DESCRIPTION OF CAPITAL SECURITIES
Transamerica may issue a series of Subordinated Securities that are
structured as Subordinated Capital Securities and that are payable at Maturity
only by exchange for, or from certain Available Funds from the sale of, Common
Stock, Perpetual Preferred Stock or other capital securities of Transamerica
acceptable to the Rating Agencies (the "Capital Securities"). Unless otherwise
provided in the Prospectus Supplement, whenever Subordinated Debt Securities are
exchangeable for Capital Securities, Transamerica will be obligated to deliver
at Maturity Capital Securities with a Market Value (as defined below) equal to
the principal amount of such Subordinated Debt Securities. In addition,
Transamerica will unconditionally undertake to sell the Capital Securities in a
secondary offering (the "Secondary Offering") on behalf of the
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holders of such Subordinated Capital Securities who elect to receive cash and
not Capital Securities at Maturity with a Market Value (as defined below) equal
to the principal amount of such Subordinated Debt Securities. Transamerica will
bear all expenses of the Secondary Offering, including underwriting discounts
and commissions. If Transamerica fails to effect the Secondary Offering, it will
deliver to the holders of Subordinated Debt Securities Capital Securities, and
not cash, upon exchange of the Subordinated Debt Securities. In such event,
Transamerica will have no continuing obligation to effect a Secondary Offering
but will not be relieved of any liability for money damages resulting from the
breach of its obligation to effect a Secondary Offering. The "Market Value" of
any Capital Securities means their sale price in the Secondary Offering. If
Transamerica does not effect the Secondary Offering, the Market Value of such
Capital Securities shall be the fair value when exchanged as determined by three
independent nationally recognized investment banking firms selected by
Transamerica.
Transamerica may select any Perpetual Preferred Stock as Capital Securities
to be exchanged for Subordinated Capital Securities or to be sold and the
proceeds of such sale designated on the books of Transamerica and set forth in a
notice to the Subordinated Trustee and the Rating Agencies as Available Funds.
"Perpetual Preferred Stock" is any preferred stock that is not mandatorily, or
at the option of the holder, redeemable or repayable, otherwise than in shares
of Common Stock or Perpetual Preferred Stock of another class or series or with
the proceeds of the sale of Common Stock or Perpetual Preferred Stock. Any
shares of Perpetual Preferred Stock to be so issued will have such designations,
preferences, dividend and other rights, qualifications, limitations and
restrictions as may be determined by Transamerica and approved by the Board of
Directors.
Transamerica may also select any other securities to be exchanged for
Subordinated Capital Securities or to be sold and an amount equal to the
proceeds of such sale to be designated as Available Funds which qualify at the
time of exchange or sale as Capital Securities as determined by the Rating
Agencies. Such other Capital Securities will have such terms as may be
determined by Transamerica and approved by its Board of Directors.
PLAN OF DISTRIBUTION
Transamerica may sell Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers; or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms of
the offering of any Debt Securities, including the names of any underwriters,
the purchase price of such Debt Securities and the proceeds to Transamerica from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, any securities exchanges on which such
Debt Securities may be listed and any restrictions on the sale and delivery of
Debt Securities in bearer form.
If underwriters are used in the sale, Debt 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. Such Debt
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Debt Securities will be subject
to certain conditions precedent, and the underwriters will be obligated to
purchase all of such Debt Securities if any of such Debt Securities are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Debt Securities may also be sold directly by Transamerica or through agents
designated by Transamerica from time to time. Any agent involved in the offer or
sale of Debt Securities will be named, and any commissions payable by
Transamerica to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will act on a best efforts basis for the period of its
appointment.
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Any underwriters, dealers or agents participating in the distribution of
Debt Securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of Debt Securities may be
deemed to be underwriting discounts and commissions under the Act. Agents and
underwriters may be entitled under agreements entered into with Transamerica to
indemnification by Transamerica against certain civil liabilities, including
liabilities under the Act, or to contribution with respect to payments that the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engage in transactions with, or perform
services for, Transamerica or its affiliates in the ordinary course of business.
All Debt Securities will be a new issue of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by
Transamerica for public offering and sale may make a market in such Debt
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any Debt Securities.
EXPERTS
The financial statements and schedules of Transamerica Corporation and
consolidated subsidiaries incorporated by reference in this Prospectus and in
the Registration Statement relating hereto have been audited by Ernst & Young,
independent auditors, for the periods indicated in their report thereon which is
included in the Annual Report on Form 10-K for the year ended December 31, 1990.
The financial statements and schedules audited by Ernst & Young have been
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of Sedgwick Group plc and consolidated
subsidiaries incorporated by reference in this Prospectus and in the
Registration Statement relating hereto have been examined by Coopers & Lybrand
Deloitte, independent auditors, for the periods indicated in their report
thereon which is included in the Annual Report on Form 10-K for the year ended
December 31, 1990. The financial statements examined by Coopers & Lybrand
Deloitte have been incorporated herein by reference in reliance on their report
given on their authority as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Debt Securities and certain other legal matters in
connection therewith will be passed upon for Transamerica by Orrick, Herrington
& Sutcliffe, San Francisco, California.
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