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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-11778
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ACE LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CAYMAN ISLANDS 98-0091805
(JURISDICTION OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
THE ACE BUILDING
30 WOODBOURNE AVENUE
HAMILTON HM 08
BERMUDA
(441) 295-5200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Ordinary Shares, par value $0.041666667 per share New York Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference into Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
As of December 15, 1998, there were 193,656,476 Ordinary Shares par value
$0.041666667 of the Registrant outstanding and the aggregate market value of
voting stock held by non-affiliates at such date was approximately $5.35
billion. For the purposes of this computation, shares held by directors (and
shares held by any entities in which they serve as officers) and officers of the
registrant have been excluded. Such exclusion is not intended, nor shall it be
deemed, to be an admission that such persons are affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of registrant's definitive proxy statement relating to its
Annual General Meeting of Shareholders scheduled to be held on February 5, 1999,
are incorporated by reference into Part III of this report and certain portions
of the 1998 Annual Report to Shareholders are incorporated by reference into
Parts II and IV of this report.
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<PAGE>
EXPLANATORY STATEMENT
This Annual Report on Form 10-K/A amends and restates the following information
which was previously incorporated by reference in the registrant's Annual Report
on Form 10-K for the year ended September 30, 1998 which was filed on December
18, 1998 (the "Original 10-K"): (i) Note 14 - Condensed Unaudited Quarterly
Financial Data of Notes to Consolidated Financial Statements of the registrant
incorporated by reference in response to Part II, Item 8 - Financial Statements
and Supplementary Data and (ii) the portion of registrant's definitive proxy
statement relating to its Annual General Meeting of Shareholders held on
February 5, 1999 and incorporated by reference in response to Part III,
Item 12-Security Ownership of Certain Beneficial Owners and Management.
<PAGE>
Part II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following amends and restates Note 14 - Condensed Unaudited Quarterly
Financial Data of Notes to Consolidated Financial Statements of the registrant
incorporated by reference in response to Part II, Item 8 - Financial Statements
and Supplementary Data of the Original 10-K.
14. Condensed Unaudited Quarterly Financial Data
<TABLE>
<CAPTION>
1998 First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Adjusted for pooling-of-interests
Net premiums earned $205,330 $221,475 $246,350 $221,148
Net investment income 63,672 78,283 93,011 89,288
Net realized gains (losses)
on investments 27,493 145,616 69,448 (54,172)
-------- -------- -------- --------
Total revenues $296,495 $445,374 $408,809 $256,264
======== ======== ======== ========
Losses and loss expenses $122,255 $129,780 $146,233 $118,624
======== ======== ======== ========
Net income $122,210 $247,901 $176,528 $ 13,512
======== ======== ======== ========
Diluted Earnings per share $0.67 $1.37 $0.90 $0.07
======== ======== ======== ========
As originally reported
Net premiums earned $167,821 $184,746 $213,126 $221,148
Net investment income 58,413 73,129 88,151 89,288
Net realized gains (losses)
on investments 27,492 145,616 68,791 (54,172)
-------- -------- -------- --------
Total revenues $253,726 $403,491 $370,068 $256,264
======== ======== ======== ========
Losses and loss expenses $109,161 $116,265 $134,305 $118,624
======== ======== ======== ========
Net income $112,816 $236,205 $171,463 $ 13,512
======== ======== ======== ========
Diluted Earnings per share $0.67 $1.41 $0.95 $0.07
======== ======== ======== ========
</TABLE>
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<TABLE>
<CAPTION>
1997 First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Adjusted for pooling-of-interests
Net premiums earned $206,919 $199,150 $202,965 $196,338
Net investment income 62,867 61,160 64,303 65,110
Net realized gains (losses)
on investments 41,580 (2,480) 45,788 $ 42,814
-------- -------- -------- --------
Total revenue $311,366 $257,830 $313,056 $304,262
======== ======== ======== ========
Losses and loss expenses $123,019 $117,350 $123,900 $121,871
======== ======== ======== ========
Net income $138,443 $ 87,676 $139,915 $136,691
======== ======== ======== ========
Diluted Earnings per share $0.72 $0.46 $0.76 $0.74
======== ======== ======== ========
As originally reported
Net premiums earned $164,400 $158,641 $163,605 $158,192
Net investment income 59,738 58,094 59,545 60,446
Net realized gains (losses)
on investments 41,723 (2,339) 45,786 42,812
-------- -------- -------- --------
Total revenues $265,861 $214,396 $268,936 $261,450
======== ======== ======== ========
Losses and loss expenses $110,150 $105,290 $111,380 $109,121
======== ======== ======== ========
Net income $125,741 $ 77,949 $130,038 $127,626
======== ======== ======== ========
Diluted Earnings per share $0.71 $0.45 $0.77 $0.75
======== ======== ======== ========
</TABLE>
<PAGE>
Part III
ITEM 12. SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following amends and restates the portion of registrant's definitive proxy
statement relating to its Annual General Meeting of Shareholders held on
February 5, 1999 and incorporated by reference in response to Part III,
Item 12 - Security Ownership of Certain Beneficial Owners and Management in the
Original 10-K.
BENEFICIAL OWNERSHIP OF ORDINARY SHARES
Directors and Officers
The following tables set forth information, as of 4 December 1998, with
respect to the beneficial ownership of Ordinary Shares by Brian Duperreault,
the Company's Chairman, President and Chief Executive Officer (the Company's
"CEO"), the Company's other four most highly compensated executive officers
(the "Named Executive Officers"), each of the Company's directors and by all
directors and executive officers of the Company as a group. Unless otherwise
indicated, the named individual has sole voting and investment power over the
Ordinary Shares under the column "Ordinary Shares Beneficially Owned." The
Ordinary Shares owned by each director and each Named Executive Officer
constitute less than one percent of the outstanding Ordinary Shares. The
Ordinary Shares owned by all directors and executive officers as a group
constitute approximately 4.2% of the outstanding Ordinary Shares.
<TABLE>
<CAPTION>
Ordinary
Ordinary Shares
Shares Subject Restricted
Beneficially to Ordinary
Name of Beneficial Owner Owned Option(1) Shares(2)
------------------------ ------------ --------- ----------
<S> <C> <C> <C>
Brian Duperreault....... 273,059 675,000 280,000
Donald Kramer........... 108,723 1,032,730 20,725
Dominic J. Frederico.... 10,082 115,000 89,850
William J. Loschert (3). 106,019 336,000 18,875
Christopher Z. Marshall. 97,325 324,000 48,850
Michael G. Atieh (3).... 6,189 -- 1,068
Bruce L. Crockett (3)... 5,786 -- 1,068
Jeffrey W. Greenberg (4) 22,311 -- 1,068
Meryl D. Hartzband (4).. -- -- --
Robert M. Hernandez (3). 19,819 -- 1,068
Peter Menikoff (3)...... 14,275 -- 1,068
Thomas J. Neff (3)...... 2,429 -- 1,068
Glen M. Renfrew......... 5,400 -- 1,068
Robert Ripp (3)......... 7,689 -- 1,068
Walter A. Scott (3)..... 226,184 305,000 1,068
Dermot F. Smurfit....... 441 -- 1,068
Robert W. Staley (4).... 7,611 -- 1,068
Gary M. Stuart (3)...... 5,289 -- 1,068
</TABLE>
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<TABLE>
<CAPTION>
Ordinary
Ordinary Shares
Shares Subject Restricted
Beneficially to Ordinary
Name of Beneficial Owner Owned Option(1) Shares(2)
------------------------ ------------ --------- ----------
<S> <C> <C> <C>
Sidney F. Wentz (5)............... 11,188 -- 1,068
All directors and executive offi-
cers as a group
(25 individuals) (6)............. 4,306,571 3,278,530 547,184
</TABLE>
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(1) Represents Ordinary Shares which the reporting person has the right to
acquire within 60 days of 4 December 1998 pursuant to options.
(2) The reporting person has the right to vote (but not dispose of) the
Ordinary Shares listed under "Restricted Ordinary Shares."
(3) The amounts included under "Ordinary Shares Beneficially Owned" and
"Restricted Ordinary Shares" include certain Ordinary Shares for which the
reporting person has elected to defer receipt. The reporting person has
the right to dispose of (but not to vote) such Ordinary Shares.
(4) Mr. Greenberg, Ms. Hartzband and Mr. Staley serve as officers or are
otherwise affiliated with significant shareholders of the Company. The
number of Ordinary Shares beneficially owned by such shareholders is set
forth below.
(5) Includes 6,000 Ordinary Shares owned by Mr. Wentz's wife.
(6) Includes Ordinary Shares indirectly owned.
Each of the Company's directors named below is an officer of or otherwise
affiliated with a significant shareholder of the Company. The following table
sets forth the name of each such director, the name of the affiliated
shareholder (or the ultimate parent of such shareholder) and the number of
Ordinary Shares beneficially owned as of 11 December 1998, by such shareholder
(or the ultimate parent of such shareholder).
<TABLE>
<CAPTION>
Percent
of
Number of Total
Ordinary Ordinary
Name of Shareholder Shares Shares
Name Outstanding
---- ------------------- --------- -----------
<S> <C> <C> <C>
Jeffrey W. Greenberg.... Marsh & McLennan Risk Capital Holdings, Ltd. 3,790,113 1.96%
Meryl D. Hartzband...... J. P. Morgan & Co. Incorporated 3,205,020 1.66%
Robert W. Staley........ Emerson Electric Co. 621,816 *
</TABLE>
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* Represents less than one percent of the outstanding Ordinary Shares.
Other Beneficial Owners
The following table sets forth information regarding each person known by
the Company (including corporate groups) to own of record or beneficially own
more than five percent of the Company's outstanding Ordinary Shares as of the
dates indicated below.
<TABLE>
<CAPTION>
Number of
Shares Percent
Beneficially of
Name and Address of Beneficial Owner Owned Class
------------------------------------ ------------ -------
<S> <C> <C>
Oppenheimer Capital (1).......................... 27,449,329 14.17%
Oppenheimer Tower
World Financial Center
New York, New York 10281
American Express Financial Corporation (2)....... 13,284,319 6.86%
IDS Tower--10
Minneapolis, Minnesota 55440-0010
Wellington Management Company (3)................ 12,699,204 6.56%
75 State Street
Boston, Massachusetts 02109
</TABLE>
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<TABLE>
<CAPTION>
Number of
Shares Percent
Beneficially of
Name and Address of Beneficial Owner Owned Class
------------------------------------ ------------ -------
<S> <C> <C>
Jennison Associates (4)........................... 10,563,900 5.46%
466 Lexington Avenue
New York, NY 10017
State Street Research & Management Company (5).... 9,227,400 4.77%
One Financial Center, 30th Floor
Boston, Massachusetts 02111-2690
</TABLE>
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(1) Based upon information contained in a Schedule 13G filed by Oppenheimer
Capital ("Oppenheimer") on 10 March 1998, information contained in a 13F
filed on 14 August 1998 for the quarter ending 30 June 1998 by PIMCO
Advisers L.P. on behalf of Oppenheimer, and information provided by
Oppenheimer as of 4 December 1998. According to such Schedules 13G and
13F, Oppenheimer is a registered investment advisor under Section 203 of
the Investment Advisers Act of 1940. As a result of Oppenheimer's role as
investment adviser, it may be deemed to be the beneficial owner of the
27,449,329 Ordinary Shares having the sole power to dispose of and vote
the shares under its written guidelines established by its Management
Board.
(2) Based upon information contained in a Schedule 13G jointly filed by
American Express Company and American Express Financial Corporation on 29
January 1998, information contained in a Schedule 13F-E filed on 21
October 1998 and information provided by American Express Financial
Corporation as of 7 December 1998. According to such Schedules 13G and
13F-E, American Express Company is a Parent Holding Company in accordance
with Rule 13d-1(b)(1)(ii)(G) and American Express Financial Corporation is
a registered investment adviser under Section 203 of the Investment
Advisers Act of 1940.
(3) Based on information contained in a Schedule 13G filed by Wellington
Management Company, LLP ("WMC") on 12 February 1998, information contained
in a Schedule 13F filed on 13 November 1998, and information provided by
WMC as of 7 December 1998. WMC is a registered investment adviser under
the Investment Advisers Act of 1940 and a Parent Holding Company, in
accordance with Rule 13d-1(b)(1)(ii)(G), of Wellington Trust Company, NA,
75 State Street, Boston, MA 02109, a wholly-owned subsidiary of WMC, and a
bank as defined in Section 3(a)(6) of the Securities Exchange Act of 1934.
As of 7 December 1998, WMC, in its capacity as investment adviser, may be
deemed to have beneficial ownership of 12,699,204 Ordinary Shares that are
owned by numerous investment advisory clients, none of which is known to
have such interest with respect to more than five percent of the class.
(4) Based upon information obtained from Jennison Associates as of 4 December
1998.
(5) Based upon information obtained from State Street Research & Management
Company ("SSRM") as of 4 December 1998. SSRM is a registered investment
advisor under Section 203 of the Investment Advisers Act of 1940. As of 4
December 1998, the 9,227,400 Ordinary Shares reported above were owned by
various investment advisory clients of SSRM, none of which has such interest
with respect to more than five percent of the class. SSRM disclaims any
beneficial ownership in such shares.
Other than as disclosed above, there are no persons who own of record, or
are known by the Company to beneficially own, as of 4 December 1998, more than
five percent of the Company's outstanding Ordinary Shares.
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
ACE Limited
By: /s/ Christopher Z. Marshall
Christopher Z. Marshall
Chief Financial Officer
February 11, 1999
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Brian Duperreault Chairman, President and February 5, 1999
- ---------------------------- Chief Executive Officer;
Brian Duperreault Director
/s/ Christopher Z. Marshall Chief Financial Officer February 5, 1999
- ---------------------------- (Principal Financial and
Christopher Z. Marshall Accounting Officer)
/s/ Donald Kramer Vice Chairman; Director February 5, 1999
- ----------------------------
Donald Kramer
/s/ Michael G. Atieh Director February 5, 1999
- ----------------------------
Michael G. Atieh
/s/ Bruce L. Crockett Director February 5, 1999
- ----------------------------
Bruce L. Crockett
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Jeffrey W. Greenberg Director February 5, 1999
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Jeffrey W. Greenberg
/s/ Meryl D. Hartzband Director February 5, 1999
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Meryl D. Hartzband
/s/ Robert M. Hernandez Director February 5, 1999
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Robert M. Hernandez
/s/ Peter Menikoff Director February 5, 1999
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Peter Menikoff
/s/ Thomas J. Neff Director February 5, 1999
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Thomas J. Neff
/s/ Glen M. Renfrew Director February 5, 1999
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Glen M. Renfrew
/s/ Robert Ripp Director February 5, 1999
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Robert Ripp
/s/ Walter A. Scott Director February 5, 1999
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Walter A. Scott
/s/ Dermot F. Smurfit Director February 5, 1999
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Dermot F. Smurfit
Director February 5, 1999
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Robert W. Staley
/s/ Gary M. Stuart Director February 5, 1999
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Gary M. Stuart
/s/ Sidney F. Wentz Director February 5, 1999
- ----------------------------
Sidney F. Wentz
</TABLE>
