sv3asr
As filed with the Securities and Exchange Commission on
November 22, 2011
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
|
|
|
W. R. Berkley Corporation
|
|
W. R. Berkley Capital Trust III
|
(Exact name of registrant
as specified in its charter)
|
|
(Exact name of each registrant
as
specified in its certificate of trust)
|
Delaware
|
|
Delaware
|
(State or other jurisdiction
of
incorporation or organization)
|
|
(State or other jurisdiction of
incorporation or
organization of each registrant)
|
22-1867895
|
|
To Be Applied For
|
(I.R.S. Employer
Identification Number)
|
|
(I.R.S. Employer
Identification Number)
|
475 Steamboat Road
Greenwich, Connecticut 06830
(203) 629-3000
|
|
c/o W.
R. Berkley Corporation
475 Steamboat Road
Greenwich, Connecticut 06830
(203) 629-3000
|
(Address, including zip code,
and telephone number,
including area code, of registrants principal executive
offices)
|
|
(Address, including zip code,
and telephone number,
including area code, of registrants principal executive
offices)
|
Ira S. Lederman, Esq.
Senior Vice President, General Counsel and Secretary
W. R. Berkley Corporation
475 Steamboat Road
Greenwich, Connecticut 06830
(203) 629-3000
(Name, address, including
zip code, and telephone number, including area code, of agent
for service of each registrant)
Please address a copy of all communications to:
Jeffrey S. Hochman, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY
10019-6099
(212) 728-8000
Approximate date of commencement of proposed sale to the
public: From time to time after the effective
date of this registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box: o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box: þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box. þ
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
|
|
|
|
|
|
|
Large accelerated
filer þ
|
|
Accelerated
filer o
|
|
Non-accelerated
filer o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company o
|
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
Amount to be Registered/Proposed Maximum
|
|
|
|
Offering Price per Unit/Proposed Maximum
|
Title of Each Class of
|
|
|
Aggregate Offering Price/Amount of
|
Securities to be Registered(1)
|
|
|
Registration Fee(2)(3)(4)
|
Common Stock of W. R. Berkley Corporation, par value $.20 per
share(4)
|
|
|
|
Preferred Stock of W. R. Berkley Corporation, par value $.10 per
share
|
|
|
|
Depositary Shares of W. R. Berkley Corporation(5)
|
|
|
|
Debt Securities of W. R. Berkley Corporation(6)
|
|
|
|
Warrants to Purchase Common Stock of W. R. Berkley Corporation
|
|
|
|
Warrants to Purchase Preferred Stock of W. R. Berkley Corporation
|
|
|
|
Warrants to Purchase Debt Securities of W. R. Berkley Corporation
|
|
|
|
Stock Purchase Contracts of W. R. Berkley Corporation
|
|
|
|
Stock Purchase Units of W. R. Berkley Corporation
|
|
|
|
Preferred Securities of W. R. Berkley Capital Trust III
|
|
|
|
Guarantees of Preferred Securities of W. R. Berkley Capital
Trust III by W. R. Berkley Corporation and
certain backup undertakings(7)
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These offered securities may be sold separately, together or as
units with other offered securities. |
|
(2) |
|
Such indeterminate number or amount of Common Stock, Preferred
Stock, Depositary Shares, Debt Securities, Warrants, Stock
Purchase Contracts and Stock Purchase Units of W. R. Berkley
Corporation and Preferred Securities of W. R. Berkley Capital
Trust III as may from time to time be issued at
indeterminate prices, in U.S. Dollars or the equivalent thereof
denominated in foreign currencies or units of two or more
foreign currencies or composite currencies (such as European
Currency Units). Certain debt securities of W. R. Berkley
Corporation may be issued and sold to W. R. Berkley Capital
Trust III in connection with the issuance of Preferred
Securities by such trust, in which event such Debt Securities
may later be distributed to the holders of such Preferred
Securities upon a dissolution of W. R. Berkley Capital
Trust III and the distribution of the assets thereof. |
|
(3) |
|
Pursuant to Rule 456(b) and Rule 457(r) under the
Securities Act of 1933, as amended (the Securities
Act), the registrants are deferring payment of the
registration fee. Separate consideration may or may not be
received for securities that are issuable on exercise,
conversion or exchange of other securities or that are issued in
units or represented by Depositary Shares registered hereunder. |
|
(4) |
|
Also includes such presently indeterminate number of shares of
Common Stock as may be issued (a) upon conversion of or
exchange for any Debt Securities or Preferred Stock that provide
for conversion or exchange into Common Stock, (b) upon
exercise of warrants to purchase Common Stock or
(c) pursuant to Stock Purchase Contracts. Also includes
such presently indeterminate number or amount of offered
securities as may be issued (x) upon conversion of or
exchange for any Preferred Securities that provide for
conversion or exchange into offered securities or (y) in
connection with Stock Purchase Units. |
|
(5) |
|
To be represented by Depositary Receipts representing an
interest in all or a specified portion of a share of Preferred
Stock. |
|
(6) |
|
Such indeterminate principal amount of Debt Securities (which
may be senior or subordinated). |
|
(7) |
|
No separate consideration will be received for the Guarantees.
The Guarantees include the rights of holders of the Preferred
Securities under the Guarantees and certain backup undertakings,
comprised of obligations of W. R. Berkley Corporation under a
subordinated indenture and any supplemental indentures thereto
and under the trust agreement to provide certain indemnities in
respect of, and be responsible for certain costs, expenses,
debts and liabilities of W. R. Berkley Capital Trust III,
as described in this registration statement. All obligations
under the trust agreement, including the indemnity obligation,
are included in the
back-up
undertakings. |
PROSPECTUS
W. R. Berkley
Corporation
Common Stock, Preferred Stock,
Depositary Shares, Debt Securities,
Warrants to Purchase Common
Stock, Warrants to Purchase Preferred
Stock, Warrants to Purchase
Debt Securities, Stock Purchase Contracts
and Stock Purchase
Units
W. R. Berkley Capital
Trust III
Preferred Securities
Fully and Unconditionally
Guaranteed to the Extent Provided in this Prospectus
by
W. R. Berkley
Corporation
We or the trust will provide the specific terms of these
securities in supplements to this prospectus. The prospectus
supplements may also add to or update the information contained
in this prospectus. You should read this prospectus and any
supplements carefully before you invest.
Our common stock is listed on the New York Stock Exchange under
the symbol WRB. On November 21, 2011, the
closing price of our common stock, as reported by the New York
Stock Exchange, was $33.18 per share.
Investing in our or the trusts securities involves
risks. See Risk Factors on Page 5.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
This prospectus may not be used to consummate sales of offered
securities unless accompanied by a prospectus supplement.
You should rely only on the information contained or
incorporated by reference in this prospectus or any supplement.
Neither we nor the trust has authorized anyone else to provide
you with different information. We and the trust are offering
these securities only in states where the offer is permitted.
You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on
the front of those documents. Our business, financial condition,
results of operations and prospects may have changed since that
date.
The date of this prospectus is November 22, 2011.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we and
the trust filed with the Securities and Exchange Commission (the
Commission) utilizing a shelf
registration process, relating to the common stock, preferred
stock, depositary shares, debt securities, warrants, stock
purchase contracts, stock purchase units, preferred securities
and preferred securities guarantee described in this prospectus.
Under this shelf process, we and the trust are registering an
unspecified amount of each class of the securities described in
this prospectus, and we may sell any combination of the
securities described in this prospectus in one or more
offerings, and the trust may sell its trust preferred
securities. This prospectus does not contain all of the
information set forth in the registration statement as permitted
by the rules and regulations of the Commission. For additional
information regarding us, the trust and the offered securities,
please refer to the registration statement of which this
prospectus forms a part. This prospectus provides you with a
general description of the securities we or the trust may offer.
Each time we or the trust sells securities, we or the trust will
provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus
supplement may also add to, update, supplement or clarify
information contained in this prospectus. The rules of the
Commission allow us to incorporate by reference information into
this prospectus. This information incorporated by reference is
considered to be a part of this prospectus, and information that
we file later with the Commission will automatically update and
supersede this information.
You should read both this prospectus and any prospectus
supplement together with additional information described under
the heading Where You Can Find More Information and
Incorporation of Certain Documents by Reference.
Unless otherwise indicated, all references in this prospectus to
W. R. Berkley, we, us,
our, the Company or similar terms refer
to W. R. Berkley Corporation together with its subsidiaries, and
all references in this prospectus to the trust refer
to W. R. Berkley Capital Trust III.
FORWARD-LOOKING
STATEMENTS
This prospectus and the documents incorporated herein by
reference may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Some of the forward-looking statements can be identified by the
use of forward-looking words such as believes,
expects, potential,
continued, may, will,
should, seeks,
approximately, predicts,
intends, plans, estimates,
anticipates or the negative version of those words
or other comparable words. Any forward-looking statements
contained or incorporated by reference in this prospectus,
including statements related to our outlook for the industry and
for our performance for the year 2011 and beyond, are based upon
our historical performance and on current plans, estimates and
expectations. The inclusion of this forward-looking information
is not and should not be regarded as a representation by us, the
underwriters or any other person that the future plans,
estimates or expectations contemplated by us will be achieved.
Such forward-looking statements are subject to various risks and
uncertainties, including but not limited to:
|
|
|
|
|
the cyclical nature of the property casualty industry;
|
|
|
|
the long-tail and potentially volatile nature of the insurance
and reinsurance business;
|
|
|
|
product demand and pricing;
|
|
|
|
claims development and the process of estimating reserves;
|
|
|
|
investment risks, including those of our portfolio of fixed
maturity securities and investments in equity securities,
including investments in financial institutions, municipal
bonds, mortgage-backed securities, loans receivable, investment
funds, real estate, merger arbitrage and private equity
investments;
|
|
|
|
the impact of significant competition;
|
|
|
|
the uncertain nature of damage theories and loss amounts;
|
|
|
|
natural and man-made catastrophic losses, including as a result
of terrorist activities;
|
1
|
|
|
|
|
general economic and market activities, including inflation,
interest rates and volatility in the credit and capital markets;
|
|
|
|
the impact of the economic downturn, and the potential effect of
any legislative, regulatory, accounting or other initiatives
taken in response to it, on our results and financial condition;
|
|
|
|
continued availability of capital and financing;
|
|
|
|
the success of our new ventures or acquisitions and the
availability of other opportunities;
|
|
|
|
the availability of reinsurance;
|
|
|
|
our retention under the Terrorism Risk Insurance Program
Reauthorization Act of 2007;
|
|
|
|
the ability of our reinsurers to pay reinsurance recoverables
owed to us;
|
|
|
|
foreign currency and political risks relating to our
international operations;
|
|
|
|
other legislative and regulatory developments, including those
related to business practices in the insurance industry;
|
|
|
|
changes in the ratings assigned to us or our insurance company
subsidiaries by rating agencies;
|
|
|
|
the availability of dividends from our insurance company
subsidiaries;
|
|
|
|
our ability to attract and retain key personnel and qualified
employees; and
|
|
|
|
other risks detailed from time to time in our filings with the
Commission.
|
We describe some of these risks and uncertainties in greater
detail under the caption Risk Factors below and in
Item 1A of our Annual Report on
Form 10-K
for the year ended December 31, 2010, which is incorporated
herein by reference. These risks and uncertainties could cause
our actual results for the year 2011 and beyond to differ
materially from those expressed in any forward-looking statement
we make. Any projections of growth in our revenues would not
necessarily result in commensurate levels of earnings. Our
future financial performance is dependent upon factors discussed
elsewhere in this prospectus, any related prospectus supplement
and the documents incorporated by reference in this prospectus.
Forward-looking statements speak only as of the date on which
they are made. Except to the extent required by applicable law,
we do not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new
information, future developments or otherwise. For a discussion
of factors that could cause actual results to differ, see
Risk Factors below and the information contained in
our publicly available filings with the Commission. These
filings are described below under the captions Where You
Can Find More Information and Incorporation of
Certain Documents by Reference.
W. R.
BERKLEY CORPORATION
Overview
We are an insurance holding company that is among the largest
commercial lines writers in the United States. Through our
subsidiaries, we presently operate in five segments of the
property casualty insurance business:
|
|
|
|
|
specialty lines of insurance, including excess and surplus
lines, premises operations, professional liability and
commercial automobile;
|
|
|
|
regional commercial property casualty insurance;
|
|
|
|
alternative markets, including workers compensation and
the management of self-insurance programs;
|
|
|
|
reinsurance, including treaty, facultative and Lloyds
business; and
|
|
|
|
international.
|
2
Our decentralized structure provides us with the flexibility to
respond to local or specific market conditions and to pursue
specialty business niches. It also allows us to be closer to our
customers in order to better understand their individual needs
and risk characteristics. Our structure allows us to capitalize
on the benefits of economies of scale through centralized
capital, investment and reinsurance management and actuarial,
financial and corporate legal staff support. Since 2006, we have
formed 21 new operating units to capitalize on various business
opportunities.
Our specialty insurance and reinsurance operations are conducted
throughout the United States, and, on a limited basis, outside
the United States. Regional insurance operations are conducted
primarily in the Midwest, Northeast, Southern (excluding Florida
and Louisiana), Mid Atlantic, and North Pacific regions of the
United States. Alternative markets operations are conducted
throughout the United States. Our international operations are
conducted primarily in the United Kingdom, Continental Europe,
Norway, South America, Australia, Southeast Asia and Canada.
Other
Information
For further information regarding us and our financial
information, you should refer to our recent filings with the
Commission.
We were incorporated in Delaware in 1970 as the successor to a
New Jersey corporation that was incorporated in 1967. Our
principal executive offices are located at 475 Steamboat Road,
Greenwich, Connecticut 06830, and our telephone number is
(203) 629-3000.
W. R.
BERKLEY CAPITAL TRUST III
The trust is a statutory trust created under Delaware law
pursuant to:
|
|
|
|
|
a trust agreement executed by us, as sponsor of the trust, and
the trustees for the trust; and
|
|
|
|
the filing of a certificate of trust with the Delaware Secretary
of State on March 22, 2001.
|
The trust agreement will be amended and restated in its entirety
substantially in the form filed as an exhibit to the
registration statement of which this prospectus forms a part.
The restated trust agreement will be qualified as an indenture
under the Trust Indenture Act of 1939. The trust exists for
the exclusive purposes of:
|
|
|
|
|
issuing and selling the preferred securities and common
securities that represent undivided beneficial interests in the
assets of the trust;
|
|
|
|
using the gross proceeds from the sale of the preferred
securities and common securities to acquire a particular series
of our subordinated debt securities; and
|
|
|
|
engaging in only those other activities necessary or incidental
to the issuance and sale of the preferred securities and common
securities and purchase of our subordinated debt securities.
|
We will indirectly or directly own all of the common securities
of the trust. The common securities of the trust will rank
equally, and payments will be made thereon pro rata, with the
preferred securities of that trust, except that, if an event of
default under the restated trust agreement resulting from an
event of default under our subordinated debt securities held by
the trust has occurred and is continuing, the rights of the
holders of the common securities to payment in respect of
distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of
the preferred securities.
Unless otherwise disclosed in the related prospectus supplement,
the trust has a term of approximately 55 years, but may
dissolve earlier as provided in the restated trust agreement of
the trust. Unless otherwise disclosed in the applicable
prospectus supplement, the trusts business and affairs
will be conducted by the trustees appointed by us, as the direct
or indirect holder of all of the common securities. The holder
of the common securities will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the
trustees of the trust. The duties and obligations of the
trustees of the trust will be governed by the restated trust
agreement of the trust.
3
Unless otherwise disclosed in the related prospectus supplement,
two of the trustees of the trust will be administrative
trustees. The administrative trustees will be persons who are
employees or officers of or affiliated with us. One trustee of
the trust will be the property trustee. The property trustee
will be a financial institution that is not affiliated with us,
that has a minimum amount of combined capital and surplus of not
less than $50,000,000 and that will act as property trustee
under the terms set forth in the applicable prospectus
supplement. The property trustee will also act as indenture
trustee for the purposes of compliance with the provisions of
the Trust Indenture Act. In addition, one trustee of the
trust, which trustee will reside in or have its principal place
of business in the State of Delaware, will be the Delaware
trustee. The Delaware trustee may be the property trustee,
if it otherwise meets the requirements of applicable law. We
will pay all fees and expenses related to the trust and the
offering of preferred securities and common securities.
The principal executive offices for the trust is located at
c/o W.
R. Berkley Corporation, 475 Steamboat Road, Greenwich,
Connecticut 06830. The telephone number of the trust is
(203) 629-3000.
4
RISK
FACTORS
Our businesses face significant risks. If any of
the events or circumstances described as risks below actually
occurs, our businesses, results of operations or financial
condition could be materially and adversely affected. In such
case, the market value of our securities could decline and you
may lose part or all of your investment. You should carefully
consider and evaluate all of the information included or
incorporated in this prospectus and any prospectus supplement
relating to the offering of these securities, including the risk
factors listed below, before deciding whether to invest in our
securities.
Risks
Relating to Our Industry
Our
results may fluctuate as a result of many factors, including
cyclical changes in the insurance and reinsurance
industry.
The results of companies in the property casualty insurance
industry historically have been subject to significant
fluctuations and uncertainties. The demand for insurance is
influenced primarily by general economic conditions, while the
supply of insurance is often directly related to available
capacity or the perceived profitability of the business. Over
the past several years, we have faced increased competition in
our business, including as a result of an increased flow of
capital into the insurance and reinsurance industry, with both
new entrants and existing insurers seeking to gain market share.
This has resulted in decreased premium rates and at times less
favorable contract terms and conditions. The adequacy of premium
rates is affected mainly by the severity and frequency of
claims, which are influenced by many factors, including natural
disasters, regulatory measures and court decisions that define
and expand the extent of coverage and the effects of economic
inflation on the amount of compensation due for injuries or
losses. In addition, investment rates of return may impact rate
adequacy. These factors can have a significant impact on
ultimate profitability because a property casualty insurance
policy is priced before its costs are known, as premiums usually
are determined long before claims are reported. These factors
could produce results that would have a negative impact on our
results of operations and financial condition.
Our
actual claims losses may exceed our reserves for claims, which
may require us to establish additional reserves.
Our gross reserves for losses and loss expenses were
approximately $9 billion as of September 30, 2011. Our
loss reserves reflect our best estimates of the cost of settling
claims and related expenses with respect to insured events that
have occurred.
Reserves do not represent an exact calculation of liability.
Rather, reserves represent an estimate of what management
expects the ultimate settlement and claims administration will
cost for claims that have occurred, whether known or unknown.
The major assumptions about anticipated loss emergence patterns
are subject to unanticipated fluctuation. These estimates, which
generally involve actuarial projections, are based on
managements assessment of facts and circumstances then
known, as well as estimates of future trends in claims severity
and frequency, inflation, judicial theories of liability,
reinsurance coverage, legislative changes and other factors,
including the actions of third parties which are beyond our
control.
The inherent uncertainties of estimating reserves are greater
for certain types of liabilities, where long periods of time
elapse before a definitive determination of liability is made
and settlement is reached. In periods with increased economic
volatility, such as under the current financial market
conditions, it becomes more difficult to accurately predict
claim costs. It is especially difficult to estimate the impact
of inflation on loss reserves given the current economic
environment and related government actions. Reserve estimates
are continually refined in an ongoing process as experience
develops and further claims are reported and settled.
Adjustments to reserves are reflected in the results of the
periods in which such estimates are changed. Because setting
reserves is inherently uncertain, we cannot assure that our
current reserves will prove adequate in light of subsequent
events. Should we need to increase our reserves, our pre-tax
income for the period would decrease by a corresponding amount.
We decreased our estimates for claims occurring in prior years
by $142 million in the first nine months of 2011,
$253 million in 2010, $234 million in 2009,
$196 million in 2008 and $106 million in 2007, and
increased our estimates by $27 million in 2006. We, along
with the property casualty insurance industry in general, have
5
experienced higher than expected losses for certain types of
business written from 1999 to 2002. Although our reserves
reflect our best estimate of the costs of settling claims, we
cannot assure you that our claim estimates will not need to be
increased in the future.
We discount our reserves for excess and assumed workers
compensation business because of the long period of time over
which losses are paid. Discounting is intended to appropriately
match losses and loss expenses to income earned on investment
securities supporting liabilities. The expected loss and loss
expense payout pattern subject to discounting is derived from
our loss payout experience. Changes in the loss and loss expense
payout pattern are recorded in the period they are determined.
If the actual loss payout pattern is shorter than anticipated,
the discount will be reduced and pre-tax income will decrease by
a corresponding amount.
As a
property casualty insurer, we face losses from natural and
man-made catastrophes.
Property casualty insurers are subject to claims arising out of
catastrophes that may have a significant effect on their results
of operations, liquidity and financial condition. Catastrophe
losses have had a significant impact on our results. For
example, weather-related losses were $139 million in the
first nine months of 2011, $81 million in 2010,
$63 million in 2009, $114 million in 2008,
$34 million in 2007 and $39 million in 2006.
Catastrophes can be caused by various events, including
hurricanes, windstorms, earthquakes, hailstorms, explosions,
severe winter weather and fires, as well as terrorist
activities. The incidence and severity of catastrophes are
inherently unpredictable but have increased in recent years. The
extent of losses from a catastrophe is a function of both the
total amount of insured exposure in the area affected by the
event and the severity of the event. Some catastrophes are
restricted to small geographic areas; however, hurricanes and
earthquakes may produce significant damage in large, heavily
populated areas. Catastrophes can cause losses in a variety of
our property and casualty lines, and most of our past
catastrophe-related claims have resulted from severe storms.
Seasonal weather variations or the impact of climate change may
affect the severity and frequency of our losses. Insurance
companies are not permitted to reserve for a catastrophe until
it has occurred. It is therefore possible that a catastrophic
event or multiple catastrophic events could produce significant
losses and have a material adverse effect on our results of
operations and financial condition.
We
face significant competitive pressures in our businesses, which
have reduced premium rates and could harm our ability to
maintain or increase our profitability and premium
volume.
We compete with a large number of other companies in our
selected lines of business. We compete, and will continue to
compete, with major U.S. and
non-U.S. insurers
and reinsurers, other regional companies, as well as mutual
companies, specialty insurance companies, underwriting agencies
and diversified financial services companies, some of which have
implicit or explicit government support. Competitiveness in our
businesses is based on many factors, including premium charges,
ratings assigned by independent rating agencies, commissions
paid to producers, the perceived financial strength of the
company, other terms and conditions offered, services provided
(including ease of doing business over the internet), speed of
claims payment and reputation and experience in the lines to be
written.
Some of our competitors, particularly in the reinsurance
business, have greater financial and marketing resources than we
do. These competitors within the reinsurance segment include
Swiss Re, Munich Re, Berkshire Hathaway, Transatlantic
Reinsurance, and Partner Re. We expect that perceived financial
strength, in particular, will become more important as customers
seek high quality reinsurers. Certain of our competitors operate
from Bermuda or other tax advantaged or less regulated
jurisdictions that may provide them with additional competitive
and pricing advantages.
Over the past several years, we have faced increased competition
in our business, particularly in our reinsurance and specialty
segments, as increased supply has led to reduced prices and, at
times, less favorable terms and conditions. Our specialty
segment has encountered increased competition from admitted
companies seeking to increase market share. We expect to
continue to face strong competition in these and our other lines
of business and may continue to experience reduced pricing and
weaker terms and conditions.
6
This intense competition could cause the supply and/or demand
for insurance or reinsurance to change, which could affect our
ability to price our products at attractive rates and retain
existing business or write new products at adequate rates or on
acceptable terms and conditions. If we are unable to retain
existing business or write new business at adequate rates and on
acceptable terms and conditions, our results of operations could
be materially and adversely affected.
Conditions
in the financial markets and the effect of the economic downturn
have had and may continue to have a negative impact on our
results of operations and financial condition, particularly if
such conditions continue.
The significant volatility and uncertainty experienced in
financial markets around the world during the past several years
and the effect of the economic downturn have continued. Although
the U.S. and various foreign governments have taken various
actions to try to stabilize the financial markets, the ultimate
effectiveness of such actions remains unclear. Therefore,
volatility and uncertainty in the financial markets and the
resulting negative economic impact may continue for some time.
While we monitor conditions in the financial markets, we cannot
predict future conditions or their impact on our results of
operations and financial condition. Depending on conditions in
the financial markets, we could incur additional realized and
unrealized losses in our investment portfolio in future periods,
and financial market volatility and uncertainty and an economic
downturn could have a significant negative impact on third
parties that we do business with, including insureds and
reinsurers.
We, as
a primary insurer, may have significant exposure for terrorist
acts.
To the extent an act of terrorism, whether a domestic or foreign
act, is certified by the Secretary of Treasury, we may be
covered under the Terrorism Risk Insurance Act of 2002, as
amended on December 22, 2005 and further amended on
December 26, 2007 (TRIA), for up to 85% of our
losses for certain property/casualty lines of insurance.
However, any such coverage would be subject to a mandatory
deductible based on 20% of earned premium for the prior year for
the covered lines of commercial property and casualty insurance.
Based on our 2010 earned premiums, our deductible under TRIA
during 2011 is approximately $503 million. TRIA is in
effect through December 31, 2014 unless extended or
replaced by a similar program. The coverage provided under TRIA
does not apply to reinsurance that we write.
Our
earnings could be more volatile because of our significant level
of retentions.
As compared to a number of our competitors, we maintain
significant retention levels in premiums written. We purchase
less reinsurance, the process by which we transfer, or cede,
part of the risk we have assumed to a reinsurance company,
thereby retaining more risk. As a result, our earnings could be
more volatile and increased severities are more likely to have a
material adverse effect on our results of operations and
financial condition.
We are
subject to extensive governmental regulation, which increases
our costs and could restrict the conduct of our
business.
We are subject to extensive governmental regulation and
supervision. Most insurance regulations are designed to protect
the interests of policyholders rather than stockholders and
other investors. This system of regulation, generally
administered by a department of insurance in each state in which
we do business, relates to, among other things:
|
|
|
|
|
standards of solvency, including risk-based capital measurements;
|
|
|
|
restrictions on the nature, quality and concentration of
investments;
|
|
|
|
requiring certain methods of accounting;
|
|
|
|
rate and form regulation pertaining to certain of our insurance
businesses; and
|
|
|
|
potential assessments for the provision of funds necessary for
the settlement of covered claims under certain policies provided
by impaired, insolvent or failed insurance companies.
|
7
State insurance departments conduct periodic examinations of the
affairs of insurance companies and require the filing of annual
and other reports relating to the financial condition of
insurance companies, holding company issues and other matters.
Federal financial services modernization legislation and
legislative and regulatory initiatives taken or which may be
taken in response to the current conditions in the financial
markets and the ongoing economic downturn may lead to additional
federal regulation of the insurance industry in the coming years.
On July 21, 2010, President Obama signed into law the Dodd
Frank Wall Street Reform and Consumer Protection Act (the
Dodd-Frank Act) which effects sweeping changes to
financial services regulation in the United States. The
Dodd-Frank Act establishes the Financial Services Oversight
Council (FSOC) which is authorized to recommend that
certain systemically significant non-bank financial companies,
including insurance companies, be regulated by the Board of
Governors of the Federal Reserve. The Dodd-Frank Act also
establishes a Federal Insurance Office (FIO) and
authorizes the federal preemption of certain state insurance
laws. FSOC and the FIO are authorized to study, monitor and
report to Congress on the U.S. insurance industry and the
significance of global reinsurance to the U.S. insurance
market. The potential impact of the Dodd-Frank Act on the
U.S. insurance business is not clear, however, our business
could be affected by changes to the U.S. system of
insurance regulation or our designation or the designation of
insurers or reinsurers with which we do business as systemically
significant non-bank financial companies.
Although U.S. state regulation is the primary form of
regulation of insurance and reinsurance, in addition to the
changes brought about by the Dodd-Frank Act, Congress has
considered over the past years various proposals relating to the
creation of an optional federal charter, repeal of the insurance
company antitrust exemption from the McCarran Ferguson Act, and
tax law changes. We may be subject to potentially increased
federal oversight as a financial institution. Also, foreign
governments regulate our international operations.
With respect to international measures, an EU directive
concerning the capital adequacy, risk management and regulatory
reporting for insurers and reinsurers (Solvency II)
which was adopted by the European Parliament in April 2009, may
affect our insurance businesses. Solvency II is expected to
apply to insurers beginning in early 2014. Implementation of
Solvency II may require us to utilize a significant amount
of resources to ensure compliance. In addition, Solvency II
may have the effect of increasing the capital requirements of
our EU domiciled insurers. Solvency II provides for the
supervision of group solvency. Our capital requirements may be
adversely affected if the EU Commission finds that the insurance
regimes of our third-country domiciled companies are not
equivalent to the requirements of Solvency II.
We may be unable to maintain all required licenses and approvals
and our business may not fully comply with the wide variety of
applicable laws and regulations or the relevant authoritys
interpretation of the laws and regulations. Also, some
regulatory authorities have relatively broad discretion to
grant, renew or revoke licenses and approvals. If we do not have
the requisite licenses and approvals or do not comply with
applicable regulatory requirements, the insurance regulatory
authorities could preclude or temporarily suspend us from
carrying on some or all of our activities or monetarily penalize
us. Also, changes in the level of regulation of the insurance
industry, whether federal, state or foreign, or changes in laws
or regulations themselves or interpretations by regulatory
authorities, restrict the conduct of our business.
In certain of our insurance businesses, the rates we charge our
policyholders are subject to regulatory approval. Certain lines
of business are subject to a greater degree of regulatory
scrutiny than others. For example, the workers
compensation business is highly regulated. For the nine months
ended September 30, 2011, approximately 17% of our net
premiums written represented primary workers compensation
business. Over the past several years, rates for primary
workers compensation business written in the State of
California have declined significantly as a result of
workers compensation reform. Of our net premiums written
during the first nine months of 2011, approximately 2%
represented primary workers compensation business written
in the State of California.
8
Risks
Relating to Our Business
We
cannot guarantee that our reinsurers will pay in a timely
fashion, if at all, and, as a result, we could experience
losses.
We purchase reinsurance by transferring part of the risk that we
have assumed, known as ceding, to a reinsurance company in
exchange for part of the premium we receive in connection with
the risk. Although reinsurance makes the reinsurer contractually
liable to us to the extent the risk is transferred or ceded to
the reinsurer, it does not relieve us, the reinsured, of our
liability to our policyholders. Our reinsurers may not pay the
reinsurance recoverables that they owe to us or they may not pay
such recoverables on a timely basis. Accordingly, we bear credit
risk with respect to our reinsurers, and if our reinsurers fail
to pay us, our financial results would be adversely affected.
Underwriting results and investment returns of some of our
reinsurers may affect their future ability to pay claims. As of
September 30, 2011, the amount due from our reinsurers was
approximately $1,187 million, including amounts due from
state funds and industry pools where it was intended that we
would bear no risk. Certain of these amounts due from reinsurers
are secured by letters of credit or by funds held in trust on
our behalf.
We are
rated by A.M. Best, Standard & Poors, and
Moodys, and a decline in these ratings could affect our
standing in the insurance industry and cause our sales and
earnings to decrease.
Ratings have become an increasingly important factor in
establishing the competitive position of insurance companies.
Certain of our insurance company subsidiaries are rated by
A.M. Best, Standard & Poors and
Moodys Investors Services. While A.M. Best,
Standard & Poors and Moodys ratings
reflect their opinions as to a companys financial
strength, operating performance, strategic position and ability
to meet its obligations to policyholders, they are not
evaluations directed to investors and are not recommendations to
buy, sell or hold our securities. Our ratings are subject to
periodic review, and we cannot assure you that we will be able
to retain those ratings.
Twenty-six of our twenty-seven insurance company subsidiaries
rated by A.M. Best Company, Inc.
(A.M. Best) have ratings of A+ (Superior) (the
second highest rating out of fifteen possible ratings), and one
is rated A (Excellent) (the third highest rating). Twenty-two of
our twenty-three insurance company subsidiaries rated by
Standard & Poors (S&P) have
financial strength ratings of A+ (Strong) (the seventh highest
rating out of twenty-seven possible ratings), and one is rated A
(Strong) (the eighth highest rating). Our Moodys ratings
are A2 for Berkley Insurance Company, Berkley Regional Insurance
Company and Admiral Insurance Company (the sixth highest rating
out of twenty-one possible ratings).
If our ratings are reduced from their current levels by
A.M. Best, Standard & Poors or
Moodys, our competitive position in the insurance industry
could suffer and it would be more difficult for us to market our
products. A significant downgrade could result in a substantial
loss of business as policyholders move to other companies with
higher claims-paying and financial strength ratings.
If
market conditions cause reinsurance to be more costly or
unavailable, we may be required to bear increased risks or
reduce the level of our underwriting commitments.
As part of our overall risk and capacity management strategy, we
purchase reinsurance for certain amounts of risk underwritten by
our insurance company subsidiaries, especially catastrophe
risks. We also purchase reinsurance on risks underwritten by
others which we reinsure. Market conditions beyond our control
determine the availability and cost of the reinsurance
protection we seek to purchase, which may affect the level of
our business and profitability. Our reinsurance contracts are
generally subject to annual renewal. We may be unable to
maintain our current reinsurance contracts or to obtain other
reinsurance contracts in adequate amounts and at favorable
rates. In addition, we may be unable to obtain reinsurance on
terms acceptable to us relating to certain lines of business
that we intend to begin writing. If we are unable to renew our
expiring contracts or to obtain new reinsurance contracts,
either our net exposures would increase or, if we are unwilling
to bear an increase in net exposures, we would have to reduce
the level of our underwriting commitments, especially
catastrophe exposed risks.
9
Depending
on conditions in the financial markets and the economic
downturn, we may be unable to raise debt or equity capital if
needed.
If the current conditions in the financial markets and the
economic downturn continue, we may be unable to access debt or
equity capital on acceptable terms if needed, which could have a
negative impact on our ability to invest in our insurance
company subsidiaries
and/or to
take advantage of opportunities to expand our business, such as
possible acquisitions and new ventures.
Our
international operations expose us to investment, political and
economic risks, including foreign currency and credit
risk.
Our expanding international operations in the United Kingdom,
Continental Europe, Norway, South America, Australia, Southeast
Asia and Canada expose us to investment, political and economic
risks, including foreign currency and credit risk. Changes in
the value of the U.S. dollar relative to other currencies
could have an adverse effect on our results of operations and
financial condition.
Our investments in
non-U.S.-denominated
securities are subject to fluctuations in
non-U.S. securities
and currency markets, and those markets can be volatile.
Non-U.S. currency
fluctuations also affect the value of any dividends paid by our
non-U.S. subsidiaries
to their parent companies in the U.S.
We may
not find suitable acquisition candidates or new insurance
ventures and even if we do, we may not successfully integrate
any such acquired companies or successfully invest in such
ventures.
As part of our present strategy, we continue to evaluate
possible acquisition transactions and the
start-up of
complementary businesses on an ongoing basis, and at any given
time we may be engaged in discussions with respect to possible
acquisitions and new ventures. We cannot assure you that we will
be able to identify suitable acquisition transactions or
insurance ventures, that such transactions will be financed and
completed on acceptable terms or that our future acquisitions or
start-up
ventures will be successful. The process of integrating any
companies we do acquire or investing in new ventures may have a
material adverse effect on our results of operations and
financial condition.
We may
be unable to attract and retain key personnel and qualified
employees.
We depend on our ability to attract and retain key personnel,
including our Chairman and CEO, COO, senior executive officers,
presidents of our operating units, experienced underwriters and
other skilled employees who are knowledgeable about our
business. If the quality of our underwriting team and other
personnel decreases, we may be unable to maintain our current
competitive position in the specialized markets in which we
operate, and be unable to expand our operations into new markets.
Risks
Relating to Our Investments
A
significant amount of our assets is invested in fixed maturity
securities and is subject to market fluctuations.
Our investment portfolio consists substantially of fixed
maturity securities. As of September 30, 2011, our
investment in fixed maturity securities was approximately
$11 billion, or 84% of our total investment portfolio. As
of that date, our portfolio of fixed maturity securities
consisted of the following types of securities:
U.S. Government securities (9%); state and municipal
securities (48%); corporate securities (24%); mortgage-backed
securities (14%) and foreign government bonds (5%).
The fair value of these assets and the investment income from
these assets fluctuate depending on general economic and market
conditions. The fair value of fixed maturity securities
generally decreases as interest rates rise. Conversely, if
interest rates decline, investment income earned from future
investments in fixed maturity securities will be lower. In
addition, some fixed maturity securities, such as
mortgage-backed and other asset-backed securities, carry
prepayment risk as a result of interest rate fluctuations.
10
The value of investments in fixed maturity securities is subject
to impairment as a result of deterioration in the credit
worthiness of the issuer, default by the issuer (including
states and municipalities) in the performance of its obligations
in respect of the securities
and/or
increases in market interest rates. To a large degree, the
credit risk we face is a function of the economy; accordingly,
we face a greater risk in an economic downturn or recession.
Although the historical rates of default on state and municipal
securities have been relatively low, our state and municipal
fixed maturity securities could be subject to a higher risk of
default or impairment due to declining municipal tax bases and
revenue. The economic downturn has resulted in many states and
municipalities operating under deficits or projected deficits,
the severity and duration of which could have an adverse impact
on both the valuation of our state and municipal fixed maturity
securities and the issuers ability to perform its
obligations thereunder. Additionally, our investments are
subject to losses as a result of a general decrease in
commercial and economic activity for an industry sector in which
we invest, as well as risks inherent in particular securities.
Although we attempt to manage these risks through the use of
investment guidelines and other oversight mechanisms and by
diversifying our portfolio and emphasizing preservation of
principal, our efforts may not be successful. Impairments,
defaults
and/or rate
increases could reduce our net investment income and net
realized investment gains or result in investment losses.
Investment returns are currently, and will likely continue to
remain, under pressure due to the significant volatility
currently experienced in the financial markets, economic
uncertainty, more generally, and the shape of the yield curve.
As a result, our exposure to the risks described above could
materially and adversely affect our results of operations.
We
invest some of our assets in equity securities, merger arbitrage
securities, investment funds, private equity and real estate
related assets, which may decline in value.
We invest a portion of our investment portfolio in equity
securities, merger arbitrage securities, investment funds,
private equity and real estate related assets. At
September 30, 2011, our investment in these assets was
approximately $2 billion, or 16%, of our investment
portfolio. We reported provisions for other than temporary
impairments in the value of these assets of approximately
$400,000 during the first nine months of 2011, $9 million
in 2010, $63 million in 2009 and $427 million in 2008,
and losses from investment funds of none during the first nine
months of 2011, $8 million in 2010, $174 million in
2009 and $4 million in 2008.
Merger and arbitrage trading securities were $384 million,
or 3%, of our investment portfolio at September 30, 2011.
Merger arbitrage involves investing in the securities of
publicly held companies that are the targets in announced tender
offers and mergers. Merger arbitrage differs from other types of
investments in its focus on transactions and events believed
likely to bring about a change in value over a relatively short
time period, usually four months or less. Our merger arbitrage
positions are exposed to the risk associated with the completion
of announced deals, which are subject to regulatory as well as
political and other risks.
Investments in real estate, publicly traded real estate
investment trusts, real estate investment funds and limited
partnerships and loans receivable were $963 million, or 7%,
of our investment portfolio at September 30, 2011. The
values of our real estate related investments are subject to
fluctuations based on changes in the economy in general and real
estate valuations in particular. These investments have been
subject to significant volatility as a result of the current
conditions in the financial markets. In addition, our
investments in real estate related assets are less liquid than
our other investments.
Risks
Relating to Purchasing Our Securities
We are
an insurance holding company and, therefore, may not be able to
receive dividends in needed amounts.
As an insurance holding company, our principal assets are the
shares of capital stock of our insurance company subsidiaries.
We have to rely on dividends from our insurance company
subsidiaries to meet our obligations for paying principal and
interest on outstanding debt obligations and for paying
dividends to stockholders and corporate expenses. The payment of
dividends by our insurance company subsidiaries is subject to
regulatory restrictions and will depend on the surplus and
future earnings of these subsidiaries, as well as regulatory
restrictions. As a result, in the future we may not be able to
receive dividends from these subsidiaries at times and in
amounts necessary to meet our obligations or pay dividends.
During 2011, the maximum amount of dividends that can be paid
without
11
regulatory approval is approximately $490 million. As of
September 30, 2011, our insurance company subsidiaries have
paid us approximately $483 million of dividends, leaving
approximately $7 million of such dividends that are
permitted to be paid during 2011 without regulatory approval.
We are
subject to certain provisions that may have the effect of
hindering, delaying or preventing third party takeovers, which
may prevent our stockholders from receiving premium prices for
their shares in an unsolicited takeover and make it more
difficult for third parties to replace our current
management.
Provisions of our Restated Certificate of Incorporation, as
amended (Certificate of Incorporation), and Amended
and Restated By-Laws (By-Laws), as well as state
insurance statutes, may hinder, delay or prevent unsolicited
acquisitions or changes of our control. These provisions may
also have the effect of making it more difficult for third
parties to cause the replacement of our current management
without the concurrence of our board of directors.
These provisions include:
|
|
|
|
|
our classified board of directors and the ability of our board
to increase its size and to appoint directors to fill newly
created directorships;
|
|
|
|
the requirement that 80% of our stockholders must approve
mergers and other transactions between us and the holder of 5%
or more of our shares, unless the transaction was approved by
our board of directors prior to such holders acquisition
of 5% of our shares;
|
|
|
|
the need for advance notice in order to raise business or make
nominations at stockholders meetings; and
|
|
|
|
state insurance statutes that restrict the acquisition of
control (generally defined as 10% of the outstanding shares,
though 5% in Alabama and certain other jurisdictions) of an
insurance company without regulatory approval.
|
12
USE OF
PROCEEDS
Unless the applicable prospectus supplement states otherwise, we
will use the net proceeds from the sale of offered securities
for working capital, capital expenditures, acquisitions, stock
repurchases and other general corporate purposes. The trust will
invest all proceeds received from the sale of its preferred
securities and common securities in a particular series of our
subordinated debt securities. Until we use the net proceeds in
the manner described above, we may temporarily use them to make
short-term investments or reduce short-term borrowings.
RATIO OF
EARNINGS TO FIXED CHARGES
The following table shows our ratio of earnings to fixed charges
for the periods indicated. For purposes of the computation of
ratio of earnings to fixed charges, earnings consist of income
before income taxes, preferred dividends, change in accounting
and extraordinary items plus fixed charges. Fixed charges
consist of interest expense, capitalized interest, amortization
of financing costs and one-third of minimum rental payments
under operating leases. The trust had no operations during the
periods set forth below and no preferred stock dividends were
paid during such periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
Year Ended December 31,
|
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
Ratio of Earnings to Fixed Charges
|
|
|
5.0
|
|
|
|
6.2
|
|
|
|
4.9
|
|
|
|
4.5
|
|
|
|
12.3
|
|
|
|
11.0
|
|
13
GENERAL
DESCRIPTION OF THE OFFERED SECURITIES
We may from time to time offer under this prospectus, separately
or together:
|
|
|
|
|
common stock;
|
|
|
|
preferred stock, which may be represented by depositary shares
as described below;
|
|
|
|
unsecured senior or subordinated debt securities;
|
|
|
|
warrants to purchase common stock,
|
|
|
|
warrants to purchase preferred stock;
|
|
|
|
warrants to purchase debt securities;
|
|
|
|
stock purchase contracts; and
|
|
|
|
stock purchase units, each representing ownership of a stock
purchase contract and, as security for the holders
obligation to purchase common stock or preferred stock under the
stock purchase contract, any of our debt securities,
U.S. Treasury securities, or preferred securities of the
Trust.
|
The trust may offer preferred securities representing undivided
beneficial interests in its assets, which will be fully and
unconditionally guaranteed to the extent described in this
prospectus by us.
DESCRIPTION
OF OUR CAPITAL STOCK
Authorized
and Outstanding Capital Stock
Pursuant to our Certificate of Incorporation, our authorized
capital stock is 505,000,000 shares, consisting of:
|
|
|
|
|
5,000,000 shares of preferred stock, par value $.10 per
share, of which 40,000 shares were designated as
Series A Junior Participating Preferred Stock; and
|
|
|
|
500,000,000 shares of common stock, par value $.20 per
share.
|
As of November 1, 2011, we had 137,102,059 outstanding
shares of common stock, which excludes unissued shares reserved
under various employee compensation plans and shares held by
certain of our subsidiaries. No shares of preferred stock are
currently outstanding.
No holders of any class of our capital stock are entitled to
preemptive rights.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in
the order listed above. Our board of directors is empowered,
without approval of our stockholders, to cause the preferred
stock to be issued in one or more series, with the numbers of
shares of each series and the rights, preferences and
limitations of each series to be determined by it. The specific
matters that may be determined by our board of directors include
the dividend rights, voting rights, redemption rights,
liquidation preferences, if any, conversion and exchange rights,
retirement and sinking fund provisions and other rights,
qualifications, limitations and restrictions of any wholly
unissued series of preferred stock, the number of shares
constituting that series and the terms and conditions of the
issue of the shares.
The following is a summary of the material provisions and
features of our Certificate of Incorporation and our By-Laws.
You should refer to our Certificate of Incorporation and our
By-Laws for complete information regarding the provisions of our
Certificate of Incorporation and our By-Laws, including the
definitions of some of the terms used below. Copies of our
Certificate of Incorporation and our By-Laws are incorporated by
reference as exhibits to the registration statement of which
this prospectus forms a part. Whenever particular sections or
defined terms of our Certificate of Incorporation and our
By-Laws are referred to, such sections or defined terms are
incorporated herein by reference, and the statement in
connection with which such reference is made is qualified in its
entirety by such reference.
14
Common
Stock
Subject to any preferential rights of any preferred stock
created by our board of directors, each outstanding share of our
common stock is entitled to such dividends as our board of
directors may declare from time to time out of funds that we can
legally use to pay dividends. The holders of common stock
possess exclusive voting rights, except to the extent our board
of directors specifies voting power with respect to any
preferred stock that is issued.
Each holder of our common stock is entitled to one vote for each
share of common stock and does not have any right to cumulate
votes in the election of directors. In the event of liquidation,
dissolution or
winding-up
of W. R. Berkley, holders of our common stock will be entitled
to receive on a pro-rata basis any assets remaining after
provision for payment of creditors and after payment of any
liquidation preferences to holders of preferred stock, if any.
The transfer agent and registrar for our common stock is Wells
Fargo Bank, N.A.
Our common stock is listed on the New York Stock Exchange under
the symbol WRB. All shares of our common stock
currently issued and outstanding are fully paid and
nonassessable. Shares of our common stock offered by a
prospectus supplement, upon issuance against full consideration,
will be fully paid and nonassessable. A more detailed
description of our common stock is set forth in our registration
statement filed under the Exchange Act on
Form 8-A/A
on May 1, 2001, including any further amendment or report
for the purpose of updating such description.
Preferred
Stock
The particular terms of any series of preferred stock will be
set forth in the prospectus supplement relating to the offering.
The rights, preferences, privileges and restrictions, including
dividend rights, voting rights, terms of redemption, retirement
and sinking fund provisions and liquidation preferences, if any,
of the preferred stock of each series will be fixed or
designated pursuant to a certificate of designation adopted by
our board of directors or a duly authorized committee of our
board of directors. The terms, if any, on which shares of any
series of preferred stock are convertible or exchangeable into
common stock will also be set forth in the prospectus supplement
relating to the offering. These terms may include provisions for
conversion or exchange, either mandatory, at the option of the
holder, or at our option, in which case the number of shares of
common stock to be received by the holders of preferred stock
would be calculated as of a time and in the manner stated in the
applicable prospectus supplement. The description of the terms
of a particular series of preferred stock that will be set forth
in the applicable prospectus supplement does not purport to be
complete and is qualified in its entirety by reference to the
certificate of designation relating to such series.
Provisions
of Our Certificate of Incorporation and By-Laws
Provisions of our Certificate of Incorporation and By-Laws may
delay or make more difficult unsolicited acquisitions or changes
of our control. We believe that these provisions will enable us
to develop our business in a manner that will foster long-term
growth without disruption caused by the threat of a takeover not
thought by our board of directors to be in our best interests
and the best interests of our stockholders.
Those provisions could have the effect of discouraging third
parties from making proposals involving an unsolicited
acquisition or change of control of W. R. Berkley, although the
proposals, if made, might be considered desirable by a majority
of our stockholders. Those provisions may also have the effect
of making it more difficult for third parties to cause the
replacement of our current management without the concurrence of
our board of directors.
These provisions include:
|
|
|
|
|
the establishment of a classified board of directors and the
ability of our board to increase its size and to appoint
directors to fill newly created directorships;
|
|
|
|
the requirement that 80% of our stockholders entitled to vote in
the election of directors approve certain transactions between
us and certain of our stockholders, including the merger of W.
R. Berkley into such
|
15
|
|
|
|
|
certain stockholder, our disposition of substantial assets to
such certain stockholder or our exchange of voting securities
with such certain stockholder for the sale or lease to us of
securities or assets of such certain stockholder;
|
|
|
|
|
|
the need for advance notice in order to raise business or make
nominations at stockholders meetings; and
|
|
|
|
the availability of capital stock for issuance from time to time
at the discretion of our board of directors (see
Authorized and Outstanding Capital Stock
and Preferred Stock).
|
See Restrictions on Ownership Under Insurance
Laws, and Delaware General Corporation
Law for other provisions applicable to us that may
discourage takeovers.
Classified
Board of Directors; Number of Directors; Filling of
Vacancies
Our Certificate of Incorporation and By-Laws provide for a board
of directors divided into three classes, with one class being
elected each year to serve for a three-year term. As a result,
at least two annual meetings of stockholders may be required for
stockholders to change a majority of our board of directors. Our
Certificate of Incorporation and By-Laws also provide that newly
created directorships resulting from any increase in the
authorized number of up to 15 directors, or any vacancy,
may be filled by a vote of a majority of directors then in
office. Accordingly, our board of directors may be able to
prevent any stockholder from obtaining majority representation
on the board of directors by increasing the size of the board
and filling the newly created directorships with its own
nominees. Directors may be removed at any time for cause by the
majority vote of the directors then in office. Additionally,
directors may be removed with or without cause by the vote or
consent of 80% of our stockholders entitled to vote in the
election of directors.
Stockholder
Approval of Certain Transactions Effecting a Change of
Control
The affirmative vote or consent of 80% of our stockholders
entitled to vote in the election of directors is required to
authorize any of the following transactions:
|
|
|
|
|
our merger or consolidation into any other corporation;
|
|
|
|
the sale, lease, exchange, mortgage or other disposition of all
or any substantial part of our assets to any other corporation,
person or other entity; or
|
|
|
|
the sale or lease by any other corporation, person or entity to
us or any of our subsidiaries of any securities or assets,
except assets having an aggregate fair market value of less than
$4,000,000, in exchange for our or any of our subsidiaries
voting securities, including securities convertible into voting
securities or options and warrants or rights to purchase voting
securities;
|
if such corporation, person or entity is, or has been at any
time within the preceding two years, the beneficial owner of 5%
or more of the outstanding shares of our stock entitled to vote
in the elections of directors. These transactions do not require
an 80% stockholder vote if (a) our board of directors
approved a memorandum of understanding with the other
corporation prior to the time the other corporation became a
beneficial owner of 5% or more of the outstanding shares of our
stock entitled to vote in the elections of directors or
(b) a majority of the outstanding shares of all classes of
stock entitled to vote in elections of directors of the target
corporation is owned by us.
Advance
Notice for Raising Business or Making Nominations at
Meetings
Our By-Laws establish an advance notice procedure for
stockholder proposals to be brought before an annual or special
meeting of stockholders and for nominations by stockholders of
candidates for election as directors at an annual or special
meeting at which directors are to be elected. Only such business
may be conducted at a special meeting of stockholders as has
been specified in our notice to stockholders of such meeting,
which notice will be given not less than 10 nor more than
60 days before the date of the meeting. Only such business
may be conducted at an annual meeting of stockholders as has
been brought before the meeting by, or at the direction of, the
board of directors, or by a stockholder who has given to the
secretary of W. R. Berkley timely written notice, in proper
form, of the stockholders intention to bring that business
before the meeting. The Chairman of the meeting will have the
16
authority to make all determinations with respect to these
matters. Only persons who are nominated by, or at the direction
of, the board of directors, or who are nominated by a
stockholder who has given timely written notice, in proper form,
to the secretary prior to a meeting at which directors are to be
elected will be eligible for election as directors.
To be timely, notice of business to be brought before an annual
meeting or nominations of candidates for election as directors
at an annual meeting is required to be received by the secretary
of W. R. Berkley not less than 60 days nor more than
90 days in advance of the anniversary date of the
immediately preceding annual meeting. In the event that the date
of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered not
earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of the
sixtieth day prior to such annual meeting or the tenth day
following the day on which public announcement of the date of
such meeting is first made.
Similarly, notice of nominations to be brought before a special
meeting of stockholders for the election of directors is
required to be delivered to the secretary not earlier than the
ninetieth day prior to such special meeting and not later than
the close of business on the later of the sixtieth day prior to
such special meeting or the tenth day following the day on which
public announcement of the date of such meeting is first made.
The notice of any nomination for election as a director is
required to set forth:
|
|
|
|
|
as to each person whom the stockholder proposes to nominate for
election or reelection as a director, all information relating
to such person that is required to be disclosed in solicitations
of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Exchange
Act, or any successor rule or regulation; and
|
|
|
|
as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination is made
(1) the name and address of such stockholder, as they
appear on our books, and of such beneficial owner, and
(2) the class and number of our shares which are owned
beneficially and of record by such stockholder and such
beneficial owner.
|
Restrictions
on Ownership Under Insurance Laws
Although our Certificate of Incorporation and By-Laws do not
contain any provision restricting ownership as a result of the
application of various state insurance laws, these laws will be
a significant deterrent to any person interested in acquiring
our control. The insurance holding company laws of each of the
jurisdictions in which our insurance subsidiaries are
incorporated or commercially domiciled, as well as state
corporation laws, govern any acquisition of control of our
insurance subsidiaries or of us. In general, these laws provide
that no person or entity may directly or indirectly acquire
control of an insurance company unless that person or entity has
received the prior approval of the insurance regulatory
authorities. An acquisition of control generally would be
presumed in the case of any person or entity who purchases 10%
or more of our outstanding common stock, unless the applicable
insurance regulatory authorities determine otherwise. Under
Alabama law, which is applicable to us due to our ownership of
American Mining Insurance Company, Inc., an Alabama-domiciled
insurance company, the acquisition of more than 5% of our
capital stock is subject to prior regulatory approval.
Delaware
General Corporation Law
The terms of Section 203 of the Delaware General
Corporation Law apply to us since we are a Delaware corporation
and our Certificate of Incorporation does not exclude us from
the restrictions imposed thereunder. Pursuant to
Section 203, with certain exceptions, a Delaware
corporation may not engage in any of a broad range of business
combinations, such as mergers, consolidations and sales of
assets, with an interested stockholder, as defined
below, for a period of three years from the date that such
person became an interested stockholder unless:
|
|
|
|
|
the transaction that results in a persons becoming an
interested stockholder or the business combination is approved
by the board of directors of the corporation before the person
becomes an interested stockholder;
|
17
|
|
|
|
|
upon consummation of the transaction which results in the
stockholder becoming an interested stockholder, the interested
stockholder owns 85% or more of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding shares owned by persons who are directors and also
officers and shares owned by certain employee stock
plans; or
|
|
|
|
on or after the time the person becomes an interested
stockholder, the business combination is approved by the
corporations board of directors and by holders of at least
two-thirds of the corporations outstanding voting stock,
excluding shares owned by the interested stockholder, at a
meeting of stockholders.
|
Under Section 203, an interested stockholder is
defined as any person, other than the corporation and any direct
or indirect majority-owned subsidiary, that is:
|
|
|
|
|
the owner of 15% or more of the outstanding voting stock of the
corporation; or
|
|
|
|
an affiliate or associate of the corporation and was the owner
of 15% or more of the outstanding voting stock of the
corporation at any time within the three-year period immediately
prior to the date on which it is sought to be determined whether
such person is an interested stockholder.
|
Under certain circumstances, Section 203 makes it more
difficult for a person who would be an interested stockholder to
effect various business combinations with a corporation for a
three-year period, although the stockholders may elect to
exclude a corporation from the restrictions imposed thereunder.
The provisions of Section 203 may encourage companies
interested in acquiring us to negotiate in advance with our
board of directors, because the stockholder approval requirement
would be avoided if a majority of the directors then in office
approve either the business combination or the transaction which
results in the stockholder becoming an interested stockholder.
These provisions also may have the effect of preventing changes
in our management. It is further possible that such provisions
could make it more difficult to accomplish transactions that
stockholders may otherwise deem to be in their best interest.
DESCRIPTION
OF THE DEPOSITARY SHARES
General
We may, at our option, elect to offer depositary shares, each
representing a fraction of a share of a particular series of
preferred stock, as described below. In the event we elect to do
so, depositary receipts evidencing depositary shares will be
issued to the public.
The shares of any class or series of preferred stock represented
by depositary shares will be deposited under a deposit agreement
among us, a depositary selected by us and the holders of the
depositary receipts. The depositary will be a bank or trust
company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the
applicable fraction of a share of preferred stock represented by
such depositary share, to all the rights and preferences of the
preferred stock represented thereby, including dividend, voting,
redemption and liquidation rights.
The depositary shares will be evidenced by depositary receipts
issued pursuant to the deposit agreement. Depositary receipts
will be distributed to those persons purchasing the fractional
shares of the related class or series of preferred stock in
accordance with the terms of the offering described in the
related prospectus supplement. Copies of the forms of deposit
agreement and depositary receipt are filed as exhibits to the
registration statement of which this prospectus forms a part,
and the following summary is qualified in its entirety by
reference to such exhibits.
Pending the preparation of definitive depositary receipts, the
depositary may, upon our written order, issue temporary
depositary receipts substantially identical to, and entitling
the holders thereof to all the rights pertaining to, the
definitive depositary receipts but not in definitive form.
Definitive depositary receipts will be prepared thereafter
without unreasonable delay, and temporary depositary receipts
will be exchangeable for definitive depositary receipts without
charge to the holder thereof.
18
Dividends
and Other Distributions
The depositary will distribute all cash dividends or other
distributions received in respect of the related class or series
of preferred stock to the record holders of depositary shares
relating to such class or series of preferred stock in
proportion to the number of such depositary shares owned by such
holders.
In the event of a distribution other than in cash, the
depositary will distribute property received by it to the record
holders of depositary shares entitled thereto, unless the
depositary determines that it is not feasible to make such
distribution, in which case the depositary may, with our
approval, sell such property and distribute the net proceeds
from such sale to such holders.
Withdrawal
of Shares
Upon surrender of the depositary receipts at the corporate trust
office of the depositary, unless the related depositary shares
have previously been called for redemption, the holder of the
depositary shares evidenced thereby is entitled to delivery of
the number of whole shares of the related class or series of
preferred stock and any money or other property represented by
such depositary shares. Holders of depositary shares will be
entitled to receive whole shares of the related class or series
of preferred stock on the basis set forth in the prospectus
supplement for such class or series of preferred stock, but
holders of such whole shares of preferred stock will not
thereafter be entitled to exchange them for depositary shares.
If the depositary receipts delivered by the holder evidence a
number of depositary shares in excess of the number of
depositary shares representing the number of whole shares of
preferred stock to be withdrawn, the depositary will deliver to
such holder at the same time a new depositary receipt evidencing
such excess number of depositary shares. In no event will
fractional shares of preferred stock be delivered upon surrender
of depositary receipts to the depositary.
Redemption
of Depositary Shares
Whenever we redeem shares of preferred stock held by the
depositary, the depositary will redeem as of the same redemption
date the number of depositary shares representing shares of the
related class or series of preferred stock so redeemed. The
redemption price per depositary share will be equal to the
applicable fraction of the redemption price per share payable
with respect to such class or series of the preferred stock. If
less than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or pro
rata as may be determined by the depositary.
Voting
the Preferred Stock
Upon receipt of notice of any meeting at which the holders of
the preferred stock are entitled to vote, the depositary will
mail the information contained in such notice of meeting to the
record holders of the depositary shares relating to such
preferred stock. Each record holder of such depositary shares on
the record date, which will be the same date as the record date
for the preferred stock, will be entitled to instruct the
depositary as to the exercise of the voting rights pertaining to
the amount of the class or series of preferred stock represented
by such holders depositary shares. The depositary will
endeavor, insofar as practicable, to vote the number of shares
of the preferred stock represented by such depositary shares in
accordance with such instructions, and we will agree to take all
action which the depositary deems necessary in order to enable
the depositary to do so. The depositary will abstain from voting
shares of preferred stock to the extent it does not receive
specific instructions from the holders of depositary shares
representing such shares of preferred stock.
Amendment
and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares
and any provision of the deposit agreement may at any time be
amended by agreement between us and the depositary. However, any
amendment which materially and adversely alters the rights of
the holders of depositary receipts will not be effective unless
such amendment has been approved by the holders of depositary
receipts representing at least a majority of the depositary
shares then outstanding. Additionally, unless otherwise provided
in the related prospectus supplement, in the case of amendments
relating to or affecting rights to receive dividends or
distributions or voting or redemption
19
rights, approval is required by the holders of depositary
receipts representing
662/3%
of the depositary shares then outstanding. The deposit agreement
may be terminated by us or the depositary only if:
|
|
|
|
|
all outstanding depositary shares have been redeemed,
|
|
|
|
there has been a final distribution in respect of the related
class or series of shares of preferred stock in connection with
our liquidation, dissolution or winding up and such distribution
has been distributed to the holders of depositary
receipts; or
|
|
|
|
upon the consent of holders of depositary receipts representing
not less than
662/3%
of the depositary shares outstanding.
|
Charges
of Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary
arrangements. We will also pay charges of the depositary in
connection with the initial deposit of the related class or
series of shares of preferred stock and any redemption of such
shares of preferred stock. Holders of depositary receipts will
pay all other transfer and other taxes and governmental charges
and such other charges as are expressly provided in the deposit
agreement to be for their accounts.
The depositary may refuse to effect any transfer of a depositary
receipt or any withdrawal of shares of a class or series of
shares of preferred stock evidenced thereby until all such taxes
and charges with respect to such depositary receipt or such
shares of shares of preferred stock are paid by the holders
thereof.
Miscellaneous
The depositary will forward all reports and communications from
us which are delivered to the depositary and which we are
required to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable if either is
prevented or delayed by law or any circumstance beyond its
control in performing its obligations under the deposit
agreement. Our obligations and the obligations of the depositary
under the deposit agreement will be limited to performance in
good faith of our and their respective duties thereunder and
neither we nor the depositary will be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares
or class or series of preferred stock unless satisfactory
indemnity is furnished. We and the depositary may rely on
written advice of counsel or accountants, or information
provided by persons presenting shares of preferred stock for
deposit, holders of depositary shares or other persons believed
to be competent and on documents believed to be genuine.
Resignation
and Removal of Depositary
The depositary may resign at any time by delivering to us notice
of its election to do so, and we may at any time remove the
depositary. Any such resignation or removal of the depositary
will take effect upon the appointment of a successor depositary,
which successor depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION
OF THE DEBT SECURITIES
The following description of our debt securities sets forth the
material terms and provisions of the debt securities to which
any prospectus supplement may relate. Our senior debt securities
are to be issued under an indenture between us and a trustee,
the form of which is incorporated by reference as an exhibit to
the registration statement of which this prospectus forms a
part. We refer to this indenture in this prospectus as the
senior indenture. Our subordinated debt securities
are to be issued under two separate indentures. Our subordinated
debt securities which are issued to the trust in connection with
the issuance of preferred securities and common securities by
that trust are to be issued under an indenture which we
sometimes refer to in this prospectus as the trust-issued
subordinated indenture. Our other subordinated debt
securities are to be issued under an indenture which we
sometimes refer to in this prospectus as the subordinated
indenture. Each of the trust-issued subordinated
20
indenture and the subordinated indenture are between us and a
trustee and the form of each is filed as an exhibit to the
registration statement of which this prospectus forms a part.
The trust-issued subordinated indenture and the subordinated
indenture are sometimes referred to herein collectively as the
subordinated indentures. The senior indenture, the
trust-issued subordinated indenture and the subordinated
indenture are sometimes referred to herein collectively as the
W. R. Berkley indentures and each individually as a
W. R. Berkley indenture. The particular terms of the
debt securities offered by any prospectus supplement, and the
extent to which the general provisions described below may apply
to the offered debt securities, will be described in the
applicable prospectus supplement.
The following are summaries of the material terms and provisions
of the W. R. Berkley indentures and the related debt securities.
You should refer to the forms of the W. R. Berkley indentures
and the debt securities for complete information regarding the
terms and provisions of the W. R. Berkley indentures, including
the definitions of some of the terms used below, and the debt
securities. Wherever particular articles, sections or defined
terms of a W. R. Berkley indenture are referred to, those
articles, sections or defined terms are incorporated herein by
reference, and the statement in connection with which such
reference is made is qualified in its entirety by such
reference. Wherever particular articles, sections or defined
terms of a W. R. Berkley indenture, without specific reference
to a particular W. R. Berkley indenture, are referred to, those
articles, sections or defined terms are contained in all W. R.
Berkley indentures. The senior indenture and the subordinated
indenture are substantially identical, except for certain
covenants of ours and provisions relating to subordination. The
subordinated indenture and the trust-issued subordinated
indenture are substantially identical, except for certain rights
and covenants of ours and provisions relating to the issuance of
securities to a trust.
General
The W. R. Berkley indentures do not limit the aggregate
principal amount of the debt securities which we may issue
thereunder and provide that we may issue the debt securities
thereunder from time to time in one or more series.
(Section 3.1) The W. R. Berkley indentures do not limit the
amount of other Indebtedness or the debt securities, other than
certain secured Indebtedness as described below, which we or our
Subsidiaries may issue.
Unless otherwise provided in a prospectus supplement, the senior
debt securities will be unsecured obligations of ours and will
rank equally with all of our other unsecured and unsubordinated
indebtedness. The subordinated debt securities will be unsecured
obligations of ours, subordinated in right of payment to the
prior payment in full of all Senior Indebtedness of ours as
described below under Subordination of the Subordinated
Debt Securities and in the applicable prospectus
supplement. The W. R. Berkley indentures do not limit the amount
of senior, pari passu and junior Indebtedness that we may issue.
As of September 30, 2011, we had outstanding approximately
$1,512 million face value of senior notes and other debt
and $250 million face value of preferred securities issued
by a subsidiary trust. The sole assets of that trust consist of
$250 million aggregate principal amount of our junior
subordinated debentures, and we have guaranteed that
trusts obligations under the securities to the extent that
trust has funds available for payment of distributions. See
Notes 14 and 15 to our consolidated financial statements
included in our Annual Report on
Form 10-K
for the year ended December 31, 2010, which are
incorporated by reference in this prospectus.
Because we are a holding company, our rights and the rights of
our creditors, including the holders of our debt securities, and
stockholders to participate in any distribution of assets of any
Subsidiary upon the Subsidiarys liquidation or
reorganization or otherwise would be subject to the prior claims
of the Subsidiarys creditors, except to the extent that we
may ourselves be a creditor with recognized claims against the
Subsidiary. The rights of our creditors, including the holders
of our debt securities, to participate in the distribution of
stock owned by us in certain of the Subsidiaries, including our
insurance Subsidiaries, may also be subject to approval by
certain insurance regulatory authorities having jurisdiction
over such Subsidiaries. As of September 30, 2011, our
Subsidiaries had approximately $36 million of indebtedness
for borrowed money excluding our junior subordinated debentures.
In the event our subordinated debt securities are issued to the
trust in connection with the issuance of preferred securities
and common securities by the trust, such subordinated debt
securities subsequently may be distributed pro rata to the
holders of such preferred securities and common securities in
connection with the dissolution of that trust upon the
occurrence of certain events. These events will be described in
the prospectus supplement relating to such
21
preferred securities and common securities. Only one series of
our subordinated debt securities will be issued to the trust in
connection with the issuance of preferred securities and common
securities by the trust.
The prospectus supplement relating to the particular debt
securities offered thereby will describe the following terms of
the offered debt securities:
|
|
|
|
|
the title of such debt securities and the series in which such
debt securities will be included, which may include medium-term
notes;
|
|
|
|
any limit upon the aggregate principal amount of such debt
securities;
|
|
|
|
the date or dates, or the method or methods, if any, by which
such date or dates will be determined, on which the principal of
such debt securities will be payable;
|
|
|
|
the rate or rates at which such debt securities will bear
interest, if any, which rate may be zero in the case of certain
debt securities issued at an issue price representing a discount
from the principal amount payable at maturity, or the method by
which such rate or rates will be determined, including, if
applicable, any remarketing option or similar method, and the
date or dates from which such interest, if any, will accrue or
the method by which such date or dates will be determined;
|
|
|
|
the date or dates on which interest, if any, on such debt
securities will be payable and any regular record dates
applicable to the date or dates on which interest will be so
payable;
|
|
|
|
the place or places where the principal of, any premium or
interest on or any additional amounts with respect to such debt
securities will be payable, any of such debt securities that are
issued in registered form may be surrendered for registration of
transfer or exchange, and any such debt securities may be
surrendered for conversion or exchange;
|
|
|
|
whether any of such debt securities are to be redeemable at our
option, whether we will be obligated to redeem or purchase any
of such debt securities pursuant to any sinking fund or
analogous provision or at the option of any holder thereof, and
the terms of such option or obligation, as described under
Redemption below;
|
|
|
|
if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities to be
issued in registered form will be issuable and, if other than a
denomination of $5,000, the denominations in which any debt
securities to be issued in bearer form will be issuable;
|
|
|
|
whether the debt securities will be convertible into common
stock and/or
exchangeable for other securities and, if so, the terms and
conditions upon which such debt securities will be so
convertible or exchangeable;
|
|
|
|
if other than the principal amount, the portion of the principal
amount, or the method by which such portion will be determined,
of such debt securities that will be payable upon declaration of
acceleration of the maturity thereof;
|
|
|
|
if other than United States dollars, the currency of payment,
including composite currencies, of the principal of, any premium
or interest on or any additional amounts with respect to any of
such debt securities;
|
|
|
|
whether the principal of, any premium or interest on or any
additional amounts with respect to such debt securities will be
payable, at our election or the election of a holder, in a
currency other than that in which such debt securities are
stated to be payable and the date or dates on which, the period
or periods within which, and the other terms and conditions upon
which, such election may be made;
|
|
|
|
any index, formula or other method used to determine the amount
of payments of principal of, any premium or interest on or any
additional amounts with respect to such debt securities;
|
|
|
|
whether such debt securities are to be issued in the form of one
or more global securities and, if so, the identity of the
depositary for such global security or securities;
|
|
|
|
whether such debt securities are senior debt securities or
subordinated debt securities and, if subordinated debt
securities, the specific subordination provisions applicable
thereto;
|
22
|
|
|
|
|
in the case of subordinated debt securities issued to a trust,
the terms and conditions of any obligation or right of ours or a
holder to convert or exchange such subordinated debt securities
into preferred securities of that trust;
|
|
|
|
in the case of subordinated debt securities issued to a trust,
the form of restated trust agreement and, if applicable, the
agreement relating to our guarantee of the preferred securities
of that trust;
|
|
|
|
in the case of subordinated debt securities, the relative
degree, if any, to which such subordinated debt securities of
the series will be senior to or be subordinated to other series
of the subordinated debt securities or other indebtedness of
ours in right of payment, whether such other series of the
subordinated debt securities or other indebtedness are
outstanding or not;
|
|
|
|
any modifications of or additions to the Events of Default or
covenants of ours with respect to such debt securities;
|
|
|
|
whether the provisions described below under Discharge,
Defeasance and Covenant Defeasance will be applicable to
such debt securities;
|
|
|
|
whether any of such debt securities are to be issued upon the
exercise of warrants, and the time, manner and place for such
debt securities to be authenticated and delivered; and
|
|
|
|
any other terms of such debt securities and any modifications or
additions to the applicable W. R. Berkley indenture in respect
of such debt securities. (Section 3.1)
|
We will have the ability under the W. R. Berkley indentures to
reopen a previously issued series of the debt
securities and issue additional debt securities of that series
or establish additional terms of that series. We are also
permitted to issue debt securities with the same terms as
previously issued debt securities. (Section 3.1)
Unless otherwise provided in the related prospectus supplement,
principal, premium, interest and additional amounts, if any,
with respect to any debt securities will be payable at the
office or agency maintained by us for such purposes. In the case
of debt securities issued in registered form, interest may be
paid by check mailed to the persons entitled thereto at their
addresses appearing on the security register or by transfer to
an account maintained by the payee with a bank located in the
United States. Interest on debt securities issued in registered
form will be payable on any interest payment date to the persons
in whose names the debt securities are registered at the close
of business on the regular record date with respect to such
interest payment date. All paying agents initially designated by
us for the debt securities will be named in the related
prospectus supplement. We 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 we will be required to maintain a paying agent
in each place where the principal of, any premium or interest on
or any additional amounts with respect to the debt securities
are payable. (Sections 3.7 and 10.2)
Unless otherwise provided in the related prospectus supplement,
the debt securities may be presented for transfer or exchanged
for other debt securities of the same series, containing
identical terms and provisions, in any authorized denominations,
and of a like aggregate principal amount, at the office or
agency maintained by us for such purposes. Such transfer or
exchange will be made without service charge, but we may require
payment of a sum sufficient to cover any tax or other
governmental charge and any other expenses then payable. We will
not be required to:
|
|
|
|
|
issue, register the transfer of, or exchange, the debt
securities during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption
of any such debt securities and ending at the close of business
on the day of such mailing, or
|
|
|
|
register the transfer of or exchange any debt security so
selected for redemption in whole or in part, except the
unredeemed portion of any debt security being redeemed in part.
(Section 3.5)
|
We have appointed the trustee as security registrar. Any
transfer agent, in addition to the security registrar, initially
designated by us for any debt securities will be named in the
related prospectus supplement. We may at any time designate
additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which
any transfer agent acts, except that we will be required to
maintain a transfer agent in each
23
place where the principal of, any premium or interest on or any
additional amounts with respect to the debt securities are
payable. (Section 10.2)
Unless otherwise provided in the related prospectus supplement,
the debt securities will be issued only in fully registered form
without coupons in minimum denominations of $1,000 and any
integral multiple thereof. (Section 3.2) The debt
securities may be represented in whole or in part by one or more
global debt securities registered in the name of a depositary or
its nominee and, if so represented, interests in such global
debt security will be shown on, and transfers thereof will be
effected only through, records maintained by the designated
depositary and its participants as described below. Where the
debt securities of any series are issued in bearer form, the
special restrictions and considerations, including special
offering restrictions and special United States Federal income
tax considerations, applicable to such debt securities and to
payment on and transfer and exchange of such debt securities
will be described in the related prospectus supplement.
The debt securities may be issued as original issue discount
securities, bearing no interest or bearing interest at a rate
which at the time of issuance is below market rates, to be sold
at a substantial discount below their principal amount. Special
United States Federal income tax and other considerations
applicable to original issue discount securities will be
described in the related prospectus supplement.
If the purchase price of any debt securities is payable in one
or more foreign currencies or currency units or if any debt
securities are denominated in one or more foreign currencies or
currency units or if the principal of, or any premium or
interest on, or any additional amounts with respect to, any debt
securities is payable in one or more foreign currencies or
currency units, the restrictions, elections, certain United
States Federal income tax considerations, specific terms and
other information with respect to such debt securities and such
foreign currency or currency units will be set forth in the
related prospectus supplement.
We will comply with Section 14(e) under the Exchange Act,
and any other tender offer rules under the Exchange Act which
may then be applicable, in connection with any obligation of
ours to purchase debt securities at the option of the holders.
Any such obligation applicable to a series of debt securities
will be described in the related prospectus supplement.
Unless otherwise described in a prospectus supplement relating
to any debt securities, the W. R. Berkley indentures do not
contain any provisions that would limit our ability to incur
indebtedness or that would afford holders of the debt securities
protection in the event of a sudden and significant decline in
our credit quality or a takeover, recapitalization or highly
leveraged or similar transaction involving us. Accordingly, we
could in the future enter into transactions that could increase
the amount of indebtedness outstanding at that time or otherwise
affect our capital structure or credit rating. You should refer
to the prospectus supplement relating to a particular series of
the debt securities for information regarding any modifications
of or additions to the Events of Default described below or our
covenants contained in the W. R. Berkley indentures, including
any addition of a covenant or other provisions providing event
risk or similar protection.
Conversion
and Exchange
The terms, if any, on which debt securities of any series are
convertible into or exchangeable for common stock, preferred
stock or other securities property or cash, or a combination of
any of the foregoing, will be set forth in the related
prospectus supplement. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the
holder, or at our option, in which the securities, property or
cash to be received by the holders of the debt securities would
be calculated according to the factors and at such time as
described in the related prospectus supplement.
Global
Securities
The debt securities of a series may be issued in whole or in
part in the form of one or more global debt securities that will
be deposited with, or on behalf of, a depositary identified in
the prospectus supplement relating to such series.
24
The specific terms of the depositary arrangement with respect to
a series of the debt securities will be described in the
prospectus supplement relating to such series. We anticipate
that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a global security, the depositary for such
global security or its nominee will credit, on its book-entry
registration and transfer system, the respective principal
amounts of the debt securities represented by such global
security. Such accounts will be designated by the underwriters
or agents with respect to such debt securities or by us if such
debt securities are offered and sold directly by us. Ownership
of beneficial interests in a global security will be limited to
persons that may hold interests through participants. Ownership
of beneficial interests in such global security will be shown
on, and the transfer of that ownership will be effected only
through, records maintained by the depositary or its nominee
with respect to interests of participants, and on the records of
participants with respect to interests of persons other than
participants. The laws of some states require that certain
purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a global
security.
So long as the depositary for a global security, or its nominee,
is the registered owner of such global security, such depositary
or such nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by such
global security for all purposes under the applicable W. R.
Berkley indenture. Except as described below, owners of
beneficial interests in a global security will not be entitled
to have the debt securities of the series represented by such
global security registered in their names and will not receive
or be entitled to receive physical delivery of the debt
securities of that series in definitive form.
Principal of, any premium and interest on, and any additional
amounts with respect to, the debt securities registered in the
name of a depositary or its nominee will be made to the
depositary or its nominee, as the case may be, as the registered
owner of the global security representing such debt securities.
None of the trustee, any paying agent, the security registrar or
us will have any responsibility or liability for any aspect of
the records relating to or payments made on account of
beneficial ownership interests of the global security for such
debt securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
We expect that the depositary for a series of the debt
securities or its nominee, upon receipt of any payment with
respect to such debt securities, will credit immediately
participants accounts with payments in amounts
proportionate to their respective beneficial interest in the
principal amount of the global security for such debt securities
as shown on the records of such depositary or its nominee. We
also expect that payments by participants to owners of
beneficial interests in such global security held through such
participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
the accounts of customers registered in street name,
and will be the responsibility of such participants.
The W. R. Berkley indentures provide that if:
|
|
|
|
|
the depositary for a series of the debt securities notifies us
that it is unwilling or unable to continue as depositary or if
such depositary ceases to be eligible under the applicable W. R.
Berkley indenture and a successor depositary is not appointed by
us within 90 days of written notice,
|
|
|
|
we determine that the debt securities of a particular series
will no longer be represented by global securities and we
execute and deliver to the trustee a company order to such
effect, or
|
|
|
|
an Event of Default with respect to a series of the debt
securities has occurred and is continuing,
|
then, in an such case, the global securities will be exchanged
for the debt securities of such series in definitive form of
like tenor and of an equal aggregate principal amount, in
authorized denominations. Such definitive debt securities will
be registered in such name or names as the depositary shall
instruct the trustee. (Section 3.5) It is expected that
such instructions may be based upon directions received by the
depositary from participants with respect to ownership of
beneficial interests in global securities.
Payment
of Additional Amounts
If subordinated debt securities issued to a trust in connection
with the issuance of preferred securities and common securities
by that trust provide for the payment by us of certain taxes,
assessments or other governmental
25
charges imposed on the holder of any such debt security, we will
pay to the holder of any such debt security such additional
amounts as provided in the applicable W. R. Berkley indenture.
(Section 10.4 of the trust-issued subordinated indenture)
We will make all payments of principal of, and premium, if any,
interest and any other amounts on, or in respect of, the debt
securities of any series without withholding or deduction at
source for, or on account of, any present or future taxes, fees,
duties, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of a taxing jurisdiction or
any political subdivision or taxing authority thereof or
therein, unless such taxes, fees, duties, assessments or
governmental charges are required to be withheld or deducted by:
|
|
|
|
|
the laws, or any regulations or rulings promulgated thereunder,
of a taxing jurisdiction or any political subdivision or taxing
authority thereof or therein, or
|
|
|
|
an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or
rulings, including, without limitation, a holding by a court of
competent jurisdiction or by a taxing authority in a taxing
jurisdiction or any political subdivision thereof.
|
If a withholding or deduction at source is required, we will,
subject to certain limitations and exceptions described below,
pay to the holder of any such debt security such additional
amounts as may be necessary so that every net payment of
principal, premium, if any, interest or any other amount made to
such holder, after the withholding or deduction, will not be
less than the amount provided for in such debt security and the
applicable W. R. Berkley indenture to be then due and payable.
We will not be required to pay any additional amounts for or on
account of:
(1) any tax, fee, duty, assessment or governmental charge
of whatever nature which would not have been imposed but for the
fact that such holder:
|
|
|
|
|
was a resident, domiciliary or national of, or engaged in
business or maintained a permanent establishment or was
physically present in, the relevant taxing jurisdiction or any
political subdivision thereof or otherwise had some connection
with the relevant taxing jurisdiction other than by reason of
the mere ownership of, or receipt of payment under, such debt
security,
|
|
|
|
presented such debt security for payment in the relevant taxing
jurisdiction or any political subdivision thereof, unless such
debt security could not have been presented for payment
elsewhere; or
|
|
|
|
presented such debt security for payment more than 30 days
after the date on which the payment in respect of such debt
security became due and payable or provided for, whichever is
later, except to the extent that the holder would have been
entitled to such additional amounts if it had presented such
debt security for payment on any day within that
30-day
period;
|
(2) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(3) any tax, assessment or other governmental charge that
is imposed or withheld by reason of the failure by the holder or
the beneficial owner of such debt security to comply with any
reasonable request by us addressed to the holder within
90 days of such request:
|
|
|
|
|
to provide information concerning the nationality, residence or
identity of the holder or such beneficial owner, or
|
|
|
|
to make any declaration or other similar claim or satisfy any
information or reporting requirement, which is required or
imposed by statute, treaty, regulation or administrative
practice of the relevant taxing jurisdiction or any political
subdivision thereof as a precondition to exemption from all or
part of such tax, assessment or other governmental
charge; or
|
(4) any combination of items (1), (2) and
(3) above.
In addition, we will not pay additional amounts with respect to
any payment of principal of, or premium, if any, interest or any
other amounts on, any such debt security to any holder who is a
fiduciary or partnership or other than
26
the sole beneficial owner of such debt security to the extent
such payment would be required by the laws of the relevant
taxing jurisdiction, or any political subdivision or relevant
taxing authority thereof or therein, to be included in the
income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership
or a beneficial owner who would not have been entitled to such
additional amounts had it been the holder of the debt security.
(Section 10.4 of the senior indenture and the subordinated
indenture)
Option to
Extend Interest Payment Date
If provided in the related prospectus supplement, we will have
the right at any time and from time to time during the term of
any series of subordinated debt securities issued to a trust to
defer payment of interest for such number of consecutive
interest payment periods as may be specified in the related
prospectus supplement, subject to the terms, conditions and
covenants, if any, specified in such prospectus supplement,
provided that such extension period may not extend beyond the
stated maturity of such series of subordinated debt securities.
Certain United States Federal income tax consequences and
special considerations applicable to such subordinated debt
securities will be described in the related prospectus
supplement. (Section 3.11 of the trust-issued subordinated
indenture).
Option to
Extend Maturity Date
If provided in the related prospectus supplement, we will have
the right to change or extend the stated maturity of the
principal of the subordinated debt securities of any series
issued to a trust upon the liquidation of that trust and the
exchange of the subordinated debt securities for the preferred
securities of that trust, provided that:
|
|
|
|
|
we are not in bankruptcy, otherwise insolvent or in liquidation;
|
|
|
|
we have not defaulted on any payment on such subordinated debt
securities and no deferred interest payments have accrued;
|
|
|
|
the trust is not in arrears on payments of distributions on its
preferred securities and no deferred distributions have
accumulated;
|
|
|
|
the subordinated debt securities of such series are rated
investment grade by Standard & Poors Ratings
Services, Moodys Investors Service, Inc. or another
nationally recognized statistical rating organization; and
|
|
|
|
the extended stated maturity is no later than the
49th anniversary of the initial issuance of the preferred
securities of the trust.
|
If we exercise our right to liquidate the trust and exchange the
subordinated debt securities for the preferred securities of the
trust as described above, any changed stated maturity of the
principal of the subordinated debt securities shall be no
earlier than the date that is five years after the initial issue
date of the preferred securities and no later than the date
30 years, plus an extended term of up to an additional
19 years if the conditions described above are satisfied,
after the initial issue date of the preferred securities of the
trust. (Section 3.14 of the trust-issued subordinated
indenture)
Redemption
If provided in the related prospectus supplement, we will have
the right to redeem some or all of the debt securities. The
prospectus supplement relating to the particular debt securities
offered thereby will describe:
|
|
|
|
|
whether and on what terms we will have the option to redeem such
debt securities in lieu of paying additional amounts in respect
of certain taxes, fees, duties, assessments or governmental
charges that might be imposed on holders of such debt securities;
|
|
|
|
whether any of such debt securities are to be redeemable at our
option and, if so, the date or dates on which, the period or
periods within which, the price or prices at which and the other
terms and conditions upon which such debt securities may be
redeemed, in whole or in part, at our option; and
|
|
|
|
whether we will be obligated to redeem or purchase any of such
debt securities pursuant to any sinking fund or analogous
provision or at the option of any holder thereof and, if so, the
date or dates on which, the period
|
27
|
|
|
|
|
or periods within which, the price or prices at which and the
other terms and conditions upon which such debt securities will
be redeemed or purchased, in whole or in part, pursuant to such
obligation, and any provisions for the remarketing of such debt
securities so redeemed or purchased.
|
If provided in the related prospectus supplement, the holders of
the debt securities may have the right to cause us to repay
their indebtedness upon a change of control of W. R. Berkley.
Each W. R. Berkley indenture provides that if we do not redeem
all of the debt securities thereunder, the trustee will select
the securities to be redeemed by such method as it shall deem
fair and appropriate. If any debt securities are to be redeemed
in part only, we will issue a new note for such securities in
principal amount equal to the unredeemed principal portion. If a
portion of your debt securities is selected for partial
redemption and you convert or elect repurchase of a portion of
your securities, the converted or repurchased portion will be
deemed to be taken from the portion selected for redemption.
Unless otherwise provided in the prospectus supplement, notice
of redemption setting forth the redemption date and redemption
price must be given at least thirty days and not more than sixty
days prior to the redemption date.
Except as otherwise provided in the related prospectus
supplement, in the case of any series of subordinated debt
securities issued to the trust, if an Investment Company Event
or a Tax Event shall occur and be continuing, we may, at our
option, redeem such series of subordinated debt securities, in
whole but not in part, at any time within 90 days of the
occurrence of such special event, at a redemption price equal to
100% of the principal amount of such subordinated debt
securities then outstanding plus accrued and unpaid interest to
the date fixed for redemption. (Section 11.8 of the
trust-issued subordinated indenture)
For purposes of the trust-issued subordinated indenture,
Investment Company Event means, in respect of the
trust, the receipt by the trust of an opinion of counsel
experienced in such matters to the effect that, as a result of
the occurrence of a change in law or regulation or a change in
the interpretation or application of law or regulation by any
legislative body, court or governmental agency or regulatory
authority, the trust is or will be considered an investment
company that is required to be registered under the Investment
Company Act, which change becomes effective on or after the date
of original issuance of the preferred securities of the trust.
(Section 1.1 of the trust-issued subordinated indenture)
For purposes of the trust-issued subordinated indenture,
Tax Event means, in respect of the trust, the
receipt by the trust or us of an opinion of counsel experienced
in such matters to the effect that, as a result of any amendment
to, or change, including any announced prospective change, in,
the laws of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or
decision is announced on or after the date of original issuance
of the preferred securities of the trust, there is more than an
insubstantial risk that:
|
|
|
|
|
the trust is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with
respect to income received or accrued on the corresponding
series of subordinated debt securities,
|
|
|
|
interest payable by us on such subordinated debt securities is
not, or within 90 days of the date of such opinion will not
be, deductible by us, in whole or in part, for United States
Federal income tax purposes, or
|
|
|
|
the trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimus amount of other
taxes, duties or other governmental charges. (Section 1.1
of the trust-issued subordinated indenture).
|
Notice of any redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to
each holder of subordinated debt securities to be redeemed at
its registered address. Unless we default in payment of the
redemption price, on and after the redemption date interest will
cease to accrue on the subordinated debt securities or portions
thereof called for redemption.
28
Covenants
Applicable to Subordinated Debt Securities Issued to the
Trust
We will covenant, as to each series of our subordinated debt
securities issued to the trust in connection with the issuance
of preferred securities and common securities by that trust,
that we will not, and will not permit any of our Subsidiaries to:
|
|
|
|
|
declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of our outstanding capital stock, or
|
|
|
|
make any payment of principal of, or interest or premium, if
any, on or repay, repurchase or redeem any debt security of ours
that ranks junior in interest to the subordinated debt
securities of such series or make any guarantee payments with
respect to any guarantee by us of the debt securities of any
Subsidiary of ours if such guarantee ranks junior in interest to
the subordinated debt securities of such series,
|
other than (a) dividends or distributions in our common
stock, (b) redemptions or purchases of any rights
outstanding under a shareholder rights plan of ours, or the
declaration of a dividend of such rights or the issuance of
stock under any such plan in the future, (c) payments under
any preferred securities guarantee of ours, and
(d) purchases of common stock related to the issuance of
common stock under any of our benefit plans for our directors,
officers or employees, if at such time:
(1) there shall have occurred any event of which we have
actual knowledge that (A) with the giving of notice or
lapse of time or both, would constitute an Event of Default
under the applicable subordinated indenture and (B) in
respect of which we shall not have taken reasonable steps to
cure,
(2) we shall be in default with respect to our payment of
obligations under the preferred securities guarantee relating to
such preferred securities, or
(3) we shall have given notice of our election to begin an
Extension Period as provided in the applicable subordinated
indenture with respect to the subordinated debt securities of
such series and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
(Section 10.10 of the trust-issued subordinated indenture)
In the event our subordinated debt securities are issued to the
trust in connection with the issuance of preferred securities
and common securities of the trust, for so long as such series
of subordinated debt securities remain outstanding, we will also
covenant:
|
|
|
|
|
to maintain directly or indirectly 100% ownership of the common
securities of the trust; provided, however, that any permitted
successor of ours under the applicable subordinated indenture
may succeed to our ownership of such common securities,
|
|
|
|
not to voluntarily dissolve,
wind-up or
liquidate the trust, except in connection with the distribution
of our subordinated debt securities to the holders of preferred
securities and common securities in liquidation of the trust,
the redemption of all of the preferred securities and common
securities of the trust, or certain mergers, consolidations or
amalgamations, each as permitted by the restated trust agreement
of the trust; and
|
|
|
|
to use our reasonable efforts, consistent with the terms of the
related trust agreement, to cause the trust to remain classified
as a grantor trust for United States Federal income tax
purposes. (Section 10.12 of the trust-issued subordinated
indenture)
|
Consolidation,
Amalgamation, Merger and Sale of Assets
Each W. R. Berkley indenture provides that we may not:
(1) consolidate or amalgamate with or merge into any Person
or convey, transfer or lease our properties and assets as an
entirety or substantially as an entirety to any Person, or
29
(2) permit any Person to consolidate or amalgamate with or
merge into us, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to us,
unless:
|
|
|
|
|
in the case of (1) above, such Person is a corporation
organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia and
will expressly assume, by supplemental indenture satisfactory in
form to the trustee, the due and punctual payment of the
principal of, any premium and interest on and any additional
amounts with respect to all of the debt securities issued
thereunder, and the performance of our obligations under such W.
R. Berkley indenture and the debt securities issued thereunder,
and provides for conversion or exchange rights in accordance
with the provisions of the debt securities of any series that
are convertible or exchangeable into common stock or other
securities,
|
|
|
|
immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of ours or a
Subsidiary as a result of such transaction as having been
incurred by us or such Subsidiary at the time of such
transaction, no Event of Default, and no event which after
notice or lapse of time or both would become an Event of
Default, will have happened and be continuing, and
|
|
|
|
certain other conditions are satisfied. (Section 8.1)
|
Events of
Default
Except as otherwise provided in the related prospectus
supplement and specifically deleted or modified in or pursuant
to the related supplemental indenture, board resolution or
officers certificate establishing the terms of any series
of debt securities pursuant to the applicable W. R. Berkley
indenture, each of the following events will constitute an Event
of Default under the applicable W. R. Berkley indenture with
respect to any series of debt securities issued thereunder,
whatever the reason for such Event of Default and whether it
will be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body:
(1) default in the payment of any interest on any debt
security of such series, or any additional amounts payable with
respect thereto, when such interest becomes or such additional
amounts become due and payable, and continuance of such default
for a period of 30 days;
(2) default in the payment of the principal of or any
premium on any debt security of such series, or any additional
amounts payable with respect thereto, when such principal or
premium becomes or such additional amounts become due and
payable either at maturity, upon any redemption, by declaration
of acceleration or otherwise;
(3) default in the deposit of any sinking fund payment,
when and as due by the terms of any debt security of such series;
(4) default in the performance, or breach, of any covenant
or warranty of ours contained in the applicable W. R. Berkley
indenture for the benefit of such series or in the debt
securities of such series, and the continuance of such default
or breach for a period of 60 days after there has been
given written notice as provided in such W. R. Berkley indenture;
(5) if any event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by
which there may be secured or evidenced, any Indebtedness of
ours, whether such Indebtedness now exists or is hereafter
created or incurred, happens and consists of default in the
payment of more than $50,000,000 in principal amount of such
Indebtedness at the maturity thereof, after giving effect to any
applicable grace period, or results in such Indebtedness in
principal amount in excess of $50,000,000 becoming or being
declared due and payable prior to the date on which it would
otherwise become due and payable, and such default is not cured
or such acceleration is not rescinded or annulled within a
period of 30 days after there has been given written notice
as provided in the applicable W. R. Berkley indenture;
(6) we shall fail within 60 days to pay, bond or
otherwise discharge any uninsured judgment or court order for
the payment of money in excess of $50,000,000, which is not
stayed on appeal or is not otherwise being appropriately
contested in good faith;
30
(7) in the event subordinated debt securities are issued to
the trust or a trustee for the trust in connection with the
issuance of preferred securities and common securities by the
trust, the voluntary or involuntary dissolution, winding up or
termination of the trust, except in connection with the
distribution of subordinated debt securities to the holders of
preferred securities and common securities in liquidation of
that trust, the redemption of all of the preferred securities
and common securities of the trust, or certain mergers,
consolidations or amalgamations, each as permitted by the
restated trust agreement of the trust;
(8) certain events in our bankruptcy, insolvency or
reorganization; and
(9) any other Event of Default provided in or pursuant to
the applicable W. R. Berkley indenture with respect to the debt
securities of such series. (Section 5.1)
If an Event of Default with respect to the debt securities of
any series, other than an Event of Default described in
(8) of the preceding paragraph, occurs and is continuing,
either the trustee or the holders of at least 25% in principal
amount of the outstanding debt securities of such series by
written notice as provided in the applicable
W. R. Berkley indenture may declare the principal
amount, or such lesser amount as may be provided for in the debt
securities of such series, of all outstanding debt securities of
such series to be due and payable immediately. At any time after
a declaration of acceleration 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 applicable W. R. Berkley indenture,
the holders of a majority in aggregate principal amount of the
debt securities of such series may, under certain circumstances,
rescind and annul such acceleration. An Event of Default
described in (8) of the preceding paragraph will cause the
principal amount and accrued interest, or such lesser amount as
provided for in the debt securities of such series, to become
immediately due and payable without any declaration or other act
by the trustee or any holder. (Section 5.2)
Each W. R. Berkley indenture provides that, within 90 days
after the occurrence of any event which is, or after notice or
lapse of time or both would become, an Event of Default with
respect to the debt securities of any series, the trustee will
transmit, in the manner set forth in such W. R. Berkley
indenture, notice of such default to the holders of the debt
securities of such series unless such default has been cured or
waived; provided, however, that the trustee may withhold such
notice if and so long as the board of directors, the executive
committee or the trust committee of directors
and/or
responsible officers of the trustee in good faith determine that
the withholding of such notice is in the best interest of the
holders of the debt securities of such series; and provided,
further, that in the case of any default of the character
described in (5) of the second preceding paragraph, no such
notice to holders will be given until at least 30 days
after the default occurs. (Section 6.2)
If an Event of Default occurs and is continuing with respect to
the debt securities of any series, the trustee may in its
discretion proceed to protect and enforce its rights and the
rights of the holders of the debt securities of such series by
all appropriate judicial proceedings. (Section 5.3) Each W.
R. Berkley indenture provides that, subject to the duty of the
trustee during any 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 such W. R. Berkley indenture at the
request or direction of any of the holders of the debt
securities, unless such holders shall have offered to the
trustee indemnity reasonably satisfactory to the trustee.
(Section 6.1) Subject to such provisions for the
indemnification of the trustee, and subject to applicable law
and certain other provisions of the applicable W. R. Berkley
indenture, the holders of a majority in aggregate principal
amount of the outstanding debt 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 debt securities of such series.
(Section 5.12)
If an Event of Default with respect to a series of subordinated
debt securities issued to the trust has occurred and is
continuing and such event is attributable to a default in the
payment of interest or principal on the related subordinated
debt securities on the date such interest or principal is
otherwise payable, a holder of preferred securities of the trust
may institute a legal proceeding directly against us for
enforcement of payment to such holder of the principal of or
interest on such related subordinated debt securities having a
principal amount equal to the
31
aggregate liquidation amount of the related preferred securities
of such holder. We may not amend the applicable subordinated
indenture to remove the foregoing right to bring a direct action
without the prior written consent of the holders of all of the
preferred securities of the trust. If the right to bring such
direct action is removed, the trust may become subject to the
reporting obligations under the Exchange Act. We will have the
right under the subordinated indenture to set-off any payment
made to such holder of preferred securities by us, in connection
with a direct action. (Section 3.12 of the trust-issued
subordinated indenture) The holders of preferred securities will
not be able to exercise directly any other remedy available to
the holders of the related subordinated debt securities.
The holders of the preferred securities would not be able to
exercise directly any remedies other than those set forth in the
preceding paragraph available to the holders of the subordinated
debt securities unless there shall have been an event of default
under the applicable restated trust agreement. See
Description of Preferred Securities Events of
Default; Notice. (Section 5.8 of the trust-issued
subordinated indenture)
Modification
and Waiver
We and the trustee may modify or amend a W. R. Berkley indenture
with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding debt securities of
each series affected thereby; provided, however, that no such
modification or amendment may, without the consent of the holder
of each outstanding debt security affected thereby:
|
|
|
|
|
change the stated maturity of the principal of, or any premium
or installment of interest on, or any additional amounts with
respect to, any debt security,
|
|
|
|
reduce the principal amount of, or the rate, or modify the
calculation of such rate, of interest on, or any additional
amounts with respect to, or any premium payable upon the
redemption of, any debt security,
|
|
|
|
change our obligation to pay additional amounts with respect to
any debt security,
|
|
|
|
reduce the amount of the principal of an original issue discount
security that would be due and payable upon a declaration of
acceleration of the maturity thereof or the amount thereof
provable in bankruptcy,
|
|
|
|
change the redemption provisions of any debt security or
adversely affect the right of repayment at the option of any
holder of any debt security,
|
|
|
|
change the place of payment or the coin or currency in which the
principal of, any premium or interest on or any additional
amounts with respect to any debt security is payable,
|
|
|
|
impair the right to institute suit for the enforcement of any
payment on or after the stated maturity of any debt security or,
in the case of redemption, on or after the redemption date or,
in the case of repayment at the option of any holder, on or
after the repayment date,
|
|
|
|
reduce the percentage in principal amount of the outstanding
debt securities, the consent of whose holders is required in
order to take specific actions,
|
|
|
|
reduce the requirements for quorum or voting by holders of debt
securities in Section 15.4 of the applicable W. R. Berkley
indenture,
|
|
|
|
modify any of the provisions in the applicable W. R. Berkley
indenture regarding the waiver of past defaults and the waiver
of certain covenants by the holders of the debt securities
except to increase any percentage vote required or to provide
that other provisions of such W. R. Berkley indenture cannot be
modified or waived without the consent of the holder of each
debt security affected thereby,
|
|
|
|
make any change that adversely affects the right to convert or
exchange any debt security into or for our common stock or other
debt securities or other securities, cash or property in
accordance with its terms,
|
|
|
|
modify any of the provisions of the subordinated indenture
relating to the subordination of the subordinated debt
securities in a manner adverse to holders of the subordinated
debt securities, or
|
|
|
|
modify any of the above provisions. (Section 9.2)
|
32
In addition, no supplemental indenture may directly or
indirectly modify or eliminate the subordination provisions of a
subordinated indenture in any manner which might terminate or
impair the subordination of the subordinated debt securities to
Senior Indebtedness without the prior written consent of the
holders of the Senior Indebtedness. (Section 9.7 of the
subordinated indenture and the trust-issued subordinated
indenture)
We and the trustee may modify or amend a W. R. Berkley indenture
and the debt securities of any series without the consent of any
holder in order to, among other things:
|
|
|
|
|
provide for our successor pursuant to a consolidation,
amalgamation, merger or sale of assets;
|
|
|
|
add to our covenants for the benefit of the holders of all or
any series of debt securities or to surrender any right or power
conferred upon us by the applicable W. R. Berkley indenture;
|
|
|
|
provide for a successor trustee with respect to the debt
securities of all or any series;
|
|
|
|
cure any ambiguity or correct or supplement any provision in the
applicable W. R. Berkley indenture which may be defective or
inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under
the applicable W. R. Berkley indenture which will not adversely
affect the interests of the holders of debt securities of any
series;
|
|
|
|
change the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication
and delivery of debt securities under the applicable W. R.
Berkley indenture;
|
|
|
|
add any additional Events of Default with respect to all or any
series of debt securities;
|
|
|
|
secure the debt securities;
|
|
|
|
provide for conversion or exchange rights of the holders of any
series of debt securities; or
|
|
|
|
make any other change that does not materially adversely affect
the interests of the holders of any debt securities then
outstanding under the applicable W. R. Berkley indenture.
(Section 9.1)
|
The holders of at least a majority in aggregate principal amount
of the debt securities of any series may, on behalf of the
holders of all debt securities of that series, waive compliance
by us with certain restrictive provisions of the applicable W.
R. Berkley indenture. (Section 10.6) The holders of not
less than a majority in aggregate principal amount of the
outstanding debt securities of any series may, on behalf of the
holders of all debt securities of that series, waive any past
default and its consequences under the applicable W. R. Berkley
indenture with respect to debt securities of that series, except
a default:
|
|
|
|
|
in the payment of principal of, any premium or interest on or
any additional amounts with respect to debt securities of that
series; or
|
|
|
|
in respect of a covenant or provision of the applicable W. R.
Berkley indenture that cannot be modified or amended without the
consent of the holder of each debt security of any series.
(Section 5.13)
|
Under each W. R. Berkley indenture, we are required to furnish
the trustee annually a statement as to performance by us of
certain of our obligations under such W. R. Berkley indenture
and as to any default in such performance. We are also required
to deliver to the trustee, within five days after occurrence
thereof, written notice of any Event of Default or any event
which after notice or lapse of time or both would constitute an
Event of Default. (Section 10.7)
Discharge,
Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of any series of
debt securities that have not already been delivered to the
trustee for cancellation and that either have become due and
payable or will become due and payable within one year, or
scheduled for redemption within one year, by depositing with the
trustee, in trust, funds in U.S. dollars or in the Foreign
Currency in which such debt securities are payable in an amount
sufficient to pay the entire indebtedness on such debt
securities with respect to principal and any premium, interest
and additional amounts to the date of such deposit, if such debt
securities have become due and payable, or to the maturity
thereof, as the case may be. (Section 4.1)
33
Each W. R. Berkley indenture provides that, unless the
provisions of Section 4.2 thereof are made inapplicable to
debt securities of or within any series pursuant to
Section 3.1 thereof, we may elect either:
|
|
|
|
|
to defease and be discharged from any and all obligations with
respect to such debt securities, except for, among other things,
the obligation to pay additional amounts, if any, upon the
occurrence of certain events of taxation, assessment or
governmental charge with respect to payments on such debt
securities and other obligations to register the transfer or
exchange of such debt securities, to replace temporary or
mutilated, destroyed, lost or stolen debt securities, to
maintain an office or agency with respect to such debt
securities and to hold moneys for payment in trust, or
|
|
|
|
to be released from its obligations with respect to such debt
securities under certain covenants as described in the related
prospectus supplement, and any omission to comply with such
obligations will not constitute a default or an Event of Default
with respect to such debt securities.
|
Such defeasance or such covenant defeasance, as the case may be,
will be conditioned upon the irrevocable deposit by us with the
trustee, in trust, of an amount in U.S. dollars or in the
Foreign Currency in which such debt securities are payable at
stated maturity, or Government Obligations, or both, applicable
to such debt securities which through the scheduled payment of
principal and interest in accordance with their terms will
provide money in an amount sufficient to pay the principal of,
any premium and interest on, and any additional amounts with
respect to, such debt securities on the scheduled due dates.
(Section 4.2)
Such a trust may only be established if, among other things:
|
|
|
|
|
the applicable defeasance or covenant defeasance does not result
in a breach or violation of, or constitute a default under, the
applicable W. R. Berkley indenture or any other material
agreement or instrument to which we are a party or by which we
are bound,
|
|
|
|
no Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to the
debt securities to be defeased will have occurred and be
continuing on the date of establishment of such a trust and,
with respect to defeasance only, at any time during the period
ending on the 123rd day after such date, and
|
|
|
|
we have delivered to the trustee an opinion of counsel, as
specified in the applicable W. R. Berkley indenture, to the
effect that the holders of such debt securities will not
recognize income, gain or loss for United States Federal income
tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States 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 such opinion of counsel, in the
case of defeasance, must refer to and be based upon a letter
ruling of the Internal Revenue Service received by us, a Revenue
Ruling published by the Internal Revenue Service or a change in
applicable United States Federal income tax law occurring
after the date of the applicable W. R. Berkley indenture.
(Section 4.2)
|
Foreign Currency means any currency, currency
unit or composite currency, including, without limitation, the
euro, issued by the government of one or more countries other
than the United States of America or by any recognized
confederation or association of such governments.
(Section 1.1)
Government Obligations means debt securities
which are:
(1) direct obligations of the United States of America or
the government or the governments which issued the Foreign
Currency in which the debt securities of a particular series are
payable, for the payment of which its full faith and credit is
pledged, or
(2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America or such government or governments which issued the
Foreign Currency in which the debt securities of such series are
payable,
the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America
or such other government or governments, which, in the case of
clauses (1) and (2), are not callable or redeemable at the
option of the issuer or issuers thereof, and will also include a
depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a
specific payment of interest on or principal
34
of or any other amount with respect to any such Government
Obligation held by such custodian for the account of the holder
of such depository receipt, provided that, except as required by
law, such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from
any amount received by the custodian with respect to the
Government Obligation or the specific payment of interest on or
principal of or any other amount with respect to the Government
Obligation evidenced by such depository receipt.
(Section 1.1)
If after we have deposited funds
and/or
Government Obligations to effect defeasance or covenant
defeasance with respect to debt securities of any series:
(1) the holder of a debt security of that series is
entitled to, and does, elect pursuant to Section 3.1 of the
applicable W. R. Berkley indenture or the terms of such debt
security to receive payment in a currency other than that in
which such deposit has been made in respect of such debt
security, or
(2) a Conversion Event occurs in respect of the Foreign
Currency in which such deposit has been made;
the indebtedness represented by such debt security will be
deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of, any premium and
interest on, and any additional amounts with respect to, such
debt security as such debt security becomes due out of the
proceeds yielded by converting the amount or other properties so
deposited in respect of such debt security into the currency in
which such debt security becomes payable as a result of such
election or such Conversion Event based on:
|
|
|
|
|
in the case of payments made pursuant to clause (1) above,
the applicable market exchange rate for such currency in effect
on the second business day prior to such payment date, or
|
|
|
|
with respect to a Conversion Event, the applicable market
exchange rate for such Foreign Currency in effect, as nearly as
feasible, at the time of the Conversion Event. (Section 4.2)
|
Conversion Event means the cessation of use
of:
|
|
|
|
|
a Foreign Currency both by the government of the country or
countries which issued such Foreign Currency and for the
settlement of transactions by a central bank or other public
institutions of or within the international banking
community, or
|
|
|
|
any currency unit or composite currency for the purposes for
which it was established.
|
All payments of principal of, any premium and interest on, and
any additional amounts with respect to, any debt security that
are payable in a Foreign Currency that ceases to be used by the
government or governments of issuance will be made in
U.S. dollars. (Section 1.1)
In the event we effect covenant defeasance with respect to any
debt securities and such debt securities are declared due and
payable because of the occurrence of any Event of Default other
than an Event of Default with respect to any covenant as to
which there has been covenant defeasance, the amount in such
Foreign Currency in which such debt securities are payable, and
Government Obligations on deposit with the trustee, will be
sufficient to pay amounts due on such debt securities at the
time of the stated maturity but may not be sufficient to pay
amounts due on such debt securities at the time of the
acceleration resulting from such Event of Default. However, we
would remain liable to make payment of such amounts due at the
time of acceleration.
Subordination
of the Subordinated Debt Securities
The subordinated debt securities will, to the extent set forth
in the subordinated indenture, be subordinate in right of
payment to the prior payment in full of all Senior Indebtedness.
(Section 16.1 of the subordinated indentures). In the event
of:
|
|
|
|
|
any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case
or proceeding in connection therewith, relative to us or to our
creditors, as such, or to our assets,
|
|
|
|
any voluntary or involuntary liquidation, dissolution or other
winding up of ours, whether or not involving insolvency or
bankruptcy, or
|
|
|
|
any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of ours,
|
35
then and in any such event the holders of Senior Indebtedness
will be entitled to receive payment in full of all amounts due
or to become due on or in respect of all Senior Indebtedness, or
provision will be made for such payment in cash, before the
holders of the subordinated debt securities are entitled to
receive or retain any payment on account of principal of, or any
premium or interest on, or any additional amounts with respect
to, subordinated debt securities, and to that end the holders of
Senior Indebtedness will be entitled to receive, for application
to the payment thereof, any payment or distribution of any kind
or character, whether in cash, property or securities, including
any such payment or distribution which may be payable or
deliverable by reason of the payment of any other Indebtedness
of ours being subordinated to the payment of subordinated debt
securities, which may be payable or deliverable in respect of
subordinated debt securities in any such case, proceeding,
dissolution, liquidation or other winding up event.
(Section 16.3 of the subordinated indentures)
By reason of such subordination, in the event of our liquidation
or insolvency, holders of Senior Indebtedness and holders of
other obligations of ours that are not subordinated to Senior
Indebtedness may recover more, ratably, than the holders of
subordinated debt securities.
Subject to the payment in full of all Senior Indebtedness, the
rights of the holders of subordinated debt securities will be
subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or
securities of ours applicable to such Senior Indebtedness until
the principal of, any premium and interest on, and any
additional amounts with respect to, subordinated debt securities
have been paid in full. (Section 16.4 of the subordinated
indentures)
No payment of principal, including redemption and sinking fund
payments, of or any premium or interest on or any additional
amounts with respect to the subordinated debt securities may be
made:
|
|
|
|
|
if any Senior Indebtedness of ours is not paid when due and any
applicable grace period with respect to such default has ended
and such default has not been cured or waived or ceased to
exist, or
|
|
|
|
if the maturity of any Senior Indebtedness of ours has been
accelerated because of a default. (Section 16.2 of the
subordinated indentures)
|
The subordinated indenture does not limit or prohibit us from
incurring additional Senior Indebtedness, which may include
Indebtedness that is senior to subordinated debt securities, but
subordinate to our other obligations. The senior debt securities
will constitute Senior Indebtedness under the subordinated
indenture.
The term Senior Indebtedness means all Indebtedness
of ours outstanding at any time, except:
|
|
|
|
|
the subordinated debt securities,
|
|
|
|
indebtedness as to which, by the terms of the instrument
creating or evidencing the same, it is provided that such
Indebtedness is subordinated to or ranks equally with the
subordinated debt securities,
|
|
|
|
Indebtedness of ours to an Affiliate of ours,
|
|
|
|
interest accruing after the filing of a petition initiating any
bankruptcy, insolvency or other similar proceeding unless such
interest is an allowed claim enforceable against us in a
proceeding under federal or state bankruptcy laws,
|
|
|
|
trade accounts payable, and
|
|
|
|
any Indebtedness, including all other debt securities and
guarantees in respect of those debt securities, initially issued
to (1) W. R. Berkley Capital Trust III, or
(2) any trust, partnership or other entity affiliated with
us which is a financing vehicle of ours or any Affiliate of ours
in connection with an issuance by such entity of preferred
securities or other securities which are similar to the
preferred securities described under Description of
Preferred Securities below.
|
Such Senior Indebtedness will continue to be Senior Indebtedness
and be entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any
term of such Senior Indebtedness. (Sections 1.1 and 16.8 of
the subordinated indentures)
36
The subordinated indenture provides that the foregoing
subordination provisions, insofar as they relate to any
particular issue of subordinated debt securities, may be changed
prior to such issuance. Any such change would be described in
the related prospectus supplement.
New York
Law to Govern
The W. R. Berkley indentures and the debt securities will be
governed by, and construed in accordance with, the laws of the
State of New York applicable to agreements made or instruments
entered into and, in each case, performed wholly in that state.
(Section 1.13)
Information
Concerning the Trustee
We may from time to time borrow from, maintain deposit accounts
with and conduct other banking transactions with the trustee and
its affiliates in the ordinary course of business. The trustee
will be named in the applicable prospectus supplement.
Under each W. R. Berkley indenture, the trustee may be required
to transmit annual reports to all holders regarding its
eligibility and qualifications as trustee under the applicable
W. R. Berkley indenture and related matters. (Section 7.3)
DESCRIPTION
OF THE WARRANTS TO PURCHASE
COMMON STOCK OR PREFERRED STOCK
The following statements with respect to the common stock
warrants and preferred stock warrants are summaries of the
material provisions of a stock warrant agreement to be entered
into by us and a stock warrant agent to be selected at the time
of issue. The stock warrant agreement may include or incorporate
by reference standard warrant provisions substantially in the
forms of the Common Stock Warrant Agreement and the Preferred
Stock Warrant Agreement filed as exhibits to the registration
statement of which this prospectus forms a part.
General
The stock warrants, evidenced by stock warrant certificates, may
be issued under the stock warrant agreement independently or
together with any other securities offered by any prospectus
supplement and may be attached to or separate from such other
offered securities. If stock warrants are offered, the related
prospectus supplement will describe the designation and terms of
the stock warrants, including, without limitation, the following:
|
|
|
|
|
the offering price, if any;
|
|
|
|
the designation and terms of the common stock or preferred stock
purchasable upon exercise of the stock warrants;
|
|
|
|
if applicable, the date on and after which the stock warrants
and the related offered securities will be separately
transferable;
|
|
|
|
the number of shares of common stock or preferred stock
purchasable upon exercise of one stock warrant and the initial
price at which such shares may be purchased upon exercise;
|
|
|
|
the date on which the right to exercise the stock warrants shall
commence and the date on which such right shall expire;
|
|
|
|
a discussion of certain United States Federal income tax
considerations;
|
|
|
|
the call provisions, if any;
|
|
|
|
the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable;
|
|
|
|
the antidilution provisions of the stock warrants; and
|
|
|
|
any other terms of the stock warrants.
|
37
The shares of common stock or preferred stock issuable upon
exercise of the stock warrants will, when issued in accordance
with the stock warrant agreement, be fully paid and
nonassessable.
Exercise
of Stock Warrants
Stock warrants may be exercised by surrendering to the stock
warrant agent the stock warrant certificate with the form of
election to purchase on the reverse thereof duly completed and
signed by the warrantholder, or its duly authorized agent,
indicating the warrantholders election to exercise all or
a portion of the stock warrants evidenced by the certificate.
The signature must be guaranteed by a bank or trust company, by
a broker or dealer which is a member of the Financial Industry
Regulatory Authority (FINRA) or by a member of a
national securities exchange. Surrendered stock warrant
certificates shall be accompanied by payment of the aggregate
exercise price of the stock warrants to be exercised, as set
forth in the related prospectus supplement, in lawful money of
the United States, unless otherwise provided in the related
prospectus supplement. Upon receipt thereof by the stock warrant
agent, the stock warrant agent will requisition from the
transfer agent for the common stock or the preferred stock, as
the case may be, for issuance and delivery to or upon the
written order of the exercising warrantholder, a certificate
representing the number of shares of common stock or preferred
stock purchased. If less than all of the stock warrants
evidenced by any stock warrant certificate are exercised, the
stock warrant agent shall deliver to the exercising
warrantholder a new stock warrant certificate representing the
unexercised stock warrants.
Antidilution
and Other Provisions
The exercise price payable and the number of shares of common
stock or preferred stock purchasable upon the exercise of each
stock warrant and the number of stock warrants outstanding will
be subject to adjustment in certain events, including the
issuance of a stock dividend to holders of common stock or
preferred stock, respectively, or a combination, subdivision or
reclassification of common stock or preferred stock,
respectively. In lieu of adjusting the number of shares of
common stock or preferred stock purchasable upon exercise of
each stock warrant, we may elect to adjust the number of stock
warrants. No adjustment in the number of shares purchasable upon
exercise of the stock warrants will be required until cumulative
adjustments require an adjustment of at least 1% thereof. We
may, at our option, reduce the exercise price at any time. No
fractional shares will be issued upon exercise of stock
warrants, but we will pay the cash value of any fractional
shares otherwise issuable. Notwithstanding the foregoing, in
case of our consolidation, merger, or sale or conveyance of our
property as an entirety or substantially as an entirety, the
holder of each outstanding stock warrant shall have the right to
the kind and amount of shares of stock and other securities and
property, including cash, receivable by a holder of the number
of shares of common stock or preferred stock into which such
stock warrants were exercisable immediately prior thereto.
No Rights
as Stockholders
Holders of stock warrants will not be entitled, by virtue of
being such holders, to vote, to consent, to receive dividends,
to receive notice as stockholders with respect to any meeting of
stockholders for the election of our directors or any other
matter, or to exercise any rights whatsoever as our stockholders.
DESCRIPTION
OF THE WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the debt warrants are
summaries of the material provisions of a debt warrant agreement
to be entered into by us and a debt warrant agent to be selected
at the time of issue. The debt warrant agreement may include or
incorporate by reference standard warrant provisions
substantially in the form of the Debt Warrant Agreement filed as
an exhibit to the registration statement of which this
prospectus forms a part.
General
The debt warrants, evidenced by debt warrant certificates, may
be issued under the debt warrant agreement independently or
together with any other securities offered by any prospectus
supplement and may be attached to or
38
separate from such other offered securities. If debt warrants
are offered, the related prospectus supplement will describe the
designation and terms of the debt warrants, including without
limitation the following:
|
|
|
|
|
the offering price, if any;
|
|
|
|
the designation, aggregate principal amount and terms of the
debt securities purchasable upon exercise of the debt warrants;
|
|
|
|
if applicable, the date on and after which the debt warrants and
the related offered securities will be separately transferable;
|
|
|
|
the principal amount of debt securities purchasable upon
exercise of one debt warrant and the price at which such
principal amount of debt securities may be purchased upon
exercise;
|
|
|
|
the date on which the right to exercise the debt warrants shall
commence and the date on which such right shall expire;
|
|
|
|
a discussion of certain United States Federal income tax
considerations;
|
|
|
|
whether the warrants represented by the debt warrant
certificates will be issued in registered or bearer form;
|
|
|
|
the currency, currencies or currency units in which the offering
price, if any, and exercise price are payable;
|
|
|
|
the antidilution provisions of the debt warrants; and
|
|
|
|
any other terms of the debt warrants.
|
Warrantholders will not have any of the rights of holders of
debt securities, including the right to receive the payment of
principal of, any premium or interest on, or any additional
amounts with respect to, the debt securities or to enforce any
of the covenants of the debt securities or the applicable W. R.
Berkley indenture except as otherwise provided in the applicable
W. R. Berkley indenture.
Exercise
of Debt Warrants
Debt warrants may be exercised by surrendering the debt warrant
certificate at the office of the debt warrant agent, with the
form of election to purchase on the reverse side of the debt
warrant certificate properly completed and executed, and by
payment in full of the exercise price, as set forth in the
related prospectus supplement. The signature must be guaranteed
by a bank or trust company, by a broker or dealer which is a
member of FINRA or by a member of a national securities
exchange. Upon the exercise of debt warrants, we will issue the
debt securities in authorized denominations in accordance with
the instructions of the exercising warrantholder. If less than
all of the debt warrants evidenced by the debt warrant
certificate are exercised, a new debt warrant certificate will
be issued for the remaining number of debt warrants.
DESCRIPTION
OF PREFERRED SECURITIES
The trust will be governed by the terms of a restated trust
agreement. Under the restated trust agreement, the trust may
issue, from time to time, only one series of preferred
securities. The preferred securities will have the terms set
forth in the restated trust agreement or made a part of the
restated trust agreement by the Trust Indenture Act, and
described in the related prospectus supplement. These terms will
mirror the terms of the subordinated debt securities purchased
by the trust using the proceeds from the sale of its preferred
securities and its common securities. The subordinated debt
securities issued to the trust will be guaranteed by us on a
subordinated basis and are referred to as the
corresponding subordinated debt securities relating
to the trust. See Use of Proceeds.
The following summary sets forth the material terms and
provisions of the restated trust agreement and the preferred
securities to which any prospectus supplement relates. You
should refer to the form of restated trust agreement and to the
Trust Indenture Act for complete information regarding the
terms and provisions of that agreement and of the preferred
securities, including the definitions of some of the terms used
below. The form of restated trust agreement filed as an exhibit
to the registration statement of which this prospectus forms a
part is incorporated by reference in this summary. Whenever
particular sections or defined terms of a restated trust
39
agreement are referred to, such sections or defined terms are
incorporated herein by reference, and the statement in
connection with which such reference is made is qualified in its
entirety by such reference.
Issuance,
Status and Guarantee of Preferred Securities
Under the terms of the restated trust agreement for the trust,
the administrative trustees will issue the preferred securities
on behalf of the trust. The preferred securities will represent
preferred beneficial interests in the trust and the holders of
the preferred securities will be entitled to a preference in
certain circumstances as regards distributions and amounts
payable on redemption or liquidation over the common securities
of the trust, as well as other benefits under the corresponding
restated trust agreement. The preferred securities of the trust
will rank equally, and payments will be made on the preferred
securities pro rata, with the common securities of the trust
except as described under Subordination of
Common Securities. The property trustee will hold legal
title to the corresponding subordinated debt securities in trust
for the benefit of the holders of the related preferred
securities and common securities. The common securities and the
preferred securities of the trust are collectively referred to
as the trust securities of the trust.
We will issue a guarantee agreement for the benefit of the
holders of the trusts preferred securities. Under such
preferred securities guarantee, we will guarantee on a
subordinated basis payment of distributions on the related
preferred securities and amounts payable on redemption or
liquidation of such preferred securities, but only to the extent
that the related trust has funds on hand to make such payments.
See Description of Preferred Securities Guarantee.
Distributions
Distributions on the preferred securities will be cumulative,
will accumulate from the original issue date and will be payable
on the dates as specified in the related prospectus supplement.
In the event that any date on which distributions are payable on
the preferred securities is not a Business Day, payment of the
distribution payable on such date will be made on the next
succeeding day that is a Business Day, and without any
additional distributions or other payment in respect of any such
delay, except that, if such Business Day is in the next
succeeding calendar year, payment of such distribution shall be
made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date such
payment was originally payable. (Section 4.1) A
Business Day is any day other than a Saturday or a
Sunday, or a day on which banking institutions in the City of
New York are authorized or required by law or executive order to
remain closed or a day on which the principal corporate trust
office of the property trustee or the trustee for the
corresponding subordinated debt securities is closed for
business. (Section 1.1)
Distributions on the preferred securities will be payable at a
rate specified in the related prospectus supplement. The amount
of distributions payable for any period will be computed on the
basis of a
360-day year
of twelve
30-day
months unless otherwise specified in the related prospectus
supplement. Distributions to which holders of preferred
securities are entitled will accumulate additional distributions
at the rate per annum if and as specified in the related
prospectus supplement. (Section 4.1) References to
distributions include any such additional
distributions unless otherwise stated.
If provided in the applicable prospectus supplement, we have the
right under the subordinated indenture to defer the payment of
interest at any time or from time to time on the corresponding
subordinated debt securities for an Extension Period which will
be specified in the related prospectus supplement. No Extension
Period may extend beyond the stated maturity of the
corresponding subordinated debt securities. See
Description of Debt Securities Option to
Extend Interest Payment Date. As a consequence of any such
extension, distributions on the corresponding preferred
securities would be deferred, but would continue to accumulate
additional distributions at the rate per annum set forth in the
prospectus supplement for such preferred securities, by the
trust which issued such preferred securities during any such
Extension Period. (Section 4.1)
The funds of the trust available for distribution to holders of
its preferred securities will be limited to payments under the
corresponding subordinated debt securities in which the trust
will invest the proceeds from the issuance and sale of its trust
securities. If we do not make interest payments on those
corresponding subordinated debt securities, the property trustee
will not have funds available to pay distributions on the
related preferred securities. The payment of distributions, if
and to the extent the trust has funds legally available for the
payment of such
40
distributions and cash sufficient to make such payments, is
guaranteed by us on a limited basis as set forth herein under
Description of Preferred Securities Guarantee.
Distributions on the preferred securities will be payable to the
holders thereof as they appear on the register of the trust on
the relevant record dates. As long as the preferred securities
remain in book-entry form, the record dates will be one Business
Day prior to the relevant distribution dates. Subject to any
applicable laws and regulations and the provisions of the
applicable restated trust agreement, each distribution payment
will be made as described under Global Preferred
Securities. In the event any preferred securities are not
in book-entry form, the relevant record date for such preferred
securities will be the date at least 15 days prior to the
relevant distribution date, as specified in the related
prospectus supplement. (Section 4.1)
Redemption
or Exchange
Mandatory Redemption. Upon any repayment or
redemption, in whole or in part, of any corresponding
subordinated debt securities held by the trust, whether at
stated maturity, upon earlier redemption or otherwise, the
proceeds from such repayment or redemption shall simultaneously
be applied by the property trustee, upon not less than 30 nor
more than 60 days notice to holders of trust securities, to
redeem, on a pro rata basis, preferred securities and common
securities having an aggregate stated liquidation amount equal
to the aggregate principal amount of the corresponding
subordinated debt securities so repaid or redeemed. The
redemption price per trust security will be equal to the stated
liquidation amount thereof plus accumulated and unpaid
distributions thereon to the date of redemption, plus the
related amount of premium, if any, and any additional amounts
paid by us upon the concurrent repayment or redemption of the
corresponding subordinated debt securities. (Section 4.2)
If less than all of any series of corresponding subordinated
debt securities are to be repaid or redeemed on a redemption
date, then the proceeds from such repayment or redemption shall
be allocated to the redemption pro rata of the related preferred
securities and the common securities. (Section 4.2)
We will have the right to redeem any series of corresponding
subordinated debt securities:
|
|
|
|
|
at any time, in whole but not in part, upon the occurrence of a
Special Event and subject to the further conditions described
under Description of Debt Securities
Redemption, or
|
|
|
|
as may be otherwise specified in the applicable prospectus
supplement.
|
Special Event Redemption or Distribution of Corresponding
Subordinated Debt Securities. If a Special Event
relating to the preferred securities and common securities of
the trust shall occur and be continuing, we have the right to
redeem the corresponding subordinated debt securities, in whole
but not in part, and thereby cause a mandatory redemption of
such preferred securities and common securities, in whole but
not in part, at the redemption price within 90 days
following the occurrence of the Special Event. At any time, we
have the right to dissolve the related trust and after
satisfaction of the liabilities of creditors of the trust as
provided by applicable law, cause such corresponding
subordinated debt securities to be distributed to the holders of
such preferred securities and common securities in liquidation
of the trust. If we do not elect to redeem the corresponding
subordinated debt securities upon the occurrence of a Special
Event, the applicable preferred securities will remain
outstanding, and in the event a Tax Event has occurred and is
continuing, Additional Sums may be payable on the corresponding
subordinated debt securities. Additional Sums means
the additional amounts as may be necessary in order that the
amount of distributions then due and payable by the trust on the
outstanding preferred securities and common securities of the
trust shall not be reduced as a result of any additional taxes,
duties and other governmental charges to which the trust has
become subject as a result of a Tax Event. (Section 1.1)
On and from the date fixed for any distribution of corresponding
subordinated debt securities upon dissolution of the trust:
|
|
|
|
|
the trust securities will no longer be deemed to be outstanding,
|
|
|
|
the depositary or its nominee, as the record holder of the
applicable preferred securities, will receive a registered
global certificate or certificates representing the
corresponding subordinated debt securities to be delivered upon
such distribution, and
|
41
|
|
|
|
|
any certificates representing such preferred securities not held
by the depositary or its nominee will be deemed to represent
beneficial interests in the corresponding subordinated debt
securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of such preferred
securities, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid distributions on such preferred
securities until such certificates are presented to the
administrative trustees or their agent for transfer or
reissuance. (Section 4.2)
|
We cannot predict the market prices for the preferred securities
or the corresponding subordinated debt securities that may be
distributed in exchange for preferred securities if a
dissolution and liquidation of the trust were to occur.
Accordingly, the preferred securities that you may purchase, or
the corresponding subordinated debt securities that you may
receive on dissolution and liquidation of the trust, may trade
at a discount to the price that you paid to purchase the
preferred securities.
Redemption Procedures
Preferred securities redeemed on each redemption date shall be
redeemed at the redemption price with the applicable proceeds
from the contemporaneous redemption of the corresponding
subordinated debt securities. Redemptions of the preferred
securities shall be made and the redemption price shall be
payable on each redemption date only to the extent that the
related trust has funds on hand available for the payment of
such redemption price. See also Subordination
of Common Securities.
If the trust gives a notice of redemption, which notice will be
irrevocable, in respect of its preferred securities, then, by
12:00 noon, New York City time, on the redemption date, to the
extent funds are available, the property trustee will deposit
irrevocably with the depositary for the preferred securities
funds sufficient to pay the applicable redemption price and will
give the depositary irrevocable instructions and authority to
pay the redemption price to the holders of such preferred
securities. If such preferred securities are no longer in
book-entry form, the property trustee, to the extent funds are
available, will irrevocably deposit with the paying agent for
such preferred securities funds sufficient to pay the applicable
redemption price and will give such paying agent irrevocable
instructions and authority to pay the redemption price to the
holders thereof upon surrender of their certificates evidencing
such preferred securities. Notwithstanding the foregoing,
distributions payable on or prior to the redemption date for any
preferred securities called for redemption shall be payable to
the holders of such preferred securities on the relevant record
dates for the related distribution dates. If notice of
redemption shall have been given and funds deposited as
required, then immediately prior to the close of business on the
date of such deposit, all rights of the holders of such
preferred securities so called for redemption will cease, except
the right of the holders of such preferred securities to receive
the redemption price, but without interest, and such preferred
securities will cease to be outstanding. In the event that any
date on which any redemption price is payable is not a Business
Day, then payment of the redemption price payable on such date
will be made on the next succeeding day which is a Business Day,
and without any interest or other payment in respect of any such
delay, except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date. In the event that payment of the
redemption price in respect of preferred securities called for
redemption is improperly withheld or refused and not paid either
by the related trust or by us pursuant to the preferred
securities guarantee as described under Description of
Preferred Securities Guarantee, distributions on such
preferred securities will continue to accumulate at the then
applicable rate, from the redemption date originally established
by the trust for such preferred securities to the date such
redemption price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes
of calculating the redemption price.
Subject to applicable law, including, without limitation, United
States Federal securities law, we or our subsidiaries may at any
time and from time to time purchase outstanding preferred
securities by tender, in the open market or by private agreement.
Payment of the redemption price on the preferred securities
shall be made to the applicable recordholders as they appear on
the register for such preferred securities on the relevant
record date, which shall be one Business Day prior to the
relevant redemption date; provided, however, that in the event
that any preferred securities are not in
42
book-entry form, the relevant record date for such preferred
securities shall be a date at least 15 days prior to the
redemption date, as specified in the applicable prospectus
supplement.
If less than all of the preferred securities and common
securities issued by the trust are to be redeemed on a
redemption date, then the aggregate liquidation amount of such
preferred securities and common securities to be redeemed shall
be allocated pro rata to the preferred securities and the common
securities based upon the relative liquidation amounts of such
classes. The particular preferred securities to be redeemed
shall be selected on a pro rata basis not more than 60 days
prior to the redemption date by the property trustee from the
outstanding preferred securities not previously called for
redemption, or by such other method as the property trustee
shall deem fair and appropriate. The property trustee shall
promptly notify the trust registrar in writing of the preferred
securities selected for redemption and, in the case of any
preferred securities selected for partial redemption, the
liquidation amount thereof to be redeemed. For all purposes of
the restated trust agreement, unless the context otherwise
requires, all provisions relating to the redemption of preferred
securities shall relate, in the case of any preferred securities
redeemed or to be redeemed only in part, to the portion of the
liquidation amount of preferred securities which has been or is
to be redeemed.
Notice of any redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to
each holder of trust securities to be redeemed at its registered
address. Unless we default in payment of the redemption price on
the corresponding subordinated debt securities, on and after the
redemption date interest will cease to accrue on such
subordinated debt securities or portions thereof called for
redemption and distributions will cease to accrue on the related
preferred securities or portions thereof. (Section 4.2)
Subordination
of Common Securities
Payment of distributions on, and the redemption price of, the
trusts preferred securities and common securities, as
applicable, shall be made pro rata based on the liquidation
amount of such preferred securities and common securities;
provided, however, that if on any distribution date or
redemption date an event of default under the corresponding
subordinated debt securities shall have occurred and be
continuing, no payment of any distribution on, or redemption
price of, any of the trusts common securities, and no
other payment on account of the redemption, liquidation or other
acquisition of such common securities, shall be made unless
payment in full in cash of all accumulated and unpaid
distributions on all of the trusts outstanding preferred
securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the redemption price the
full amount of such redemption price on all of the trusts
outstanding preferred securities then called for redemption,
shall have been made or provided for, and all funds available to
the property trustee shall first be applied to the payment in
full in cash of all distributions on, or redemption price of,
the trusts preferred securities then due and payable.
In the case of any Event of Default under the restated trust
agreement resulting from an event of default under the
corresponding subordinated debt securities, the holder of the
trusts common securities will be deemed to have waived any
right to act with respect to any such Event of Default under the
restated trust agreement until the effect of all such Events of
Default with respect to such preferred securities have been
cured, waived or otherwise eliminated. Until any such Events of
Default under the restated trust agreement with respect to the
preferred securities have been so cured, waived or otherwise
eliminated, the property trustee shall act solely on behalf of
the holders of such preferred securities and not on behalf of
the holder of the trusts common securities, and only the
holders of such preferred securities will have the right to
direct the property trustee to act on their behalf.
(Section 4.3)
Liquidation
Distribution Upon Dissolution of the Trust
Pursuant to the restated trust agreement, the trust shall
automatically dissolve upon expiration of its term and shall
dissolve on the first to occur of:
(1) certain events of our bankruptcy, dissolution or
liquidation;
(2) the distribution to the holders of its trust securities
of corresponding subordinated debt securities having an
aggregate principal amount equal to the aggregate stated
liquidation amount of the trust securities, if we, as Depositor,
have given written direction to the property trustee to dissolve
the trust, which direction is optional and wholly within our
discretion, as Depositor;
43
(3) the redemption of all of the trusts trust
securities following a Special Event;
(4) the redemption of all of the trusts preferred
securities as described under Description of Preferred
Securities Redemption or Exchange
Mandatory Redemption; and
(5) the entry of an order for the dissolution of the trust
by a court of competent jurisdiction. (Section 9.2)
If an early dissolution occurs as described in clause (1),
(2) or (5) above or upon the date designated for
automatic dissolution of the trust, the trust shall be
liquidated by the trustees as expeditiously as the trustees
determine to be possible by distributing, after satisfaction of
liabilities to creditors of the trust as provided by applicable
law, to the holders of the trust securities corresponding
subordinated debt securities having an aggregate principal
amount equal to the aggregate stated liquidation amount of the
trust securities. However, if such distribution is determined by
the property trustee, in consultation with us, not to be
practical, such holders will be entitled to receive out of the
assets of the trust available for distribution to holders, after
satisfaction of liabilities to creditors of the trust as
provided by applicable law, an amount equal to, in the case of
holders of preferred securities, the aggregate of the
liquidation amount plus accumulated and unpaid distributions
thereon to the date of payment. If such Liquidation Distribution
can be paid only in part because the trust has insufficient
assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the trust on
its preferred securities shall be paid on a pro rata basis.
Holders of the trusts common securities will be entitled
to receive distributions upon any such liquidation pro rata with
the holders of its preferred securities, except that if an event
of default under the corresponding subordinated debt securities
has occurred and is continuing, the preferred securities shall
have a priority over the common securities. (Section 9.4)
Events of
Default; Notice
Any one of the following events constitutes an Event of
Default under the restated trust agreement with respect to
the preferred securities, whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body:
(1) the occurrence of an event of default in respect of the
corresponding subordinated debt securities (see
Description of Debt Securities Events of
Default);
(2) default by the property trustee in the payment of any
distribution when it becomes due and payable, and continuation
of such default for a period of 30 days;
(3) default by the property trustee in the payment of any
redemption price of any trust security when it becomes due and
payable;
(4) default in the performance, or breach, in any material
respect, of any covenant or warranty of the trustees in such
restated trust agreement, other than a covenant or warranty a
default in the performance of which or the breach of which is
dealt with in clause (2) or (3) above, and
continuation of such default or breach for a period of
60 days after there has been given, by registered or
certified mail, to the defaulting trustee or trustees by the
holders of at least 25% in aggregate liquidation preference of
the outstanding preferred securities of the trust, a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a Notice of
Default under such restated trust agreement; or
(5) the occurrence of certain events of bankruptcy or
insolvency with respect to the property trustee and the failure
by the holder of the common securities of the trust to appoint a
successor property trustee within 60 days thereof.
(Section 1.1)
Within five Business Days after the occurrence of any Event of
Default actually known to the property trustee, the property
trustee shall transmit notice of such Event of Default to the
holders of the trusts preferred securities, the
administrative trustees and to us, as Depositor, unless such
Event of Default shall have been cured or waived. We, as
Depositor, and the administrative trustees are required to file
annually with the property trustee a certificate as to whether
or not we and the administrative trustees are in compliance with
all the conditions and covenants applicable to us and the
administrative trustees under the restated trust agreement.
(Sections 8.15 and 8.16)
44
If an event of default under the corresponding subordinated debt
securities has occurred and is continuing, the preferred
securities shall have a preference over the common securities
upon dissolution of the trust as described above. See
Liquidation Distribution Upon Dissolution of
the Trust. The existence of an Event of Default under the
restated trust agreement does not entitle the holders of
preferred securities to accelerate the maturity thereof.
Removal
of Trustees
Unless an event of default under the corresponding subordinated
debt securities shall have occurred and be continuing, any
trustee may be removed at any time by the holder of the common
securities. If an event of default under the corresponding
subordinated debt securities has occurred and is continuing, the
property trustee and the Delaware trustee may be removed at such
time by the holders of a majority in liquidation amount of the
outstanding preferred securities. In no event will the holders
of the preferred securities have the right to vote to appoint,
remove or replace the administrative trustees, which voting
rights are vested exclusively in the holder of the common
securities. No resignation or removal of a trustee and no
appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance
with the provisions of the restated trust agreement.
(Section 8.10)
Co-Trustees
and Separate Property Trustee
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the property of the trust may
at the time be located, the holder of the common securities and
the administrative trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the
property trustee, of all or any part of the property of the
trust, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons
in such capacity any property, title, right or power deemed
necessary or desirable, subject to the provisions of the
applicable restated trust agreement. In case an event of default
under the corresponding subordinated debt securities has
occurred and is continuing, the property trustee alone shall
have power to make such appointment. (Section 8.9)
Merger or
Consolidation of Trustees
Any corporation into which the property trustee, the Delaware
trustee or any administrative trustee that is not a natural
person may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such trustee shall be a
party shall be the successor of such trustee under the restated
trust agreement, provided such corporation shall be otherwise
qualified and eligible. (Section 8.12)
Mergers,
Consolidations, Amalgamations or Replacements of the
Trust
The trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any
corporation or other entity, except as described below or as
described in Liquidation Distribution Upon Dissolution of
the Trust. The trust may, at our request, with the consent
of only the administrative trustees and without the consent of
the holders of the preferred securities, merge with or into,
convert into, consolidate, amalgamate, or be replaced by or
convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under
the laws of any State, provided, that:
|
|
|
|
|
such successor entity either (a) expressly assumes all of
the obligations of the trust with respect to the preferred
securities or (b) substitutes for the preferred securities
other securities having substantially the same terms as the
preferred securities so long as such successor securities rank
the same as the preferred securities rank in priority with
respect to distributions and payments upon liquidation,
redemption and otherwise,
|
|
|
|
we expressly appoint a trustee of such successor entity
possessing the same powers and duties as the property trustee as
the holder of the corresponding subordinated debt securities,
|
45
|
|
|
|
|
the successor securities are listed or traded, or any successor
securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the
preferred securities are then listed or traded, if any,
|
|
|
|
such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the
preferred securities, including any successor securities, to be
downgraded by any nationally recognized statistical rating
organization,
|
|
|
|
such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of
the preferred securities, including any successor securities, in
any material respect,
|
|
|
|
such successor entity has a purpose substantially identical to
that of the trust,
|
|
|
|
prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, we have received an
opinion from independent counsel to the trust experienced in
such matters to the effect that (a) such merger,
conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the holders of the
preferred securities, including any successor securities, in any
material respect, and (b) following such merger,
conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the trust nor any
successor entity will be required to register as an
investment company under the Investment Company
Act, and
|
|
|
|
we or any permitted successor or assignee own all of the common
securities of such successor entity and guarantee the
obligations of such successor entity under the successor
securities at least to the extent provided by the preferred
securities guarantee.
|
Notwithstanding the foregoing, the trust shall not, except with
the consent of holders of 100% in liquidation amount of the
preferred securities, consolidate, amalgamate, merge with or
into, convert into, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to
any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, convert into, or replace it if
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the trust or the
successor entity to be classified as other than a grantor trust
for United States Federal income tax purposes. (Section 9.5)
Voting
and Preemptive Rights
Except as provided below and under Description of
Preferred Securities Guarantee Amendments and
Assignment and as otherwise required by law and the
applicable restated trust agreement, the holders of the
preferred securities will have no voting rights. Holders of the
preferred securities have no preemptive or similar rights.
(Section 6.1)
Amendment
of Restated Trust Agreement
The restated trust agreement may be amended from time to time by
us and the trustees, without the consent of the holders of the
trust securities:
(1) to cure any ambiguity, correct or supplement any
provisions in such restated trust agreement that may be
inconsistent with any other provision, or to make any other
provisions with respect to matters or questions arising under
such restated trust agreement, which shall not be inconsistent
with the other provisions of such restated trust
agreement, or
(2) to modify, eliminate or add to any provisions of such
restated trust agreement to such extent as shall be necessary to
ensure that the trust will be classified for United States
Federal income tax purposes as a grantor trust at all times that
any trust securities are outstanding or to ensure that the trust
will not be required to register as an investment
company under the Investment Company Act;
provided, however, that in the case of clause (1), such action
shall not adversely affect in any material respect the interests
of any holder of trust securities. Any such amendments of the
restated trust agreement shall become effective when notice
thereof is given to the holders of trust securities of the trust.
46
The restated trust agreement may be amended by us and the
trustees with the consent of holders representing not less than
a majority, based upon liquidation amounts, of the outstanding
trust securities, and receipt by the trustees of an opinion of
counsel to the effect that such amendment or the exercise of any
power granted to the trustees in accordance with such amendment
will not affect the trusts status as a grantor trust for
United States Federal income tax purposes or the trusts
exemption from status as an investment company under
the Investment Company Act. However, without the consent of each
holder of trust securities, such restated trust agreement may
not be amended to:
|
|
|
|
|
change the amount or timing of any distribution on the trust
securities or otherwise adversely affect the amount of any
distribution required to be made in respect of the trust
securities as of a specified date, or
|
|
|
|
restrict the right of a holder of trust securities to institute
suit for the enforcement of any such payment on or after such
date. (Section 10.2)
|
So long as any corresponding subordinated debt securities are
held by the property trustee, the trustees shall not:
|
|
|
|
|
direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, or executing any trust
or power conferred on the property trustee with respect to such
corresponding subordinated debt securities,
|
|
|
|
waive any past default that is waivable under Section 5.13
of the subordinated indentures (as described in
Description of the Debt Securities
Modification and Waiver),
|
|
|
|
exercise any right to rescind or annul a declaration that the
principal of all the subordinated debt securities shall be due
and payable, or
|
|
|
|
consent to any amendment, modification or termination of the
subordinated indenture or such corresponding subordinated debt
securities, where such consent shall be required,
|
without, in each case, obtaining the prior approval of the
holders of a majority in aggregate liquidation amount of all
outstanding preferred securities.
However, where a consent under the subordinated indenture would
require the consent of each holder of corresponding subordinated
debt securities affected thereby, no such consent shall be given
by the property trustee without the prior consent of each holder
of the corresponding preferred securities. The trustees shall
not revoke any action previously authorized or approved by a
vote of the holders of the preferred securities except by
subsequent vote of the holders of the preferred securities. The
property trustee shall notify each holder of preferred
securities of any notice of default with respect to the
corresponding subordinated debt securities. In addition to
obtaining the foregoing approvals of the holders of the
preferred securities, prior to taking any of the foregoing
actions, the trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the trust will
not be classified as a corporation for United States Federal
income tax purposes on account of such action. (Section 6.1)
Any required approval or action of holders of preferred
securities may be given or taken at a meeting of holders of
preferred securities convened for such purpose or pursuant to
written consent. The property trustee will cause a notice of any
meeting at which holders of preferred securities are entitled to
vote to be given to each holder of record of preferred
securities in the manner set forth in the restated trust
agreement. (Sections 6.2, 6.3 and 6.6)
No vote or consent of the holders of preferred securities will
be required for the trust to redeem and cancel its preferred
securities in accordance with the applicable restated trust
agreement.
Notwithstanding that holders of preferred securities are
entitled to vote or consent under any of the circumstances
described above, any of the preferred securities that are owned
by us, the trustees or any affiliate of ours or any trustees,
shall, for purposes of such vote or consent, be treated as if
they were not outstanding.
47
Global
Preferred Securities
The preferred securities of the trust may be issued in whole or
in part in the form of one or more global preferred securities
that will be deposited with, or on behalf of, the depositary
identified in the prospectus supplement.
The specific terms of the depositary arrangement with respect to
the preferred securities of the trust will be described in the
related prospectus supplement. We anticipate that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a global preferred security, and the
deposit of such global preferred security with or on behalf of
the depositary, the depositary for such global preferred
security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate
liquidation amounts of the individual preferred securities
represented by such global preferred securities to the accounts
of participants. Such accounts shall be designated by the
underwriters or agents with respect to such preferred securities
or by us if such preferred securities are offered and sold
directly by us. Ownership of beneficial interests in a global
preferred security will be limited to participants or persons
that may hold interests through participants. Ownership of
beneficial interests in such global preferred security will be
shown on, and the transfer of that ownership will be effected
only through, records maintained by the depositary or its
nominee with respect to interests of participants, and the
records of participants with respect to interests of persons who
hold through participants. The laws of some states require that
certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a global
preferred security.
So long as the depositary for a global preferred security, or
its nominee, is the registered owner of such global preferred
security, such depositary or such nominee, as the case may be,
will be considered the sole owner or holder of the preferred
securities represented by such global preferred security for all
purposes under the restated trust agreement governing such
preferred securities. Except as provided below, owners of
beneficial interests in a global preferred security will not be
entitled to have any of the individual preferred securities
represented by such global preferred security registered in
their names, will not receive or be entitled to receive physical
delivery of any such preferred securities in definitive form and
will not be considered the owners or holders thereof under the
restated trust agreement.
Payments of any liquidation amount, premium or distributions in
respect of individual preferred securities registered in the
name of a depositary or its nominee will be made to the
depositary or its nominee, as the case may be, as the registered
owner of the global preferred security representing such
preferred securities. None of W. R. Berkley, the property
trustee, any paying agent, or the securities registrar for such
preferred securities will have any responsibility or liability
for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the global
preferred security representing such preferred securities or for
maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
We expect that the depositary or its nominee, upon receipt of
any payment in respect of a global preferred security
representing the trusts preferred securities, will credit
immediately participants accounts with payments in amounts
proportionate to their respective beneficial interest in the
aggregate liquidation amount of such global preferred security
for such preferred securities as shown on the records of such
depositary or its nominee. We also expect that payments by
participants to owners of beneficial interests in such global
preferred security held through such participants will be
governed by standing instructions and customary practices, as is
now 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 participants.
Unless otherwise specified in the applicable prospectus
supplement, the restated trust agreement of trust will provide
that:
|
|
|
|
|
if we advise the trustees in writing that the depositary is no
longer willing or able to act as depositary and we fail to
appoint a qualified successor within 90 days,
|
|
|
|
we at our option advise the trustees in writing that we elect to
terminate the book-entry system through the depositary, or
|
48
|
|
|
|
|
after the occurrence of an event of default under the
corresponding subordinated debt securities, owners of preferred
securities representing at least a majority of liquidation
amount of such preferred securities advise the property trustee
in writing that the continuation of a book-entry system through
the depositary is no longer in their best interests,
|
then the global preferred securities will be exchanged for
preferred securities in definitive form in accordance with the
instructions of the depositary. It is expected that such
instructions may be based upon directions received by the
depositary from participants with respect to ownership of
beneficial interests in global preferred securities. Individual
preferred securities so issued will be issued in authorized
denominations.
Payment
and Paying Agency
Payments in respect of the preferred securities shall be made to
the depositary, which shall credit the relevant accounts at the
depositary on the applicable distribution dates or, if the
trusts preferred securities are not held by the
depositary, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall
appear on the register of the trust. Unless otherwise specified
in the applicable prospectus supplement, the paying agent shall
initially be the property trustee and any copaying agent chosen
by the property trustee and acceptable to us and the
administrative trustees. The paying agent shall be permitted to
resign as paying agent upon 30 days written notice to
us and the property trustee. In the event the property trustee
shall no longer be the paying agent, the administrative trustees
shall appoint a successor, which shall be a bank or trust
company acceptable to the administrative trustees and us, to act
as paying agent. (Section 5.9)
Registrar
and Transfer Agent
Unless otherwise specified in the applicable prospectus
supplement, the property trustee will act as registrar and
transfer agent for the preferred securities.
Registration of transfers of preferred securities will be
effected without charge by or on behalf of the trust, but upon
payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The trust
will not be required to register or cause to be registered the
transfer of their preferred securities after such preferred
securities have been called for redemption. (Section 5.4)
Information
Concerning the Property Trustee
The property trustee, other than during the occurrence of and
continuation of a default by us in performance of any
trust-issued subordinated indenture, undertakes to perform,
without negligence, acting in bad faith or willful misconduct,
only those duties specifically set forth in the restated trust
agreement, provided that it must exercise the same degree of
care as a prudent person would exercise in the conduct of his or
her own affairs after default with respect to any trust-issued
subordinated indenture. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers
vested in it by the applicable restated trust agreement at the
request of any holder of preferred securities unless it is
offered indemnity reasonably satisfactory to the property
trustee against the costs, expenses and liabilities that might
be incurred thereby. If in performing its duties under the
restated trust agreement, the property trustee is required to
decide between alternative causes of action, construe ambiguous
provisions in the applicable restated trust agreement or is
unsure of the application of any provision of the applicable
restated trust agreement, and the matter is not one on which
holders of preferred securities are entitled under such restated
trust agreement to vote, then the property trustee shall take
such action as is directed by us. If it is not so directed, the
property trustee shall take such action as it deems advisable
and in the best interests of the holders of the trust securities
and will have no liability except for its own bad faith,
negligence or willful misconduct.
Administrative
Trustees
The administrative trustees are authorized and directed to
conduct the affairs of and to operate the trust in such a way
that it will not be deemed to be an investment
company required to be registered under the Investment
Company Act or classified as an association taxable as a
corporation for United States Federal income tax purposes and so
that the corresponding subordinated debt securities will be
treated as our indebtedness for United States Federal income tax
purposes. In this connection, we and the administrative trustees
are authorized to take any
49
action, not inconsistent with applicable law, the certificate of
trust of the trust or the restated trust agreement, that we and
the administrative trustees determine in our and their
discretion to be necessary or desirable for such purposes, as
long as such action does not materially adversely affect the
interests of the holders of the related preferred securities.
DESCRIPTION
OF PREFERRED SECURITIES GUARANTEE
Concurrently with the issuance by the trust of its preferred
securities, we will execute and deliver a preferred securities
guarantee for the benefit of the holders from time to time of
such preferred securities. The property trustee will act as
indenture trustee under the preferred securities guarantee for
the purposes of compliance with the Trust Indenture Act,
and the preferred securities guarantee will be qualified as an
indenture under the Trust Indenture Act. In this
prospectus, we refer to the property trustee acting as indenture
trustee under the preferred securities guarantee as the
guarantee trustee. The following is a summary of the
material terms and provisions of the preferred securities
guarantee. You should refer to the form of preferred securities
guarantee and the Trust Indenture Act for more complete
information regarding the provisions of the preferred securities
guarantee, including the definitions of some of the terms used
below. The form of the preferred securities guarantee has been
filed as an exhibit to the registration statement of which this
prospectus forms a part and is incorporated by reference in this
summary. Whenever particular sections or defined terms of a
preferred securities guarantee are referred to, such sections or
defined terms are incorporated herein by reference, and the
statement in connection with which such reference is made is
qualified in its entirety by such reference. Reference in this
summary to preferred securities means the trusts preferred
securities to which a preferred securities guarantee relates.
The guarantee trustee will hold the preferred securities
guarantee for the benefit of the holders of the related
trusts preferred securities.
General
We will irrevocably agree to pay in full on a subordinated
basis, to the extent described herein, the Guarantee Payments
without duplication of amounts theretofore paid by or on behalf
of the trust, to the holders of the preferred securities, as and
when due, regardless of any defense, right of setoff or
counterclaim that the trust may have or assert other than the
defense of payment. The following Guarantee Payments with
respect to the preferred securities, to the extent not paid by
or on behalf of the related trust, will be subject to the
preferred securities guarantee:
|
|
|
|
|
any accrued and unpaid distributions required to be paid on such
preferred securities, to the extent that the trust has funds on
hand available for payment at such time,
|
|
|
|
the redemption price, including all accrued and unpaid
distributions to the redemption date, with respect to any
preferred securities called for redemption, to the extent that
the trust has funds on hand available for payment at such
time, and
|
|
|
|
upon a voluntary or involuntary dissolution, winding up or
liquidation of the trust, unless the corresponding subordinated
debt securities are distributed to holders of such preferred
securities, the lesser of (a) the Liquidation Distribution,
to the extent the trust has funds available for payment at such
time, and (b) the amount of assets of the trust remaining
available for distribution to holders of preferred securities.
|
Our obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by us to the holders of
the preferred securities or by causing the trust to pay such
amounts to such holders. (Section 5.1)
The preferred securities guarantee will be an irrevocable
guarantee on a subordinated basis of the trusts payment
obligations under the preferred securities, but will apply only
to the extent that such trust has funds sufficient to make such
payments. The preferred securities guarantee is, to that extent,
a guarantee of payment and not a guarantee of collection.
If we do not make interest payments on the corresponding
subordinated debt securities held by the trust, the trust will
not be able to pay distributions on the preferred securities and
will not have funds legally available for payment. The preferred
securities guarantee will rank subordinate and junior in right
of payment to all other Indebtedness of ours, including all debt
securities, except those ranking equally or subordinate by their
terms. See
50
Status of the Preferred Securities
Guarantee. Because we are a holding company, our rights
and the rights of our stockholders and creditors, including the
holders of preferred securities who are creditors of ours by
virtue of the preferred securities guarantee, to participate in
any distribution of assets of any subsidiary upon such
subsidiarys liquidation or reorganization or otherwise
would be subject to the prior claims of the subsidiarys
creditors, except to the extent that we may ourselves be a
creditor with recognized claims against the subsidiary. The
right of creditors of ours, including the holders of preferred
securities who are creditors of ours by virtue of the preferred
securities guarantee, to participate in the distribution of
stock owned by us in certain of our subsidiaries, including our
insurance subsidiaries, may also be subject to approval by
certain insurance regulatory authorities having jurisdiction
over such subsidiaries. Except as otherwise provided in the
applicable prospectus supplement, the preferred securities
guarantee does not limit our ability to incur or issue other
secured or unsecured debt, whether under an indenture or
otherwise.
Our obligations described herein and in any accompanying
prospectus supplement, through the preferred securities
guarantee, the restated trust agreement, the subordinated
indenture and any supplemental indentures thereto and the
expense agreement described below, taken together, constitute a
full, irrevocable and unconditional guarantee by us of payments
due on the preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of
providing a full, irrevocable and unconditional guarantee of the
trusts obligations under the preferred securities. See
W. R. Berkley Capital Trust III,
Description of Preferred Securities, and
Description of Debt Securities.
Status of
the Preferred Securities Guarantee
The preferred securities guarantee will constitute an unsecured
obligation of ours and will rank subordinate and junior in right
of payment to all other Indebtedness of ours, except those
ranking equally or subordinate by their terms. (Section 6.2)
The preferred securities guarantee will rank equally with all
other similar preferred securities guarantees issued by us on
behalf of holders of preferred securities of any trust,
partnership or other entity affiliated with us which is a
financing vehicle of ours. (Section 6.3) The preferred
securities guarantee will constitute a guarantee of payment and
not of collection. This means that the guaranteed party may
institute a legal proceeding directly against us to enforce its
rights under the preferred securities guarantee without first
instituting a legal proceeding against any other person or
entity. (Section 5.4) The preferred securities guarantee
will not be discharged except by payment of the Guarantee
Payments in full to the extent not paid by the trust or upon
distribution to the holders of the preferred securities of the
corresponding subordinated debt securities. The preferred
securities guarantee does not place a limitation on the amount
of additional Indebtedness that may be incurred by us. We expect
from time to time to incur additional Indebtedness that will
rank senior to the preferred securities guarantee.
Payment
of Additional Amounts
We will make all Guarantee Payments pursuant to the preferred
securities guarantee without withholding or deduction at source
for, or on account of, any present or future taxes, fees,
duties, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of a taxing jurisdiction or
any political subdivision or taxing authority thereof or
therein, unless such taxes, fees, duties, assessments or
governmental charges are required to be withheld or deducted by:
|
|
|
|
|
the laws, or any regulations or rulings promulgated thereunder,
of a taxing jurisdiction or any political subdivision or taxing
authority thereof or therein, or
|
|
|
|
an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or
rulings, including, without limitation, a holding by a court of
competent jurisdiction or by a taxing authority in a taxing
jurisdiction or any political subdivision thereof.
|
If a withholding or deduction at source is required, we will,
subject to certain limitations and exceptions described below,
pay to the holders of the related preferred securities such
additional amounts as may be necessary so that every Guarantee
Payment pursuant to the preferred securities guarantee made to
such holder, after such
51
withholding or deduction, will not be less than the amount
provided for in such preferred securities guarantee to be then
due and payable.
We will not be required to pay any additional amounts for or on
account of:
(1) any tax, fee, duty, assessment or governmental charge
of whatever nature which would not have been imposed but for the
fact that such holder (a) was a resident, domiciliary or
national of, or engaged in business or maintained a permanent
establishment or was physically present in, the relevant taxing
jurisdiction or any political subdivision thereof or otherwise
had some connection with the relevant taxing jurisdiction other
than by reason of the mere ownership of preferred securities, or
receipt of payment under such preferred securities guarantee,
(b) presented such preferred security for payment in the
relevant taxing jurisdiction or any political subdivision
thereof, unless such preferred security could not have been
presented for payment elsewhere, or (c) presented such
preferred security for payment more than 30 days after the
date on which the payment in respect of such preferred security
became due and payable or provided for, whichever is later,
except to the extent that the holder would have been entitled to
such additional amounts if it had presented such preferred
security for payment on any day within that
30-day
period;
(2) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment or other governmental charge;
(3) any tax, assessment or other governmental charge that
is imposed or withheld by reason of the failure by the holder or
the beneficial owner of such preferred security to comply with
any reasonable request by us or the trust addressed to the
holder within 90 days of such request (a) to provide
information concerning the nationality, residence or identity of
the holder or such beneficial owner or (b) to make any
declaration or other similar claim or satisfy any information or
reporting requirement, which is required or imposed by statute,
treaty, regulation or administrative practice of the relevant
taxing jurisdiction or any political subdivision thereof as a
precondition to exemption from all or part of such tax,
assessment or other governmental charge; or
(4) any combination of items (1), (2) and
(3) above.
In addition, we will not pay any additional amounts with respect
to the preferred securities guarantee to any holder who is a
fiduciary or partnership or other than the sole beneficial owner
of such preferred security to the extent such payment would be
required by the laws of the relevant taxing jurisdiction, or any
political subdivision or relevant taxing authority thereof or
therein, to be included in the income for tax purposes of a
beneficiary or partner or settlor with respect to such fiduciary
or a member of such partnership or a beneficial owner who would
not have been entitled to such additional amounts had it been
the holder of the preferred securities.
Amendments
and Assignment
Except with respect to any changes which do not materially
adversely affect the rights of holders of the related preferred
securities, in which case no vote will be required, the
preferred securities guarantee may not be amended without the
prior approval of the holders of not less than a majority of the
aggregate liquidation amount of such outstanding preferred
securities. (Section 8.2) All guarantees and agreements
contained in the preferred securities guarantee shall bind our
successors, assigns, receivers, trustees and representatives and
shall inure to the benefit of the holders of the related
preferred securities then outstanding. (Section 8.1)
Events of
Default
An event of default under the preferred securities guarantee
will occur upon a failure by us to perform any of our payment or
other obligations thereunder. The holders of not less than a
majority in aggregate liquidation amount of the preferred
securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
guarantee trustee in respect of such preferred securities
guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under such preferred
securities guarantee. (Section 5.4)
If the guarantee trustee fails to enforce the preferred
securities guarantee, any holder of the preferred securities may
institute a legal proceeding directly against us to enforce its
rights under such preferred securities guarantee
52
without first instituting a legal proceeding against the trust,
the guarantee trustee or any other person or entity.
(Section 5.4)
We, as guarantor, are required to file annually with the
guarantee trustee a certificate as to whether or not we are in
compliance with all the conditions and covenants applicable to
us under the preferred securities guarantee. (Section 2.4)
Information
Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and
continuance of a default by us in performance of any preferred
securities guarantee, undertakes to perform only such duties as
are specifically set forth in the preferred securities guarantee
and, after default with respect to any preferred securities
guarantee, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or
her own affairs. (Section 3.1) Subject to this provision,
the guarantee trustee is under no obligation to exercise any of
the powers vested in it by any preferred securities guarantee at
the request of any holder of any preferred securities unless it
is offered reasonable indemnity against the costs, expenses, and
liabilities that might be incurred thereby. (Section 3.2)
Termination
of the Preferred Securities Guarantee
The preferred securities guarantee will terminate and be of no
further force and effect upon:
|
|
|
|
|
full payment of the redemption price of the preferred securities,
|
|
|
|
the distribution of the corresponding subordinated debt
securities to the holders of the preferred securities, or
|
|
|
|
upon full payment of the amounts payable upon liquidation of the
trust.
|
The preferred securities guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any
holder of the preferred securities must restore payment of any
sums paid with respect to such preferred securities or such
preferred securities guarantee. (Section 7.1)
New York
Law to Govern
The preferred securities guarantee will be governed by and
construed in accordance with the laws of the State of New York
applicable to agreements made and performed wholly in that
state. (Section 8.5)
Expense
Agreement
Pursuant to the expense agreement entered into by us under the
restated trust agreement, we will irrevocably and
unconditionally guarantee to each person or entity to whom the
trust becomes indebted or liable, the full payment of any costs,
expenses or liabilities of the trust, other than obligations of
the trust to pay to the holders of the preferred securities or
other similar interests in the trust of the amounts due such
holders pursuant to the terms of the preferred securities or
such other similar interests, as the case may be.
DESCRIPTION
OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, representing contracts
obligating holders to purchase from us, and obligating us to
sell to the holders, a specified number of shares of common
stock or preferred stock at a future date or dates. The price
per share may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific
formula set forth in the stock purchase contracts. The stock
purchase contracts may be issued separately or as a part of
stock purchase units consisting of a stock purchase contract
and, as security for the holders obligations to purchase
the shares under the stock purchase contracts, either:
|
|
|
|
|
our senior debt securities or our subordinated debt securities,
|
|
|
|
U.S. Treasury securities, or
|
|
|
|
preferred securities of the trust.
|
53
The stock purchase contracts may require us to make periodic
payments to the holders of the stock purchase units or vice
versa, and such payments may be unsecured or prefunded on some
basis. The stock purchase contracts may require holders to
secure their obligations in a specified manner and in certain
circumstances we may deliver newly issued prepaid stock purchase
contracts upon release to a holder of any collateral securing
such holders obligations under the original stock purchase
contract.
The applicable prospectus supplement will describe the terms of
any stock purchase contracts or stock purchase units and, if
applicable, prepaid stock purchase contracts. The description in
the prospectus supplement will not purport to be complete and
will be qualified in its entirety by reference to:
|
|
|
|
|
the stock purchase contracts,
|
|
|
|
the collateral arrangements and depositary arrangements, if
applicable, relating to such stock purchase contracts or stock
purchase units, and,
|
|
|
|
if applicable, the prepaid stock purchase contracts and the
document pursuant to which such prepaid stock purchase contracts
will be issued.
|
PLAN OF
DISTRIBUTION
We and/or
the trust may sell offered securities in any one or more of the
following ways from time to time: through agents; to or through
underwriters; through dealers; or directly to purchasers. The
prospectus supplement with respect to the offered securities
will set forth the terms of the offering of the offered
securities, including the name or names of any underwriters,
dealers or agents; the purchase price of the offered securities
and the proceeds to us
and/or the
trust from such sale; any underwriting discounts and commissions
or agency fees and other items constituting underwriters
or agents compensation; any initial public offering price
and any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchange on which such offered
securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
The distribution of the offered securities may be effected from
time to time in one or more transactions at a fixed price or
prices, which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices
or at negotiated prices.
Offers to purchase offered securities may be solicited by agents
designated by us from time to time. Any such agent involved in
the offer or sale of the offered securities in respect of which
this prospectus is delivered will be named, and any commissions
payable by us
and/or the
trust to such agent will be set forth, in the applicable
prospectus supplement. Unless otherwise indicated in such
prospectus supplement, any such agent will be acting on a
reasonable best efforts basis for the period of its appointment.
Any such agent may be deemed to be an underwriter, as that term
is defined in the Securities Act, of the offered securities so
offered and sold.
If offered securities are sold by means of an underwritten
offering, we
and/or the
trust will execute an underwriting agreement with an underwriter
or underwriters, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters,
and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the prospectus supplement
which will be used by the underwriters to make resales of the
offered securities. If underwriters are utilized in the sale of
the offered securities, the offered securities will be acquired
by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying
prices determined by the underwriters at the time of sale. Our
and/or the
trusts offered securities may be offered to the public
either through underwriting syndicates represented by managing
underwriters or directly by the managing underwriters. If any
underwriter or underwriters are utilized in the sale of the
offered securities, unless otherwise indicated in the prospectus
supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a
sale of offered securities will be obligated to purchase all
such offered securities of a series if any are purchased.
54
We and/or
the trust may grant to the underwriters options to purchase
additional offered securities, to cover over-allotments, if any,
at the public offering price, with additional underwriting
discounts or commissions, as may be set forth in the prospectus
supplement relating thereto. If we
and/or the
trust grant any over-allotment option, the terms of such
over-allotment option will be set forth in the prospectus
supplement relating to such offered securities.
If a dealer is utilized in the sales of offered securities in
respect of which this prospectus is delivered, we
and/or the
trust will sell such offered securities to the dealer as
principal. The dealer may then resell such offered securities to
the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the Securities Act, of
the offered securities so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the
related prospectus supplement.
Offers to purchase offered securities may be solicited directly
by us and/or
the trust and the sale thereof may be made by us
and/or the
trust directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such
sales will be described in the related prospectus supplement.
Offered securities may also be offered and sold, if so indicated
in the applicable prospectus supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption
or repayment pursuant to their terms, or otherwise, by one or
more firms, acting as principals for their own accounts or as
agents for us
and/or the
trust. Any such remarketing firm will be identified and the
terms of its agreements, if any, with us
and/or the
trust and its compensation will be described in the applicable
prospectus supplement. Remarketing firms may be deemed to be
underwriters, as such term is defined in the Securities Act, in
connection with the offered securities remarketed thereby.
Agents, underwriters, dealers and remarketing firms may be
entitled under relevant agreements entered into with us
and/or the
trust to indemnification by us
and/or the
trust against certain civil liabilities, including liabilities
under the Securities Act that may arise from any untrue
statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact in this
prospectus, any supplement or amendment hereto, or in the
registration statement of which this prospectus forms a part, or
to contribution with respect to payments which the agents,
underwriters or dealers may be required to make.
If so indicated in the prospectus supplement, we
and/or the
trust will authorize underwriters or other persons acting as our
and/or the
trusts agents to solicit offers by certain institutions to
purchase offered securities from us
and/or the
trust at the public offering price, pursuant to contracts
providing for payments and delivery on a future date.
Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must
be approved by us
and/or the
trust. The obligations of any purchaser under any such contract
will be subject to the condition that the purchase of the
offered securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents
will not have any responsibility in respect of the validity or
performance of such contracts. Disclosure in the prospectus
supplement of our
and/or the
trusts use of delayed delivery contracts will include the
commission that underwriters and agents soliciting purchases of
the securities under delayed contracts will be entitled to
receive in addition to the date when we or the trust will demand
payment and delivery of the securities under the delayed
delivery contracts. These delayed delivery contracts will be
subject only to the conditions described in the prospectus
supplement.
Each series of offered securities will be a new issue and, other
than the shares of common stock which are listed on the New York
Stock Exchange, will have no established trading market. We
and/or the
trust may elect to list any series of offered securities on an
exchange, and in the case of common stock, on any additional
exchange, but, unless otherwise specified in the applicable
prospectus supplement, neither we nor the trust shall be
obligated to do so. We cannot predict the liquidity of the
trading market for any of the offered securities.
Underwriters, dealers, agents and remarketing firms, or their
affiliates, may be customers of, engage in transactions with, or
perform services for, us and our subsidiaries in the ordinary
course of business.
55
LEGAL
MATTERS
Unless otherwise stated in the applicable prospectus supplement,
the validity of any securities offered by us in the applicable
prospectus supplement will be passed upon for us by Willkie
Farr & Gallagher LLP, New York, New York. Unless
otherwise stated in the applicable prospectus supplement, the
validity of the preferred securities offered by the trust in the
applicable prospectus supplement will be passed upon for the
trust by Prickett, Jones & Elliott, P.A., special
Delaware counsel to the trust. The validity of any securities
offered in the applicable prospectus supplement will be passed
upon for any underwriters or agents by counsel to be named in
the applicable prospectus supplement. As of November 21,
2011, Jack H. Nusbaum, Senior Partner of Willkie
Farr & Gallagher LLP and a member of our board of
directors, beneficially owned 74,827 shares of our common
stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedules of W. R. Berkley Corporation and
subsidiaries as of December 31, 2010 and 2009, and for each
of the years in the three-year period ended December 31,
2010, and managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2010, have been incorporated by reference in
this prospectus by reference to our Annual Report on
Form 10-K
for the year ended December 31, 2010 in reliance upon the
reports of KPMG LLP, an independent registered public accounting
firm, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
WHERE YOU
CAN FIND MORE INFORMATION
|
|
W.
|
R.
Berkley Corporation
|
We have filed with the Commission a registration statement on
Form S-3
under the Securities Act, relating to our common stock and other
securities. This prospectus is a part of such registration
statement, but such registration statement also contains
additional information and exhibits.
We are subject to the informational requirements of the Exchange
Act. Accordingly, we file annual, quarterly and current reports,
proxy statements and other information with the Commission. You
can read and copy the registration statement and any other
document that we file with the Commission at the
Commissions public reference room at
100 F Street, N.E., Washington, D.C. 20549. Our
filings with the Commission are also available from the
Commissions web site at
http://www.sec.gov.
Please call the Commissions toll-free telephone number at
1-800-SEC-0330
if you need further information about the operation of the
Commissions public reference room. Information about us is
also available on our web site at
http://www.wrberkley.com.
Information on our web site is not a part of this prospectus.
|
|
W.
|
R.
Berkley Capital Trust III
|
There are no separate financial statements of the trust in this
prospectus. We do not believe the financial statements would be
helpful to the holders of the preferred securities of the trust
because:
|
|
|
|
|
We, a reporting company under the Exchange Act, will directly or
indirectly own all of the voting securities of the trust;
|
|
|
|
The trust has no independent operations or proposals to engage
in any activity other than issuing securities representing
undivided beneficial interests in the assets of the trust and
investing the proceeds in subordinated debt securities issued by
us; and
|
|
|
|
The obligations of the trust under the preferred securities will
be fully and unconditionally guaranteed by us. See
Description of Preferred Securities Guarantee.
|
The trust is not currently subject to the information reporting
requirements of the Exchange Act. The trust will become subject
to the requirements upon the effectiveness of the registration
statement that contains this prospectus, although the trust
intends to seek and expect to receive an exemption from those
requirements. If
56
the trust does not receive such an exemption, the expenses of
operating the trust would increase, as would the likelihood that
we would exercise our option to dissolve and liquidate the trust
early.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to incorporate by reference
the information we file with it, which means that we can
disclose important information to you by referring to those
documents. The information incorporated by reference is an
important part of this prospectus. Any statement contained in a
document which is incorporated by reference in this prospectus
is automatically updated and superseded if information contained
in this prospectus, or information that we later file with the
Commission, modifies or replaces this information. We
incorporate by reference the following documents:
|
|
|
|
|
Our Annual Report on
Form 10-K
for the year ended December 31, 2010;
|
|
|
|
Our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2011, June 30, 2011
and September 30, 2011;
|
|
|
|
Our Current Report on
Form 8-K,
dated May 17, 2011 (as amended by Amendment No. 1
filed on September 14, 2011);
|
|
|
|
Our Proxy Statement dated April 5, 2011 for our 2011 Annual
Meeting of Stockholders; and
|
|
|
|
The descriptions of our common stock set forth in our
registration statement on Form
8-A/A filed
with the Commission on May 1, 2001, including any further
amendments or reports for the purposes of updating such
descriptions.
|
All documents we subsequently file pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the termination of this offering, shall also be deemed
to be incorporated by reference into this prospectus.
To receive a free copy of any of the documents incorporated by
reference in this prospectus, other than any exhibits, unless
the exhibits are specifically incorporated by reference into
this prospectus, call us at
(203) 629-3000
or write us at the following address: W. R. Berkley Corporation,
475 Steamboat Road, Greenwich, Connecticut 06830, Attention: Ira
S. Lederman, Secretary.
57
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
|
Item 14.
|
Other
Expenses of Issuance and Distribution
|
The following table sets forth the expenses expected to be
incurred in connection with the issuance and distribution of the
securities registered hereby, other than underwriting discounts
and commissions. All amounts shown are estimates except the
Commission registration fee.
|
|
|
|
|
Commission registration fee
|
|
$
|
0
|
*
|
Trustees fees and expenses
|
|
$
|
25,000
|
|
Printing and engraving expenses
|
|
$
|
100,000
|
|
Accounting fees and expenses
|
|
$
|
100,000
|
|
Legal fees and expenses
|
|
$
|
100,000
|
|
Miscellaneous
|
|
$
|
25,000
|
|
|
|
|
|
|
Total
|
|
$
|
350,000
|
|
|
|
|
* |
|
Pursuant to Rule 456(b) and Rule 457(r) under the
Securities Act of 1933, as amended, the registrants are
deferring payment of the registration fee. |
|
|
Item 15.
|
Indemnification
of Directors and Officers
|
Section 145 of the Delaware General Corporation Law, as
amended, which is applicable to us, provides in regards to
indemnification of directors and officers as follows:
145. Indemnification of Officers, Directors, Employees and
Agents; Insurance.
(a) A corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the persons
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good
faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had
reasonable cause to believe that the persons conduct was
unlawful.
(b) A corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor
by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses
(including attorneys fees) actually and reasonably
incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good
faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation and except
that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the
circumstances
II-1
of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a present or former director or
officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this section, or in
defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys fees)
actually and reasonably incurred by such person in connection
therewith.
(d) Any indemnification under subsections (a) and
(b) of this section (unless ordered by a court) shall be
made by the corporation only as authorized in the specific case
upon a determination that indemnification of the present or
former director, officer, employee or agent is proper in the
circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made with respect to a
person who is a director or an officer of the corporation at the
time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding
even though less than a quorum, or (2) by a committee of
such directors designated by majority vote of such directors,
even though less than a quorum, or (3) if there are no such
directors, or, if such directors so direct, by independent legal
counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys fees) incurred by
an officer or director of the corporation in defending any
civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be
determined that such person is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses
(including attorneys fees) incurred by former directors
and officers or other employees and agents of the corporation or
by persons serving at the request of the corporation as
directors, officers, employees or agents of another corporation,
partnership, joint venture, trust or other enterprise may be so
paid upon such terms and conditions, if any, as the corporation
deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of
this section shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to
action in such persons official capacity and as to action
in another capacity while holding such office. A right to
indemnification or to advancement of expenses arising under a
provision of the certificate of incorporation or a bylaw shall
not be eliminated or impaired by an amendment to the certificate
of incorporation or the bylaws after the occurrence of the act
or omission that is the subject of the civil, criminal,
administrative or investigative action, suit or proceeding for
which indemnification or advancement of expenses is sought,
unless the provision in effect at the time of such act or
omission explicitly authorizes such elimination or impairment
after such action or omission has occurred.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of such persons status as
such, whether or not the corporation would have the power to
indemnify such person against such liability under this section.
(h) For purposes of this section, references to the
corporation shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or
was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation
as such person would have with respect to such constituent
corporation if its separate existence had continued.
II-2
(i) For purposes of this section, references to other
enterprises shall include employee benefit plans;
references to fines shall include any excise taxes
assessed on a person with respect to any employee benefit plan;
and references to serving at the request of the
corporation shall include any service as a director,
officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner
not opposed to the best interests of the corporation
as referred to in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement
of expenses or indemnification brought under this section or
under any bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise. The Court of Chancery may
summarily determine a corporations obligation to advance
expenses (including attorneys fees).
As permitted by the Delaware General Corporation Law, our
stockholders approved an amendment to our Certificate of
Incorporation containing provisions eliminating a
directors personal liability for monetary damages to us
and our stockholders arising from a breach of a directors
fiduciary duty except for liability under Section 174 of
the Delaware General Corporation Law, liability for any breach
of the directors duty of loyalty to us or our
stockholders, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, or
any transaction from which the director received an improper
personal benefit. The amendment also provides for
indemnification of directors, officers and other persons under
certain circumstances.
We maintain policies of insurance under which we and our
directors and officers are insured subject to specified
exclusions and deductible and maximum amounts against loss
arising from any claim which may be made against us or any of
our directors or officers by reason of any breach of duty,
neglect, error, misstatement, omission or act done or alleged to
have been done while acting in our or their respective
capacities.
Please see the Exhibit Index included herewith, which is
incorporated herein by reference.
Each undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
II-3
provided, however, that paragraphs (a)(i), (a)(ii) and (a)(iii)
above do not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(d) That, for purposes of determining liability under the
Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
(ii) Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by
Section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(e) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
Each undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of such registrants annual report pursuant to
Section 13(a) or 15(d) of the
II-4
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers or persons controlling the registrants pursuant to the
provisions set forth or described in Item 15 of this
registration statement, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by them is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
Each undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Each undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting
agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt
delivery to each purchaser.
The undersigned registrants hereby undertake to file an
application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of section 310
of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under
section 305(b)(2) of the Trust Indenture Act.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Town of Greenwich, State of Connecticut, on the 22nd day of
November, 2011.
W. R. BERKLEY CORPORATION
|
|
|
|
By:
|
/s/ William
R. Berkley
|
William R. Berkley
Chairman of the Board and Chief Executive Officer
POWER OF
ATTORNEY
Each individual whose signature appears below hereby constitutes
and appoints each of William R. Berkley, W. Robert
Berkley, Jr., Eugene G. Ballard and Ira S. Lederman, and
each of them, as his true and lawful attorneys-in-fact and
agents for the undersigned, with full power of substitution, for
and in the name, place and stead of the undersigned to sign and
file with the Securities and Exchange Commission under the
Securities Act of 1933 (i) any and all amendments,
including post-effective amendments, to this registration
statement, (ii) any registration statement relating to this
offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933,
(iii) any exhibits to any such registration statement or
amendments, including post-effective amendments, or
(iv) any and all applications and other documents in
connection with any such registration statement or amendments,
including post-effective amendments, and generally to do all
things and perform any and all acts and things whatsoever
requisite and necessary or desirable to enable the Registrants
to comply with the provisions of the Securities Act of 1933 and
all requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on
Form S-3
has been signed by the following persons in the capacities
indicated on the
22nd day
of November, 2011.
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ William
R. Berkley
William
R. Berkley
|
|
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
/s/ Eugene
G. Ballard
Eugene
G. Ballard
|
|
Senior Vice President Chief
Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
/s/ W.
Robert Berkley, Jr.
W.
Robert Berkley, Jr.
|
|
Director and President Chief Operating Officer
|
|
|
|
/s/ Ronald
E. Blaylock
Ronald
E. Blaylock
|
|
Director
|
|
|
|
/s/ Mark
E. Brockbank
Mark
E. Brockbank
|
|
Director
|
II-6
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ George
G. Daly
George
G. Daly
|
|
Director
|
|
|
|
/s/ Mary
C. Farrell
Mary
C. Farrell
|
|
Director
|
|
|
|
/s/ Rodney
A. Hawes, Jr.
Rodney
A. Hawes, Jr.
|
|
Director
|
|
|
|
/s/ Jack
H. Nusbaum
Jack
H. Nusbaum
|
|
Director
|
|
|
|
/s/ Mark
L. Shapiro
Mark
L. Shapiro
|
|
Director
|
II-7
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, W.
R. Berkley Capital Trust III has duly caused this
Registration Statement on
Form S-3
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Greenwich, State of Connecticut, on
the 22nd day of November, 2011.
W. R. BERKLEY CAPITAL TRUST III
|
|
|
|
By:
|
W. R. Berkley
Corporation, as Depositor
|
|
|
By:
|
/s/ Eugene
G. Ballard
|
Eugene G. Ballard
Senior Vice President Chief Financial Officer
II-8
EXHIBIT INDEX
|
|
|
|
|
|
*1
|
.1
|
|
Form of Underwriting Agreement relating to common stock,
preferred stock, depositary shares, debt securities and warrants
of W. R. Berkley Corporation
|
|
*1
|
.2
|
|
Form of Underwriting Agreement relating to preferred securities
of W. R. Berkley Capital Trust III and preferred securities
guarantee of W. R. Berkley Corporation
|
|
*1
|
.3
|
|
Form of Underwriting Agreement relating to stock purchase
contracts
|
|
*1
|
.4
|
|
Form of Underwriting Agreement relating to stock purchase units
|
|
4
|
.1
|
|
Restated Certificate of Incorporation, as amended through
May 10, 2004, of W. R. Berkley Corporation (incorporated by
reference to Exhibits 3.1 and 3.2 to W. R. Berkley
Corporations Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2003 (File
No. 001-15202))
|
|
4
|
.2
|
|
Amendment, dated May 11, 2004, to W. R. Berkley
Corporations Restated Certificate of Incorporation, as
amended (incorporated by reference to Exhibit 3.2 to W. R.
Berkley Corporations Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2004 (File
No. 001-15202))
|
|
4
|
.3
|
|
Amendment, dated May 16, 2006, to W. R. Berkley
Corporations Restated Certificate of Incorporation, as
amended (incorporated by reference to Exhibit 3.2 to W. R.
Berkley Corporations Current Report on
Form 8-K
filed May 17, 2006 (File
No. 001-15202))
|
|
4
|
.4
|
|
Amended and Restated By-Laws of W. R. Berkley Corporation as of
August 2, 2011 (incorporated by reference to Exhibit 3
to W. R. Berkley Corporations Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2011 (File
No. 001-15202))
|
|
4
|
.5
|
|
Senior Indenture, dated as of February 14, 2003, between W.
R. Berkley Corporation and The Bank of New York (now known as
The Bank of New York Mellon) (incorporated by reference to
Exhibit 4.1 to W. R. Berkley Corporations Annual
Report on
Form 10-K
for the year ended December 31, 2002
(File No. 001-15202))
|
|
4
|
.6
|
|
Form of Subordinated Indenture between W. R. Berkley Corporation
and the Trustee (incorporated by reference to Exhibit 4.8
to W. R. Berkley Corporations Registration Statement on
Form S-3
(Registration
No. 333-57546))
|
|
4
|
.7
|
|
Form of Subordinated Indenture between W. R. Berkley Corporation
and the Trustee, with respect to debt securities issued to W. R.
Berkley Capital Trust III (incorporated by reference to
Exhibit 4.9 to W. R. Berkley Corporations
Registration Statement on
Form S-3
(Registration
No. 333-57546))
|
|
*4
|
.8
|
|
Form of Common Stock Warrant Agreement, including form of Warrant
|
|
*4
|
.9
|
|
Form of Preferred Stock Warrant Agreement, including form of
Warrant
|
|
*4
|
.10
|
|
Form of Debt Warrant Agreement, including form of Warrant
|
|
4
|
.11
|
|
Certificate of Trust of W. R. Berkley Capital Trust III
(incorporated by reference to Exhibit 4.14 to
W. R. Berkley Corporations Registration
Statement on
Form S-3
(Registration
No. 333-57546))
|
|
4
|
.12
|
|
Trust Agreement of W. R. Berkley Capital Trust III
(incorporated by reference to Exhibit 4.16 to
W. R. Berkley Corporations Registration
Statement on
Form S-3
(Registration
No. 333-57546))
|
|
*4
|
.13
|
|
Form of Amended and Restated Trust Agreement for W. R.
Berkley Capital Trust III
|
|
*4
|
.14
|
|
Form of Preferred Security Certificate for W. R. Berkley Capital
Trust III
|
|
*4
|
.15
|
|
Form of Preferred Securities Guarantee Agreement with respect to
the preferred securities issued by W. R. Berkley
Capital Trust III
|
|
*4
|
.16
|
|
Form of Expense Agreement (attached as Exhibit D to the
Form of Amended Restated Trust Agreement to be filed as
Exhibit 4.13 hereto)
|
|
*4
|
.17
|
|
Form of Certificate of Designation for the Preferred Stock of W.
R. Berkley Corporation (together with form of Preferred Stock
Certificate)
|
|
*4
|
.18
|
|
Form of Deposit Agreement
|
|
*4
|
.19
|
|
Form of Depositary Receipt
|
|
*4
|
.20
|
|
Form of Senior Note
|
|
*4
|
.21
|
|
Form of Subordinated Note
|
|
*4
|
.22
|
|
Form of Subordinated Note with respect to debt securities issued
to W. R. Berkley Capital Trust III
|
|
*4
|
.23
|
|
Form of Stock Purchase Contract Agreement
|
|
*4
|
.24
|
|
Form of Pledge Agreement
|
|
**5
|
.1
|
|
Opinion of Willkie Farr & Gallagher LLP
|
|
|
|
|
|
|
**5
|
.2
|
|
Opinion of Prickett, Jones & Elliott, P.A. with
respect to W. R. Berkley Capital Trust III
|
|
**12
|
.1
|
|
Statement re: Computation of Ratio of Earnings to Fixed Charges
|
|
**23
|
.1
|
|
Consent of KPMG LLP
|
|
**23
|
.2
|
|
Consent of Willkie Farr & Gallagher LLP (included in
Exhibit 5.1 above)
|
|
**23
|
.3
|
|
Consent of Prickett, Jones & Elliott, P.A. (included
in Exhibit 5.2 above)
|
|
**24
|
.1
|
|
Power of Attorney (included on signature pages)
|
|
**25
|
.1
|
|
Statement of Eligibility of the Trustee on
Form T-1,
as trustee for the W. R. Berkley Corporation Senior Indenture
|
|
**25
|
.2
|
|
Statement of Eligibility of the Trustee on
Form T-1,
as trustee for the W. R. Berkley Corporation Subordinated
Indenture
|
|
**25
|
.3
|
|
Statement of Eligibility of the Trustee on
Form T-1,
as trustee for the W. R. Berkley Corporation Subordinated
Indenture with respect to debt securities issued to W. R.
Berkley Capital Trust III
|
|
**25
|
.4
|
|
Statement of Eligibility of the Trustee on
Form T-1,
as Property Trustee for the Amended and Restated
Trust Agreement of W. R. Berkley Capital Trust III
|
|
**25
|
.5
|
|
Statement of Eligibility of the Trustee on
Form T-1,
as Preferred Securities Guarantee Trustee under the Preferred
Securities Guarantee Agreement of W. R. Berkley Corporation for
the benefit of the holders of Preferred Securities of W. R.
Berkley Capital Trust III
|
|
|
|
* |
|
To be filed, if necessary, subsequent to the effective date of
this registration statement by an amendment to this registration
statement or incorporated by reference pursuant to a Current
Report on
Form 8-K
in connection with the offering of securities. |
|
** |
|
Filed herewith. |