Filed Under Rule 424(b)(3)
Registration No. 333-62257
PROSPECTUS SUPPLEMENT
(To the Prospectus dated August 26, 1998)
543,547 Shares
XL CAPITAL LTD
(formerly EXEL LIMITED)
Ordinary Shares
(par value $.01 per share)
--------------
The Prospectus, dated August 26, 1998, to which this Prospectus Supplement
is attached, relates, among other things, to the resale by the holders thereof
of up to 3,000,000 Class A Ordinary Shares of XL Capital Ltd (formerly EXEL
Limited). This Prospectus Supplement relates to the resale by the Selling
Shareholders named herein of up to 543,547 Ordinary Shares. XL issued the
Ordinary Shares in connection with the acquisition of ECS, Inc. from the Selling
Shareholders on June 1, 1999.
The Ordinary Shares are traded on the New York Stock Exchange under the
NYSE symbol "XL". The last reported sales price of the Ordinary Shares as
reported by the NYSE Composite Tape on October 28, 1999 was $50.875 per Ordinary
Share.
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The date of this Prospectus Supplement is October 29, 1999.
<PAGE>
The following information should be read in conjunction with the
information contained elsewhere in the Prospectus. Except for information in
this Prospectus Supplement, reference should be made to the accompanying
Prospectus dated August 26, 1998 and the information incorporated therein by
reference. Capitalized terms used and not defined herein shall have the meanings
given to them in the Prospectus.
PRICE RANGE OF ORDINARY SHARES
The Ordinary Shares of XL are traded on the NYSE under the symbol "XL". The
following table sets forth the reported high and low closing sale prices for
such shares for the periods indicated.
Price
-------------------
High Low
--------- ---------
FISCAL YEAR 1998 (1)
Third Quarter................................... $83.250 $62.125
Fourth Quarter.................................. 63.938 77.688
FISCAL YEAR 1999 (1)
First Quarter................................... 75.188 56.750
Second Quarter.................................. 66.500 55.750
Third Quarter................................... 57.688 42.188
Fourth Quarter (through October 28, 1999)....... 50.875 44.938
- ------------------------------
(1) The fiscal year of XL ends on December 31 of each year.
The last reported sales price of the Ordinary Shares as reported by the
NYSE Composite Tape on October 28, 1999 was $50.875 per Ordinary Share.
SELLING SHAREHOLDERS
The Selling Shareholders acquired the Ordinary Shares offered hereby in
connection with the acquisition by XL of ECS from the Selling Shareholders on
June 1, 1999.
The following table sets forth, as of the date of this Prospectus
Supplement, the names of the Selling Shareholders, the Ordinary Shares owned by
each of the Selling Shareholders, Ordinary Shares to be offered from time to
time by each of the Selling Shareholders, and the Ordinary Shares to be owned by
each of the Selling Shareholders after completion of this offering. The
information concerning the Selling Shareholders may change from time to time,
and any such changed information will be set forth in supplements to the
Prospectus, if and when necessary.
<TABLE>
<CAPTION>
Number of Shares Number of Shares Number of Shares to be
Selling Shareholder Owned (1) Being Offered (2) Held after Offering
- ---------------------------------------- --------------------- --------------------- -------------------------
<S> <C> <C> <C>
William Kronenberg, III 309,822 309,822 -0-
David M. Rosenberg 152,193 152,193 -0-
Frank A. Piliero 81,532 81,532 -0-
</TABLE>
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S-1
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated in the
footnotes to this table, the persons named in the table have sole voting
and investment power with respect to all of the ordinary shares
beneficially owned.
(2) Assumes that each Selling Shareholder will sell all of the Ordinary Shares,
although there can be no assurance that any or all of such Ordinary Shares
will be sold.
In connection with the acquisition by XL of ECS from the Selling
Shareholders, XL entered into a registration rights agreement with the Selling
Shareholders, pursuant to which XL agreed, among other things, to file this
Prospectus Supplement with the Commission. In addition, XL entered into an
employment agreement with William Kronenberg, III, pursuant to which Mr.
Kronenberg serves as the President and Chief Executive Officer of ECS. The
initial term of the employment agreement expires June 1, 2004. Mr. Kronenberg
also serves as a director of ECS and X.L. America, Inc., a subsidiary of XL, and
as chairman of the global environmental practice group within XL. Except as set
forth above, none of the Selling Shareholders has had a material relationship
with XL within the past three years.
PLAN OF DISTRIBUTION
XL is registering the resale of the Ordinary Shares on behalf of the
Selling Shareholders. As used herein, "Selling Shareholders" includes donees and
pledgees selling Ordinary Shares received from a named Selling Shareholder after
the date of this Prospectus Supplement. All costs, expenses and fees in
connection with the registration of the Ordinary Shares offered hereby will be
borne by XL. Brokerage commissions and similar selling expenses, if any,
attributable to the sale of Ordinary Shares, brokerage commissions and similar
selling expenses, if any, attributable to the sale of Ordinary Shares will be
borne by the Selling Shareholders. Sales of Ordinary Shares may be effected by
Selling Shareholders from time to time in one or more types of transactions
(which may include block transactions) on the NYSE, in the over-the-counter
market, in negotiated transactions, through put or call options transactions
relating to the Ordinary Shares, through short sales of Ordinary Shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The Selling Shareholders have advised XL that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the securities, nor is there an underwriter
or coordinating broker acting in connection with the proposed sale of Ordinary
Shares by the Selling Shareholders.
The Selling Shareholders may effect such transactions by selling Ordinary
Shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. Such broker-dealers may receive compensation in the form
of discounts, concessions, or commissions from the Selling Shareholders and/or
the purchasers of Ordinary Shares for whom such broker-dealers may act as agents
or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
Selling Shareholders and any broker-dealers that act in connection with the sale
of Shares might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received by such broker-dealers
and any profit on the resale of the Shares sold by them while acting as
principals might be deemed to be underwriting discounts or commissions under the
Securities Act. Because Selling Shareholders may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, the Selling
Shareholders will be subject to the prospectus delivery requirements of the
Securities Act, which may include delivery through the facilities of the NYSE
pursuant to Rule 153 under the Securities Act. XL has informed the Selling
Shareholders that the anti-manipulative provisions of Regulation M promulgated
under the Exchange Act may apply to their sales in the market. Selling
Shareholders also may resell all or a portion of the Ordinary Shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
they meet the criteria and conform to the requirements of such Rule.
S-2
<PAGE>
Upon XL being notified by a Selling Shareholder that any material
arrangement has been entered into with a broker-dealer for the sale of Ordinary
Shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
Prospectus will be filed, if required, pursuant to Rule 424(b) under the Act,
disclosing (i) the name of each such Selling Shareholder and of the
participating broker-dealer(s), (ii) the number of Ordinary Shares involved,
(iii) the price at which such Ordinary Shares were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set our or incorporated by reference in this Prospectus
and (vi) other facts material to the transaction. In addition, upon XL being
notified by a Selling Shareholder that a donee or pledgee intends to sell more
than 500 Ordinary Shares, a supplement to this Prospectus will be filed.
S-3
<PAGE>
PROSPECTUS
3,000,000 Shares
EXEL LIMITED
Ordinary Shares
(par value $.01 per share)
-------------
EXEL Limited ("EXEL" or the "Company") intends to offer from time to time
its Class A Ordinary Shares, with the par value of $.01 per share (the "Ordinary
Shares"). In addition, certain shareholders of the Company (the "Selling
Shareholders") may from time to time offer Ordinary Shares. The Ordinary Shares
will be issued in amounts, at prices and on terms to be determined at the time
or times of sale.
For each offering of Ordinary Shares for which this Prospectus is being
delivered, there will be an accompanying Prospectus Supplement (each, a
"Prospectus Supplement") that will set forth the terms of offering of such
Ordinary Shares, including the number of shares offered for sale by the Company
and the Selling Shareholders, if any, and certain information with respect to
any Selling Shareholders. The Ordinary Shares may be sold by the Company or the
Selling Shareholders through underwriters or dealers, directly by the Company or
the Selling Shareholders or through agents for offering pursuant to the terms
fixed at the time of sale. See "Plan of Distribution" herein.
The Ordinary Shares are traded on the New York Stock Exchange ("NYSE")
under the NYSE symbol "XL." The last reported sales price of the Ordinary Shares
as reported by the NYSE Composite Tape on August 25, 1998 was $75 5/8 per share.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is August 26, 1998.
<PAGE>
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS
THE COMISSIONER PASSED UPON THE ACCURACY OF THIS PROSPECTUS
AVAILABLE INFORMATION
EXEL is subject to certain informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files certain reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and copies of such materials can be obtained by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. The public may obtain information
on the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission maintains an Internet world wide web site that
contains reports, proxy and information statements and other information
regarding issuers, like EXEL, who file electronically with the Commission. The
address of that site is http://www.sec.gov. In addition, copies of such
materials are available for inspection and reproduction at the public reference
facilities of the Commission at its New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048; and at its Chicago Regional
Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Reports, proxy statements and other information concerning EXEL also
may be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Ordinary Shares, reference is
hereby made to the Registration Statement. Additional information with respect
to the Company may be provided in the future by means of appendices or
supplements to this Prospectus.
The Company is a Cayman Islands corporation and certain of its officers and
directors are residents of various jurisdictions outside the United States. All
or a substantial portion of the assets of such officers and directors and the
Company, at any one time, are or may be located in jurisdictions outside the
United States. Therefore, it ordinarily could be difficult for investors to
effect service of process within the United States on any of these parties who
reside outside the United States or to recover against them on judgment of
United States courts predicated upon civil liability under the United States
federal securities laws. Notwithstanding the foregoing, the Company has
irrevocably agreed that it may be served with process with respect to actions
based on offers and sales of shares made hereby in the United States by serving
CT Corporation System, 1633 Broadway, New York, New York 10019, its United
States agent appointed for that purpose. The Company has been advised by Hunter
& Hunter, its Cayman Islands counsel, that there is doubt as to whether the
courts of the Cayman Islands would enforce (i) judgments of United States courts
obtained in actions against such persons or the Company predicated upon the
civil liability provisions of the United States federal securities laws and (ii)
original actions brought in the Cayman Islands against such persons or the
Company predicated solely upon United States federal securities laws. There is
no treaty in effect between the United States and the Cayman Islands providing
for such enforcement, and there are grounds upon which Cayman Islands courts may
not enforce judgments of United States courts. Certain remedies available under
the United States federal securities laws would not be allowed in Cayman Islands
courts as contrary to that nation's public policy.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference in this Prospectus:
(i) Joint Proxy Statement of EXEL Limited ("Old EXEL") and Mid Ocean
Limited ("Mid Ocean") dated July 2, 1998;
(ii) Annual Report on Form 10-K of Old EXEL for the year ended November 30,
1997, as filed February 25, 1998 and amended by its Form 10-K/A filed
on June 26, 1998 (File No. 1-10804);
(iii) Quarterly Reports on Form 10-Q of Old EXEL for the quarter ended
February 28, 1998, as filed April 14, 1998 and amended by its Form
10-Q/A filed April 21, 1998, and for the quarter ended May 31, 1998,
as filed on July 15, 1998 (File No. 1-10804);
(iv) Current Reports on Form 8-K of Old EXEL filed March 17, 1998, May 5,
1998, August 3, 1998 and August 7, 1998 (File No. 1-10804);
(v) Annual Report on Form 10-K of Mid Ocean for the year ended October 31,
1997, as filed on January 28, 1998 and amended by its Form 10-K/A
filed on June 26, 1998 (File No. 1-14336);
(vi) Quarterly Reports on Form 10-Q of Mid Ocean for the quarter ended
January 31, 1998, as filed on March 17, 1998, and for the quarter
ended April 30, 1998, as filed on June 12, 1998 and amended by its
form 10-Q/A on June 26, 1998 (File No. 1-14336);
(vii) Current Reports on Form 8-K of Mid Ocean filed March 25, 1998, May
14, 1998 and August 3, 1998 (File No. 1-14336).
All documents filed by EXEL with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference herein and to be part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in a Prospectus Supplement or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The documents that have been incorporated by reference in this Prospectus
but not delivered with this Prospectus are available without charge upon written
or oral request from the Company Secretary, EXEL Limited, Cumberland House, 1
Victoria Street, Hamilton, Bermuda HM11, Telephone Number (441) 292-8515.
THE COMPANY
EXEL is the successor in interest to, and represents the combination
effected August 7, 1998 of, Old EXEL and Mid Ocean in the schemes of arrangement
(the "Arrangements") between each of Old EXEL and Mid Ocean and their respective
shareholders. As used herein, EXEL, unless the context otherwise requires,
refers to EXEL, its predecessors and its subsidiaries. Each of Old EXEL and Mid
Ocean are wholly owned subsidiaries of EXEL. EXEL, through its operating
subsidiaries including X.L. Insurance Company, Ltd. and X.L. Mid Ocean
Reinsurance Company, Ltd. and others, provides, on a world-wide basis, excess
liability insurance
-2-
<PAGE>
coverage to industrial, commercial and other enterprises, directors and officers
of such enterprises and profes- sional firms and high excess property and other
coverages, and is also a leading provider of reinsurance on a global basis. Its
executive offices are located at Cumberland House, 1 Victoria Street, Hamilton
HM11, Bermuda and its telephone number is (441) 292-8515.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the
Company intends to use the net proceeds from the sale of Ordinary Shares for
general corporate purposes, including strategic investments and acquisitions and
the financing thereof. EXEL has made strategic investments and various
acquisitions of other businesses during the past several years. As part of its
operations, EXEL regularly evaluates the potential acquisition of, and holds
discussions with, various insurance institutions and other businesses as
opportunities arise.
The Company will not receive any of the proceeds from the sale of Ordinary
Shares by any Selling Shareholders.
PRICE RANGE OF ORDINARY SHARES
The Ordinary Shares of EXEL (and its predecessor, Old EXEL) have been
traded on the NYSE under the symbol "XL". The following table sets forth the
reported high and low closing sale prices for such shares for the periods
indicated.
Price
--------------------------
High Low
--------------- ----------
FISCAL YEAR 1996 (1)
First Quarter................................... $35.938 $29.813
Second Quarter.................................. 36.375 34.125
Third Quarter................................... 36.688 33.063
Fourth Quarter.................................. 40.125 31.875
FISCAL YEAR 1997 (1)
First Quarter................................... 45.000 36.500
Second Quarter.................................. 44.500 39.000
Third Quarter................................... 57.500 44.500
Fourth Quarter.................................. 64.000 55.063
FISCAL YEAR 1998 (1)
First Quarter................................... 66.688 59.063
Second Quarter.................................. 80.125 66.938
Third Quarter (Through August 25, 1998) (2).... 83.250 72.250
(1) The fiscal year of EXEL ends on November 30 of each year.
(2) Pursuant to the Arrangements, on August 7, 1998, Ordinary Shares of EXEL
were exchanged for ordinary shares of Old EXEL and Mid Ocean on a 1 for 1
and 1 for 1.0215 basis, respectively.
The last reported sale price for Ordinary Shares on the NYSE on August 25,
1998 was $75 5/8 per share.
SELLING SHAREHOLDERS
Some or all of the Ordinary Shares being offered pursuant to this
Prospectus may be offered by certain Selling Shareholders. Identification of any
such Selling Shareholders will be made in the applicable Prospectus Supplement.
-3-
<PAGE>
PLAN OF DISTRIBUTION
The Company or the Selling Shareholders, if any, may sell Ordinary Shares
in any of three ways: (i) directly to one or more purchasers; (ii) through
agents; or (iii) through underwriters or dealers. The Prospectus Supplement
relating to each offering of Ordinary Shares will set forth the terms of the
offering of such Ordinary Shares, including the name or names of any such
agents, underwriters or dealers, the purchase price of such Ordinary Shares and
the net proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, the initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers,
as well as the number of Ordinary shares offered for sale by the Company or the
Selling shareholders, if any, and certain information with respect to any
Selling Shareholders. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If underwriters are used in any sale of Ordinary Shares, such Ordinary
Shares will be acquired by such underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Such Ordinary Shares may be offered to the public either
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise set forth in the Prospectus
Supplement relating to a sale of Ordinary Shares, the obligations of any
underwriter or underwriters to purchase such Ordinary Shares will be subject to
certain conditions precedent and such underwriter or underwriters will be
obligated to purchase all of such Ordinary Shares if any shares are purchased,
except that, in certain cases involving a default by one or more underwriters,
less than all of such Ordinary Shares may be purchased. Only underwriters named
in a Prospectus Supplement are deemed to be underwriters in connection with the
Ordinary Shares offered thereby.
If underwriters are used in any sale of Ordinary Shares, the purchase
agreement in connection with such sale may provide for an option on the part of
the underwriters to purchase additional shares of such Ordinary Shares within
thirty days of the execution of such purchase agreement, which option may be
exercised solely to cover overallotments. Any such overallotment option will be
disclosed in the Prospectus Supplement in connection with the Ordinary Shares
offered thereby.
If an agent of the Company or the Selling Shareholders is used in any sale
of Ordinary Shares, such agent will be named and any commission payable by the
Company or the Selling Shareholders to such agent will be set forth in the
Prospectus Supplement relating to such Ordinary Shares. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
effort basis for the period of its appointment.
The Ordinary Shares offered hereby will be listed on the New York Stock
Exchange.
Any underwriters, dealers or agents participating in the distribution of
the Securities may be deemed to be underwriters, and any discount or commissions
received by them on the sale or resale of Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act of 1933, as
amended (the "Securities Act"). Agents, underwriters and dealers may be entitled
under agreements entered into with the Company or the Selling Shareholders to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. Agents and underwriters may be customers
of, engaged in transactions with, or perform services for, the Company, the
Selling Shareholders or their respective affiliates in the ordinary course of
business.
-4-
<PAGE>
LEGAL OPINIONS
Certain legal matters in connection with the shares of Ordinary Shares
offered hereby are being passed upon for the Company by Hunter & Hunter, Cayman
Islands, British West Indies.
EXPERTS
The consolidated balance sheets as of November 30, 1997 and 1996 and the
consolidated statements of income, retained earnings and cash flows for each of
the three years in the period ended November 30, 1997, as well as the related
supplemental schedules, of Old EXEL incorporated by reference in this Prospectus
have been incorporated herein in reliance on the report of
PricewaterhouseCoopers, independent accountants, given on the authority of said
firm as experts in accounting and auditing.
The consolidated financial statements and related supplemental schedules of
Mid Ocean incorporated in this Prospectus by reference to the Mid Ocean Annual
Report on Form 10-K (as amended by Form 10-K/A filed June 26, 1998) for the year
ended October 31, 1997, have been so incorporated in reliance on the report of
KPMG Peat Marwick, independent accountants, given on the authority of said firm
as experts in accounting and auditing.
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
========================================================== ===================================================
You should rely only on the information contained in
this prospectus supplement and the prospectus. We have
not, and the Selling Shareholders have not, authorized
any other person to provide you with different
information. If anyone provides you with different or
inconsistent information, you should not rely on it. We
are not, and the Selling Shareholders are not, making an XL CAPITAL LTD
offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume
that the information appearing in this prospectus
supplement and the prospectus is accurate as of the date
on the front cover of this prospectus supplement only.
Our business, financial condition, results of operations 543,547
and prospects may have changed since that date. ORDINARY SHARES
(par value $.01 per share)
--------------- ---------------
TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
--------------- ---------------
Prospectus Supplement
Page
Price Range of Ordinary Shares................S-1
Selling Shareholders..........................S-1
Plan of Distribution..........................S-2
Prospectus
Available Information.........................1
Incorporation of Certain Documents
by Reference...............................2
The Company...................................3
Use of Proceeds...............................3
Price Range of Ordinary Shares ...............3
Selling Shareholders..........................4
Plan of Distribution..........................4
Legal Opinions................................5
Experts.......................................5 Dated: October 29, 1999
========================================================== ===================================================
</TABLE>
