<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
XL CAPITAL LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
XL CAPITAL LTD
----------------
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on April 9, 1999
----------------
Hamilton, Bermuda
February 26, 1999
TO THE CLASS A SHAREHOLDERS OF XL CAPITAL LTD:
Notice is Hereby Given that the Annual General Meeting of Class A
Shareholders ("Shareholders") of XL CAPITAL LTD (the "Company") will be held
at the Executive Offices of the Company, Cumberland House, One Victoria
Street, 9th Floor, Hamilton HM 11, Bermuda, on Friday, April 9, 1999, at 8:30
a.m. local time for the following purposes:
1. To elect six Class I Directors to hold office until 2002;
2. To appoint PricewaterhouseCoopers LLP, New York, New York, to act as
the independent auditors of the Company for the fiscal year ending November
30, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only Shareholders of record, as shown by the transfer books of the Company
at the close of business on February 26, 1999 are entitled to notice of and to
vote at the Annual General Meeting.
PLEASE DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON,
YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT. A PROXY
NEED NOT BE A SHAREHOLDER OF THE COMPANY.
As ordered,
/s/ Brian M. O'Hara
President and Chief Executive
Officer
<PAGE>
XL CAPITAL LTD
CUMBERLAND HOUSE, HAMILTON, BERMUDA
----------------
PROXY STATEMENT
FOR
THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on April 9, 1999
----------------
February 26, 1999
The accompanying proxy is solicited by the Board of Directors of XL CAPITAL
LTD (the "Company") to be voted at the Annual General Meeting of Class A
Shareholders ("Shareholders") of the Company to be held on April 9, 1999 and
any adjournments thereof.
When such proxy is properly executed and returned, the Class A Ordinary
Shares, par value U.S.$0.01 per share ("Ordinary Shares" or "Shares"), of the
Company it represents will be voted at the meeting on the following: (1) the
election of the six nominees for Class I Directors identified herein; (2) the
appointment of PricewaterhouseCoopers LLP, New York, New York ("Auditors"), to
act as the independent auditors of the Company for the fiscal year ending
November 30, 1999; and (3) such other business as may properly come before the
meeting or any adjournments thereof.
Any Shareholder giving a proxy has the power to revoke it prior to its
exercise by notice of revocation to the Secretary of the Company in writing,
by voting in person at the Annual General Meeting or by execution of a
subsequent proxy, provided that such action is taken in sufficient time to
permit the necessary examination and tabulation of the subsequent proxy or
revocation before the vote is taken.
Shareholders of record as of the close of business on February 26, 1999
will be entitled to vote at the meeting. As of February 26, 1999, there were
outstanding 108,344,168 Ordinary Shares entitled to vote at the meeting, with
each Share entitling the holder of record on such date to one vote (subject to
certain provisions of the Company's Articles of Association--see "Beneficial
Ownership").
This Proxy Statement, the attached Notice of Annual Meeting and the
accompanying proxy card are first being mailed to Shareholders on or about
March 4, 1999.
Other than the approval of the minutes of the 1998 Annual General Meeting,
the Special General Meetings of Shareholders held on August 3, 1998 to approve
the merger with Mid Ocean Limited and on February 1, 1999 to approve the
change of the Company's name to "XL Capital Ltd", the Company knows of no
specific matter to be brought before the Annual General Meeting which is not
referred to in this Notice of Meeting. If any such matter comes before the
meeting, including any Shareholder proposal properly made, the proxy holders
will vote proxies in accordance with their judgment.
Directors will be elected at the Annual General Meeting by a majority of
the votes cast at the meeting by the holders of Shares represented in person
or by proxy at the meeting, provided there is a quorum (consisting of holders
of at least 50 percent (50%) of the outstanding Shares being present in person
or by proxy). Approval of the appointment of the Auditors will be by similar
vote.
All Ordinary Share and related information contained herein has been
adjusted for a one-for-one share dividend paid to shareholders of record on
July 26, 1996.
<PAGE>
BENEFICIAL OWNERSHIP
The following table lists the beneficial ownership of each person or group
who, as of a recent date, owned, to the Company's knowledge, more than five
percent of the Company's Ordinary Shares outstanding. The table is based upon
information contained in filings with the Securities and Exchange Commission
(the "Commission").
<TABLE>
<CAPTION>
Percentage
Number of
of Outstanding
Name and Address Shares Shares(1)
---------------- ---------- -----------
<S> <C> <C>
Oppenheimer Capital................................ 16,187,172 14.5%
Oppenheimer Tower
World Financial Centre
New York, NY 10281
Capital Guardian Trust Company..................... 9,427,430 8.6%
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Scudder Kemper Investments, Inc.................... 8,686,740 7.9%
345 Park Avenue
New York, NY 10154
Capital Research and Management Company............ 6,760,800 6.2%
333 South Hope Street
Los Angeles, CA 90071
Marsh & McLennan Companies, Inc.(2)................ 6,132,442 5.6%
1166 Avenue of the Americas
New York, NY 10036-2774
</TABLE>
- --------
(1) Each Ordinary Share has one vote, except that if, and so long as, the
Controlled Shares (as hereinafter defined) of any person constitute ten
percent (10%) or more of the issued Ordinary 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 approximately ten percent
(10%), pursuant to a formula specified in the Company's Articles of
Association. "Controlled Shares" include, among other things, all Ordinary
Shares which such person is deemed to beneficially own directly,
indirectly or constructively (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934).
(2) Derived from information set forth in the Schedule 13D filed with the
Commission by Marsh & McLennan Companies, Inc. ("MMC"), on behalf of
itself and Marsh & McLennan Risk Capital Holdings, Ltd. ("MMRCH"), a
direct subsidiary of MMC, and MMRC LLC ("MMRC LLC"), a limited liability
company indirectly beneficially owned by MMC. The Schedule 13D states that
as of August 7, 1998, MMRCH directly owned 5,058,186 of such shares and
MMRC LLC directly owned 1,074,256 of such shares. The Schedule 13D states
that each of MMRCH and MMRC LLC has the sole power to dispose of the
shares owned by it, provided however, that with respect to the shares
owned by MMRC LLC, MMRCH has the ability to block a sale of such shares,
and if MMRCH desires the sale of such shares, the other members of MMRC
LLC have agreed to vote in favor of such a sale.
BOARD OF DIRECTORS
The Company's Articles of Association provide that the Board of Directors
shall be divided into three classes designated Class I, Class II and Class
III, each class consisting as nearly as possible of one-third of the total
number of Directors constituting the entire Board of Directors.
The term of office for each Director in Class I expires at the Annual
General Meeting of the Company in 1999; the term of office for each Director
in Class II expires at the Annual General Meeting in 2000; and the term of
office for each Director in Class III expires at the Annual General Meeting in
2001; and at each Annual
2
<PAGE>
General Meeting the successors of the class of Directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the Annual
General Meeting to be held in the third year following the year of their
election.
In fiscal 1998, there were nine meetings of the Board and all incumbent
Directors attended at least 75% of such meetings and of the meetings held by
all committees of the Board of which they were a member. The Board of
Directors has passed a resolution that if a Director does not attend 50% of
the Board meetings during his term, such Director will not be eligible for
nomination for reelection unless the Board feels there are exceptional reasons
to retain such Director.
The Board of Directors has established four standing committees: an Audit
Committee, a Compensation Committee, a Nominating and Corporate Governance
Committee and a Finance Committee.
Audit Committee
The Audit Committee of the Board of Directors meets with the Company's
independent accountants to discuss the scope and results of their audit and to
review the adequacy of the Company's financial reporting, accounting and
control systems. The Audit Committee oversees the Company's reserving
methodology, and the adequacy of the Company's reserves. Each year the Audit
Committee recommends to the Board an independent accounting firm to audit the
financial statements of the Company. Messrs. Gould (until he resigned in
September 1998), Jeanbart, Rance and Thornton (Chairman), Dr. Thrower and Sir
Brian Corby comprised the Audit Committee. The Audit Committee met five times
during fiscal 1998.
Compensation Committee
The Compensation Committee reviews the performance and compensation of
senior corporate officers, establishes overall employee compensation policies
and recommends to the Board of Directors major compensation programs. The
Compensation Committee also recommends to the Board restricted stock and
option awards under the Company's stock incentive plans and benefits under
other compensation plans of the Company. No member of the Compensation
Committee is a member of management or eligible for compensation from the
Company other than as a Director unless the Board of Directors determines that
such compensation will not affect the independence of the Committee member.
Messrs. Clements, Hatcher, Newhouse and Weiser (Chairman) comprised the
Compensation Committee. The Compensation Committee met six times during fiscal
1998.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee makes recommendations to
the Board as to nominations for the Board (including qualifications and
criteria for Board and Committee memberships) and compensation for Board and
Committee members, as well as structural, governance and procedural matters.
The Nominating and Corporate Governance Committee also reviews shareholder
proposals, the performance of the Board, tenure and retirement policies of the
Board and the Company's succession planning. Messrs. Esposito (Chairman),
Clements, Loudon and O'Hara and Dr. Parker comprised the Nominating and
Corporate Governance Committee. The Nominating and Corporate Governance
Committee met seven times during fiscal 1998.
Finance Committee
The Finance Committee establishes and recommends the financial policies of
the Company and reviews the Company's capital management practices, dividend
policy, mergers, acquisitions and divestitures, significant strategic
investments and new business initiatives, as well as overall investment policy
and performance. Messrs. Butt, Esposito, Glauber, Loudon (Chairman), O'Hara,
Senter, Thornton and Weiser and Dr. Parker comprised the Finance Committee.
The Finance Committee met six times during fiscal 1998.
Directors Compensation
During fiscal 1998, all Directors, except for those who are also employees
of the Company, received an annual fee of $30,000 plus $3,000 per meeting.
Committee Chairmen received an annual fee of $3,000 and all Committee members
received an attendance fee of $1,500 per meeting. Prior to the beginning of
each fiscal year, directors may elect to defer all or part of the Board annual
retainer in increments of $5,000. Deferred payments
3
<PAGE>
are credited in the form of share units, calculated by dividing 110 percent of
the deferred payment by the market value of the Company's stock at the
beginning of the fiscal year, in accordance with the terms of the Directors
Stock & Option Plan, as amended. Alternatively, Directors may elect to receive
their annual retainers in the form of shares having a value equal to their
annual fees.
On December 1, 1998, the following Directors elected to defer all or a
portion of their annual retainer:
<TABLE>
<CAPTION>
Share
Amount Units
Directors Deferred Credited
--------- -------- --------
<S> <C> <C>
Michael Butt............................................ $40,000 585
Robert Clements......................................... $30,000 439
Robert V. Hatcher....................................... $30,000 439
John Loudon............................................. $10,000 146
Robert Newhouse......................................... $40,000 585
Robert S. Parker........................................ $15,000 219
Alan Senter............................................. $30,000 439
John Thornton........................................... $30,000 439
Ellen Thrower........................................... $15,000 219
John Weiser............................................. $30,000 439
</TABLE>
On December 1, 1998, all non-employee Directors were granted 2,000 options
exercisable at $73.00 per share (the Fair Market Value on December 1, 1998)
pursuant to the terms of the 1991 Performance Incentive Program. In addition,
Messrs. Corby, Glauber, Jeanbart, Butt and Newhouse each received an
additional 4,000 options pursuant to the terms of the 1991 Performance
Incentive Program upon their commencement as Directors of the Company.
A Retirement Plan for Non-Employee Directors (the "Retirement Plan") was
implemented effective July 1, 1994, to provide the Directors with a pension on
the termination of service for a period equal to the time served as a
Director. The amount to be paid to each Director was to equal the annual
retainer at the date of termination of service multiplied by the number of
years served on the Board. Except in the case of two directors for whom the
plan will continue, the Retirement Plan was terminated in 1997 and, under the
Company's Stock Plan for Non-employee Directors (the "Stock Plan"), the
present value of the accrued benefits of each Director under the Retirement
Plan was converted into an equivalent amount of Ordinary Share units (each
unit corresponding to one Ordinary Share.) In addition, under the Stock Plan,
as of December 1 of each year, Ordinary Share units are credited to the
account of each non-employee Director (other than the Directors who continue
to accrue benefits under the Retirement Plan). The number of Ordinary Share
units credited each year is equal to the annual retainer fee divided by the
fair market value of an Ordinary Share on each December 1. Benefits under the
Stock Plan will be distributed in the form of Ordinary Shares following
termination of a non-employee Director's service on the Board.
Michael P. Esposito, Jr.'s annual compensation as Chairman of the Board
with respect to fiscal 1998 comprised a salary of $250,000, pension
contributions of $25,000, bonus of $250,000, a grant of 1,365 incentive stock
options at an exercise price of $73.00 per share, a grant of 36,135 options at
an exercise price of $73.00 per share and a restricted stock award of 6,850
shares.
Certain Transactions
Certain Shareholders of the Company and their affiliates, including the
employers of or entities otherwise associated with certain of the Directors,
have purchased insurance, reinsurance or other services from the Company's
subsidiaries on terms the Company believes were no more favorable to the
insured than those made available to non-affiliated customers.
Through its subsidiaries, the Company has engaged and may continue to
engage, in the ordinary course of its business, in insurance, reinsurance,
investment or other transactions with subsidiaries of J&H Marsh & McLennan
Global Broking Limited (collectively "J&H Marsh") or companies in which J&H
Marsh has equity interests, including Marsh & McLennan Capital Corp. ("MMCC")
and Risk Capital Reinsurance Company ("RCRe"). Robert Clements, a Director of
the company, is a consultant to MMCC and has been the Chairman of Risk Capital
Holdings, Inc., the parent company of RCRe, since its formation in 1995.
4
<PAGE>
A subsidiary of the Company provides property catastrophe reinsurance to
Island Heritage Insurance Company, Ltd., a Cayman Islands insurer ("Island
Heritage"). Messrs. Clements and Thornton, Directors of the Company, are
directors of Island Heritage, and Messrs. Esposito, Loudon, O'Hara and Weiser
are shareholders in Island Heritage. The Company believes that the reinsurance
provided to Island Heritage is on terms no more favorable than those provided
to other ceding companies.
A subsidiary of the Company owns a 13 percent interest in Measurisk Group,
a New York limited liability company, of which Mr. Glauber is a director.
The Company has consulting agreements with two Directors, Robert J.
Newhouse and Michael Butt, for terms of two years from October 31, 1998 in the
case of Mr. Newhouse and one year from December 31, 1998 in the case of Mr.
Butt. The consulting agreements provide that the duties and time commitments
shall be as mutually agreed by the Company and Messrs. Newhouse and Butt,
respectively, and that the Company will pay to Messrs. Newhouse and Butt
annual consulting fees of $250,000 and $535,000, respectively. Such agreements
provide for certain other benefits to Messrs. Newhouse and Butt, including in
the case of Mr. Newhouse that his surviving spouse shall receive $187,500 per
year for three years from his death. Messrs. Newhouse and Butt are subject to
non-competition covenants during the terms of their consulting agreements and
thereafter for periods of 12 months and 24 months, respectively.
The Company has provided to Mr. O'Hara, a Director and the President and
Chief Executive Officer of the Company, a facility to borrow up to $1 million
from the Company. This facility does not bear interest unless Mr. O'Hara
terminates his employment with the Company, at which time the interest will be
the applicable United States Federal rate for long-term loans determined in
accordance with Section 1274(d) of the United States Internal Revenue Code of
1986, as amended (the "Federal Rate"). The facility requires repayment of
amounts drawn in ten annual installments.
In 1998, the Company provided to Mr. Robert J. Cooney, Executive Vice
President of the Company and President and Chief Executive Officer of XL
Insurance Ltd, a recourse loan in the amount of $488,000, in connection with
certain income tax liabilities arising from the vesting of restricted stock
under the Company's stock-based incentive compensation plans. This loan bears
interest at the applicable Federal Rate and is repayable at the end of its
five-year term or within 30 days after termination of employment. Interest is
payable annually.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company is not aware of any Director or officer who failed to file on a
timely basis disclosure reports required by Section 16 of the Securities
Exchange Act of 1934, except that certain Forms 3 or 4 were filed after their
date due.
I. ELECTION OF DIRECTORS
At the Annual General Meeting, six Directors are to be elected to hold
office until the 2002 Annual General Meeting of Shareholders. All of the
nominees are currently serving as Directors and were appointed in accordance
with the Company's Articles of Association. The Directors of the Company will
continue to serve in accordance with their previously appointed or elected
terms.
Unless authority is withheld by the Shareholders, it is the intention of
the persons named in the enclosed proxy to vote for the nominees listed below.
All of the nominees have consented to serve if elected, but if any becomes
unavailable to serve, the persons named as proxies may exercise their
discretion to vote for a substitute nominee. The name, principal occupation
and other information concerning each Director is set forth below.
The Board of Directors recommends that Shareholders vote FOR the nominees.
5
<PAGE>
NOMINEES FOR WHOM PROXIES WILL BE VOTED
Nominees for Class I Directors whose terms expire in 2002:
Robert Clements, age 66, has been a Director of the Company since 1986. Mr.
Clements has served as Chairman of Marsh & McLennan Risk Capital Corp. since
1994. He served as President of Marsh & McLennan Companies, Inc. from 1992 to
1994 and has been a director of Marsh & McLennan Companies, Inc. since 1981.
He previously served as President and Chairman of the Board of Marsh and
McLennan, Incorporated from 1985 and 1988, respectively. Mr. Clements also
serves as Chairman and director of Risk Capital Holdings, Inc., the parent
company of RCRe, and as a director of Annuity and Life Re (Holdings), Ltd.,
Stockton Reinsurance Limited and Hiscox plc. Mr. Clements is Chairman of the
Board of Trustees of the College of Insurance and a member of Rand Corp.
President's Council.
Michael P. Esposito, Jr., age 59, has been Chairman of the Board since 1995
and a Director of the Company since 1986. Mr. Esposito has been Co-Chairman of
Inter-Atlantic Capital Partners, Inc. since 1995. Mr. Esposito served as Chief
Corporate Compliance, Control and Administration Officer of The Chase
Manhattan Corporation from 1991 to 1995, having previously served as Executive
Vice President and Chief Financial Officer from 1987 to 1991. Mr. Esposito
served as a director of Mid Ocean Limited from 1995 to 1998 and currently
serves as a director of Annuity and Life Re (Holdings), Ltd., Risk Capital
Holdings, Inc. and Forest City Enterprises.
Robert Glauber, age 59, has been a Director of the Company since August of
1998. Mr. Glauber served as a director of Mid Ocean Limited and has been a
Lecturer at the John F. Kennedy School of Government, Harvard University, in
Cambridge, Massachusetts, since 1992. Mr. Glauber formerly was the Under
Secretary at the U.S. Treasury Department, Washington, D.C., and was Professor
of Business Administration at the Harvard Business School. Mr. Glauber is a
director of Dun & Bradstreet Corp., various Dreyfus Corp. investment funds,
the National Association of Securities Dealers, Inc., the Federal Reserve Bank
of Boston and the Measurisk Group.
Paul Jeanbart, age 59, has been a Director of the Company since August of
1998. Mr. Jeanbart has been the Chief Executive Officer of Rolaco Group of
Companies since 1977. Mr. Jeanbart also serves as a director of Rolaco
Holdings S.A., Club Mediterranee S.A., Semiramis Hotel Co., Delta
International Bank S.A. and SODEXHO Alliance S.A. Mr. Jeanbart served as a
director of Mid Ocean Limited from 1994 to 1998.
Cyril Rance, age 64, has been a Director of the Company since 1990. Mr.
Rance served as President and Chief Executive Officer of the Bermuda Fire &
Marine Insurance Co. Ltd. from 1985 to 1990. Mr. Rance also serves as a
director of several local hotel, communications, real estate and insurance
companies located in Bermuda.
Ellen E. Thrower, age 52, has been a Director of the Company since December
1995. Dr. Thrower has been President and Chief Executive Officer of The
College of Insurance since 1988.
DIRECTORS WHOSE TERMS OF OFFICE DO NOT EXPIRE AT THIS MEETING
Class II Directors whose terms expire in 2000:
Sir Brian Corby, age 69, has been a Director of the Company since August of
1998. Sir Brian served as Chief Executive Officer of Prudential Corporation
plc from 1982 to 1990 and as Chairman of Prudential Corporation plc from 1990
to 1995. Among other positions he has held are President of the Confederation
of British Industry, President of the Geneva Association and a director of the
Bank of England. Sir Brian served as a director of Mid Ocean Limited from 1995
to 1998. Sir Brian has been the Chairman of The Brockbank Group, plc since
1997 and is also Chairman of East of England Inward Investment Agency,
Cambridge, England and a Director of Pan Holding SA, Luxembourg.
Robert V. Hatcher, Jr., age 68, has been a Director of the Company since
June 1997. Mr. Hatcher served as Chairman of Johnson & Higgins from 1982 until
his retirement in 1990. Mr. Hatcher also serves as a director of Media General
and Front Royal.
6
<PAGE>
Robert J. Newhouse, age 74, has been a Director of the Company since August
of 1998. Mr. Newhouse was formerly the Chairman of the Board of Mid Ocean
Limited. He served as Vice Chairman of Marsh & McLennan Companies Inc., as a
Member of the Office of the Chairman of Marsh & McLennan Companies Inc. and as
a member of the Executive Committee of Marsh & McLennan Companies Inc. until
1990. Mr. Newhouse was elected a director of Marsh & McLennan Companies Inc.
in 1971, Executive Vice President in 1974 and President in 1976. He was
elected Vice Chairman of Marsh & McLennan Companies Inc. in 1988. Mr. Newhouse
also serves as a Director of Trident Corp.
Brian M. O'Hara, age 50, has been President and Chief Executive Officer of
the Company since 1994 and a Director of the Company since 1986, having
previously served as Vice Chairman of the Company from 1987 to 1994. He has
also served as Chairman and Chief Executive Officer of XL Insurance Ltd since
December 1995, having served as Chairman, President and Chief Executive
Officer from 1994, as President and Chief Executive Officer from 1992, and as
President and Chief Operating Officer from 1986. Mr. O'Hara served as a
director of Mid Ocean Limited and currently serves as a director of Annuity
and Life Re (Holdings), Ltd. and the Bermuda Commercial Bank Limited.
John T. Thornton, age 61, has been a Director of the Company since 1988.
Mr. Thornton has served as Executive Vice President and Chief Financial
Officer of Norwest Corporation from 1987 to 1998. Mr. Thornton currently
serves as Executive Vice President and Financial Executive of Wells Fargo &
Co.
John Weiser, age 67, has been a Director of the Company since 1986. Mr.
Weiser served as Senior Vice President and director of Bechtel Group, Inc.
from 1980 to 1997 and continues as a director thereof. Mr. Weiser also served
as President of Bechtel Enterprises, Inc. from 1988 to 1992 and as General
Counsel of Bechtel Group, Inc. from 1980 to 1988 and from 1992 to 1994.
Class III Directors for terms to expire in 2001:
Michael Butt, age 56, has been a Director of the Company since August of
1998. Mr. Butt was formerly a director and the President and Chief Executive
Officer of Mid Ocean Limited from June 1993 until its merger with the
Company's predecessor company in August of 1998. Mr. Butt has served as a
director of the Instituto Nazionale di Assicurazioni, Rome from November 1993
to December 1997, and the Bank of N.T. Butterfield & Son, Ltd. since October
1996. From 1992 to April 1993, Mr. Butt served as a director of Phoenix
Securities Limited, a private investment banking firm based in London. From
1987 to 1992 he was a director of BAT Industries and Chairman and Chief
Executive Officer of Eagle Star Holdings Plc and Eagle Star Insurance Company.
From 1982 to 1986, Mr. Butt was Chairman of Sedgwick Limited and Vice Chairman
of Sedgwick Group Plc.
Ian R. Heap, age 73, has been a Director of the Company since 1987 and was
Chairman of the Board of the Company from 1988 to 1992. He was President and
Chief Executive Officer of the Company and XL Insurance Ltd from 1987 to 1988.
From 1992 to 1993 he served as President and Chief Executive Officer of Mid
Ocean Reinsurance Company Ltd. Mr. Heap also serves as a director of Risk
Capital Holdings, Inc. Mr. Heap has served as President and Chief Executive
Officer of X.L. Insurance Company of America, Inc. since 1998.
John Loudon, age 62, has been a Director of the Company since 1992. Mr.
Loudon has been Chairman of Caneminster Ltd., a British investment company,
since 1991 and previously served as Chairman of Warrior International Limited
from 1988 to 1991. Mr. Loudon also serves as a director of Heineken N.V.,
Derby Trust plc, Ocean Group plc, SHV Holdings N.V. and Hiscox plc.
Robert S. Parker, age 61, has been a Director of the Company since 1991.
Dr. Parker has been Dean of the School of Business Administration at
Georgetown University since 1986. Dr. Parker also serves as a director of Back
Bay Restaurant Group, Inc.
7
<PAGE>
Alan Z. Senter, age 57, has been a Director of the Company since 1986. Mr.
Senter served as Executive Vice President and Chief Financial Officer of Nynex
Corporation from 1994 to 1997. Mr. Senter served as Principal of Senter
Associates, a financial advisory company, from 1993 to 1994. Mr. Senter served
as a director and Executive Vice President and Chief Financial Officer of
International Specialty Products and GAF Corporation from 1992 to 1993. Mr.
Senter previously served as the Vice President and Senior Financial Officer of
Xerox Corporation from 1990 to 1992. Mr. Senter also serves as a director of
InterVu, Inc.
EQUITY SECURITIES OWNED BENEFICIALLY AS OF JANUARY 31, 1999
The following table summarizes the beneficial ownership as of January 31,
1999, of the Shares of the Company by each Director and executive officer of
the Company for the year ended November 30, 1998, and all such Directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number of Number of
Name Shares Options(1) Total(2)
---- --------- ---------- ---------
<S> <C> <C> <C>
Mark E. Brockbank......................... 547,086 68,011 615,097
Michael A. Butt........................... 244,511 118,366 362,877
Robert Clements(3)........................ 51,392 20,599 71,991
Robert J. Cooney(4)....................... 103,550 349,000 452,550
Sir Brian Corby........................... 1,471 10,599 12,070
Michael P. Esposito, Jr.(5)............... 54,024 180,062 234,086
Robert R. Glauber......................... 10,430 15,198 25,628
Robert V. Hatcher, Jr..................... 1,469 11,000 12,469
Ian R. Heap(6)............................ 6,000 16,000 22,000
Paul Jeanbart(7).......................... 4,535 9,066 13,601
Henry C.V. Keeling........................ 129,693 105,968 235,661
John Loudon............................... 2,783 16,000 18,783
Robert R. Lusardi(8)...................... 28,000 170,500 198,500
Robert J. Newhouse........................ 89,046 193,714 282,760
Brian M. O'Hara........................... 287,947 848,688 1,136,635
Robert S. Parker.......................... 3,938 16,000 19,938
Cyril Rance............................... 6,606 16,000 22,606
Alan Z. Senter............................ 3,774 16,000 19,774
John T. Thornton.......................... 10,676 16,000 26,676
Ellen E. Thrower.......................... 2,341 14,000 16,341
John W. Weiser(9)......................... 33,456 16,000 49,456
--------- --------- ---------
All Directors and executive officers of
the Company as a group (21 individuals)... 1,622,728 2,226,771 3,849,499
========= ========= =========
</TABLE>
- --------
(1) Includes Shares issuable upon exercise of outstanding options.
(2) To the Company's knowledge, no Director or executive officer other than
Mr. O'Hara had a beneficial ownership interest in excess of 1 percent of
the outstanding Shares as of January 31, 1999. As a group, all Directors
and executive officers of the Company had a beneficial ownership interest
in approximately 3.5% of the outstanding shares as of January 31, 1999.
The percentages of outstanding Shares are calculated separately for each
Shareholder and for all Directors and executive officers of the Company as
a group on the basis of the number of outstanding Shares as of January 31,
1999.
(3) Includes 12,258 Shares that Mr. Clements owns indirectly.
(4) Excludes 2,128 Shares owned by Mr. Cooney's family as to which Mr. Cooney
disclaims beneficial ownership.
(5) Includes 4,000 Shares that Mr. Esposito owns indirectly. Excludes 15,000
options assigned to members of his family.
(6) Includes 4,000 Shares that Mr. Heap owns indirectly.
(7) Includes 3,064 Shares that Mr. Jeanbart owns indirectly.
(8) Includes as options 40,500 Shares issuable upon the exercise of a warrant
dated as of December 1, 1997 purchased by Mr. Lusardi from the Company.
The warrant may be exercised in whole or in part from time to time at an
exercise price equal to $61.50 per Share until the close of business on
November 30, 2007.
(9) Includes 14,000 options assigned to a family partnership.
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows the compensation of the five most highly
compensated executive officers of the Company for services paid for or
rendered with respect to fiscal 1998 to the Company and its subsidiaries in
all capacities:
<TABLE>
<CAPTION>
Long-Term Compensation
-----------------------------------------------
Annual Compensation Awards Payouts
---------------------------------------- --------------------- -------------------------
Other Restricted Securities Long-term
Name and Principal Annual Stock Underlying Incentive All Other
Position Year Salary Bonus Compensation(1) Awards Options Payouts Compensation(2)
------------------ ---- -------- ---------- --------------- ---------- ---------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brian M. O'Hara(3)...... 1998 $650,000 $1,250,000 $123,065 $1,277,500 75,000 $ 0 $65,000
President and Chief 1997 550,000 750,000 111,775 0 100,000 0 55,000
Executive Officer of
the 1996 550,000 1,000,000 104,358 3,522,375 354,490 0 55,000
Company
Mark E. Brockbank(4).... 1998 $618,750 $1,081,265 $ 33,726 $ 365,000 60,000 $ 0 $60,019
Executive Vice
President of the
Company and Chief
Executive Officer of
The Brockbank
Group plc
Robert J. Cooney(3)..... 1998 $475,000 $ 600,000 $112,054 $ 365,000 40,000 $ 0 $47,500
Executive Vice 1997 400,000 400,000 101,355 0 50,000 0 40,000
President of the 1996 400,000 350,000 101,365 946,875 50,000 0 40,000
Company and President
and Chief Executive
Officer of XL Insurance
Ltd
Robert R. Lusardi(5).... 1998 $316,000 $ 600,000 $133,178 $1,779,500 130,000 $ 0 $40,000
Executive Vice
President and Chief
Financial Officer of
the Company
Henry C.V. Keeling(6)... 1998 $400,000 $ 350,000 $188,588 $ 365,000 60,000 $ 0 $40,000
Executive Vice
President of the
Company and President
and Chief Executive
Officer of XL Mid
Ocean Reinsurance Ltd
</TABLE>
- --------
(1) Mr. O'Hara received $96,000 for housing expenses in each of fiscal 1998,
1997 and 1996. Mr. Cooney received $96,000 for housing expenses in fiscal
1998, 1997 and 1996. Mr. Lusardi received $36,000 for housing expenses in
fiscal 1998. Mr. Keeling received $134,000 for housing expenses in fiscal
1998.
(2) All other compensation relates to contributions to the Money Accumulation
Pension Plan.
(3) See "Board of Directors--Certain Transactions."
(4) Compensation for Mr. Brockbank is converted to U.S. dollars from UK pounds
sterling at a conversion rate of 1.65, for the year ending September 30,
1998. Compensation is included for the period prior to the merger with Mid
Ocean Limited.
(5) Mr. Lusardi commenced his employment with the Company on February 17,
1998.
(6) Includes compensation for the period prior to the merger with Mid Ocean
Limited.
9
<PAGE>
OPTIONS GRANTED IN LAST FISCAL YEAR
The following table shows the options granted in the last fiscal year to the
five most highly paid executive officers together with the potential realizable
value at assumed rates of return:
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Ratio of Stock
Price Appreciation for
Individual Grants Options Term
----------------------------------------------------- ----------------------
% of
Number of Total Options Exercise
Securities Granted to or Base
Underlying Employees Price
Options in Last (per
Name Granted(1) Fiscal Year share)(2) Expiration Data 5% 10%
---- ---------- ------------- --------- ---------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Brian M. O'Hara......... 73,635 5.4 $73.00 December 4, 2008 $3,380,532 $ 8,566,932
President and Chief 1,365(4) -- $73.00 December 4, 2008 $ 62,666 $ 158,808
Executive Officer of
the Company
Mark E. Brockbank....... 40,000 2.9 $79.25 August 7, 2008 $1,993,595 $ 5,052,163
Executive Vice 20,000 1.5 $73.00 December 4, 2008 $ 918,186 $ 2,326,864
President of the
Company and Chief
Executive Officer of
The Brockbank Group plc
Robert J. Cooney........ 38,625 2.8 $73.00 December 4, 2008 $1,773,247 $ 4,493,756
Executive Vice 1,375(4) -- $73.00 December 4, 2008 $ 63,125 $ 159,972
President of the
Company and President
and Chief Executive
Officer of XL Insurance
Ltd
Robert R. Lusardi....... 140,500(3) 7.4 $61.50 December 1, 2007 $5,434,121 $13,771,130
Executive Vice
President 16,035 1.2 $73.00 December 4, 2008 $ 736,156 $ 1,865,563
and Chief Financial 13,965(4) 1.0 $73.00 December 4, 2008 $ 641,123 $ 1,624,733
Officer of the Company
Henry C. V. Keeling..... 40,000 2.9 $79.25 August 7, 2008 $1,993,595 $ 5,052,163
Executive Vice 20,000 1.5 $73.00 December 4, 2008 $ 918,186 $ 2,326,864
President of the
Company and President
and Chief Executive
Officer of XL Mid Ocean
Reinsurance Ltd
</TABLE>
- --------
(1) All options were granted under the Company's 1991 Performance Incentive
Program (excluding Mr. Lusardi's warrant).
(2) Market price at date of grant.
(3) Includes as options 40,500 shares issuable upon the exercise of a
warrant dated as of December 1, 1997 which expires on November 30,
2007.
(4) Incentive stock options.
10
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table shows the options exercised during the last fiscal year
by the five most highly paid executive officers together with the number and
value of unexercised options at November 30, 1998:
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Implied Underlying Options at In-the-Money Options
on Value November 30, 1998 at November 30, 1998
Name Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Brian M. O'Hara......... -- -- 588,832 / 259,856 $26,365,150 / $5,471,286
President and Chief
Executive Officer of
the Company
Mark E. Brockbank....... -- -- 8,011 / 20,000 $ 484,145 / $ 42,500
Executive Vice
President of the
Company and Chief
Executive Officer of
The Brockbank Group plc
Robert J. Cooney........ -- -- 253,856 / 95,154 $12,610,448 / $1,181,055
Executive Vice
President of the
Company and President
and Chief Executive
Officer of XL Insurance
Ltd
Robert R. Lusardi....... -- -- 73,834 / 96,666 $ 1,005,988 / $ 972,074
Executive Vice
President and Chief
Financial Officer of
the Company
Henry C. V. Keeling..... -- -- 33,483 / 32,485 $ 893,262 / $ 277,780
Executive Vice
President of the
Company and President
and Chief Executive
Officer of XL Mid Ocean
Reinsurance Ltd
</TABLE>
No options have adjustable exercise prices.
RESTRICTED STOCK GRANTS
The following table shows the restricted stock grants held by the five most
highly paid executive officers at November 30, 1998:
<TABLE>
<CAPTION>
No. of
Restricted
Stock Grants at Value of Restricted
November 30, Stock Grants at
1998 November 30, 1998
Name Vested/Unvested Vested/Unvested
---- ---------------- -----------------------
<S> <C> <C>
Brian M. O'Hara...................... 91,000 / 128,800 $6,836,375 / $9,676,100
President and Chief Executive
Officer of the Company
Mark E. Brockbank.................... -- / 17,768 -- / $1,334,821
Executive Vice President of the
Company and Chief Executive Officer
of The Brockbank Group plc
Robert J. Cooney..................... 55,000 / 43,000 $4,131,875 / $3,230,375
Executive Vice President of the
Company and President and Chief
Executive Officer of XL Insurance
Ltd
Robert R. Lusardi.................... -- / 28,000 -- / $2,103,500
Executive Vice President and Chief
Financial Officer of the Company
Henry C. V. Keeling.................. 6,265 / 17,530 $ 470,658 / $1,316,941
Executive Vice President of the
Company and President and Chief
Executive Officer of XL Mid Ocean
Reinsurance Ltd
</TABLE>
11
<PAGE>
Existing Employment Agreements and Termination of Employment and Change-in-
Control Arrangements. The Company or one of its subsidiaries has entered into
employment agreements with two of its executive officers: Mr. Keeling, as
Executive Vice President of the Company and President and Chief Executive
Officer of XL Mid Ocean Reinsurance Ltd ("XLMORE"), and Mr. Brockbank, as
Executive Vice President of the Company and Chief Executive Officer of The
Brockbank Group plc ("Brockbank"), a wholly-owned subsidiary of the Company.
Mr. Keeling resides in Bermuda, and Mr. Brockbank resides in England.
Mr. Keeling's agreement provides for (i) a base salary which is subject to
review for increase at the discretion of the Compensation Committee of the
Board; (ii) an annual bonus determined by the Compensation Committee of the
Board, based on criteria determined by the Compensation Committee of the
Board; (iii) reimbursement for, or payment of, certain travel, living and
other expenses; and (iv) the right to participate in such other employee or
fringe benefit programs for senior executives as are in effect from time to
time. Mr. Brockbank's agreement provides for (a) a base salary; (b)
reimbursement for certain travel, subsistence and entertainment expenses; (c)
payment of premiums for private medical health insurance for Mr. Brockbank;
(d) a death insurance benefit equal to four times his annual salary; (e)
provision of permanent health insurance and (f) continued participation in the
Brockbank Pension Scheme or equivalent payment to a personal pension plan in
lieu thereof.
Mr. Keeling's employment agreements expires on August 7, 2001. The
employment agreement of Mr. Brockbank expires upon 12 months written notice
from any party thereto, provided that, such agreement terminates automatically
upon the last day of the month in which Mr. Brockbank attains the age of 65
years. Mr. Keeling's agreement shall be automatically extended for an
additional period of one year unless the Company or Mr. Keeling provides
written notice at least six months prior to the then-scheduled expiration
date.
Mr. Keeling's agreement further provides that, in the event of termination
of his employment prior to the expiration date by reason of death or
disability, Mr. Keeling (in the case of death, Mr. Keeling's spouse or estate)
is entitled to receive his then-current base salary through the end of the
month in which his employment terminated. Mr. Keeling's estate shall be
entitled to any annual bonus awarded but not yet paid and a pro rata bonus for
the year of death, if the Compensation Committee of the Board so determines.
In the event of termination of his employment without cause, Mr. Keeling
shall receive his then-current base salary for a period of one year following
the date of termination, plus any annual bonus awarded but not paid, and other
rights and benefits as determined in accordance with the applicable terms of
the relevant benefit programs, including the right to exercise options
granted. If Mr. Keeling's employment is terminated for cause, he is entitled
to receive his base salary through the date on which such termination for
cause occurs and such other benefits as determined in accordance with the
applicable terms of any benefit programs, including the right to exercise
options granted to him then vested. In the event Mr. Brockbank's employment is
terminated for cause or by reason of disability, he is entitled to receive his
base salary through the effective date of such termination. Each executive may
voluntary terminate his employment prior to the expiration of the term and
such termination shall be deemed a termination for cause.
If Mr. Keeling is terminated (other than for cause) within the 12-month
period following a Change in Control (as defined in his employment agreement)
or terminates during such period for Good Reason (as defined in his employment
agreement), he has the right to terminate his employment in the case of
altered duties, and, in both cases, he shall receive his current base salary
and employee benefits for a period of two years, an amount equal to two times
the largest annual bonus awarded to him in the three years prior to a Change
in Control, the pro rata portion of the annual bonus that would have been paid
to him for the year in which the Change in Control occurs and the right to
exercise options granted.
Mr. Keeling's agreement provides for a minimum annual bonus of $50,000. In
addition, two other officers of XLMORe and all of the employees of Brockbank
have employment agreements.
All grants of restricted shares and share options under the Company's
incentive compensation plans automatically vest upon a Change in Control (as
defined in such plans).
12
<PAGE>
Compensation Committee Interlocks and Insider Participation
Mr. Newhouse, a member of the Compensation Committee, provides certain
strategic consulting services to the Company and its subsidiaries pursuant to
a consulting agreement expiring on October 31, 2000. See "Board of Directors--
Certain Transactions".
Mr. Clements, a member of the Compensation Committee of the Company, is a
consultant to MMCC and has been the Chairman of Risk Capital Holdings, Inc.,
the parent company of RCRe, since its formation in 1995. See "Board of
Directors -- Certain Transactions."
Compensation Committee Report
The Board of Directors and the Compensation Committee believe that the
Company's success requires well qualified individuals, who are creative,
energetic and highly motivated and who relate well to the Company's customers
and each other. The Compensation Committee is aware of the challenge of
attracting and keeping such people in offshore, higher-cost communities, such
as Bermuda and London. Our compensation policies are designed to attract,
retain and motivate the people the Company needs, in the locations where it
conducts its business.
The competitiveness of the compensation package is tested against peer
companies in the United States with adjustments, when appropriate, to reflect
offshore location. The Company's staff is relatively small and highly skilled
and hence pay positioning is set well above the median of peer companies.
In order to align the interests of senior management with the intersts of
shareholders, a significant percentage of an executive's compensation is at
risk through ownership of stock and options and through year-end cash and
stock awards. Performance targets are agreed prospectively each year and
awards are made shortly after completion of the fiscal year, based on
individual and corporate performance against such targets.
Major factors considered in making awards to the Chief Executive Officer
and senior management include the following:
(a) share performance relative to a peer group;
(b) strategic steps to defend and grow the value of the business in a
rapidly changing environment (including application of technology
and development of new business and risk transfer opportunities in
the capital markets);
(c) growth and development of the management team; and
(d) operating performance in the core business, such as premium growth,
combined ratio, retention rate and investment performance.
In making final awards to senior management, subjective factors also play a
major role.
This year, the Compensation Committee worked closely with Pearl Meyer &
Partners, a leading compensation and benefits consultant, to review the
competitiveness of pay levels, to advise on the effectiveness and design of
the Company's incentive compensation plans and to assist in establishing
appropriate pay and performance measures.
Robert Clements
Robert V. Hatcher, Jr.
Robert J. Newhouse
John Weiser, Chairman
13
<PAGE>
Performance Graph
Set forth below is a line graph comparing the yearly dollar change in the
cumulative total Shareholder return on the Company's Shares (assuming
reinvestment of dividends) from July 19, 1991 (the date on which the Company's
Shares were first listed on the New York Stock Exchange) through November 30,
1998 as compared to the cumulative total return of the Standard & Poor's 500
Stock Index and the cumulative total return of the Standard & Poor's Property
Casualty Index.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
XL Capital S&P 500 S&P Prop Casu
<S> <C> <C> <C>
Jul-91 100 100 100
Nov-91 106.3 98.9 94.6
May-92 119.1 111.1 99.1
Nov-92 158.8 117.1 124.2
May-93 165.3 124 129.1
Nov-93 154.8 128.9 126.6
May-94 152.4 129.2 125.8
Nov-94 137.8 130.3 120.7
May-95 174.5 155.3 146.8
Nov-95 236.1 178.4 175.1
May-96 265.9 199.4 175.6
Nov-96 294.5 228 221.1
May-97 349.4 258 252.9
Nov-97 491.8 293 289.4
May-98 608.6 330.5 301.3
Nov-98 614.8 355.1 277.9
</TABLE>
II. SELECTION OF INDEPENDENT ACCOUNTANTS
The Audit Committee and the Board of Directors have recommended the
appointment of PricewaterhouseCoopers LLP, New York, New York, as the
independent Auditors of the Company for the fiscal year ending November 30,
1999. Representatives of the firm are expected to be present at the Annual
Meeting with an opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions.
Your Board of Directors recommends a vote FOR the proposal to appoint
PricewaterhouseCoopers LLP, New York, New York.
14
<PAGE>
III. STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Shareholder proposals intended for inclusion in the Proxy Statement for the
2000 Annual General Meeting of Shareholders should be sent to the Company's
Secretary at Cumberland House, One Victoria Street, Hamilton HM 11, Bermuda
and must be received by October 31, 1999. In addition, if a shareholder
intends to present a proposal at the 2000 Annual General Meeting other than
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, and if the
proposal is not received by the Company's Secretary by January 10, 2000, then
the proxies designated by the Board of Directors of the Company for the 2000
Annual General Meeting of Shareholders may vote in their discretion on any
such proposal any shares for which they have been appointed proxies without
mention of such matter in the Proxy Statement for such meeting or on the proxy
card for such meeting.
Any Shareholder entitled to vote at a meeting may nominate persons for
election as Directors if written notice of such intent is delivered or mailed,
postage prepaid, and received by the Secretary at the principal executive
offices of the Company not less than 5 days nor more than 21 days before the
date appointed for such meeting. The shareholder notice must include the
following information about the proposed nominee: (a) name, age, and business
and residence addresses; (b) principal occupation or employment; (c) class and
number of Shares or securities of the Company beneficially owned; and (d) any
other information required to be disclosed in solicitations of proxies
pursuant to Regulation 14A of the Securities Exchange Act of 1934, including
the proposed nominee's written consent to serve if elected. The notice must
also include information on the Shareholder making the nomination, including
such Shareholder's name and address as it appears on the Company's books and
the class and number of Shares of the Company beneficially owned. The
nomination of any person not made in compliance with the foregoing procedures
shall be disregarded.
IV. OTHER MATTERS
While management knows of no other issues, if any other matters properly
come before the meeting, it is the intention of the persons named in the
accompanying proxy form to vote the proxy in accordance with their judgment on
such matters.
Proxy Solicitation
The Company will bear the cost of this solicitation of proxies. Proxies may
be solicited by mail, personal interview, telephone and telegraph by
Directors, officers and employees of the Company and its subsidiaries without
receiving additional compensation. In addition to the foregoing, the Company
has retained Georgeson & Company Inc. to assist in the solicitation of proxies
for a fee of approximately $10,000 plus reasonable out-of-pocket expenses and
disbursements of that firm. Upon request the Company will also reimburse
brokers and others holding stock in their names, or in the names of nominees,
for forwarding proxy materials to their principals.
The Company will furnish, without charge to any Shareholder, a copy of its
Form 10-K Report that it files annually with the Securities and Exchange
Commission. A copy of this report for the fiscal year ended November 30, 1998
may be obtained upon written request to the Company's Secretary at Cumberland
House, One Victoria Street, Hamilton HM 11, Bermuda.
As ordered,
/S/ Brian M. O'Hara
President and Chief Executive
Officer
15
<PAGE>
PROXY--XL CAPITAL LTD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
for the Annual General Meeting of Shareholders to be held on April 9, 1999
PROXY
The undersigned Shareholder of XL CAPITAL LTD hereby appoints Brian M.
O'Hara or, failing him, Paul S. Giordano to be its proxy and to vote for the
undersigned on all matters arising at the meeting or any adjournment thereof and
to represent the undersigned at the Annual General Meeting of Shareholders of XL
CAPITAL LTD to be held on April 9, 1999 in Hamilton, Bermuda.
THE SHARES REPRESENTED HEREBY WILL BE VOTED WITH THE INSTRUCTIONS CONTAINED
HEREIN AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO ANY OTHER
MATTERS THAT MAY PROPERLY COME BEFORE THE GENERAL MEETING OR ANY ADJOURNMENT
THEREOF, IF NO INSTRUCTION IS GIVEN, THE SHARES WILL BE VOTED "FOR" ITEMS 1 AND
2 ON THE REVERSE HEREOF, SUCH ITEM BEING FULLY DESCRIBED IN THE NOTICE OF SUCH
MEETING AND THE ACCOMPANYING PROXY STATEMENT, RECEIPT OF WHICH ARE ACKNOWLEDGED.
THE UNDERSIGNED RATIFIES AND CONFIRMS ALL THAT SAID PROXIES OR THEIR SUBSTITUTES
MAY LAWFULLY DO BY VIRTUE HEREOF.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE>
[X] Please mark your vote
as indicated in this example.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder and in the discretion of the proxy holders with
respect to any other matters that may properly come before the Annual General
Meeting or any adjournments thereof. If no direction is made, this proxy will be
voted for Proposals 1 and 2 and in the discretion of the proxy holders with
respect to any other matters that may properly come before the Annual General
Meeting or any adjournments thereof.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.
FOR AGAINST
1. To elect the following six nominees [ ] [ ]
as Class I Directors to hold office
R. Clements P. Jeanbart
M. P. Esposito C. Rance
R. Glauber E. Thrower
(Instructions: To withhold authority to vote for any nominee listed, write that
nominee's name in the space provided below)
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To appoint [ ] [ ] [ ]
PricewaterhouseCoopers LLP,
New York, New York, to act as
the Independent Auditors of the
Company for the fiscal year
ending November 30, 1999.
DATE: , 1999
-------------------------
------------------------------------
------------------------------------
SIGNATURE(S)
IMPORTANT: Please sign exactly as your name(s) appear(s) hereon. If you are
acting as attorney-in-fact, corporate officer, or in a fiduciary capacity,
please indicate the capacity in which you are signing.
