As filed with the Securities and Exchange Commission on April 30, 2003
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PartnerRe Ltd.
(Exact name of Registrant as specified in its charter)
Bermuda Not Applicable
(State of other jurisdiction of (I.R.S. Employer
incorporation Identification No.)
or organization)
96 Pitts Bay Road
Pembroke HM 08
Bermuda
(441) 292-0888
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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c/o Scott D. Moore
PartnerRe U.S. Corporation
One Greenwich Plaza
Greenwich, CT 06830-6352
(203) 485-4200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Albert A. Benchimol Richard J. Sandler, Esq. Susan J. Sutherland, Esq.
Executive Vice President & Chief Davis Polk & Wardwell Skadden, Arps, Slate,
Financial Officer 450 Lexington Avenue Meagher & Flom LLP
96 Pitts Bay Road New York, NY 10017 4 Times Square
Pembroke HM 08 (212) 450-4000 New York, NY 10036
Bermuda (212) 735-3000
(441) 292-0888
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering: |_| ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: |_| ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|.
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CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Each Class of Securities to be Amount to be Offering Aggregate Offering Amount of
Registered(1) Registered Price Per Share(2) Price(2) Registration Fee
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Common Shares, $1.00 par value........... 8,340,731 shares $54.84 $457,405,688 $37,004
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(1) This Registration Statement covers common shares of PartnerRe Ltd.,
including common shares to be acquired through the exercise of options and
warrants, that may be offered and sold from time to time by the selling
shareholder named herein.
(2) Estimated pursuant to Rule 457(c) solely for purposes of calculating
amount of registration fee, and based on the average of the high and low
prices reported on April 29, 2003 on the consolidated tape for New York
Stock Exchange listed companies.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be
changed. The selling shareholder may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
declared effective. This preliminary prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, April 30, 2003
PROSPECTUS
8,340,731 Common Shares
PartnerRe Ltd.
Common Shares
---------
We are registering 8,340,731 common shares for offer and sale from time to
time by the selling shareholder named in this prospectus. The selling
shareholder may sell the shares through underwriters, directly, through
ordinary brokerage transactions or through any other means described in the
section "Plan of Distribution."
We will not receive any of the proceeds from the sale of the shares by the
selling shareholder. The selling shareholder will bear all sales commissions
and similar expenses.
You should read this prospectus and any accompanying prospectus supplement
carefully before you make your investment decision. The prospectus supplement
will set forth, to the extent required, the terms of any offering of our common
shares by the selling shareholder.
The PartnerRe Ltd. common shares are listed on the New York Stock Exchange
under the symbol "PRE." The last reported sale price of the PartnerRe common
shares, as reported by the New York Stock Exchange on April 29, 2003, was
$54.66 per share.
Investing in our common shares involves risks. See "Risk Factors" on page
3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus or any accompanying prospectus
supplement. Any representation to the contrary is a criminal offense.
, 2003
TABLE OF CONTENTS
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Page
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About This Prospectus.........................................................2
Forward-Looking Statements....................................................2
PartnerRe Ltd.................................................................3
Risk Factors..................................................................3
Use of Proceeds...............................................................3
Summary Consolidated Financial Data...........................................4
Price Range of Common Shares and Dividends....................................5
The Selling Shareholder.......................................................6
Description of Our Capital Shares.............................................8
Material Bermuda and United States Federal Income Tax Consequences...........15
Plan of Distribution.........................................................21
Legal Matters................................................................22
Experts......................................................................23
Enforcement of Civil Liabilities Under United States Federal Securities Laws.23
Where You Can Find More Information..........................................23
Incorporation of Certain Documents by Reference..............................23
ABOUT THIS PROSPECTUS
For information on PartnerRe Ltd., you should only rely on the information
contained or incorporated by reference in this prospectus. We have not
authorized anyone to provide you with information different from that contained
or incorporated by reference in this prospectus. The selling shareholder may,
from time to time, offer to sell common shares and seek offers to buy common
shares only in jurisdictions where offers and sales are permitted. The
information contained or incorporated by reference in this prospectus may be
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common shares.
As used in this prospectus, the terms the "Company," "we," "our" or "us"
may, depending upon the context, refer to PartnerRe, to one or more of
PartnerRe's consolidated subsidiaries or to all of them taken as a whole.
References to "Swiss Re" refer to Swiss Reinsurance Company and references to
"selling shareholder" or "Capital Management" refer to SwissRe Capital
Management (Bermuda) Ltd., a wholly owned subsidiary of Swiss Re.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, the selling shareholder may, from time to time, sell in the
aggregate up to 8,340,731 common shares in one or more offerings, as described
in this prospectus. Each time the selling shareholder sells our common shares,
a prospectus supplement will be provided that will contain specific information
about the terms of that offering to the extent required. The prospectus
supplement may also add, update or supplement information contained in this
prospectus. You should read this prospectus and any accompanying prospectus
supplement together with the additional information contained under the heading
"Where You Can Find More Information."
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this
prospectus are based on our assumptions and expectations concerning future
events and are inherently subject to significant business, economic and
competitive risks and uncertainties, many of which, with respect to future
business decisions, are subject to change. These uncertainties and
contingencies can cause actual results to differ materially from those
expressed in any such forward-looking statements.
These uncertainties and other factors (which we describe in more detail
elsewhere in this prospectus and in our filings with the Securities and
Exchange Commission that we have incorporated by reference) include, but are
not limited to:
o the occurrence of catastrophic or other loss events with a frequency
or severity exceeding our expectations;
o a decrease in the level of demand for reinsurance and/or an increase
in the supply of reinsurance capacity;
o increased competitive pressures, including the consolidation and
increased globalization of reinsurance providers;
o actual losses and loss expenses exceeding our loss reserves, which
are necessarily based on actuarial and statistical projections of
ultimate losses;
o acts of terrorism;
o changes in the cost, availability and performance of retrocessional
reinsurance, including the ability to collect reinsurance
recoverables;
o concentration risk in dealing with a limited number of brokers;
o developments in and risks associated with global financial markets
which could affect our investment portfolio;
o changing rates of inflation and other economic conditions;
2
o availability of borrowings and letters of credit under our credit
facilities;
o losses due to foreign currency exchange rate fluctuations;
o restrictions in the issue of work permits which could result in loss
of service of any one of our executives;
o changes in the legal or regulatory environments in which we operate,
including the passage of federal or state legislation subjecting
Partner Reinsurance Company Ltd. or PartnerRe SA to supervision or
regulation, including additional tax regulation, in the United States
or other jurisdictions in which we operate; and
o actions by rating agencies that might impact our ability to write new
business.
The foregoing review of important factors should not be considered
exhaustive.
The words "believe," "anticipate," "estimate," "project," "plan,"
"expect," "intend," "hope," "will likely result," "will continue" or words of
similar impact generally involve forward-looking statements. We caution readers
not to place undue reliance on these forward-looking statements, which speak
only as of their dates. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.
PARTNERRE LTD.
We provide multi-line reinsurance to insurance companies on a worldwide
basis through our wholly owned subsidiaries, Partner Reinsurance Company Ltd.,
PartnerRe SA and Partner Reinsurance Company of the U.S. Risks reinsured
include, but are not limited to, property, casualty, motor, agriculture,
aviation/space, catastrophe, credit/surety, engineering/energy, marine, special
risk, other lines and life/annuity and health. We are a Bermuda company with
principal executive offices located at 96 Pitts Bay Road, Pembroke HM 08,
Bermuda. Our telephone number is (441) 292-0888.
RISK FACTORS
Before you invest in our common shares, you should carefully consider the
risks involved. Accordingly, you should carefully consider:
o the information contained in or incorporated by reference into this
prospectus;
o information contained in or incorporated by reference into any
prospectus supplement relating to specific offerings of our common
shares;
o the risks described in our Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "Commission") on March 28,
2003, which we incorporate by reference into this prospectus; and
o other risks and other information that may be contained in, or
incorporated by reference from, other filings we make with the
Commission.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common shares by the
selling shareholder.
3
SUMMARY CONSOLIDATED FINANCIAL DATA
The following table sets forth summary historical consolidated financial
and other data of PartnerRe. The year-end financial data has been derived from
our audited financial statements, which have been audited by Deloitte & Touche.
You should read the following information in conjunction with our financial
statements and the related notes and the other financial and statistical
information that is included or incorporated by reference in this prospectus.
Year Ended December 31,
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2002 2001 2000(1)
------------ ------------ ------------
(in millions of U.S. dollars or common
shares, except per share data and ratios)
Operating data:
Gross premiums written................................................. $ 2,705.7 $ 1,878.3 $ 1,439.5
------------ ------------ ------------
Net premiums written................................................... 2,655.4 1,825.1 1,380.3
------------ ------------ ------------
Net premiums earned.................................................... 2,425.7 1,633.5 1,314.3
Net investment income.................................................. 245.2 239.6 273.6
Net realized investment (losses) gains................................. (6.8) 20.2 (62.7)
Other income........................................................... 5.7 1.7 0.4
Total revenues......................................................... 2,669.9 1,895.0 1,525.6
Losses and loss expenses including life policy benefits................ 1,715.8 1,631.8 975.7
------------ ------------ ------------
Total expenses......................................................... 2,449.7 2,149.6 1,427.0
Income (loss) before distributions related to Trust Preferred and
Mandatorily Redeemable Preferred Securities and taxes............... 220.2 (254.6) 98.6
Distributions related to Trust Preferred and Mandatorily Redeemable
Preferred Securities................................................ 27.3 3.0 -
Income tax expenses (benefit).......................................... 2.7 (69.3) (43.7)
------------ ------------ ------------
Net income (loss) before cumulative effect of adopting new accounting
standard, net of tax................................................ 190.3 (188.3) 142.3
Cumulative effect of adopting new accounting standard, net of tax...... - 27.8 -
------------ ------------ ------------
Net income (loss)...................................................... $ 190.3 $ (160.5) $ 142.3
============ ============ ============
Diluted net income (loss) per common share............................. $ 3.28 $ (3.60) $ 2.41
============ ============ ============
Weighted average number of common and common equivalent shares
outstanding......................................................... 51.9 50.1 50.7
Number of common shares outstanding.................................... 52.4 50.2 50.1
Non-Life ratios:
Loss ratio(2).......................................................... 69.3% 100.4% 70.2%
Expense ratio(3)....................................................... 28.6% 29.8% 32.3%
------------ ------------ ------------
Combined ratio(4)...................................................... 97.9% 130.2% 102.5%
============ ============ ============
4
As of December 31,
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2002 2001 2000
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(in millions of U.S. dollars, except per
share data)
Balance sheet data:
Total investments, cash and cash equivalents........................ $ 5,412.1 $ 4,410.7 $ 3,882.1
Total assets........................................................ 8,738.0 7173.0 6,177.4
Unpaid losses and loss expenses and policy benefits for life and
annuity contracts................................................ 4,474.4 3,698.9 3,059.1
Long-term debt...................................................... 220.0 220.0 220.0
Trust Preferred and Mandatorily Redeemable Preferred Securities..... 400.0 400.0 -
Total shareholders' equity.......................................... 2,077.2 1,748.1 2,086.0
Diluted book value per common and common equivalent share........... $ 34.02 $ 29.05 $ 35.54
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(1) Includes the results of operations of PartnerRe Life U.S. for the
six-month period ended June 30, 2000, after which date PartnerRe Life U.S.
was sold.
(2) The loss ratio is calculated by dividing non-life loss and loss adjustment
expenses by non-life net premiums earned.
(3) The expense ratio is calculated by dividing non-life acquisition costs and
other operating expenses by non-life net premiums earned.
(4) The combined ratio is the sum of the non-life loss ratio and the non-life
expense ratio.
PRICE RANGE OF COMMON SHARES AND DIVIDENDS
Our common shares are listed for trading on the New York Stock Exchange
under the symbol "PRE." The following table sets forth on a per share basis the
high and low sales prices for consolidated trading in our common shares as
reported on the NYSE Composite Tape, and the cash dividends declared on the
common shares during the periods indicated.
Cash
Common Share Price Dividends
------------------ Declared
High Low Per Share
---------- ---------- ---------
Year ended December 31, 2001
First Quarter................................$ 58.13 $ 45.85 $ 0.26
Second Quarter............................... 57.00 47.75 0.28
Third Quarter................................ 55.33 34.10 0.28
Fourth Quarter............................... 54.00 46.00 0.28
Year ended December 31, 2002
First Quarter................................ 57.83 48.39 0.28
Second Quarter............................... 56.90 48.01 0.29
Third Quarter................................ 49.72 40.36 0.29
Fourth Quarter............................... 54.38 42.95 0.29
Year ending December 31, 2003
First Quarter................................ 54.35 45.00 0.29
Second Quarter (through April 29, 2003)...... 58.65 50.25 -
5
THE SELLING SHAREHOLDER
The following table sets forth information with respect to the selling
shareholder's beneficial ownership of PartnerRe common shares.
Common Shares
Beneficially Owned
Prior to the Offering(1)
------------------------------------------------- ------------------------
Beneficial Owners Number Percentage
------------------------------------------------- --------- ----------
SwissRe Capital Management (Bermuda) Ltd. 8,611,969 16.3
Mint Flower Place
8 Par-la-Ville Road
Hamilton HM GX, Bermuda
----------------
(1) Includes 7,838,096 common shares, 677,873 Class B warrants to acquire
common shares (and the common shares underlying such warrants) and 96,000
options to acquire common shares (and the common shares underlying such
options) directly owned by Capital Management, a wholly owned subsidiary
of Swiss Re ("Capital Management"). On April 29, 2003, Capital Management
notified us of its intention to exercise all of these options and warrants
and to pay for such exercise by delivery of 271,238 common shares it
currently owns. We will cancel all such shares on receipt. Following the
settlement of such exercise, Capital Management will own 8,340,731 common
shares, or 15.6% of our common shares to be issued and outstanding after
such exercise, all of which are covered by this prospectus. Swiss Re also
owns 2 million of our Series A Preferred Shares, which are not convertible
or exchangeable into our common shares and are not reflected in the table
above.
Relationship and Agreements with Swiss Re and Affiliates
Walter B. Kielholz is one of our directors and the Vice Chairman of the
Board of Directors of Swiss Re. His term as one of our directors expires with
our annual general meeting of shareholders on May 22, 2003, and he is not
standing for re-election. Swiss Re and certain of its affiliates receive fees
from us pursuant to certain agreements as described below.
In connection with the acquisition of PartnerRe SA, Swiss Re and we
entered into a Standstill Agreement dated July 10, 1997, pursuant to which
Swiss Re's ownership and voting rights with respect to us are limited to 30% of
the voting power of our voting stock and voting stock equivalents. Swiss Re
also has a right of first refusal under the standstill agreement with respect
to certain issuances or sales by us of our voting shares, in an amount equal to
its percentage ownership of our voting shares prior to such issuance or sale,
subject to certain exceptions. The standstill agreement terminates on July 10,
2004. In connection with the acquisition of PartnerRe SA, we granted Swiss Re
registration rights for that portion of our common shares issued to Swiss Re in
connection with the acquisition of PartnerRe SA that was not previously subject
to registration rights. The registration statement related to this prospectus
is being filed pursuant to the exercise of such rights and rights granted
under the subscription agreement dated August 24, 2003.
We utilize, in the conduct of our business, certain underwriting services
and licensed technology provided by Swiss Re and its affiliates, pursuant to
various service agreements including the Underwriting Services and Cooperation
Agreement. Fees incurred pursuant to such agreements include fixed fees for
access to technology and database resources. The Underwriting Services and
Cooperation Agreement was terminated as of February 28, 2003 but we will
continue to have access to certain computer technology through the end of the
year. The fees paid to Swiss Re and its affiliates under this Agreement for the
year ended December 31, 2002 aggregated $200,000.
In the normal course of our underwriting activities, we entered into
reinsurance contracts (assumed and ceded) with Swiss Re and certain affiliates
of Swiss Re. Included in our 2002 consolidated results were net ceded premiums
written of $1.0 million, net losses and loss expenses, including policy
benefits for life contracts, of $2.5 million and net acquisition costs of $1.1
million relating to reinsurance contracts with Swiss Re and its affiliates. At
December 31, 2002, there were reinsurance balances receivable and recoverable
from members of the Swiss Re Group aggregating $21.4 million, unpaid losses and
loss expenses, including life policy benefits, of $9.1 million and net ceded
funds held under reinsurance treaties of $3.0 million under these agreements.
6
In addition, we engage in finance and banking transactions with various
banks including affiliates of Credit Suisse Group, of which Mr. Kielholz is
Chairman. All such transactions are on an arm's length basis.
During 2002, we were party to Investment Advisory Agreements with Swiss
Re. Under the Investment Advisory Agreements, Swiss Re managed portions of our
portfolio of investment securities subject to our investment guidelines and
other restrictions. Pursuant to the terms of the Investment Advisory
Agreements, we paid fees totaling $1.5 million to Swiss Re in 2002. The
Investment Advisory Agreements were terminated in December 2002. See Note 9 to
our 2002 Consolidated Financial Statements, which are included in our report on
Form 10-K for the year ended December 31, 2002 and incorporated by reference in
this prospectus.
We believe that the terms of such transactions were no less favorable to
us than could have been obtained from third parties that were not affiliated
with us. Transactions involving Swiss Re, or their affiliates, on the one hand,
and us, on the other hand, require approval by a majority vote of the
disinterested members of our board of directors.
7
DESCRIPTION OF OUR CAPITAL SHARES
The following is a summary of certain provisions of:
o our Memorandum of Association and Bye-Laws, which set forth certain
terms of our capital stock,
o the certificate of designation for our 8% Series A Cumulative
Preferred Shares, which we refer to in this prospectus as the Series
A Preferred Shares, and
o the certificate of designation for our 5.61% Series B Cumulative
Redeemable Preferred Shares, which we refer to in this prospectus as
the Series B Preferred Shares.
This summary is not complete.
You should read our Memorandum of Association and Bye-Laws and the
certificate of designation of each series of our preferred shares for complete
information regarding the provisions of these governing documents including the
definitions of some of the terms used below. Copies of our Memorandum of
Association and Bye-Laws and the certificates of designation are incorporated
by reference as exhibits to the registration statement of which this prospectus
forms a part. Whenever we refer to particular sections or defined terms of our
Memorandum of Association, Bye-Laws or the certificates of designation, those
sections or defined terms are incorporated by reference into this prospectus,
and the statement in connection with which such reference is made is qualified
in its entirety by such reference.
General
Our authorized share capital of $150,000,000 consists of 100,000,000
common shares, par value $1.00 per share, 10,000,000 Series A Preferred Shares,
4,000,000 Series B Preferred Shares and 36,000,000 undesignated shares, par
value $1.00 per share. As of March 31, 2003, approximately 52,410,728 common
shares were issued and outstanding, 10,000,000 Series A Preferred Shares were
issued and outstanding and 4,000,000 Series B Preferred Shares were issued and
outstanding. On April 28, 2003, we announced an offering of a new series of
cumulative redeemable preferred shares and our intention to redeem all
outstanding Series A Preferred Shares following the closing of that offering.
We also have issued and outstanding Class B warrants to purchase 677,873
common shares, and 4,000,000 PEPS Units, which require the holder thereof to
purchase, and us to sell to such holder, a variable number of our common
shares. See "--Warrants" and "--PEPS Units" below.
Common Shares
Our common shares are listed on the New York Stock Exchange under the
symbol "PRE." The common shares currently issued and outstanding are fully paid
and nonassessable within the meaning of applicable Bermuda law. There are no
provisions of Bermuda law, our Memorandum of Association or our Bye-Laws which
impose any limitation on the rights of shareholders to hold or vote common
shares by reason of their not being residents of Bermuda.
Under our Bye-Laws, the holders of common shares have no redemption,
conversion or sinking fund rights. Subject to the restrictions set forth under
"--Anti-Takeover Effects of Certain Bye-Laws Provisions", below, holders of
common shares are entitled to one vote per share on all matters submitted to a
vote of holders of common shares and do not have any cumulative voting rights.
If we are liquidated, dissolved, or wound-up, the holders of common shares are
entitled to share equally and ratably in our assets, if any, remaining after
the payment of all of our debts and liabilities and the liquidation preference
of any outstanding preferred shares.
Other than as required by Bermuda law or in respect of alteration of class
rights and reporting requirements and certain procedural matters, all actions
by our shareholders are decided by a simple majority of votes cast.
The holders of common shares will receive such dividends, if any, as may
be declared by our board of directors out of funds legally available for such
purposes.
8
A more detailed description of our common shares is set forth in our
registration statements filed under the Exchange Act on Form 8-A on October 4,
1993 (file no. 001-14536) and October 24, 1996, including any amendment or
report for the purpose of updating such description.
Series A Preferred Shares
The Series A Preferred Shares are listed on the New York Stock Exchange
under the symbol "PRE A." The Series A Preferred Shares currently issued and
outstanding are fully paid and nonassessable within the meaning of applicable
Bermuda law. Swiss Re owns 2 million Series A Preferred Shares.
The holders of the Series A Preferred Shares have no preemptive rights
with respect to any of our common shares or any of our other securities
convertible into or carrying rights or options to purchase any common shares.
The Series A Preferred Shares are not subject to any sinking fund or other
obligation of us to redeem or retire the Series A Preferred Shares. Unless
redeemed by us, the Series A Preferred Shares will have a perpetual term with
no maturity. We currently do not have any issued shares that are senior to the
Series A Preferred Shares with respect to payment of dividends and distribution
of assets in liquidation. Our Series B Preferred Shares rank equally with our
Series A Preferred Shares with respect to payment of dividends and distribution
of assets in liquidation.
Dividends. Holders of Series A Preferred Shares are entitled to receive,
when, as and if declared by our board of directors out of funds legally
available for the payment of dividends, cumulative preferential cash dividends
in an amount per share equal to 8% of the liquidation preference per annum
(equivalent to $2.00 per share). Such dividends are payable quarterly, when, as
and if declared by our board of directors.
If any Series A Preferred Shares are outstanding, unless full cumulative
dividends on the Series A Preferred Shares have been paid, we generally may
not:
o declare or pay any dividends upon any other capital shares ranking
pari passu with the Series A Preferred Shares as to dividends and the
distribution of assets upon any liquidation, dissolution or winding
up of PartnerRe, unless all dividends are declared upon the Series A
Preferred Shares and the shares ranking equally with the Series A
Preferred Shares are declared pro rata,
o declare or pay any dividends upon the common shares or any other
capital shares ranking junior to the Series A Preferred Shares as to
dividends or the distribution of assets upon any liquidation,
dissolution or winding up of PartnerRe, or
o redeem any common shares or other shares ranking junior to the Series
A Preferred Shares.
Liquidation. Upon any voluntary liquidation, dissolution or winding-up of
the affairs of PartnerRe, the holders of Series A Preferred Shares will be
entitled to receive from our assets legally available for distribution to
shareholders, $25.00 per share, plus all dividends accrued and unpaid to the
date fixed for distribution. This distribution must be made before we make any
distribution to holders of common shares and any other distribution to holders
of common shares and any other shares ranking junior to the Series A Preferred
Shares.
Redemption. We may redeem the Series A Preferred Shares for cash at a
redemption price of $25.00 per share, plus all accrued and unpaid dividends. On
April 28, 2003, we announced our intention to redeem all outstanding Series A
Preferred Shares following the closing of the offering of a new series of
cumulative redeemable preferred shares announced at the same time.
Voting. Generally, the Series A Preferred Shares have no voting rights. If
dividends payable on the Series A Preferred Shares are in arrears in an amount
equivalent to dividends for six full dividend periods, the holders of Series A
Preferred Shares, together with the holders of our Series B Preferred Shares
and the holders of any other shares ranking equally with the Series A Preferred
Shares, voting as a single class, shall have the right to elect two directors
to our board of directors. Whenever we pay all dividends in arrears on the
Series A Preferred Shares and the shares ranking equally with the Series A
Preferred Shares then outstanding and we pay, declare or set apart for payment,
dividends for the current quarterly dividend period, then the holders of the
Series A Preferred Shares and the shares ranking equally with the Series A
Preferred Shares will no longer have rights to be represented by directors. As
of April 29, 2003, there were no dividends in arrears on the Series A Preferred
Shares.
9
In addition, without the written consent of the holders of at least 75% of
the outstanding Series A Preferred Shares, we may not:
o amend or repeal any of the provisions of our Memorandum of
Association, Bye-Laws or the certificate of designation relating to
the Series A Preferred Shares that would vary the rights, preferences
or voting powers of the holders of the Series A Preferred Shares;
o authorize any amalgamation, consolidation, merger or statutory share
exchange that affects the Series A Preferred Shares, unless each
Series A Preferred Share remains outstanding with no variation in its
rights, preferences or voting powers, or is converted into or
exchanged for preferred shares of the surviving entity having rights,
preferences and voting powers identical to that of a Series A
Preferred Share;
o authorize any creation of any shares of any class or series or any
security convertible into shares of any class or series ranking prior
to the Series A Preferred Shares in payment of dividend or the
distribution of assets on any liquidation, dissolution or winding up
of PartnerRe; or
o enter into any transaction or take any action which would amount to a
variation of the rights, preferences or voting powers of the holders
of the Series A Preferred Shares.
We may create and issue additional classes or series of shares ranking
equally with the Series A Preferred Shares and other shares ranking junior to
the Series A Preferred Shares without the consent of any holder of Series A
Preferred Shares.
A more detailed description of our Series A Preferred Shares is set forth
in our registration statement filed under the Exchange Act on Form 8-A on June
20, 1997 (file no. 001-14536), including any amendment or report for the
purpose of updating such description.
Series B Preferred Shares
The Company has outstanding 4,000,000 of its 8% PEPS Units. We issued
4,000,000 of our Series B Preferred Shares as part of this PEPS Units offering.
The 4,000,000 Series B Preferred Shares currently issued and outstanding are
not separately listed on any stock exchange and are not freely tradeable until
they are released from the pledge arrangement relating to the PEPS Units, see
"--PEPS Units." The Series B Preferred Shares currently issued and outstanding
are fully paid and nonassessable within the meaning of applicable Bermuda law.
The holders of the Series B Preferred Shares will have no preemptive
rights with respect to any of our common shares or any of our other securities
convertible into or carrying rights or options to purchase any such shares. The
Series B Preferred Shares are not subject to any sinking fund or other
obligation of PartnerRe to redeem or retire the Series B Preferred Shares. The
Series B Preferred Shares are subject to mandatory redemption on June 30, 2005.
At present, we do not have any issued shares that are senior to the Series B
Preferred Shares with respect to payment of dividends and distribution of
assets in liquidation. Our Series A Preferred Shares rank equally with our
Series B Preferred Shares with respect to payment of dividends and distribution
of assets in liquidation.
Dividends. Holders of Series B Preferred Shares are entitled to receive,
when, as and if declared by our board of directors out of funds legally
available for the payment of dividends, cumulative preferential cash dividends
in an amount per share equal to 5.61% of the liquidation preference per annum
(equivalent to $2.8050 per share). Dividends are payable quarterly, when, as
and if declared by our board of directors.
If any Series B Preferred Shares are outstanding, unless we pay full
cumulative dividends on the Series B Preferred Shares, we generally may not:
o declare or pay any dividends upon any other shares ranking equally
with the Series B Preferred Shares, unless all dividends are declared
upon the Series B Preferred Shares and the shared ranking equally
with the Series B Preferred Shares are declared pro rata;
o declare or pay any dividends upon the common shares or any other
shares ranking junior to the Series B Preferred Shares; or
10
o redeem any common shares or other shares ranking junior to the Series
B Preferred Shares.
Liquidation. Upon any voluntary liquidation, dissolution or winding-up of
the affairs of PartnerRe, the holders of Series B Preferred Shares will be
entitled to receive from our assets legally available for distribution to
shareholders $50.00 per share, plus all dividends accrued and unpaid to the
date fixed for distribution, before any distribution is made to holders of
common shares and any other shares ranking junior to the Series B Preferred
Shares.
Redemption. The Series B Preferred Shares are not redeemable prior to June
30, 2005. On June 30, 2005, we are obligated to redeem the Series B Preferred
Shares at a redemption price of $50.00 per share, plus all accrued and unpaid
dividends.
Voting. Generally, the Series B Preferred Shares have no voting rights.
However, the holders of Series B Preferred Shares, together with the holders of
our Series A Preferred Shares and the holders of any other shares ranking
equally with the Series B Preferred Shares, voting as a single class, shall
have the right to elect two directors to our board of directors, if:
o dividends payable on Series B Preferred Shares are in arrears in an
amount equivalent to dividends for six full dividend periods;
o on any date following the remarketing of the Series B Preferred
Shares, dividends payable on Series B Preferred Shares or shares
ranking equally with the Series B Preferred Shares are in arrears in
any amount; or
o we fail to redeem the Series B Preferred Shares on June 30, 2005.
Whenever we have paid all dividends in arrears on the Series B Preferred
Shares and any shares that rank equal to the Series B Preferred Shares then
outstanding and we have paid or declared and set apart for payment, dividends
for the current quarterly dividend period or we have paid or set apart for
payment, the redemption price for the Series B Preferred Shares, as the case
may be, then the right of holders of the Series B Preferred Shares and any
shares that rank equal to the Series B Preferred Shares to be represented by
directors shall cease. As of April 29, 2003, there were no dividends in arrears
on the Series B Preferred Shares.
In addition, without the written consent of the holders of at least 75% of
the outstanding Series B Preferred Shares, we may not:
o amend or repeal any of the provisions of our Memorandum of
Association, Bye-Laws or the certificate of designation relating to
the Series B Preferred Shares that would vary the rights, preferences
or voting powers of the holders of the Series B Preferred Shares;
o authorize any amalgamation, consolidation, merger or statutory share
exchange that affects the Series B Preferred Shares, unless each
Series B Preferred Share remains outstanding with no variation in its
rights, preferences or voting powers, or is converted into or
exchanged for preferred shares of the surviving entity having rights,
preferences and voting powers identical to that of a Series B
Preferred Share;
o authorize any creation of any shares of any class or series or any
security convertible into shares of any class or series ranking prior
to the Series B Preferred Shares in payment of dividend or the
distribution of assets on any liquidation, dissolution or winding up
of PartnerRe; or
o enter into any transaction or take any action which would amount to a
variation of the rights, preferences or voting powers of the holders
of the Series B Preferred Shares.
We may create and issue additional classes or series of shares that rank
equal or junior to the Series B Preferred Shares without the consent of any
holder of Series B Preferred Shares.
11
A more detailed description of our Series B Preferred Shares is set forth
in our registration statement filed under the Exchange Act on Form 8-A on
November 14, 2001 (file no. 001-14536), including any amendment or report for
the purpose of updating such description.
Undesignated Shares
Under our Bye-Laws, we have authorized 36,000,000 shares, par value $1.00
per share, the rights and preferences of which are undesignated. Without
further action of our shareholders, our board of directors may fix the relative
rights, preferences and limitations of such shares. Such determination may
include:
o fixing the dividend rates and payment dates;
o the extent of voting rights, if any;
o the terms and prices of redemption;
o the amount payable on the shares in the event of liquidation;
o sinking fund provisions; and
o the terms and conditions on which shares may be converted if the
shares are to be issued with the privilege of conversion.
Warrants
Each of the Class B warrants is currently exercisable at an exercise price
of $17.00 per share. The exercise price is subject to adjustment upon the
occurrence of certain events relating principally to changes in the number of
common shares, options or warrants outstanding. Each of the Class B warrants
expires in November 2004.
We have granted the Class B warrant holders certain registration rights
with respect to the Class B warrants and any common shares issued upon exercise
of the Class B warrants. All of the 677,873 currently outstanding Class B
warrants are owned by Capital Management. On April 29, 2003, Capital Management
notified us of its intention to exercise all of its Class B warrants. The
common shares Capital Management will receive pursuant to that exercise are
covered by this prospectus.
PEPS Units
Our PEPS Units are listed on the New York Stock Exchange under the symbol
"PRE-PrP." "PEPS" is an acronym for Premium Equity Participating Security. Each
PEPS Unit consists of one of our Series B Preferred Shares and a purchase
contract issued by us. The purchase contract obligates us to sell to the
holder, and obligates the holder to purchase from us, on or before December 31,
2004, for a price of $50.00, a number of our common shares. The number of
common shares will range between 0.8696 and 1.0638 shares, depending on the
average closing price of our common shares over the 20-trading day period
ending on the third trading day prior to December 31, 2004. If a holder chooses
to settle its purchase contract before December 31, 2004, it will receive, for
each PEPS Unit surrendered, 0.8696 of our common shares, regardless of the
market price of our common shares on the date of early settlement. The number
of common shares that will be received for each PEPS Unit surrendered is
subject to anti-dilution adjustments. Up to 4,255,200 of our common shares
would be issuable upon settlement of the purchase contracts.
Holders of PEPS Units are entitled to receive quarterly cash distributions
of contract adjustment payments payable by us at the rate of 2.39% per annum
for each PEPS Unit. We have the right to defer contract adjustment payments
until no later than December 31, 2004 or, if applicable, the date of any early
settlement of a purchase contract. Any deferred contract adjustment payments
will accrue additional contract adjustment payments at the rate of 2.39% per
annum, compounded quarterly, until paid.
Each Series B Preferred Share that is part of a PEPS Unit is pledged as
collateral to secure the holder's obligation under the related purchase
contract. If a holder settles its purchase contract in cash rather than having
its
12
Series B Preferred Share remarketed (as described below), the Series B
Preferred Share comprising a component of the surrendered PEPS Unit will then
be released from the pledge arrangement upon such settlement and delivered to
such holder, who will retain the right to have such Series B Preferred Share
remarketed as described in the next paragraph.
Unless a holder of a PEPS Unit settles the related purchase contract in
cash, such holder's Series B Preferred Share comprising a part of such PEPS
Unit will be remarketed by the remarketing agent three business days prior to
December 31, 2004. The remarketing agent will use its reasonable efforts to
remarket the Series B Preferred Shares at a price equal to 100.25% of the
stated liquidation preference of $50 per Series B Preferred Share, plus any
accrued dividends that are not paid in full as of December 31, 2004.
The purchase contracts will terminate automatically if certain bankruptcy,
insolvency or reorganization events occur with respect to us, or, in certain
circumstances, if there is a failed remarketing. If the purchase contracts
terminate, the holders will have no obligation to pay for, or right to receive,
our common shares. If the purchase contracts are terminated, the holders will
receive their Series B Preferred Shares free of our security interest.
Transfer of Shares
Our Bye-Laws contain various provisions affecting the transferability of
our capital shares. Under the Bye-Laws, our board of directors has absolute
discretion to decline to register a transfer of shares:
o unless the appropriate instrument of transfer is submitted along with
such evidence as our board of directors may reasonably require
showing the right of the transferor to make the transfer;
o unless, where applicable, the consent of the Bermuda Monetary
Authority has been obtained; or
o if our board of directors determines that such transfer would result
in a person (other than Swiss Re or its affiliates) controlling more
than 9.9% of all of our outstanding shares.
One of the primary purposes of the restriction on a holder of our capital
shares from controlling more than 9.9% of our outstanding shares is to reduce
the risk for potential adverse tax consequences. This limit may also have the
effect of deterring purchases of large blocks of common shares or proposals to
acquire us, even if some or a majority of the shareholders might deem these
purchases or acquisition proposals to be in their best interests. With respect
to this issue, also see the provisions discussed below under "Anti-Takeover
Effects of Certain Bye-Laws Provisions."
We entered into a standstill agreement, dated as of July 10, 1997, with
Swiss Re pursuant to which Swiss Re agreed to limit its and its affiliates
ownership in PartnerRe to 30% of the voting power of our outstanding shares,
unless we otherwise consent. Swiss Re also has a right of first refusal under
the standstill agreement with respect to certain issuances or sales by us of
our voting shares, in an amount equal to its percentage ownership of our voting
shares prior to such issuance or sale, subject to certain exceptions. The
standstill agreement terminates on July 10, 2004.
If our board of directors refuses to register any transfer of shares, it
shall send notice of such refusal to the transferee within three months after
the date on which the transfer was lodged with us.
Our Bermuda counsel has advised us that while the precise form of the
restrictions on transfers contained in the Bye-Laws is untested, as a matter of
general principle, restrictions on transfers are enforceable under Bermuda law
and are not uncommon.
Anti-Takeover Effects of Certain Bye-Laws Provisions
In addition to those provisions of the Bye-Laws discussed above under
"Transfers of Shares," our Bye-Laws contain certain provisions that make it
more difficult to acquire control of us by means of a tender offer, open market
purchase, a proxy fight or otherwise. These provisions are designed to
encourage persons seeking to acquire control of us to negotiate with our board
of directors. We believe that, as a general rule, the interests of our
shareholders would be best served if any change in control results from
negotiations with our board of directors. Our board of directors would
negotiate based upon careful consideration of the proposed terms, such as the
price to be
13
paid to shareholders, the form of consideration to be paid and the anticipated
tax effects of the transaction. However, these provisions could have the effect
of discouraging a prospective acquiror from making a tender offer or otherwise
attempting to obtain control of us. To the extent these provisions discourage
takeover attempts, they could deprive shareholders of opportunities to realize
takeover premiums for their shares or could depress the market price of the
shares.
Board Provisions. Our Bye-laws provide for a classified board, to which
approximately one-third of our board of directors is elected each year at our
annual general meeting of shareholders. Accordingly, our directors serve
three-year terms rather than one-year terms. Each class of directors is
required to have a minimum of one director and a maximum of four directors.
The classification of directors will have the effect of making it more
difficult for shareholders to change the composition of our board of directors.
At least two annual meetings of shareholders, instead of one, will generally be
required to effect a change in a majority of our board of directors. Such a
delay may help ensure that our directors, if confronted by a holder attempting
to force a proxy contest, a tender or exchange offer, or an extraordinary
corporate transaction, would have sufficient time to review the proposal as
well as any available alternatives to the proposal and to act in what they
believe to be in our best interests, including the shareholders. The
classification provisions will apply to every election of directors, however,
regardless of whether a change in the composition of our board of directors
would be beneficial to PartnerRe and its shareholders and whether or not a
majority of our shareholders believe that such a change would be desirable.
The classification provisions could also have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or otherwise
attempting to obtain control of PartnerRe, even though such an attempt might be
beneficial to PartnerRe and its shareholders. The classification of our board
of directors could thus increase the likelihood that incumbent directors will
retain their positions. In addition, because the classification provisions may
discourage accumulations of large blocks of our stock by purchasers whose
objective is to take control of PartnerRe and remove a majority of our board of
directors, the classification of our board of directors could tend to reduce
the likelihood of fluctuations in the market price of the shares that might
result from accumulations of large blocks for such a purpose. Accordingly,
shareholders could be deprived of certain opportunities to sell their shares at
a higher market price than might otherwise be the case.
Voting Rights Limitations. Our Bye-Laws provide that the voting rights
with respect to shares directly or indirectly beneficially or constructively
owned by any person (except Swiss Re or its affiliates) owning more than 9.9%
of the voting power of the outstanding shares, including common shares and
preferred shares, of the Company will be limited to voting power of 9.9%. The
voting rights with respect to all shares held by such person in excess of the
9.9% limitation will be allocated to the other holders of shares pro rata based
on the number of shares held by all such other holders of shares, subject only
to the further limitation that no shareholder allocated any such voting rights
may exceed the 9.9% limitation as a result of such allocation.
Availability of Shares for Future Issuances. We have available for
issuance a large number of authorized but unissued common shares. Generally,
these shares may be issued by action of our directors without further action by
shareholders, except as may be required by applicable stock exchange
requirements. The availability of these shares for issue could be viewed as
enabling the directors to make more difficult a change in our control. For
example, the directors could determine to issue warrants or rights to acquire
shares. In addition, we have authorized a sufficient amount of our shares such
that we could put in place a shareholder rights plan without further action by
shareholders. A shareholder rights plan could serve to dilute or deter stock
ownership of persons seeking to obtain control of us.
Our ability to take these actions makes it more difficult for a third
party to acquire us without negotiating with our board of directors, even if
some or a majority of the shareholders desired to pursue a proposed
transaction. Moreover, these powers could discourage or defeat unsolicited
stock accumulation programs and acquisition proposals.
14
MATERIAL BERMUDA AND UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
Statements made below as to Bermuda law are based on the opinion of Ms.
Christine Patton, our general counsel. Statements made below as to United
States federal income tax law are based on the opinion of Davis Polk &
Wardwell, United States counsel to PartnerRe Ltd.
Bermuda Taxation
There will be no Bermuda withholding tax on our dividend payments made
with respect to the common shares.
United States Taxation
In this section, we summarize certain material United States federal
income tax consequences of purchasing, holding and disposing of the common
shares. Except where we state otherwise, this summary deals only with common
shares held as capital assets as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), by a U.S. Holder (as defined below) who purchases
common shares for cash at the stated offering price.
A "U.S. Holder" is a beneficial owner of common shares who or which is:
o a citizen or resident of the United States;
o a corporation, or other entity taxable as a corporation, created or
organized in or under the laws of the United States or any political
subdivision thereof; or
o an estate or trust the income of which is subject to U.S. federal
income taxation regardless of its source.
We do not address all of the tax consequences that may be relevant to a
U.S. Holder. We also do not address the tax consequences to holders other than
U.S. Holders or to holders that may be subject to special tax treatment (such
as financial institutions, real estate investment trusts, personal holding
companies, regulated investment companies, insurance companies, entities
classified as partnerships for U.S. federal income tax purposes, S
corporations, traders and dealers in securities or currencies and certain U.S.
expatriates). Further, we do not address:
o the United States federal income tax consequences to shareholders in,
or partners or beneficiaries of, an entity that is a holder of common
shares;
o the United States federal estate, gift or alternative minimum tax
consequences of the purchase, ownership or disposition of common
shares;
o consequences to persons who hold common shares as a position in a
"straddle" or "synthetic security" or as part of a "hedging,"
"conversion," "constructive sale" or other integrated transaction or
whose "functional currency" is not the United States dollar;
o except as stated explicitly below, consequences to persons that own
or are deemed to own 10% or more of our capital stock;
o except as stated explicitly below, consequences to tax-exempt
organizations; or
o any state, local or non-U.S. tax consequences of the purchase,
ownership or disposition of common shares.
Accordingly, you should consult your own tax advisor regarding the tax
consequences of purchasing, owning and disposing of common shares in light of
your own circumstances.
This summary is based on the Code, U.S. Treasury regulations (proposed and
final) issued under the Code, and administrative and judicial interpretations
thereof, all as they currently exist as of the date of this prospectus. These
income tax laws and regulations, however, may change at any time, possibly on a
retroactive basis. Any such changes may affect the matters discussed in this
summary.
15
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE COMMON SHARES IN LIGHT OF THEIR OWN PARTICULAR
CIRCUMSTANCES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL AND NON-U.S.
LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX
LAWS.
Taxation of Distributions
Subject to the discussion below relating to the potential application of
the "controlled foreign corporation," "related person insurance income,"
"passive foreign investment company" and "foreign personal holding company"
rules, cash distributions made with respect to the common shares will
constitute dividends taxable as ordinary income for U.S. federal income tax
purposes to the extent paid out of our current or accumulated earnings and
profits. U.S. Holders of the common shares generally will be subject to U.S.
federal income tax on the receipt of such dividends. Such dividends will not be
eligible for the dividends received deduction provided by Section 243 of the
Code. To the extent that a distribution exceeds earnings and profits, it will
first be treated as a return of the U.S. Holder's basis to the extent thereof,
and then as gain from the sale of a capital asset, subject to the discussion
below related to the potential application of the "controlled foreign
corporation," "related person insurance income" and "passive foreign investment
company" rules.
Sales, Exchanges or Other Dispositions of Common Shares
In general, a U.S. Holder will recognize gain or loss on a sale, exchange,
or other taxable disposition (collectively, a "disposition") of a common share
in an amount equal to the difference between the amount realized and the
adjusted tax basis for that common share. Selling expenses incurred by a U.S.
Holder will reduce the amount of gain or increase the amount of loss recognized
by such U.S. Holder upon the disposition of the common shares. Subject to the
discussion below relating to the potential application of the "controlled
foreign corporation," "related person insurance income" and "passive foreign
investment company" rules, gain or loss on the disposition of a common share
generally will be a capital gain or loss, and generally will be a long-term
capital gain or loss if, at the time of the disposition, the U.S. Holder has a
holding period for the common share of more than one year. Capital gains of
individuals in respect of capital assets held for more than one year are
eligible for reduced rates of taxation. The deductibility of capital losses is
subject to limitations.
Application of Controlled Foreign Corporation Rules
Generally, each "10% U.S. Shareholder" (as defined below), including in
certain circumstances one that is generally tax exempt, that owns, directly or
indirectly through one or more foreign entities, shares of a foreign
corporation that is a "controlled foreign corporation" ("CFC") for an
uninterrupted period of 30 days or more during any taxable year must include in
its gross income its pro rata share of certain types of income, including
insurance income and passive income such as interest and dividends, realized by
the CFC for such year, even if that income is not distributed.
A "10% U.S. Shareholder" of a foreign corporation is any U.S. person that
owns, directly or indirectly through one or more foreign entities, or is
considered to own (by application of certain constructive ownership rules) 10%
or more of the total combined voting power of all classes of stock of the
foreign corporation. In general, a foreign corporation will be treated as a CFC
only if its 10% U.S. Shareholders collectively own (directly, indirectly
through foreign entities or by attribution) more than 50% (or 25%, in the case
of an insurance company with respect to certain insurance income) of its total
combined voting power or value. In particular, our subsidiaries Partner
Reinsurance Company and PartnerRe SA (each, an "Insurance Subsidiary")
generally will be treated as CFCs if 10% U.S. Shareholders collectively own
(directly, indirectly through foreign entities or by attribution) more than 25%
of the relevant Insurance Subsidiary's total combined voting power or value.
As discussed above under "Description of our Capital Shares -Transfer of
Shares" and "Description of our Capital Shares - Anti-Takeover Effects of
Certain Bye-Laws Provisions", certain provisions in our Bye-Laws (i) limit the
transfer of our capital stock in the event such transfer would result in any
person owning or controlling more than 9.9% of our capital stock and (ii)
restrict the voting power of our capital stock beneficially owned or controlled
by any person to 9.9%. Because of the restrictions in our Bye-Laws and the fact
that we are currently not
16
aware of any 10% U.S. Shareholder, we believe that neither we nor any of our
subsidiaries is a CFC, although there can be no assurance that we or one or
more of our subsidiaries will not be a CFC.
Each prospective investor should consult its own tax advisor to determine
whether its ownership interest would cause it to become a 10% U.S. Shareholder
of us or any of our subsidiaries and to determine the impact of such a
classification of such investor.
Application of Related Person Insurance Income Rules
Potential Inclusion of Related Person Insurance Income
The "related person insurance income" ("RPII") rules of the Code will
apply to U.S. persons (including tax-exempt persons) who, through their
ownership of our common shares, are indirect shareholders of an Insurance
Subsidiary if both (A) the Insurance Subsidiary is a CFC for RPII purposes (a
"RPII CFC") (which will be the case if, as is anticipated, 25% or more of the
value or voting power of such Insurance Subsidiary's capital stock is owned
(directly, indirectly through foreign entities or by attribution) by U.S.
persons), and (B)(i) such Insurance Subsidiary has gross RPII equal to 20% or
more of its gross insurance income and (ii) 20% or more of either the voting
power or the value of such Insurance Subsidiary's capital stock is owned
directly or indirectly through entities by persons (directly or indirectly)
insured or reinsured by such Insurance Subsidiary or persons related to such
insureds or reinsureds. RPII is Section 953(a) insurance income (investment
income and premium income) from the direct or indirect insurance or reinsurance
of any U.S. person who holds capital stock of the applicable Insurance
Subsidiary (directly or indirectly through foreign entities) or of a person
related to such a U.S. holder of capital stock. An Insurance Subsidiary may be
considered to reinsure indirectly the risk of a direct or indirect holder of
shares that is a U.S. person, and thus generate RPII, if an unrelated company
that insured such risk in the first instance reinsures the risk with such
Insurance Subsidiary.
While there can be no assurance, it is not anticipated that 20% or more of
the gross insurance income of either Insurance Subsidiary for any taxable year
will constitute RPII. If 20% or more of the gross insurance income of an
Insurance Subsidiary for any taxable year were to constitute RPII and 20% or
more of the voting power or the value of the capital stock of such Insurance
Subsidiary were held directly or indirectly by insureds or reinsureds or
persons related thereto, each direct and indirect (including by reason of
ownership of our common shares) U.S. Holder of capital stock of such Insurance
Subsidiary (a "RPII Holder") on the last day of such Insurance Subsidiary's
taxable year would be taxable currently with respect to its allocable share of
the RPII for the entire year (whether distributed or not). For this purpose,
all of such Insurance Subsidiary's RPII would be allocated solely to RPII
Holders to the extent of their ratable share of such Insurance Subsidiary's
income. A RPII Holder who owns our common shares during a taxable year but not
on the last day of the taxable year, which would normally be December 31, is
generally not required to include in gross income any part of an Insurance
Subsidiary's RPII.
Computation of RPII
In an effort to determine how much RPII each Insurance Subsidiary has
earned in each taxable year, we intend to obtain information concerning its
insureds to determine whether they or persons related to them own our capital
stock and are U.S. persons. We will take reasonable steps to secure such
information, for example, by seeking representations as to the ownership of our
capital stock by insureds or their affiliates, but there can be no assurance
that our procedures will enable us to identify all of the Insurance
Subsidiaries' RPII. For any year that we determine that an Insurance
Subsidiary's gross RPII is 20% or more of that entity's gross insurance income
for the year, we may also seek information from our shareholders as to whether
beneficial owners of our capital stock at the end of the year are U.S. persons
so that RPII may be apportioned among such persons. To the extent we are unable
to determine whether a beneficial owner of our capital stock is a U.S. person,
we may assume that such owner is not a U.S. person for purposes of apportioning
RPII, thereby increasing the per share RPII amount for all RPII Holders.
Basis Adjustments
Under proposed regulations, a RPII Holder's tax basis in our common shares
will be increased by the amount of any RPII that the shareholder includes in
income. The RPII Holder may exclude from income the amount of any distribution
by us to the extent of the RPII included in income for the year in which the
distribution was paid or for
17
any prior year. The RPII Holder's tax basis in our common shares will be
reduced by the amount of such distributions that are excluded from income.
Dispositions of Common Shares
Section 1248 of the Code generally provides that if a U.S. person sells or
exchanges stock in a foreign corporation and such person is a 10% U.S.
Shareholder at any time during the five-year period ending on the date of the
sale or exchange when such foreign corporation was a CFC, any gain from such
sale or exchange may be treated as ordinary income to the extent of the CFC's
earnings and profits during the period that the shareholder held the shares
(with certain adjustments). A 10% U.S. Shareholder will be required to report a
disposition of shares of a CFC by attaching IRS Form 5471 to the U.S. income
tax or information return that it would normally file for the taxable year in
which the disposition occurs.
Section 953(c)(7) of the Code generally provides that Section 1248 also
will apply to gain recognized by a RPII Holder with respect to the sale or
exchange of shares in a foreign corporation that earns RPII and is
characterized as a RPII CFC if the foreign corporation would be taxed as an
insurance company if it were a domestic corporation, regardless of whether the
RPII Holder is a 10% U.S. Shareholder or whether the corporation qualifies for
either the RPII 20% ownership exception or the RPII 20% gross income exception.
Existing Treasury Department regulations do not clarify whether Section 1248
and the requirement to file IRS Form 5471 would apply with respect to the
disposition of shares in a foreign corporation (such as PartnerRe Ltd.) that is
not itself a RPII CFC but has a foreign insurance subsidiary that is a RPII CFC
and that would be taxed as an insurance company if it were a domestic
corporation, nor do proposed regulations issued by the Treasury Department.
Accordingly, it is possible that Section 1248 and the requirement to file IRS
Form 5471 do not apply to a less than 10% U.S. Shareholder of our capital stock
because we are not directly engaged in the insurance business. There can be no
assurance, however, that the Internal Revenue Service will interpret the
regulations in this manner or that the Treasury Department will not amend the
regulations to provide that Section 1248 and the requirement to file IRS Form
5471 will apply to dispositions of our common shares in respect of our
ownership of the Insurance Subsidiaries. If the IRS or U.S. Treasury Department
were to make Section 1248 and the Internal Revenue Service Form 5471 filing
requirement applicable to the sale of our common shares, we intend to notify
shareholders of such developments and provide to them information necessary to
comply with Section 1248 and the filing requirement.
Application of Passive Foreign Investment Company Rules
Sections 1291 through 1298 of the Code contain special rules applicable
with respect to foreign corporations that are "passive foreign investment
companies" ("PFICs"). In general, a foreign corporation will be a PFIC if 75%
or more of its income constitutes "passive income" or 50% or more of its assets
produce passive income. If we were to be characterized as a PFIC, certain
adverse consequences could apply to U.S. Holders of our common shares. If we
were to be treated as a PFIC for any taxable year, gain recognized by a U.S.
Holder on a disposition of our common shares would be allocated ratably over
the U.S. Holder's holding period for the common shares. The amounts allocated
to the taxable year of the disposition and to any year before we became a PFIC
would be taxed as ordinary income. The amounts allocated to each other taxable
year would be subject to tax at the highest rate in effect for individuals or
corporations, as appropriate, and an interest charge would be imposed on the
amount allocated to such taxable year. Further, any distribution in respect of
our capital stock in excess of 125 percent of the average of the annual
distributions on our capital stock received by the U.S. Holder during the
preceding three years or the U.S. Holder's holding period, whichever is
shorter, would be subject to taxation as described above. In addition, if we
and one of our subsidiaries were treated as PFICs, U.S. Holders of common
shares could, under proposed Treasury Department regulations, be subject to
taxation as described above upon our sale of the subsidiary stock or our
receipt of a distribution paid from such subsidiary. Certain elections may be
available (including a mark to market election) to U.S. persons that may
mitigate the adverse consequences resulting from PFIC status.
In determining whether a foreign corporation has the requisite passive
income so as to be considered a PFIC, the Code contains an express exception
for income "derived in the active conduct of an insurance business by a
corporation which is predominantly engaged in an insurance business." This
exception is intended to ensure that income derived by a bona fide insurance
company is not treated as passive income, except to the extent such income is
attributable to financial reserves in excess of the reasonable needs of the
insurance business. The Code contains a look-through rule stating that, for
purposes of determining whether a foreign
18
corporation is a PFIC, such foreign corporation shall be treated as if it
"received directly its proportionate share of the income" and as if it "held
its proportionate share of the assets" of any other corporation in which it
owns at least 25% of the stock. Under the look-through rule, we would be deemed
to own the assets and to have received any income of the Insurance Subsidiaries
directly for the purposes of determining whether we qualify for the insurance
exception described above. We believe that we (through our subsidiaries) and
each of the Insurance Subsidiaries are predominantly engaged in an insurance
business and do not have financial reserves in excess of the reasonable needs
of our insurance businesses, so that neither we nor either of the Insurance
Subsidiaries should be considered to be a PFIC.
No regulations interpreting these specific issues under the PFIC
provisions have yet been issued. Therefore, substantial uncertainty exists with
respect to their application or their possible retroactivity. Each U.S. person
who is considering an investment in the common shares should consult its tax
advisor as to the effects of these rules.
Application of Foreign Personal Holding Company Rules
A non-U.S. corporation will be classified as a foreign personal holding
company ("FPHC") for U.S federal income tax purposes if both of the two
following tests are satisfied: (i) five or fewer individuals who are U.S.
citizens or residents own or are deemed to own (under certain attribution
rules) more than 50% of all classes of the corporation's stock measured by
voting power or value and (ii) the corporation receives at least 60% (50% in
later years) of its gross income (regardless of source) from certain passive
sources. If we or any of our non-U.S. subsidiaries were classified as a FPHC,
U.S. Holders of common shares would be required to recognize certain gross
income inclusions in respect of the FPHC's "undistributed foreign personal
holding company income". We believe that because of the wide dispersion of our
share ownership and the restrictions in our Bye-Laws (described above under
"--Application of Controlled Foreign Corporation Rules") neither we nor any of
our subsidiaries is a FPHC, although there can be no assurance that we or one
or more of our subsidiaries will not be classified as a FPHC.
Foreign Tax Credit
In the event, as expected, that U.S. persons own at least 50% of our
shares, only a portion of the dividends paid by us will be treated as foreign
source income for purposes of computing a shareholder's U.S. foreign tax credit
limitation. It is likely that substantially all of any RPII and dividends that
are foreign source income will constitute either "passive" or "financial
services" income for foreign tax credit limitation purposes. Thus, it may not
be possible for most U.S. Holders to utilize excess foreign tax credits to
reduce U.S. tax on such income.
Backup Withholding Tax and Information Reporting
Payments of dividends and sales proceeds that are made within the United
States or through certain U.S.-related financial intermediaries generally are
subject to information reporting and to backup withholding at the applicable
rate unless (i) the U.S. Holder is a corporation or other exempt recipient or
(ii) the U.S. Holder provides a correct taxpayer identification number and
certifies that no loss of exemption from backup withholding has occurred.
The amount of any backup withholding from a payment to the U.S. Holder
will be allowed as a credit against such holder's United States federal income
tax liability and may entitle the holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
Potential Legislative Developments
Legislation has been introduced in the U.S. Congress intended to eliminate
certain perceived tax advantages of companies (including insurance companies)
that have legal domiciles outside the United States but have certain U.S.
connections. While there is currently no pending legislative proposal which, if
enacted, would have a material adverse effect on us, our subsidiaries or our
shareholders, it is possible that broader-based legislative proposals could
emerge in the future that would have an adverse impact.
In addition, President Bush has proposed legislation that would exempt
from U.S. federal income tax certain dividends paid by U.S. corporations (or
non-U.S. corporations to the extent subject to U.S. income tax) to U.S.
persons. Dividends paid by PartnerRe would generally not be exempt under this
proposed legislation. As a result, if this legislation were adopted in the form
proposed, U.S. persons holding our capital stock, like U.S. persons holding
19
shares of stock in any non-U.S. corporation not subject to U.S. income tax,
would generally incur higher taxes on the dividends we plan to pay than would
be the case with comparable dividends from U.S. corporations.
20
PLAN OF DISTRIBUTION
We are registering 8,340,731 common shares on behalf of the selling
shareholder. The selling shareholder may sell the common shares from time to
time in one or more transactions on the New York Stock Exchange or otherwise,
at market prices prevailing at the time of sale, at a fixed offering price
which may be changed, at varying prices determined at the time of sale or at
negotiated prices. The selling shareholder may, subject to market conditions,
dispose of its entire holding of our common shares shortly after the
registration statement relating to this prospectus is declared effective. The
common shares may be sold at various times by one or more means, including but
not limited to the following:
o through underwriters, brokers or dealers (who may act as agent or
principal and who may receive compensation in the form of discounts,
concessions or commissions from the selling shareholder, the purchaser
or such other persons who may be effecting sales hereunder) for
resale to the public or to institutional investors at various times;
o through negotiated transactions, including, but not limited to, block
trades in which the broker or dealer so engaged will attempt to sell
the common shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o through purchases by a broker or dealer as principal and resale by
that broker or dealer for its account;
o on any national securities exchange or quotation service on which the
common shares may be listed or quoted at the time of sale at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices;
o in private transactions other than exchange or quotation service
transactions;
o short sales, purchases or sales of put, call or other types of
options, forward delivery contracts, swaps, offerings of structured
equity-linked securities or other derivative transactions or
securities;
o hedging transactions, including, but not limited to:
o transactions with a broker-dealer or its affiliate, whereby the
broker-dealer or its affiliate will engage in short sales of
common shares and may use common shares to close out its short
position;
o options or other types of transactions that require the delivery
of common shares to a broker-dealer or an affiliate thereof, who
will then resell or transfer the common shares; or
o loans or pledges of common shares to a broker-dealer or an
affiliate, who may sell the loaned common shares or, in an event
of default in the case of a pledge, sell the pledged common
shares;
o through offerings of securities exercisable, convertible or
exchangeable for common shares, including, without limitation,
securities issued by trusts, investment companies or other entities;
o offerings directly to one or more purchasers, including institutional
investors;
o through ordinary brokerage transactions and transactions in which a
broker solicits purchasers;
o through distribution to the securityholders of the selling
shareholder;
o by pledge to secure debts and other obligations;
o through a combination of any such methods of sale; or
o through any other method permitted under applicable law and not
otherwise prohibited by this prospectus.
21
The selling shareholder also may resell all or a portion of its common
shares in open market transactions in reliance upon Rule 144 under the
Securities Act of 1933, as amended, provided it meets the criteria and conforms
to the requirements of Rule 144.
The selling shareholder may offer and sell common shares other than for
cash. In such event, any required details of the transaction will be set forth
in a prospectus supplement.
To the extent required, a prospectus supplement will set forth the terms
of any offering of the common shares by the selling shareholder including but
not limited to the following:
o the name or names of any underwriters, dealers or agents and the
amounts of common shares underwritten or purchased by each of them;
and
o the public offering price of the common shares and the proceeds to the
selling shareholder and any discounts, commissions or concessions
allowed or reallowed or paid to dealers.
Any public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time. Broker-dealers
engaged by the selling shareholder may allow other broker-dealers to
participate in resales.
The selling shareholder will bear all underwriting discounts and selling
commissions and fees and disbursements of their own counsel related to the sale
of the common shares. In compliance with NASD guidelines, the maximum
commission or discount to be received by any NASD member or independent broker
dealer may not exceed 8% of the aggregate amount of the securities offered
pursuant to this prospectus and any applicable prospectus supplement. We have
agreed to pay substantially all of the other expenses incidental to the
registration, offering and sale of the common shares.
If underwriters are used in the sale of any common shares, the common
shares will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The common shares may be offered to the public either
through underwriting syndicates represented by managing underwriters or
directly by underwriters. Generally, the underwriters' obligations to purchase
the common shares will be subject to certain conditions precedent.
The selling shareholder may sell the common shares through agents from
time to time. To the extent required, the prospectus supplement will name any
agent involved in the offer or sale of the common shares and any commissions
the selling shareholder pay to them. Generally, any agent will be acting on a
best efforts basis for the period of its appointment.
Agents and underwriters may be entitled to indemnification by the selling
shareholder and/or us against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments which the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may be customers of, engage in transactions with, or perform
services for the selling shareholder and/or us in the ordinary course of
business.
Any underwriters, broker-dealers or agents participating in the
distribution of the common shares covered by this prospectus may be deemed to
be "underwriters" within the meaning of the Securities Act, and any commissions
received by any of those underwriters, broker-dealers or agents may be deemed
to be underwriting commissions under the Securities Act.
LEGAL MATTERS
The validity of the common shares will be passed on for us by Christine
Patton, our General Counsel. Certain legal matters in connection with the
offering of the common shares will be passed on for us by Davis Polk &
Wardwell, New York, New York.
22
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from our Annual Report on Form
10-K for the year ended December 31, 2002 have been audited by Deloitte &
Touche, independent auditors, as stated in their reports, which are
incorporated herein by reference (which reports express an unqualified opinion
and include an explanatory paragraph relating to the Company's change in method
of accounting for goodwill and derivative instruments and hedging activities),
and have been so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
ENFORCEMENT OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS
We are a Bermuda company. In addition, certain of our directors and
officers, as well as certain of the experts named in this prospectus, reside
outside the United States, and all or a substantial portion of our assets and
their assets are located outside the United States. Therefore, it may be
difficult for investors to effect service of process within the United States
upon those persons or to recover against us or those persons on judgments of
courts in the United States, including judgments based on civil liabilities
provisions of the United States federal securities laws.
The United States and Bermuda do not currently have a treaty providing for
reciprocal recognition and enforcement of judgments in civil and commercial
matters. Also, there is doubt as to whether the courts of Bermuda would enforce
(1) judgments of United States courts based on the civil liability provisions
of the United States federal securities laws obtained in actions against us or
our directors and officers, and (2) original actions brought in Bermuda against
us or our officers and directors based solely upon the United States federal
securities laws. A Bermuda court may, however, impose civil liability on us or
our directors or officers in a suit brought in the Supreme Court of Bermuda
provided that the facts alleged constitute or give rise to a cause of action
under Bermuda law. Certain remedies available under the laws of U.S.
jurisdictions, including certain remedies under the U.S. federal securities
laws, would not be allowed in Bermuda courts to the extent that they are
contrary to public policy.
WHERE YOU CAN FIND MORE INFORMATION
All the information contained in this prospectus relating to Swiss Re
(other than information regarding transactions between us and Swiss Re and its
affiliates) or potential methods of distribution of our common shares covered
hereby has been supplied by Swiss Re.
Government Filings. We file annual, quarterly and special reports and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document that we file at the SEC's public reference rooms
at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings subsequent to June 2001 are also available to you free of charge at the
SEC's web site at http://www.sec.gov.
Stock Market. Our common shares are traded on the New York Stock Exchange
and we have a secondary listing on the Bermuda Stock Exchange. Material filed
by PartnerRe Ltd. can be inspected at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede previously filed
information, including information contained in this document.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until this offering has been completed:
23
1. Our Annual Report on Form 10-K for the year ended December 31, 2002; and
2. Our Current Reports on Form 8-K dated March 28, 2003 ("Risk Factors") and
April 28, 2003.
You may request free copies of these filings by writing or telephoning us
at the following address:
96 Pitts Bay Road
Pembroke HM 08
Bermuda
Attention: General Counsel
Telephone: 441-292-0888
Fax: 441-292-7010
24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with
the offering described in this registration statement, other than underwriting
discounts and commissions. We have agreed to pay these expenses. All amounts
are estimates except the registration fee.
Amount to be
Paid
------------
Securities and Exchange Commission registration fee.......... $ 37,004
Legal fees and expenses...................................... 100,000
Accounting fees and expenses................................. 20,000
TOTAL................................................... $ 157,004
Item 15. Indemnification of Directors and Officers
Section 98 of the Companies Act of 1981 of Bermuda (the "Act") provides
generally that a Bermuda company may indemnify its directors, officers and
auditors against any liability that by virtue of Bermuda law otherwise would be
imposed on them, except in cases where such liability arises from the fraud or
dishonesty of which such director, officer or auditor may be guilty in relation
to the company. Section 98 further provides that a Bermudian company may
indemnify its directors, officers and auditors against any liability incurred
by them in defending any proceedings, whether civil or criminal, in which
judgment is awarded in their favor or in which they are acquitted or granted
relief by the Supreme Court of Bermuda in certain proceedings arising under
Section 281 of the Act.
We have adopted provisions in our Bye-Laws that provide that we shall
indemnify our officers and directors to the maximum extent permitted under the
Act, except where such liability arises from fraud, dishonesty, willful
negligence or default.
We have entered into employment agreements with certain of our executive
officers which each contain provisions pursuant to which we have agreed to
indemnify the executive as required by the Bye-Laws and maintain customary
insurance policies providing for indemnification.
We have purchased insurance on behalf of our directors and officers for
liabilities arising out of their capacities as such.
Item 16. Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this Registration
Statement:
Exhibit No. Description
----------- -----------
1.1(1) Form of Underwriting Agreement
4.1 Amended Memorandum of Association of PartnerRe, incorporated by
reference to the Registration Statement on Form F-3 of PartnerRe
(Registration No. 333-7094), as filed with the Securities and
Exchange Commission on June 20, 1997
4.2 Amended and Restated Bye-Laws of PartnerRe, incorporated by
reference to the Registration Statement on Form F-3 of PartnerRe
(Registration No. 333-7094), as filed with the Securities and
Exchange Commission on June 20, 1997
II-1
Exhibit No. Description
----------- -----------
4.3 Specimen Common Share Certificate, incorporated by reference
to our Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as filed with the Securities and Exchange
Commission on March 26, 1997 (File No. 000-22530)
4.4 Form of Class B Warrants, incorporated by reference to the
Registration Statement on Form F-1, as filed with the
Securities and Exchange Commission on October 26, 1993 (File
No. 33-68042)
4.5 Certificate of Designation, Preferences and Rights of 8%
Series A Cumulative Preferred Shares, incorporated by
reference to our Quarterly Report on Form 10-Q, as filed with
the Securities and Exchange Commission on August 14, 1997
(File No. 001-14536)
4.6 Certificate of Designation, Preferences and Rights of 5.61%
Series B Cumulative Redeemable Preferred Shares, incorporated
by reference to our Current Report on Form 8-K, as filed with
the Securities and Exchange Commission on November 28, 2001
(File No. 001-14536)
4.7 Specimen PEPS Units Certificate, incorporated by reference to
our Current Report on Form 8-K, as filed with the Securities
and Exchange Commission on November 28, 2001 (File No.
001-14536)
5.1 Opinion of Ms. Christine Patton, General Counsel of PartnerRe,
as to the legality of the common shares
23.1 Consent of Ms. Christine Patton, General Counsel of PartnerRe
(included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche
24.1 Power of Attorney (included on the signature page of the
Registration Statement)
----------------
(1) To be filed, if necessary, subsequent to the effectiveness 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 an offering of common shares.
Item 17. Undertakings
The 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;
(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 percent 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;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with the
II-2
Commission by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement;
(b) that, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of our annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) 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.
The undersigned registrant hereby undertakes that:
(a) for purposes of determining any liability under the Securities Act,
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; and
(b) for the purpose of determining any liability under the Securities
Act, 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the
registrant pursuant to the provisions set forth or described in Item 15 of this
registration statement, or otherwise, the registrant has been informed 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 the 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 registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PartnerRe Ltd.
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 Pembroke, Bermuda, on the 30th day of April 2003.
PARTNERRE LTD.
By: /s/ Albert A. Benchimol
-----------------------------------
Name: Albert A. Benchimol
Title: Executive Vice President
and Chief Financial Officer
Each of the undersigned directors and/or officers of PartnerRe Ltd., a
company organized under the laws of Bermuda, hereby constitutes and appoints
Albert A. Benchimol and Christine Patton, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution, for him and in
his name, place and stead, in any and all capacities, to sign, execute and
deliver this registration statement on Form S-3 and any and all amendments
(including post-effective amendments) hereto, and to sign any registration
statement for any offering covered by this registration statement that is to be
effective upon filing pursuant to Rule 462 promulgated under the Securities Act
of 1933, as amended, and all post-effective amendments thereto, and to file the
same, with all exhibits thereto and all documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or his, her or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 30th day of April 2003.
Signature Title
--------- -----
/s/ Patrick A. Thiele President, Chief Executive Officer
----------------------------------- and Director (Principal Executive Officer)
Patrick A. Thiele
/s/ Albert A. Benchimol Executive Vice President and Chief
----------------------------------- Financial Officer (Principal Financial
Albert A. Benchimol and Accounting Officer)
/s/ John A. Rollwagen Chairman of the Board of Directors
-----------------------------------
John A. Rollwagen
/s/ Robert Baylis Director
-----------------------------------
Robert Baylis
/s/ Jan H. Holsboer Director
-----------------------------------
Jan H. Holsboer
Signature Title
--------- -----
/s/ Walter B. Kielholz Director
-----------------------------------
Walter B. Kielholz
/s/ Jean-Paul Montupet Director
-----------------------------------
Jean-Paul Montupet
/s/ Remy Sautter Director
-----------------------------------
Remy Sautter
/s/ Lucio Stanca Director
-----------------------------------
Lucio Stanca
/s/ Jurgen Zech Director
-----------------------------------
Jurgen Zech
PARTNERRE U.S. CORPORATION
By: /s/ Scott D. Moore
--------------------------------------------------
Name: Scott D. Moore
Title: President and Chief Executive Officer
Authorized Representative in the United States
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
1.1(1) Form of Underwriting Agreement
4.1 Amended Memorandum of Association of PartnerRe, incorporated by
reference to the Registration Statement on Form F-3 of PartnerRe
(Registration No. 333-7094), as filed with the Securities and
Exchange Commission on June 20, 1997
4.2 Amended and Restated Bye-Laws of PartnerRe, incorporated by
reference to the Registration Statement on Form F-3 of PartnerRe
(Registration No. 333-7094), as filed with the Securities and
Exchange Commission on June 20, 1997
4.3 Specimen Common Share Certificate, incorporated by reference
to our Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as filed with the Securities and Exchange
Commission on March 26, 1997 (File No. 000-22530)
4.4 Form of Class B Warrants, incorporated by reference to the
Registration Statement on Form F-1, as filed with the
Securities and Exchange Commission on October 26, 1993 (File
No. 33-68042)
4.5 Certificate of Designation, Preferences and Rights of 8%
Series A Cumulative Preferred Shares, incorporated by
reference to our Quarterly Report on Form 10-Q, as filed with
the Securities and Exchange Commission on August 14, 1997
(File No. 001-14536)
4.6 Certificate of Designation, Preferences and Rights of 5.61%
Series B Cumulative Redeemable Preferred Shares, incorporated
by reference to our Current Report on Form 8-K, as filed with
the Securities and Exchange Commission on November 28, 2001
(File No. 001-14536)
4.7 Specimen PEPS Units Certificate, incorporated by reference to
our Current Report on Form 8-K, as filed with the Securities
and Exchange Commission on November 28, 2001 (File No.
001-14536)
5.1 Opinion of Ms. Christine Patton, General Counsel of PartnerRe,
as to the legality of the common shares
23.1 Consent of Ms. Christine Patton, General Counsel of PartnerRe
(included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche
24.1 Power of Attorney (included on the signature page of the
Registration Statement)
----------------
(1) To be filed, if necessary, subsequent to the effectiveness 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 an offering of common shares.