SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 18, 1999
XL CAPITAL LTD
________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Cayman Islands 1-10804 98-0191089
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Cumberland House, 1 Victoria Street, Hamilton, Bermuda HM 11
(Address of Principal Executive Offices) (Zip Code)
(441) 292-8515
(Registrant's telephone number, including area code)
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ITEM 2. Acquisition or Disposition of Assets.
The merger (the "Merger") of Dasher Acquisition Corp., a wholly-
owned subsidiary of XL Capital Ltd, a limited liability company organized and
incorporated under the laws of the Cayman Islands ("XL"), into NAC Re Corp.,
a Delaware corporation ("NAC Re"), with NAC Re continuing as the surviving
corporation was consummated on June 18, 1999. As a result of the Merger,
each outstanding share of NAC Re Common Stock has been converted into the
right to receive 0.915 of an XL Class A Ordinary Share, par value $0.01 per
share. Each outstanding option for shares of NAC Re Common Stock has been
converted into options to acquire the number of shares of XL Class A Ordinary
Shares that would have been received if such options and warrants had been
exercised immediately prior to the Merger.
The terms of the Merger were described in the Proxy
Statement/Prospectus included included in XL's Registration Statement on Form
S-4 (File No. 333-77019).
A copy of the press release, dated June 18, 1999, issued by XL and
NAC Re, relating to the above-described transaction is attached as an exhibit
to this report and is incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of the Business Acquired
The financial statements of NAC Re are hereby incorporated by
reference to the Annual Report of NAC Re on Form 10-K for the year ended
December 31, 1998 and the Quarterly Report of NAC Re on Form 10-Q for the
quarter ended March 31, 1999.
(b) Pro Forma Financial Information
The pro forma financial information related to the Merger is hereby
incorporated by reference to the Registration Statement on Form S-4 of XL,
filed with the Securities and Exchange Commission on April 26, 1999 (File No.
333-77019).
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit Description
2.1 Agreement and Plan of Merger, dated as of February 15, 1999, among
XL Capital Ltd, Dasher Acquisition Corp. and NAC Re Corp., as
amended by Amendment No. 1, dated as of April 26, 1999
(incorporated by reference to Annex A to the Registration Statement
on Form S-4 of XL (File No. 333-77019)
99.1 Press release dated June 18, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: June 18, 1999
XL CAPITAL LTD
By: /s/ Paul S. Giordano
--------------------
Paul S. Giordano
Senior Vice President,
General Counsel and Secretary
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EXHIBIT INDEX
Exhibit Description
2.1 Agreement and Plan of Merger, dated as of February 15, 1999, among
XL Capital Ltd, Dasher Acquisition Corp. and NAC Re Corp., as
amended by Amendment No. 1, dated as of April 26, 1999
(incorporated by reference to Annex A to the Registration Statement
on Form S-4 of XL (File No. 333-77019)
99.1 Press release dated June 18, 1999
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EXHIBIT 99.1
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Exhibit 99.1
NEWS RELEASE
IMMEDIATE
Contact: Richard H. Miller Roger R. Scotton
CFO & Treasurer Vice President -
NAC Re Corp. Corporate Communications
(203) 622-5535 XL Capital Ltd.
(441) 294-7165
XL CAPITAL COMPLETES MERGER WITH NAC RE
HAMILTON, BERMUDA AND GREENWICH, CT (June 18, 1999) -- XL Capital Ltd. (NYSE:
XL) ("XL" or "XL Capital") and NAC Re Corp. (NYSE: NRC) ("NAC Re") announced
that they completed their merger today.
Under the terms of the all-stock transaction, shareholders of NAC Re received
0.915 XL shares for each NAC Re share in a tax-free exchange that will be
accounted for as a pooling of interests under U.S. generally accepted
accounting principles. Based on XL's closing price of $59 7/16 on the New
York Stock Exchange on June 17, each NAC Re share was valued at $54.39. The
total equity value of the merger transaction was approximately $1.01 billion,
and EL's market capitalization following the merger is approximately $7.7
billion.
On a pro forma basis at year-end 1998, the combined XL Capital/NAC Re
organization would have had total assets of $13.3 billion and shareholders
equity of $5.6 billion. The combined company would have had total revenues
of approximately $600 million on a pro forma basis for XL's first fiscal
quarter of 1999.
XL Capital President and Chief Executive Officer Brian M. O'Hara welcomed NAC
Re as a member of the XL family of companies. He said: "As the leading
broker-market reinsurer in the United States, NAC Re is a highly respected
professional company with a reinsurance portfolio that is strategically
compatible with our own. We are looking forward to the benefits we will
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derive from the strong NAC Re franchise and brand, which we intend to
maintain, and to the operating synergies that should accrue to XL as a result
of this unique combination of our two organizations. In addition to
providing us with an invaluable springboard for our recent entry into the
United States and strengthening our international reinsurance and Lloyd's
businesses, NAC Re expands our underwriting capabilities significantly, while
offering attractive cross selling opportunities and generally broadening the
XL franchise."
NAC Re's President and Chief Executive Officer, Nicholas M. Brown, Jr., said
he is very pleased to be part of the XL organization. "XL is a dynamic
global insurance, reinsurance and financial services company that will help
NAC Re better serve its clients with a new and expanded product range and
greater capacity. In particular, we will be able to offer finite risk
products and catastrophe coverages to our customers on a broader scale than
in the past."
In addition to his role at NAC Re, Mr. Brown will serve as President and
Chief Executive Officer of X.L. America, Inc., XL's U.S. holding company
headquartered in Connecticut. Mr. Brown will also serve as an Executive Vice
President of XL. Ronald L. Bornhuetter, Chairman of NAC Re prior to the
completion of the merger, along with Daniel J. McNamara, a Director of NAC Re
prior to the merger, will be joining the board of directors of XL Capital.
XL Capital also announced today that it has rescinded all share repurchase
authorizations previously in effect. Separately, XL authorized the purchase
of up to 25,000 of its shares in connection with the administration of
employee benefit plans.
XL Capital, through its wholly-owned subsidiaries, including XL Insurance
Ltd, XL Mid Ocean Reinsurance Ltd, XL Capital Products Ltd and The Brockbank
Group plc, provides insurance and reinsurance coverages and financial
products worldwide. As of February 28, 1999, XL Capital had consolidated
assets of $10.5 billion and consolidated shareholders' equity of $4.8
billion. Additional information on both XL Capital and NAC Re is available
from their respective web sites: www.xl-capital.com and www.nacre.com.
NAC Re is the parent company of NAC Reinsurance Corporation, an A+ rated U.S.
reinsurer which is licensed in all fifty states, the District of Columbia and
all provinces of Canada.
This press release contains forward looking statements of management beliefs,
estimates, projections, and assumptions for the financial condition, results
of operations, business and prospects of XL, NAC Re and the combined XL/NAC
Re on a pro forma basis, including statements relating to: (a) future
assets, shareholders' equity, market capitalization and market position;
(b) the cost savings, synergies and accretion to reported and cash earnings
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that will be realized from the merger; and (c) the restructuring charges
expected to be incurred in connection with the merger. These forward looking
statements involve certain risks and uncertainties, including those detailed
from time to time in XL's and NAC Re's reports and filings with the
Securities and Exchange Commission. Factors that may cause actual results to
differ materially from those contemplated by such forward looking statements
include, among others: (1) expected cost savings and synergies from the
merger cannot be fully realized or realized within the expected time frame;
(2) revenues following the merger are lower than expected or customer loss
and business disruption following the merger are greater than anticipated;
(3) competitive pressure among insurers or reinsurers increases
significantly; (4) costs or difficulties related to the integration of the
businesses of XL and NAC Re are greater than expected; (5) general economic
conditions are less favorable than expected; (6) legislation, tax or
regulatory changes adversely affect the businesses in which the combined
company would be engaged; or (7) natural disasters or other catastrophic
events are more prevalent or significant than expected, or losses have a
greater frequency or severity than anticipated by the companies' reserving
methodologies.
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