<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
DELPHI INTERNATIONAL LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
April 10, 2000
Dear Shareholder,
You are cordially invited to attend the Annual General Meeting of Shareholders
of Delphi International Ltd. (the "Company") on May 8, 2000 at Mid Ocean Club,
Tucker's Town, Bermuda, commencing at 11:30 a.m. We look forward to greeting
those of you who are able to attend.
At this meeting you will be asked to consider and vote upon the following:
1. The election of directors.
2. The adoption of the consolidated financial statements of the Company for
the year ended December 31, 1999 together with the auditors' report
thereon.
3. The appointment of Ernst & Young as the Company's independent auditors for
the fiscal year ending December 31, 2000.
4. Proposals to be considered by the Company, as the holder of all
outstanding voting common shares of Oracle Reinsurance Company Ltd. and
O.R. Investments Ltd., at the Annual General Meetings of Oracle
Reinsurance Company Ltd. and O.R. Investments Ltd. and by the Company on
behalf of Oracle Reinsurance Company Ltd. as a member of Inman Partners
LLC.
5. A proposal to reduce the share premium relating to the Common Shares of
the Company.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THESE PROPOSALS.
Your vote is important. Whether or not you plan to attend the Annual General
Meeting in person and regardless of the number of shares you own, we urge you to
promptly complete, sign, date and return the enclosed proxy card in the envelope
provided. You may attend the Annual General Meeting and vote in person even if
you have previously returned your card. We look forward to meeting with you.
Sincerely,
Colin O'Connor
President & Chief Executive Officer
<PAGE> 3
DELPHI INTERNATIONAL LTD.
NOTICE OF 2000 ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY MAY 8, 2000
Notice is hereby given that the 2000 Annual General Meeting of Shareholders (the
"Meeting") of Delphi International Ltd. (the "Company") will be held at Mid
Ocean Club, Tucker's Town, Bermuda on May 8, 2000 commencing at 11:30 a.m. for
the following purposes:
1. To elect four Directors to serve for a term of three years.
2. To receive and adopt the consolidated financial statements of the Company
for the year ended December 31, 1999 together with the auditors' report
thereon.
3. To approve the recommendation by the Board of Directors that Ernst & Young
be appointed as the Company's independent auditors for the fiscal year
ending December 31, 2000.
4. In accordance with the Company's Bye-Laws, (A) to vote on a proposal to be
considered by the Company, as the holder of all the outstanding voting
common shares of Oracle Reinsurance Company Ltd. ("Oracle Re"), to (i)
elect four Directors to the Board of Oracle Re and (ii) to approve the
recommendation of the Board of Oracle Re that Ernst & Young be appointed
as the independent auditors of Oracle Re for the financial year ending
December 31, 2000 and (iii) to ratify the consent by Oracle Re, as a
member of Inman Partners LLC (the "LLC"), to the LLC's entering into
arrangements whereby certain of the LLC's assets may be pledged to secure
obligations of Oracle Re under its existing letter of credit agreement,
and (B) to vote on a proposal to be considered by the Company, as the
indirect holder of all the outstanding voting common shares of O.R.
Investments Ltd., to (i) elect five Directors to the Board of O.R.
Investments Ltd., and (ii) waive the preparation of audited financial
statements for the year ended December 31, 1999 of O.R. Investments Ltd.
and that no auditor be appointed to the close of the next Annual General
Meeting.
5. To consider a proposal to reduce the share premium relating to the common
shares of the Company.
If you do not expect to be present at the Meeting, please sign, date and fill in
the enclosed form of proxy and return it by mail in the enclosed addressed
envelope. All instruments appointing proxies to be used at the Meeting must be
deposited at the offices of the Company's transfer agent, First Union National
Bank, Attn: Proxy Department, Shareholders Services Group, 1525 West W.T. Harris
Blvd - 3C3, Charlotte, NC 28288-1153, USA or with the Secretary of the Company
at the Company's offices at 11 Church Street, Hamilton HM12, Bermuda, not later
than 5:00 p.m. Bermuda time on May 3, 2000. Shares represented by instruments
appointing proxies that are not deposited will not be voted at the Meeting.
By Order of the Board of Directors
______________________ Nicolas G. Trollope
Hamilton, Bermuda Director & Secretary
April 10, 2000
<PAGE> 4
DELPHI INTERNATIONAL LTD.
PROXY STATEMENT
ANNUAL GENERAL MEETING OF SHAREHOLDERS
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY DELPHI
INTERNATIONAL LTD. (THE "COMPANY") OF PROXIES TO BE VOTED AT THE ANNUAL GENERAL
MEETING OF SHAREHOLDERS (THE "MEETING") TO BE HELD ON MAY 8, 2000 AT 11:30 A.M.
AT MID OCEAN CLUB, TUCKER'S TOWN, BERMUDA.
The close of business on March 20, 2000 has been fixed as the record date for
the determination of shareholders entitled to receive notice of the Meeting and
vote thereat. The Company expects to mail this proxy material to Shareholders on
or about April 10, 2000 together with a copy of the Company's Annual Report to
Shareholders, including its Annual Report on Form 10-K for the year ended
December 31, 1999.
The cost of soliciting proxies will be borne by the Company. The Company will
reimburse brokers, custodians, nominees and other fiduciaries for their
reasonable charges and expenses incurred in forwarding proxy material to
beneficial owners of shares. In addition to solicitation by mail, certain
officers and employees of the Company may solicit proxies personally. These
officers and employees will receive no compensation other than their regular
salaries.
Any person giving a proxy may revoke it by depositing an instrument in writing
executed by him or by his attorney authorized in writing at the registered
office of the Company at any time up to the close of business on the last
business day preceding the Meeting or any adjournment thereof, with the Chairman
of the Meeting or in any other manner permitted by law. All properly executed
proxies, not theretofore revoked, will be voted on any poll taken at the Meeting
in accordance with the instructions contained therein. If no instructions are
given with respect to any particular matter, the proxy authorizes a vote in
favor of such matter and it will be voted accordingly. Proxies must be duly
executed and deposited at the office of the Company's transfer agent, First
Union National Bank, in Charlotte or with the Secretary of the Company at the
Company's office in Bermuda, prior to 5:00 p.m. Bermuda time on May 3, 2000, in
order to be voted at the Meeting.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No person who has been a Director or Officer of the Company and no person who is
a proposed nominee for election as a Director of the Company and no associate or
affiliate of any such Director, Officer or Proposed Nominee has any material
interest, direct or indirect, by way of beneficial ownership of securities or
otherwise, in any matter to be acted upon at the Meeting except as may
hereinafter be disclosed.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of March 20, 2000, the Company had outstanding 4,079,014 Common Shares, par
value $0.01 per share (the "Common Shares"), entitled to be voted at the
Meeting. Each holder of Common Shares of the Company is entitled to one vote per
share on all matters submitted to a vote of shareholders, except that if and as
long as the Controlled Shares of any person constitute 9.5% or more of the
issued and outstanding Common Shares, the voting rights with respect to the
Controlled Shares owned by such person shall be limited, in the aggregate, to a
voting power of 9.5%, pursuant to a formula specified in the Company's Bye-Laws.
"Controlled Shares" means (i) all shares of the Company directly, indirectly or
constructively owned by any person within the meaning of Section 958 of the
United States Internal Revenue Code of 1986 (the "Code") and (ii) all shares of
the Company directly, indirectly or beneficially owned by such person within the
meaning of Section 13(d) of the United States Securities Exchange Act of 1934
(the "Exchange Act") (including any shares owned by a group of persons as so
defined and including any shares that would otherwise be excluded by the
provisions of Section 13(d)(6) of the Exchange Act). Under these provisions, if,
and so long as, any person directly, indirectly or constructively owns, within
the meaning of Section 958 of the Code, Controlled Shares having more than 9.5%
of the total number of votes exercisable in respect of all shares of voting
stock of the Company, the voting rights attributable to such shares will be
limited, in the aggregate, to 9.5% of the total number of votes. If the person
solicited does not specify a choice with respect to the election of any nominee
for Director, the shares will be voted "for" such
<PAGE> 5
nominee. Proxies marked as abstaining (including proxies containing broker
non-votes) on any matter to be acted upon by shareholders will be treated as
present at the Meeting for purposes of determining a quorum but will not be
counted as votes cast on such matters.
As of March 20, 2000, the Controlled Shares with respect to Mr. Robert
Rosenkranz, Chairman of the Board of Directors of the Company, consisted of
1,295,004 Common Shares which, as of such date, represented 31.7% of the Common
Shares. Under the Bye-Laws as referred to above, the voting rights attaching to
these Common Shares are limited to a voting power of 9.5%.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Shares as of March 20, 2000, by each person
who is known by the Company to own beneficially more than 5% of the Company's
Common Shares, by each of the Company's Directors and by all Executive Officers
and Directors as a group. Unless otherwise indicated, each beneficial owner
listed below is believed by the Company to have sole voting and dispositive
power with respect to the indicated shares.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name of Beneficial Owner Ownership(2) Of Class
------------------------ ------------ --------
<S> <C> <C>
Five or greater percent owner:
Robert Rosenkranz(1) ......................... 1,102,502 26.6%
Harold F. Ilg(1) ............................. 277,310 6.7%
David Elenowitz(1) ........................... 272,624 6.6%
Directors and Executive Officers:
Robert Rosenkranz ............................ 1,102,502 26.6%
Harold F. Ilg ................................ 277,310 6.7%
Lewis S. Ranieri ............................. 123,592 3.0%
Charles P. O'Brien ........................... 94,344 2.3%
Edward A. Fox ................................ 78,696 1.9%
Robert M. Smith, Jr .......................... 58,806 1.4%
Thomas L. Rhodes ............................. 41,420 1.0%
Colin O'Connor ............................... 37,498 *
David Ezekiel ................................ 15,498 *
Nicolas G. Trollope .......................... 3,700 *
Directors and Officers as a group (10 persons) 1,833,366(3) 44.2%
</TABLE>
* Amount is less than 1%.
(1) Mr. Rosenkranz's address is c/o Delphi Capital Management, Inc., 153
East 53rd Street, New York, New York 10022. Mr. Ilg's address is c/o
Safety National Casualty Corp., 2043 Woodland Parkway, Suite 200,
St. Louis, Missouri 63146. Mr. Elenowitz's address is c/o Mercury
Capital, Inc., 153 East 53rd Street, New York, New York 10022.
(2) The indicated shares for each individual, with the exception of
Messrs. Elenowitz and Trollope, include 7,498 Common Shares, which
may be acquired pursuant to stock options within 60 days.
(3) Includes 67,482 Common Shares which may be acquired pursuant to
stock options within 60 days.
-2-
<PAGE> 6
ELECTION OF DIRECTORS
(Item 1 of Notice of Meeting)
The Company's Bye-Laws provide that the Board of Directors shall be divided into
three classes, which classes will be as follows: the First Class, whose initial
term expired at the first Annual General Meeting of the Company's shareholders
following the completion of the rights offering in January 1998; the Second
Class, whose initial term expires at the second Annual General Meeting following
completion of the rights offering; and the Third Class, whose initial term
expires at the third Annual Meeting of the Company's shareholders following
completion of the rights offering. Following their initial terms all classes of
Directors shall be elected to three year terms. In accordance with the Bye-Laws,
the four Directors comprising the Second Class of Directors will be eligible for
re-appointment on a three year term.
It is intended that the Common Shares represented by Proxies will be voted "for"
the election of the nominees listed below, unless a contrary direction is
indicated on the Proxy. While it is not expected that any of the nominees will
be unable to qualify for or accept office, if for any reason any nominee shall
be unable to do so, Proxies that would otherwise have been voted "for" such
nominee will instead be voted "for" a substitute nominee selected by the Board.
NOMINEES FOR DIRECTOR
The following sets forth information as to each nominee for election at the 2000
Annual General Meeting, including his age, positions with the Company, length of
service as Director of the Company, other Directorships currently held, if any,
principal occupations and employment during the past five years and other
business experience.
MR. HAROLD F. ILG, 52, has served as a director of each of the Company and
Oracle Reinsurance Company Ltd. ("Oracle Re") since their inception in
September 1997. Mr. Ilg has served as Chairman of the Board of Safety
National Casualty Corp. ("Safety National") since January 1999 and as
President and Chief Executive Officer of Reliance Standard Life Insurance
Company ("RSL") since April 1999. Prior to January 1999, Mr. Ilg served as
Vice-Chairman of the Board of Safety National, where he has been employed in
various capacities since 1978. Mr. Ilg also serves as a director of RSL and
as President, Chief Executive Officer and a director of First Reliance
Standard Life Insurance Company ("FRSLIC") and Reliance Standard Life
Insurance Company of Texas ("RSL-Texas").
MR. LEWIS S. RANIERI, 53, has served as a director of the Company since its
inception in September 1997. Mr. Ranieri is currently Chairman and Chief
Executive Officer of Ranieri & Co., Inc. and oversees Hyperion Partners L.P.
and Hyperion Partners II L.P. (collectively "Hyperion"), funds created to
invest in the financial services, housing and real estate industries. As
part of his responsibilities with Hyperion, Mr. Ranieri serves as
Vice-Chairman of Hyperion Capital Management, Inc., a New York based money
management firm specializing in mortgage-backed securities, as Chairman,
Director and/or Trustee of several closed-end investment companies advised by
Hyperion Capital Management, Inc., as Chairman and a director of Bank United
Corp. and a director of Bank United, a Houston-based savings and loan
institution. Mr. Ranieri also serves on the compensation committee for both
Bank United entities and as a director of Delphi Financial Group, Inc.
("DFG").
MR. THOMAS L. RHODES, 60, has served as a director of each of the Company and
Oracle Re since their inception in September 1997. Mr. Rhodes has been
President of National Review, Inc. since November 1992, where he has also
served as a director since 1988. From 1987 to November 1992, Mr. Rhodes was
a partner of Goldman, Sachs & Co., New York, NY. Mr. Rhodes is Vice-Chairman
and a director of Asset Investors Corporation and Vice-Chairman and a
director of Commercial Assets, Inc. Mr. Rhodes is a director of Apartment
Investment and Management Company, The Lynde and Harry Bradley Foundation,
DFG and RSL.
MR. ROBERT M. SMITH, JR., 48, has served as a director of each of the Company
and Oracle Re since their inception in September 1997. Mr. Smith has served
as Executive Vice President of DFG since November
-3-
<PAGE> 7
1999 and as Vice President of DFG from July 1994 to November 1999. Prior to
joining DFG, Mr. Smith was Director, Investment Banking for Merrill Lynch &
Company, New York, NY. Mr. Smith is a director of DFG, RSL, FRSLIC, RSL-Texas
and Safety National.
COMMITTEES OF THE BOARD OF DIRECTORS
The Executive Committee is empowered, subject to certain limitations, to
exercise all the powers and authorities of the Board in relation to the
management and business of the Company when the Board is not in session. The
members of the Committee are Messrs. Ezekiel, O'Connor and Trollope. The
Committee met five times in 1999.
The Compensation Committee, whose membership consists of Messrs. Ezekiel and
Rhodes, reviews compensation of the Company's Chief Executive Officer and any
discretionary grants of stock options. The Committee did not meet in 1999.
The Audit Committee is responsible for reviewing the activities of the Company's
independent accountants. The Committee, whose membership consists of Messrs.
Smith and Ezekiel, held one meeting during 1999.
DIRECTORS' ATTENDANCE
All directors attended at least 75% of the aggregate number of meetings held in
1999 of the Board and the Board committees on which such Director served, with
the exception of Mr. Ezekiel.
DIRECTORS' COMPENSATION
Directors, other than Mr. Trollope, are entitled to an annual cash retainer of
$10,000 for serving on the Company's Board plus expenses for each meeting
attended. Each Director, unless electing otherwise in advance, is entitled to
receive, in lieu of such annual cash retainer, a number of options to purchase
Common Shares determined pursuant to the formula set forth in the Company's
Director and Employee Stock Option Plan (the "Option Plan").
Under this formula, the number of Common Shares to which each option relates is
equal to three times the amount of the annual retainer that would otherwise be
payable in cash, divided by the fair market value of a Common Share on the date
of grant, and the exercise price is 100% of such fair market value on the date
of grant. For this purpose, the fair market value on any such date is the
closing price of a Common Share, as reported through the NASDAQ National Market
System, on the grant date. Options granted become exercisable in four equal
90-day installments and expire ten years from the date of grant.
Under the Option Plan, options to purchase 52,686 Common Shares, in the
aggregate, were granted to Directors during 1999 at an exercise price of $5.125
per share. The shares to which such options relate are included in the table in
the "Voting Securities and Principal Holders Thereof" section.
ADOPTION OF CONSOLIDATED FINANCIAL STATEMENTS
(ITEM 2 OF NOTICE OF MEETING)
The Company's Board of Directors has approved the consolidated financial
statements of the Company for the year ended December 31, 1999 together with the
auditors' report thereon, and two Directors of the Company have signed the
balance sheet of the consolidated financial statements on behalf of the Company.
The Board has unanimously recommended that the shareholders formally adopt the
consolidated financial statements for the year ended December 31, 1999.
In accordance with Bermuda company law and practice, the consolidated financial
statements will be laid before the Meeting and it is intended that the Common
Shares represented by proxies solicited by or on behalf of the Company will be
voted in favor of the adoption of the consolidated financial statements for the
year ended December 31, 1999 together with the auditors' report thereon, unless
a contrary direction is indicated on the Proxy.
-4-
<PAGE> 8
PROPOSAL TO APPROVE THE APPOINTMENT OF AUDITORS
(ITEM 3 OF NOTICE OF MEETING)
The Board of Directors recommends that Ernst & Young be appointed as auditors of
the Company to hold office until the next Annual General Meeting of
Shareholders. Representatives of Ernst & Young are expected to be present at the
Meeting and will be available to answer appropriate questions. Such
representatives of Ernst & Young will also be given an opportunity to make a
statement to the shareholders if they so wish.
It is intended that the Common Shares represented by proxies solicited by or on
behalf of the Company will be voted in favor of the appointment of Ernst & Young
as auditors of the Company and authorizing the Directors to fix their
remuneration, unless a contrary direction is indicated on the Proxy.
Approval of the appointment of Ernst & Young as auditors of the Company and
authorizing the directors to fix their remuneration requires the affirmative
vote of a majority of the voting power of the voting Common Shares present in
person or represented by proxy at the meeting.
APPROVAL OF ACTIONS AT SUBSIDIARY LEVEL
(ITEM 4 OF NOTICE OF MEETING)
In accordance with the Bye-Laws of the Company, with respect to any matter
required to be submitted to a vote of shareholders of a subsidiary (as that term
is defined in the Bye-Laws), the Company is required to submit a proposal
relating to such matter to the shareholders of the Company who will vote at a
General Meeting with respect to such matter in accordance with the Bye-Laws and
the shareholders of the Company shall be entitled to all of the voting rights
with respect to the shares of the subsidiary. For these purposes, the Company
has two subsidiaries namely Oracle Re and O.R. Investments Ltd; in addition,
this requirement applies with respect to Inman Partners LLC (the "LLC"), a
limited liability company of which Oracle Re is a member.
Shareholder approval is being sought to authorize any one Director of the
Company to execute unanimous written consents of the shareholders of Oracle
Re and O.R. Investments Ltd. relating to their respective annual statutory
meetings as follows:
In the case of Oracle Re, the unanimous written consent will contain two
resolutions: (1) that Messrs. Harold F. Ilg, Thomas L. Rhodes and Robert M.
Smith, Jr. be re-elected for a further three year term in accordance with the
Bye-Laws of Oracle Re and (2) that Ernst & Young be appointed as Oracle Re's
independent auditor for the financial year ending December 31, 2000.
In the case of O. R. Investments Ltd., the unanimous written consent will
contain two resolutions: (1) that Messrs. Robert Rosenkranz, Robert M. Smith,
Jr., Colin O'Connor, David Ezekiel and Nicolas G. Trollope be re-elected
Directors of O.R. Investments Ltd. to serve until the next Annual General
Meeting of the Company and that (2) O.R. Investments Ltd. waive the
preparation of financial statements for the year ended December 31, 1999 and
that no auditor be appointed to the close of the next Annual General Meeting.
In addition, with respect to the LLC, Oracle Re has, in its capacity as a member
thereof, previously consented to the LLC's entering into arrangements whereby
the LLC may pledge certain of its assets as collateral to secure Oracle Re's
obligations under its existing letter of credit agreement. Such arrangements are
in the best interests of the Company as they facilitate Oracle Re's ability to
meet its collateral requirements under such agreement. Accordingly, shareholder
approval is being sought with respect to such arrangements.
Approval of the actions of the subsidiaries and the LLC as outlined above and
for the execution by any one Director of the Company of the unanimous written
consents of both Oracle Reinsurance Company Ltd. and O. R. Investments Ltd.
as aforesaid requires the affirmative vote of a majority of the voting power
of the voting Common Shares in the Company present in person or represented
by proxy at the meeting.
-5-
<PAGE> 9
PROPOSAL TO REDUCE SHARE PREMIUM OF THE COMPANY
(ITEM 5 OF NOTICE OF MEETING)
The Company has issued 100,000 Series A Preferred Shares (the "Preferred
Shares") which carry a 9.5% cumulative dividend. The Directors are not presently
able to declare a dividend on the Preferred Shares due to the deficit in the
retained earnings account. As of December 31, 1999 there was a retained earnings
deficit in respect of the Common Shares of $18,595,390 and there was accrued
$950,000 as payable in respect of dividends on the Preferred Shares. The
directors consider it in the best interests of the Company to be able to declare
a dividend on the Preferred Shares in order to eliminate a cumulative obligation
and create longer term financial certainty as well as to be in a position, if
deemed appropriate in the future, to be able to redeem the Preferred Shares,
including all dividends then accumulated thereon. In order to achieve this
flexibility, it is necessary for the Company to reduce the share premium account
relating to the Common Shares and credit this balance arising therefrom to the
Company's contributed surplus account. Under U.S. GAAP, under which the accounts
of the Company are completed, the amount available for distribution due to this
reduction is included in additional paid-in capital on the Company's balance
sheet.
The resolution relating to this proposal that the shareholders will be asked to
approve is as follows:
"RESOLVED that the share premium account in the amount of $20,864,157
relating to the Common Shares of the Company be and is hereby reduced and
the credit arising therefrom be and is hereby transferred to the Company's
contributed surplus account."
Approval of this resolution requires the affirmative vote of a majority of the
voting power of the voting Common Shares present in person or represented by
proxy at the Meeting.
EXECUTIVE COMPENSATION
The Company has entered into an oral employment agreement with Mr. Colin
O'Connor pursuant to which Mr. O'Connor serves as President and Chief Executive
Officer of the Company.
The following table sets forth aggregate compensation paid by the Company and
its subsidiaries for services rendered in all capacities to the Company and its
subsidiaries during the fiscal year ended December 31, 1999 and for the period
from January 27, 1998 to December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
--------------------------------- ---------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary Compensation Award Options (#)(1) Compensation
- ------------------ ---- ------ ------------ ----- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Colin O'Connor, 1999 $150,000 $25,000 -- 5,854 --
President & Chief 1998 150,000 25,000 -- 1,644 --
Executive Officer
of the Company
</TABLE>
(1) Represents options granted pursuant to the Option Plan for service as a
director of the Company in lieu of an annual cash retainer.
-6-
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
Summarized below in tabular format are options granted to the named executive
officer under the Option Plan in 1999.
<TABLE>
<CAPTION>
% of Total Potential Realizable Value
Number of Options at Assumed Annual Rates of
Securities Granted to Stock Price Appreciation for
Underlying Employees Exercise Option Term
Options in Last Price Expiration ----------------------------
Name Granted Fiscal Year ($/Sh) Date 5% 10%
- ----------------- ------- ----------- ------ ---- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Colin O'Connor 5,854(1) 100% $5.125 05/10/09 $18,868 $47,815
</TABLE>
(1) Represents options granted pursuant to the Option Plan for service as a
director of the Company in lieu of the annual cash retainer. The options
indicated become exercisable in four equal quarterly installments
beginning with the first such installment occurring on August 10, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Summarized below in tabular format are options exercised by the named executive
officer during the fiscal year ended December 31, 1999 and options outstanding
under the Option Plan at December 31, 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year-End Fiscal Year-End(1)
Acquired Value ----------------------------- ----------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Colin O'Connor -- $ -- 7,498(2) -- $ -- $ --
</TABLE>
(1) Based on a closing price of $4.00 for the Company's Common Shares on
December 31, 1999.
(2) Represents options granted pursuant to the Option Plan for service as a
director of the Company in lieu of the annual cash retainer.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the Board of Directors are "insiders" within the meaning of the
Securities Act and there were no "interlocks" within the meaning of the
Securities Act.
PERFORMANCE GRAPH
In order to further assist stockholders in analyzing disclosure on compensation,
a graph comparing the total return on the Company's Common Shares to the total
return on the common stock of the companies included in the Nasdaq Composite
Index and the Standard & Poor's Property-Casualty Insurance Index ("S&P P-C
Insurance Index") has been provided. The performance graph should be analyzed in
connection with the preceding table detailing the payment of compensation. The
graph assumes $100 was invested in the Company's Common Shares and the indices
reflected therein on January 27, 1998, the date the rights offering of the
Company's Common Shares was completed, and reflects the value of that investment
through December 31, 1999.
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<PAGE> 11
01/27/1998 12/31/1998 12/31/1999
Delphi International 100 171 81
Nasdaq Composite Index 100 143 266
S&P P-C Insurance Index 100 95 71
REPORT ON EXECUTIVE COMPENSATION
Compensation of the Company's Executive Officer is supervised by the
Compensation Committee of the Board of Directors. The objective of the Company's
compensation program is to provide a total compensation package that will enable
the Company to attract, motivate and retain outstanding individuals and to
reward such individuals for increasing levels of profit and shareholder value.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
David Ezekiel Thomas L. Rhodes
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INVESTMENT ADVISORY AGREEMENTS
The allocation of the Company's assets to the strategies and among investment
managers within the strategies is performed by Acorn Advisory Capital L.P. (the
"Investment Advisor") pursuant to an investment advisory agreement (the
"Investment Advisory Agreement"). This agreement provides for the payment to the
Investment Advisor of a fee equal to 50 basis points of assets under management.
The Investment Advisor has to date waived the fee under the Investment Advisory
Agreement and has at its option the ability to waive future fees, although there
can be no assurance that it will do so. In addition, the Investment Advisory
Agreement allows the Investment Advisor to defer payment of its fee, although
there can be no assurance that it will do so. Mr. Rosenkranz, Chairman of the
Board of Directors of the Company and Oracle Re, may be deemed to be the
beneficial owner of substantially all of the Investment Advisor. The initial
term of the Investment Advisory Agreement ended on December 31, 1998. The
agreement has been renewed through December 31, 2000. Termination is subject to
notice 60 days prior to the end of the then-current term by either the Company
or the Investment Advisor.
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<PAGE> 12
Also, during 2000, Oracle Re entered into arrangements under which approximately
$12.0 million in assets are presently managed pursuant to a discrete investment
program with an entity in which Mr. Rosenkranz has a financial interest. Under
such arrangements, asset-based and performance-based fees will be paid to such
entity, which also provides similar services to unaffiliated third parties on
comparable terms. Such fees are comparable to fees charged by unaffiliated third
parties in connection with similar investment programs. Fees will not be
assessed under the Investment Advisory Agreement with respect to assets managed
under this program.
AGREEMENT WITH INTERNATIONAL ADVISORY SERVICES LTD. ("IAS")
The Company has engaged IAS to provide certain management and administrative
services to the Company. David Ezekiel, Vice President and Director of the
Company and Oracle Re, is the President and Managing Director of IAS. These
services include underwriting support and administration, preparation of
financial statements, liaison with auditors, legal advisors and other service
providers, together with such other duties as may be agreed upon.
CONYERS DILL & PEARMAN
The Company and Oracle Re retain the Bermuda law firm of Conyers Dill & Pearman
as their corporate counsel and the firm's affiliated company, Codan Services
Limited, provides corporate administrative services to the Company and Oracle
Re. Mr. Trollope, a Director of the Company, is a Partner of Conyers Dill &
Pearman.
DELPHI FINANCIAL GROUP, INC. ("DFG")
During 1998, Oracle Re entered into various reinsurance agreements with
subsidiaries of DFG, of which Mr. Rosenkranz is Chairman of the Board, President
and Chief Executive Officer and beneficially owns or has the power to vote 100%
of the shares of the Class B Common Stock and of which Messrs. Fox, O'Brien,
Ranieri, Rhodes and Smith also serve as Directors. Under these agreements,
approximately $101.5 million of group employee benefit reserves ($35 million of
long-term disability insurance reserves and $66.5 million of net excess workers'
compensation and casualty reserves) were ceded to Oracle Re. In 1999, Oracle Re
and RSL effected the partial recapture of approximately 35%, or $10 million, of
the group long-term disability liabilities ceded to Oracle Re. In January 2000,
Safety National and Oracle Re rescinded a workers' compensation quota share
reinsurance contract which had been entered into during 1999. Also in 1998, DFG
and certain of its subsidiaries purchased subordinated notes from the Company
with an aggregate principal amount of $40 million of which a $10 million note
was sold by DFG to an unrelated party prior to December 31, 1998. Such notes
bear interest at the rate of 9% per annum (which, during any five years, may be
paid in additional notes bearing the same terms in lieu of cash) and mature in
full in January 2028. Interest of $2.8 million was paid in 1999 by the issuance
of additional notes.
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<PAGE> 13
FINANCIAL STATEMENTS AVAILABLE
Consolidated financial statements for Delphi International Ltd. are included in
the Company's 1999 Annual Report on Form 10-K for the year ended December 31,
1999 which is being mailed together with this Proxy Statement. Additional copies
of the Form 10-K and the Annual Report to shareholders may be obtained without
charge by submitting a written request to Delphi International Ltd., Chevron
House, 11 Church Street, Hamilton, Bermuda.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on its review of Forms 3, 4 and 5 and
amendments thereto furnished to the Company pursuant to Section 16 of the
Securities Exchange Act of 1934 and other information obtained from such
persons, all persons subject to these reporting requirements filed the required
reports on a timely basis.
SHAREHOLDER PROPOSALS
Pursuant to the Company's Bye-Laws, resolutions intended to be presented by
shareholders for action at the 2001 Annual General Meeting must comply with the
provisions of the Bermuda Companies Act, 1981 and the Bye-Laws of the Company.
Pursuant to United States securities law regulations, proposals intended to be
presented by shareholders for action at the 2001 Annual Meeting must comply with
such regulations and be received by the Secretary of the Company not later than
December 1, 2000 in order to be considered for inclusion in the Company's proxy
statement relating to such meeting.
By Order of the Board of Directors
Nicolas G. Trollope
Director & Secretary
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<PAGE> 14
DELPHI INTERNATIONAL LTD.
Dear Shareholder,
Please take note of the important information enclosed with this Proxy.
Your vote counts and you are strongly encouraged to exercise your right
to vote your shares.
Please mark the boxes on this proxy card to indicate how your shares
will be voted. Then sign the card, detach it and return your proxy vote
in the enclosed postage paid envelope.
Your vote must be received prior to the 2000 Annual General Meeting of
Shareholders, scheduled to be held on May 8, 2000.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Delphi International Ltd.
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
DELPHI INTERNATIONAL LTD.
The undersigned shareholder hereby appoints Colin O'Connor as attorney or proxy,
with full power of substitution, and hereby authorizes him to represent and vote
in the manner designated on the reverse side of this card (or, if no designation
is made, as provided below), all of the Common Shares of Delphi International
Ltd. (the "Company") held of record by the undersigned at the close of business
on March 20, 2000 at the Company's 2000 Annual General Meeting of Shareholders
scheduled to be held on May 8, 2000 at 11:30 a.m., or any adjournments or
postponements thereof.
The undersigned acknowledges receipt of the Company's Annual Report on Form 10-K
for the year ended December 31, 1999, Notice of 2000 Annual General Meeting of
Shareholders and Proxy Statement, dated April 10, 2000, and grants authority to
said proxy or his substitutes and ratifies and confirms all that said proxies
may lawfully do in the undersigned's name, place and stead.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DELPHI
INTERNATIONAL LTD. and, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is made, this
proxy will be voted "FOR" all nominees for Director and "FOR" Proposal 2,
Proposal 3, Proposal 4 and Proposal 5.
SIGNED: ________________________________
SIGNED: ________________________________
Please sign exactly as your name(s)
appear(s) hereon. Joint owners should
each sign personally. Trustees and other
fiduciaries should indicate the capacity
in which they sign and, where more than
one name appears, a majority must sign.
If a corporation or partnership, this
signature should be that of an
authorized officer who should state his
or her title.
DATED: _________________________________
IMPORTANT: Please mark, sign and date
this proxy and return it promptly in the
enclosed envelope. No postage is
required if mailed in the United States.
<PAGE> 15
FOLD AND DETACH HERE
- -------------------------------------------------------------------------------
1. Election of Directors.
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY to vote for all
(except as written in nominees listed below
the space provided below)
Harold F. Ilg Lewis S. Ranieri Thomas L. Rhodes Robert M. Smith, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee
listed above, write that nominee's name in the space provided below.
2. Adoption of the consolidated financial statements of the Company for the
year ended December 31, 1999 together with the auditors' report thereon.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Appointment of Ernst & Young as the Company's independent auditors for the
fiscal year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Adoption of proposals to be considered by the Company, as the holder of all
outstanding voting common shares of Oracle Reinsurance Company Ltd. and O.R.
Investments Ltd., at the Annual General Meetings of Oracle Reinsurance
Company Ltd. and O.R. Investments Ltd. and by the Company on behalf of
Oracle Reinsurance Company Ltd. as a member of Inman Partners LLC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Adoption of the proposal to reduce the share premium account of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
