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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Terra Nova (Bermuda) Holdings Ltd.
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(Name of Registrant as Specified In Its Charter)
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(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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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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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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Notes:
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TERRA NOVA (BERMUDA) HOLDINGS LTD.
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
To Be Held on May 5, 1999
March 30, 1999
Hamilton, Bermuda
TO THE SHAREHOLDERS OF TERRA NOVA (BERMUDA) HOLDINGS LTD.
The Annual General Meeting of Terra Nova (Bermuda) Holdings Ltd. (the
"Company") will be held on Wednesday, May 5, 1999, at 2:00 p.m. at the Bermuda
Underwater Exploration Institute, East Broadway, Pembroke, Bermuda, for the
following purposes:
1. To elect eleven Directors to hold office until the 2000 Annual General
Meeting of Shareholders or until their successors are elected or
appointed;
2. To appoint PricewaterhouseCoopers, Bermuda to act as the independent
auditors of the Company for the fiscal year ending December 31, 1999;
and
3. To transact such other business, if any, as may be lawfully brought
before the meeting.
Only Shareholders of record, as shown by the transfer books of the Company
at the close of business on March 11, 1999, are entitled to receive notice of
and to vote at the Annual General Meeting.
YOUR VOTE IS IMPORTANT
Please mark, date, and sign the enclosed proxy and return it promptly in the
return envelope, whether or not you plan to attend the meeting.
If you later want to revoke your proxy for any reason, you may do so in the
manner described in the attached Proxy Statement. For further information
about the individuals nominated as directors, use of the proxy, and other
related matters, you are urged to read the Proxy Statement on the following
pages.
By order of the Board of Directors,
/s/ John J. Dwyer
John J. Dwyer
Chairman
<PAGE>
TERRA NOVA (BERMUDA) HOLDINGS LTD.
Richmond House, 12 Par-La-Ville Road
Hamilton HM 08 Bermuda
PROXY STATEMENT
FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 5, 1999
GENERAL INFORMATION FOR SHAREHOLDERS
The Board of Directors of Terra Nova (Bermuda) Holdings Ltd. (the "Company")
is soliciting the enclosed proxy to be voted at the Annual General Meeting of
the Company to be held at 2:00 p.m. on May 5, 1999 at the Bermuda Underwater
Exploration Institute, East Broadway, Pembroke, Bermuda, and any adjournments
thereof.
You are entitled to vote, by proxy or at the meeting, if you were a
shareholder of record of the Company's Class A Ordinary Shares at the close of
business on March 11, 1999. Each Class A Ordinary Share entitles the holder of
record to one vote. On or about March 30, 1999, the Company began mailing a
proxy card, this Proxy Statement, the Notice of Annual General Meeting, and a
copy of the Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1998 to all such shareholders.
As of March 11, 1999, there were 24,181,425 Class A Ordinary Shares, par
value US$5.80 per share ("Class A Ordinary Shares"), of the Company
outstanding and entitled to vote at the meeting. As of the same date there
were 1,796,217 Class B Ordinary Shares outstanding, par value US $5.80 per
share, with no voting rights.
When the proxy card is properly executed and returned, the Class A Ordinary
Shares it represents will, subject to any direction to the contrary, be voted
at the meeting in favor of the matters specified in the attached "Notice of
Annual General Meeting of Shareholders".
Any shareholder giving a proxy may revoke the proxy at any time before the
shares to which it relates are voted by providing the Secretary of the Company
with written notice of revocation, by voting in person at the Annual General
Meeting, or by executing a later-dated proxy. Such action must be taken in
sufficient time to permit the necessary examination and tabulation of the
revocation or subsequent proxy before the vote is taken.
The election of each nominee for director and the approval of all other
matters to be voted upon at the Annual General Meeting require the affirmative
vote of a majority of the votes cast at the Annual General Meeting, provided
there is a quorum consisting of not less than two persons present and
representing in person or by proxy more than 50% of the issued and outstanding
Class A Ordinary Shares entitled to vote at the Annual General Meeting.
Abstentions and broker non-votes will be counted as shares present for
determining if there are sufficient shares present to hold the meeting;
however, they will not be counted towards the majority needed to elect a
director or approve any other matter before the shareholders.
Except for the approval of the minutes of the 1998 Annual General Meeting,
the Company knows of no matters to be brought before the Annual General
Meeting other than the items referred to in this Notice and Proxy Statement.
If any other matters are presented at the meeting, the proxy holders will vote
the proxies in accordance with their judgement.
<PAGE>
ELECTION OF DIRECTORS
Item 1 on Proxy Card
Item 1 is the election of the members of the Board of Directors. The
Company's Bye-laws provide that all of the Company's Directors shall be
elected for a term expiring at the next Annual General Meeting of Shareholders
or until their successors are elected or appointed. The Board of Directors has
nominated John J. Byrne, Mark J. Byrne, John J. Dwyer, Robert S. Fleischer,
Allan W. Fulkerson, Steven J. Gilbert, David L. Jaffe, Hugh P. Lowenstein,
Philip F. Petronis, Nigel H.J. Rogers, and Jerry S. Rosenbloom for
consideration by the Shareholders. Each of the nominees, except Mr. John
Byrne, is presently a member of the Board, having been elected by Shareholders
at a prior meeting. At its March 25, 1999 meeting, the Board of Directors
nominated Mr. John Byrne as a candidate for election as a Director.
The Board of Directors recommends a vote FOR the election of these nominees
as Directors of the Company.
It is the intention of the persons named as proxies, subject to any
direction to the contrary, to vote in favor of the candidates nominated by the
Board of Directors. All of the Director nominees have consented to serve, if
elected, but if any nominee is unable to serve, the persons named as proxies
will exercise their discretion to vote for such other person as the Board of
Directors may designate to replace the nominee.
Certain information with respect to the nominees for election as Directors
proposed by the Company is set forth below. (Please refer to the list of
abbreviations for the names of subsidiary companies at the end of this
section.)
John J. Byrne
John J. Byrne has been nominated to become a director. Mr. Byrne has served
as a Director Emeritus of the Company from November, 1996 to the present time,
and as a Director from December 1994 until November 1996. Since 1985, Mr.
Byrne has been Chairman of the Board of Fund American Enterprise Holdings,
Inc., a financial services holding company, and was its Chief Executive
Officer and President until October 1997. Mr. Byrne is also a director of
Financial Security Assurance Holdings Ltd. and White Mountains Holdings. Mr.
Byrne is the father of Mark J. Byrne, an incumbent Director of the Company.
Age 66.
Mark J. Byrne
Mark J. Byrne has been a Director of the Company since November 1996. Mr.
Byrne is Chairman and President, West End Capital Management (Bermuda)
Limited. Mr. Byrne previously was the Managing Director, Global Fixed Income
Arbitrage, Credit Suisse First Boston. Mr. Byrne is the son of John J. Byrne,
a Director nominee. Age 37.
John J. Dwyer
John J. Dwyer has been the Chairman of the Company since May 1998 and was
previously the Deputy Chairman of the Company, serving since May 1995. Mr.
Dwyer also is the Chairman and Chief Executive Officer of Terra Nova
(Bermuda), a director of UK Holdings and TN SAS and was a director of Octavian
and TN Capital from 1995 through December 1997 and January 1998, respectively.
From May 1960 to August 1994, Mr. Dwyer was employed in various positions with
Aetna Inc. Age 61.
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Robert S. Fleischer
Robert S. Fleischer has been a Director of the Company since December 1994.
Mr. Fleischer is currently a Managing Director of Donaldson, Lufkin & Jenrette
Securities Corporation Inc. ("DLJSC") and has been employed in various
positions by DLJSC since 1978. Age 56.
Allan W. Fulkerson
Allan W. Fulkerson has been a Director of the Company since December 1994.
Mr. Fulkerson has been President and a director of Century Capital Management
Inc., an investment management firm, ("Century Capital") since April 1992, and
President and a director of Massachusetts Fiduciary Advisors, Inc., an
investment management firm, ("Massachusetts Fiduciary"), since January 1976.
Mr. Fulkerson has been Chairman of Century Shares Trust since 1976. He is also
a director of HCC Insurance Holdings, Inc., Mutual Risk Management Ltd., and
Wellington Underwriting plc. Age 65.
Steven J. Gilbert
Steven J. Gilbert has been a Director of the Company since December 1994.
Mr. Gilbert is the Chairman of Gilbert Global Equity Partners (Bermuda) Ltd.,
and was the Managing General Partner of Soros Capital LP, the principal
venture capital and leveraged transaction entity of Quantum Group of Funds,
from 1992 to 1996. He is the Managing Director of Commonwealth Capital
Partners LP, a private equity investment fund. He is also a director of NFO
Worldwide, Inc., Veritas, Inc., Star City Casino Holdings, Ltd., LCC
International, Inc., and One.Tel, Ltd. Age 51.
David L. Jaffe
David L. Jaffe has been a Director of the Company since December 1994. Mr.
Jaffe has been a Managing Director of DLJ Merchant Banking, Inc. ("DLJMB")
since January 1995 and has been employed in various positions by DLJMB or
DLJSC since 1984. He is also a director of OSF Holdings Inc. (Toronto Stock
Exchange), Brand Scaffold Services, Inc., Target Media Partners and Duane
Reade Inc. Age 40.
Hugh P. Lowenstein
Hugh P. Lowenstein has been a Director of the Company since December 1994.
From March 1987 to June 1994, Mr. Lowenstein was a Managing Director of DLJSC.
Mr. Lowenstein is the founder and owner of Shore Capital Limited, a Bermuda-
based consulting and investment firm ("Shore Capital"). Shore Capital
currently provides consulting services to DLJSC. He is also a director of
Century Business Services Inc. Age 68.
Philip F. Petronis
Philip F. Petronis has been a Director of the Company since December 1994.
Mr. Petronis has been an Executive Vice President with Guy Carpenter &
Company, Inc. since April 1998. Formerly, Mr. Petronis was a Principal of
Marsh & McLennan Risk Capital Corporation and a Managing Director of Marsh &
McLennan Inc., having served in those positions since 1992 and 1984,
respectively. He is past Chairman of the National Association of Insurance
Brokers. Age 50.
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Nigel H.J. Rogers
Nigel H.J. Rogers has been the President and Chief Executive Officer of the
Company since May 1998 and was previously the Deputy Chairman of the Company
from January 1996. Mr. Rogers has served as Managing Director of Octavian since
January 1996. He has been a member of Lloyd's since the 1982 year of account.
Mr. Rogers also serves as a director of UK Holdings, Terra Nova, TN Capital,
Corifrance, and TNAM. Age 49.
Jerry S. Rosenbloom
Jerry S. Rosenbloom has been a Director of the Company since May 1998. Dr.
Rosenbloom is Frederick H. Ecker Professor of Insurance and Risk Management at
The Wharton School of the University of Pennsylvania where he has been a member
of the faculty since 1974. He served as Chairman of the Department of Insurance
and Risk Management at the Wharton School from 1989 to 1994. Dr. Rosenbloom is
also a director of Annuity and Life Re (Holdings) Ltd., Harleysville Mutual
Insurance Company, and Mutual Risk Management. Age 59.
SUBSIDIARY COMPANY NAMES
Terra Nova Insurance (UK) Holdings plc. ("UK Holdings")
Terra Nova Insurance Company Limited ("Terra Nova")
Terra Nova (Bermuda) Insurance Company Ltd. ("Terra Nova
(Bermuda)")
Terra Nova Capital Limited ("TN Capital")
Terra Nova Asset Management Limited ("TNAM")
Octavian Syndicate Management Limited ("Octavian")
Compagnie de Reassurance d'Ile de France, Corifrance
("Corifrance")
Terra Nova S.A.S. ("TN SAS")
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EXECUTIVE OFFICERS OF THE COMPANY
The following table provides biographical information regarding the
executive officers of the Company.
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
John J. Dwyer.................... 61 Chairman of the Board
Chairman and Chief Executive Officer
of Terra Nova (Bermuda)
Director of UK Holdings
Nigel H.J. Rogers................ 49 President and Chief Executive
Officer
Chairman of UK Holdings
Director of Terra Nova
Managing Director of Octavian
Chairman of TN Capital
Director of Corifrance
William J. Wedlake............... 42 Senior Vice-President and Chief
Financial Officer
Director of UK Holdings
Director of Terra Nova
Director of TN Capital
Director of Corifrance
Jean M. Waggett.................. 57 Senior Vice-President, General
Counsel and Secretary
Director of Terra Nova (Bermuda)
Director of Corifrance
Ian L. Bowden.................... 55 Chief Investment Officer
Director of Terra Nova
Director of TNAM
John E. O'Neill.................. 49 Group Chief Actuary
</TABLE>
John J. Dwyer has been Chairman of the Board of the Company since May 1998,
having been Deputy Chairman since May 1995, and has been a director of Terra
Nova (Bermuda) since March 1995. He is a director of UK Holdings and TN SAS
and was a director of Octavian and TN Capital from 1995 through December 1997
and January 1998, respectively. From May 1960 to August 1994, Mr. Dwyer was
employed in various positions with Aetna, Inc.
Nigel H.J. Rogers has been President and Chief Executive Officer of the
Company since May 1998, having been Deputy Chairman since January 1996. Mr.
Rogers has served as Managing Director of Octavian since January 1996. He has
been a member of Lloyd's since the 1982 year of account. Mr. Rogers also
serves as a director of UK Holdings, Terra Nova, TN Capital, Corifrance, and
TNAM.
William J. Wedlake has been the Senior Vice President and Chief Financial
Officer of the Company and a director and Chief Financial Officer of UK
Holdings and Terra Nova since September 1996. Mr. Wedlake has been a director
of Corifrance since September 1997 and of TN Capital since February 1998. From
1993 to 1996, Mr. Wedlake was Finance Director (UK & Ireland) of GRE and from
1987 to 1993, Finance Director (UK) of Schroders.
Jean M. Waggett has been the Senior Vice President, Secretary and General
Counsel of the Company since March 1996. Ms. Waggett has been a director of
Terra Nova (Bermuda) since November 1996, and Corifrance since September 1997.
From 1980 until February 1996, Ms. Waggett was employed in various positions
with Aetna, Inc. and Aetna International, Inc.
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Ian L. Bowden, Chief Investment Officer, transferred to TNAM in 1996, having
been Director of Fixed Interest Investment of Terra Nova since 1986. Mr.
Bowden serves as a director of Terra Nova and TNAM.
John E. O'Neill is the Group Chief Actuary of the Company and previously was
the Chief Actuary of Terra Nova since 1994. From 1991 to 1994, Mr. O'Neill was
an associate of Bacon & Woodrow, an actuarial and management consulting firm.
From 1989 to 1991, Mr. O'Neill was the group actuary of Robert Fleming/Save &
Prosper Group.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended December 31, 1998, there were seven meetings of the
Board of Directors of the Company (including four regularly scheduled meetings
and three special meetings). Each incumbent Director who served on the Board
during the full fiscal year 1998 attended at least 75% of the aggregate of the
Board Meetings and meetings of the Committees of which he was a member.
The Board of Directors has established an Executive Committee, Audit
Committee, Compensation Committee, Financial Policy Committee and Underwriting
Review Committee. The activities of each Committee are discussed below.
Executive Committee
The Executive Committee of the Board of Directors has authority to exercise
all the powers and authorities of the Board of Directors between meetings of
the full Board of Directors except as expressly limited by applicable law or
the Company's Bye-laws. The Executive Committee also has responsibility for
succession planning. The Executive Committee is comprised of Messrs. Dwyer,
Byrne, Fulkerson, Jaffe, and Petronis. Two meetings of the Executive Committee
were held in 1998.
Audit Committee
The Audit Committee, composed entirely of non-management directors, annually
recommends to the Board a firm of independent public accountants to serve as
auditors. The Committee meets with the appointed auditors to review the scope
and results of their audit, their audit report and their fees for services.
The Audit Committee is comprised of Messrs. Fleischer, Byrne, Gilbert, and
Rosenbloom. The Committee held two meetings in 1998.
Compensation Committee
The Compensation Committee has responsibility for establishing overall
compensation policy, determining the compensation of the Chairman, reviewing
and approving compensation recommendations made by the Chairman for the
executive officers of the Company, and authorizing option grants to eligible
employees under the Company's Executive Stock Option Plans. No member of the
Compensation Committee is a member of management or is eligible for
compensation from the Company, other than as a Director. Messrs. Jaffe,
Fulkerson, Petronis, and Rosenbloom are members of the Compensation Committee.
The Committee held two meetings in 1998.
Financial Policy Committee
The Financial Policy Committee of the Board of Directors establishes overall
investment guidelines and policies, and monitors asset allocations and
investment portfolios on a regular basis. Messrs. Dwyer, Byrne, Gilbert,
Jaffe, and Lowenstein are members of the Financial Policy Committee, which
held one meeting in 1998.
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Underwriting Review Committee
The Underwriting Review Committee establishes guidelines for the Company's
underwriters and receives and reviews reports from the Company's underwriters
on a regular basis. Messrs. Rogers, Dwyer, Fleischer, Fulkerson, and Petronis
are members of the Underwriting Review Committee, which held one meeting in
1998.
DIRECTORS' COMPENSATION
Directors of the Company who are officers of the Company or its subsidiaries
do not receive additional compensation for their service as Directors. An
annual fee of $25,000 is paid for the services of a Director who is not an
officer of the Company, and the fee paid for attendance at Board or Committee
Meetings is $3,000. Chairmen of the Audit and Compensation Committees receive
an additional $1,000 annual fee. The Directors are reimbursed for out-of-
pocket expenses incurred in relation to their service on the Board.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee"), composed of four independent
non-employee Directors of the Board of Directors, is responsible for
establishing and monitoring the implementation of the compensation policies of
the Company. The Compensation Committee reviews the Company's annual
performance assessment, approves compensation for the executive officers,
authorizes salary, bonus and stock option programs, and awards option grants
under the Executive Share Option Plans to eligible employees.
The Company's compensation philosophy is to pay all employees, including
executive officers, for actual performance based on level of responsibility in
a manner which is designed to motivate employees to perform at the highest
possible level, and seeks to assure that the Company obtains and retains
highly qualified employees in its competitive marketplace. The Company
achieves these objectives by using a combination of both fixed (i.e. salary)
and variable (i.e. annual bonus and share options) compensation. The Committee
is aware of, and committed to, creating programs that will fulfill the unique
human resource and compensation needs required to build strong executive
talent in each of its operating companies in Bermuda, the United Kingdom, and
France.
The Committee recommends to the Board the compensation, including salary,
bonus and share options, to be paid to the Chairman. The Committee also
evaluates the performance of the executive officers reporting to the Chairman
and reviews and approves the recommendations of the Chairman for the
compensation, including salary and bonus, and awards option grants to the
executive officers. Finally, the Committee establishes the basis for and
aggregate amount of annual salary increases, bonus awards, and share option
grants.
Total executive compensation generally includes three elements: base salary,
annual bonus awards, and long-term compensation awards in the form of share
option grants. Executive officers' salaries are based on the job content of
each position, the market relative to comparable positions at peer companies
in each relevant jurisdiction in which the Company's operating companies and
branches are located, the individual's applicable experience, and the
performance of each executive.
Individual bonuses reflect Company performance and the individual's personal
contribution to the achievement of the Company's goals. Bonus ranges are
established by the Committee for each job position as a function of base
salary. The size of the Company's aggregate bonus pool is approved by the
Committee based on its assessment of actual performance results in relation to
the Company's annual business plan.
The Company's Executive Share Options Plans were adopted in January, 1995.
The Committee believes that equity ownership, achieved with stock options,
provides significant motivation to executive officers to
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maximize value for the Company's shareholders and, therefore, periodically
grants share options under the Option Plans. Option grant ranges are
established by the Committee for each job position as a function of base
salary. The Plans provide the right to purchase Class A Ordinary Shares at the
fair market value as of the date of grant, which is calculated as the average
closing price on the three days preceding the date of grant. The majority of
option grants in 1998 provided for vesting over five years with 20% of the
options vesting at the first anniversary and 20% on each of the subsequent
four anniversaries of the date of grant, conditioned upon continued employment
with the Company. Certain 1997 option grants to the Chairman and other senior
executive officers vested on December 31, 1998 after corporate business
objectives were achieved.
The Company is not a US taxpayer and therefore Section 162 (m) of the
Internal Revenue Code, related to the tax deductibility of compensation, is
not relevant to the Company.
COMPENSATION COMMITTEE
David Jaffe, Chairman
Allan W. Fulkerson
Philip F. Petronis
Jerry S. Rosenbloom
Compensation Committee Interlocks and Insider Participation
During 1998, the following individuals (none of whom is or has been an
officer or employee of the Company or any of its subsidiaries) served on the
Company's Compensation Committee: David L. Jaffe (Chairman), Allan W.
Fulkerson, Philip F. Petronis, and Jerry S. Rosenbloom. Mr. Jaffe is a member
of DLJMB, an affiliate of DLJSC.
CERTAIN BUSINESS RELATIONSHIPS
Registration Rights Agreement
The Company and the existing shareholders of the Company as of April 1, 1996
(the "Shareholders") entered into a Registration Rights Agreement, which
grants the Shareholders certain incidental and demand registration rights with
respect to Ordinary Shares held by them. Under this agreement, Shareholders
other than the DLJ Entities (individually or as a group) owning or having the
rights to acquire 30% or more of the Ordinary Shares outstanding and issuable
prior to the initial public offering of shares on April 17, 1996 ("Offering")
or any subsequent offering have the right to require the Company on one
occasion, and one or more of the DLJ Entities have the right to require the
Company on two occasions, to register Shares under the Securities Act for sale
in the public market, provided that the total fair value of the Shares
requested to be registered in the exercise of any such right must be at least
$15 million. Any other Shareholder not making the request will have the right
to participate in such registration on a first-priority basis (pro rata
according to the respective Ordinary Shares requested for registration)
subject to a customary underwriter's reduction.
In addition, if the Company proposes to file a registration statement
covering Ordinary Shares held by it or any other shareholder of the Company at
any time, each Shareholder will have the right to include Ordinary Shares held
by it in the registration, in each case on a first-priority basis with other
Shareholders and any other holders of Shares requesting registration, pro-rata
according to the respective Shares requested for registration, and on a
second-priority basis with the Company, in each case subject to a customary
underwriter's reduction.
8
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The Company has agreed to indemnify each Shareholder in respect of certain
liabilities, including civil liabilities under the Securities Act, and to pay
certain expenses relating to such registration.
Transactions with Five Percent Shareholders
From time to time, in the ordinary course of its insurance business, the
Company may insure risks of 5% shareholders and, in addition, may cede risks
to insurance companies who are affiliates of 5% shareholders. Such business
may be conducted through intermediaries, which may from time to time include
affiliates of 5% shareholders. As an investor, the Company may transact
business with counterparties and intermediaries which may be affiliated with
certain 5% shareholders. All transactions would be conducted on an arm's
length basis.
DLJSC acted as the initial purchaser in a resale to institutional investors
under Rule 144A in connection with the $100 million 7.0% Senior Notes Offering
in May 1998, the proceeds of which were used to redeem $100 million 10 3/4%
Senior Notes due 2005, and received $838,750 as underwriting compensation for
such activities.
The Company has retained DLJSC as its investment banker and financial
advisor on an exclusive basis until the earlier to occur of December 21, 1999
or the date that the ownership of Ordinary Shares by the DLJ Entities shall
have fallen below 40% of their initial ownership of Ordinary Shares (including
Ordinary Shares issuable upon exchange or conversion of other securities). The
Company has agreed to indemnify DLJSC in connection therewith.
Messrs. Fleischer and Jaffe, both Directors of the Company, are managing
directors of DLJSC and DLJMB (an affiliate of DLJSC), respectively. Mr.
Lowenstein, who is also a Director of the Company, was a managing director of
DLJSC until June 1994 and now, through Shore Capital, provides consulting
services to DLJSC. Mr. Jaffe is Chairman of the Board's Compensation
Committee.
Section 16 Reporting
Directors and certain executives of the Company are subject to the reporting
requirements of Section 16 of the Securities Exchange Act of 1934 as amended.
The Company is not aware of any Director or executive who failed to make a
required filing on a timely basis.
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<PAGE>
BENEFICIAL OWNERSHIP OF ORDINARY SHARES
The following table sets forth the beneficial ownership of Class A Ordinary
Shares ("Shares") by the Company's five most highly compensated executive
officers, the Company's Directors and Director nominees, and all of the
Directors, Director nominees and executive officers of the Company as a group
as of March 10, 1999. Unless otherwise indicated, the named individual has
sole voting and investment power over the Ordinary Shares set forth below.
<TABLE>
<CAPTION>
Number of Class A
Shareholder Ordinary Shares Percent
----------- ----------------- -------
<S> <C> <C>
John J. Dwyer.................................. 29,862 *
Nigel H.J. Rogers.............................. 10,000 *
John Riddick................................... 52,824 *
William J. Wedlake............................. 3,000 *
Jean M. Waggett................................ 2,000 *
John J. Byrne (1).............................. 483,625 1.99
Mark J. Byrne.................................. 1,000 *
Robert S. Fleischer (2)........................ 3,960 *
Allan W. Fulkerson (2) (3)..................... 3,460 *
Steven J. Gilbert (2) (4)...................... 13,727 *
David L. Jaffe (2)............................. 4,960 *
Hugh P. Lowenstein (2)......................... 38,960 *
Philip F. Petronis (2) (5)..................... 2,760 *
Jerry S. Rosenbloom (2)........................ 1,815 *
All directors and executive officers as a group
(16 persons).................................. 651,953 2.69
</TABLE>
- --------
(1) The above table includes some shares in a private foundation and a family
partnership over which Mrs. Byrne has voting control. The above table does
not include an additional 892,691 shares held by partnerships and
corporations in which Mr. Byrne has an indirect economic interest but does
not have investment control or voting power. Mr. Byrne disclaims direct
beneficial ownership to these 892,691 shares.
(2) 1,960 of the Shares owned by each of Messrs. Fleischer, Fulkerson, Jaffe,
Lowenstein and Petronis, 1,748 of the Shares owned by Mr. Gilbert, and 815
of the Shares owned by Mr. Rosenbloom represent Shares as to which the
Director has voting but not dispositive power.
(3) Massachusetts Fiduciary is the general partner of MFA-MASTERS, which is
the record owner of 823,706 Shares. Massachusetts Fiduciary exercises both
voting and investment power with respect to such Shares. Allan W.
Fulkerson is the sole shareholder, President and director of Massachusetts
Fiduciary. Additionally, Mr. Fulkerson is a director, shareholder and
President of Century Capital Management Inc., which exercises both voting
and investment power with respect to the 361,853 Shares owned of record by
ISF and 224,137 Shares owned by Century Capital Partners L.P. Although Mr.
Fulkerson may be deemed to beneficially own the 1,409,696 Shares owned of
record by MFA-MASTERS, ISF and Century Capital Partners L.P., he disclaims
beneficial ownership of such shares except to the extent of his
proportionate interest therein.
(4) Mr. Gilbert is the indirect beneficial owner of 1,530 Shares held by
various interests of which he is a trustee or director and has both voting
and investment power with respect to such Shares.
(5) Includes 300 Shares owned by custodial accounts for Mr. Petronis'
daughters for which he disclaims beneficial ownership.
10
<PAGE>
Other Beneficial Owners
The following table sets forth information with respect to beneficial
ownership of the Shares, as of March 10, 1999, by each person known to the
Company (including corporate groups) who beneficially owns more than five
percent of the Company's outstanding Ordinary Shares ("Shares"):
<TABLE>
<CAPTION>
Number of
Shareholder Shares Percentage
----------- --------- ----------
<S> <C> <C>
DLJ Entities (1)..................................... 4,924,799 18.96%
Fidelity Mgt. & Res. (2)............................. 2,278,800 9.42%
Boston Partners Asset Management, L.P. (3)........... 1,666,200 6.89%
Bank of NT Butterfield & Son Ltd. (4)................ 1,214,414 5.02%
</TABLE>
- --------
(1) Consists of 3,128,582 Class A (voting) Shares and 1,796,217 Class B (non-
voting) Shares, which are convertible into Class A Shares, held directly
by the following related investors: DLJMB Funding, 929,990 Shares (
567,905 Class A and 362,085 Class B); DLJSC, 134,352 Shares (82,048 Class
A and 52,304 Class B); DLJMB Overseas Partners C.V. ("DLJMB Overseas"),
2,183,345 Shares (1,121,517 Class A and 1,061,828 Class B), DLJ
International Partners C.V. ("DLJIP"), 1,039,181 Shares (967,499 Class A
and 71,682 Class B); DLJ Offshore Partners C.V. ("DLJOP"), 60,253 Shares
(36,797 Class A and 23,456 Class B); and DLJ First ESC, L.L.C. ("DLJ
First"), 577,678 Shares (352,816 Class A and 224,862 Class B). As the
parent of both DLJMB Funding and DLJSC, Donaldson, Lufkin & Jenrette, Inc.
("DLJ") may be deemed to beneficially own all of the Shares held by such
entities. As DLJMB is the general partner of each of DLJMB Overseas,
DLJIP, DLJOP and DLJ First, DLJ may be deemed to beneficially own
indirectly all of the Shares held by such entities. DLJ is an indirect
subsidiary of The Equitable Companies Incorporated. The address of DLJ is
277 Park Avenue, New York, New York 10172.
(2) Consists of 2,278,800 Class A Ordinary Shares of the Company owned by a
number of mutual funds and other investment accounts managed by affiliates
of FMR Corp. The percentage of Shares owned is calculated without giving
effect to possible conversion of the Class B Shares owned by the DLJ
Entities.
(3) The percentage of Class A Ordinary Shares owned is calculated without
giving effect to possible conversion of the Class B Shares owned by the
DLJ Entities.
(4) Such Shares are subject to a special depository receipt agreement under
which Marsh & McLennan Risk Capital Holdings, Ltd. and Bowring
(collectively, "Marsh & McLennan") have the right to request the sale or
transfer of the Shares under certain circumstances. Marsh & McLennan has
no voting power under such Shares. Marsh & McLennan may not own legally or
beneficially in excess of 5% of the Shares. Marsh & McLennan disclaims
beneficial ownership over such Shares. The percentage of Shares is
calculated without giving effect to possible conversion of the Class B
Shares owned by the DLJ Entities.
11
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth, in summary form, the compensation earned by
John J. Dwyer, the Company's Chairman, and each of the Company's other four
most highly compensated executive officers (collectively, the "Named Executive
Officers") for its 1996, 1997 and 1998 fiscal years.
<TABLE>
<CAPTION>
Long-term
Compensation
Annual Compensation(1) Awards-
------------------------------------ Securities
Other Annual Underlying
Salary Bonus Compensation(2) Options
Name and Principal Position Year $ $ $ #
- --------------------------- ---- ------- ------- --------------- ------------
<S> <C> <C> <C> <C> <C>
John J. Dwyer................. 1998 383,333 475,000 138,000 --
Chairman 1997 320,000 240,000 129,000 255,700
1996 262,500 160,000 127,440 8,500
Nigel H.J. Rogers............. 1998 383,333 475,000 31,182 --
President and Chief Executive
Officer (3) 1997 320,000 240,000 29,656 256,400
1996 256,000 192,000 30,890 --
John Riddick.................. 1998 372,000 37,200 23,791 --
Deputy Chairman (4) 1997 372,000 150,000 23,161 73,300
1996 372,000 148,800 23,524 8,414
William J. Wedlake............ 1998 295,040 200,000 24,014 --
Senior Vice President and
Chief Financial Officer 1997 280,000 150,000 24,244 67,100
1996 93,280 80,000 8,423 30,000
Jean M. Waggett............... 1998 250,000 150,000 75,000 --
Senior Vice President,
Secretary and 1997 230,000 115,000 75,000 65,500
General Counsel 1996 200,000 80,000 62,500 17,241
</TABLE>
- --------
(1) All salary and bonus amounts for the Named Executive Officers were
calculated and granted in US dollars and are shown in the table as
granted. Compensation was paid to Mr. Dwyer and Ms. Waggett in U.S.
dollars. Salary and bonus amounts for Messrs. Rogers, Riddick, and Wedlake
were translated into, and paid in, British pounds at the exchange rate of
$1.60. Because the British pound and US dollar relationship varies from
day to day, the US dollar equivalent of the compensation paid to Messrs.
Rogers, Riddick, and Wedlake in British pounds will fluctuate. For each of
1998, 1997 and 1996, the payments to Messrs. Rogers, Riddick, and Wedlake
for "Other Annual Compensation" were made in British pounds and have been
translated into US dollars at the year-end exchange rate for each of 1998,
1997, and 1996 of $1.6638, $1.6418, and $1.7113.
(2) This column includes the cost to the Company of personal health insurance
and the value attributable for personal taxation purposes of car, fuel and
private telephone expenses paid by the Company for the Named Executive
Officer where appropriate. In the cases of Mr. Dwyer and Ms. Waggett, the
amounts include housing allowances as residents in Bermuda.
(3) Mr. Rogers also participates in the Octavian Stock Option Plan which
provides for a grant of options in the years 1999 to 2003, based on profit
commissions received by Octavian following the closing of each of the
underwriting years of account 1996 to 2000.
(4) Mr. Riddick retired as Deputy Chairman with effect from December 31, 1998.
12
<PAGE>
OPTION GRANTS IN 1998
No options were granted during 1998 to Directors or to any of the Named
Executive Officers.
OPTION EXERCISES IN 1998 AND
YEAR-END 1998 OPTION VALUES
The following table sets forth information about the exercise of options to
purchase Class A Ordinary Shares during 1998 and the value realized upon
exercise by each Named Executive Officer. The table also provides the number
of exercisable and unexercisable options and the value of the in-the-money
options as of December 31, 1998 for each Named Executive Officer. The Company
has never granted SARs.
The value of unexercised options has been calculated by subtracting the
exercise price from the market price of the Ordinary Shares on December 31,
1998 ($25.25 per Share).
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Number of Underlying Options In-the-Money Options
Shares at December 31, 1998 at December 31, 1998
Acquired on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
$ $
<S> <C> <C> <C> <C> <C> <C>
John J. Dwyer........... -- -- 113,602 195,725 852,537 166,577
Nigel H.J. Rogers....... -- -- 67,279 189,121 13,583 54,361
John Riddick............ -- -- 83,071 54,006 1,110,011 105,321
William J.Wedlake....... -- -- 33,419 63,681 109,497 185,419
Jean M. Waggett......... -- -- 31,444 51,297 135,339 112,092
</TABLE>
Pension Plans
The following table sets forth the estimated maximum annual retirement
benefits payable to employees of Terra Nova and TNAM under the Terra Nova
Pension and Life Assurance Plan (1986) (the "Pension Plan") at the specified
average compensation and years of service classifications.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------
Average Compensation 15 20 25 30 35
-------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000...................... $ 36,058 $ 48,077 $ 60,096 $ 72,115 $ 83,333
150,000...................... 43,269 57,692 72,115 86,538 100,000
175,000...................... 50,481 67,308 84,135 100,962 116,667
200,000...................... 57,692 76,923 96,154 115,385 133,333
225,000...................... 64,904 86,538 108,173 129,808 150,000
250,000...................... 72,115 96,154 120,192 144,231 166,667
300,000...................... 86,538 115,385 144,231 173,077 200,000
400,000...................... 115,385 153,846 192,308 230,769 266,667
450,000...................... 129,808 173,077 216,346 259,615 300,000
500,000...................... 144,231 192,308 240,385 288,462 333,333
</TABLE>
13
<PAGE>
The Pension Plan qualifies Terra Nova and TNAM for an exemption from
compulsory participation in the State Earnings Related Pension Scheme
("SERPS"), a state-run pension plan to which non-exempted U.K. companies are
required to make annual contributions. Only permanent employees between the
ages of 20 and 61 are eligible to participate in the Pension Plan. Retirement
benefits are calculated by multiplying the number of years of covered service
by 1/52nd, multiplied by pensionable salary received in the calendar year
prior to normal retirement date (age 62) or the date of leaving service, if
earlier.
The Pension Plan has a supplementary section, which provides that certain
employees of Terra Nova and TNAM shall receive retirement benefits based upon
the same formula as that for the ordinary plan member except that the multiple
is a maximum of 1/30th for each year of service.
The maximum fraction for the purposes of computing retirement benefits is
2/3rds and, for employees joining the scheme after March 1987, the pensionable
salary is limited. The limit as of December 31, 1998 was $140,160 using a
British pound-to-US dollar exchange rate of $1.60. Pensionable salary excludes
bonuses, commissions, overtime or any other discretionary or fluctuating
payments, except where a member is specifically advised to the contrary. A
member is fully vested in the Pension Plan after two years of participation.
The Pension Plan provides for the payment of reduced benefits upon early
retirement between the ages of 50 and 62. Upon the death of a member before
retirement, the Pension Plan provides for a cash lump sum payment of four
times basic salary and a survivor annuity benefit to the member's spouse of
50% of the member's prospective benefit. This benefit is payable from the date
of the death of the member. The same benefits are payable to minor children up
to the age of 18, or for such longer period as their education continues on a
full-time basis if there is no surviving spouse. Pension Plan participants may
make additional voluntary contributions up to 15% of annual salary to
supplement their Pension Plan benefits. Such voluntary contributions are not
matched by Terra Nova and TNAM.
Terra Nova provides Mr. Wedlake and one other employee with a "Non-Approved"
Pension Plan which provides a money purchase fund and additional term life
assurance coverage targeted to raise total retirement and death benefits to a
level broadly equivalent to that enjoyed by employees who joined the Company
prior to June 1, 1989, the date upon which the United Kingdom imposed limits
on pensionable earnings.
The credit years of pensionable services for Messrs. Riddick and Wedlake at
December 31, 1998 were 21.6 and 4.4 respectively.
Mr. Dwyer, Ms. Waggett and employees of the Company who are based in
Bermuda, Canada, and Belgium participate in money purchase pension plans which
are in line with local market terms and conditions of employment and generally
cost the Company 10% of the basic salary of each participating employee.
Mr. Rogers participates in The Octavian Group Pension Scheme (the "OMP
Plan"), a defined contribution plan. Participation in the OMP Plan is at the
discretion of the Compensation Committee. For employees of Octavian, the
current annual contribution rate is 15% of annual pensionable salary, and for
underwriters and directors of Octavian, the current annual contribution rate
is 25% of annual pensionable salary. Normal retirement age is 60.
Octavian provides certain of its employees with one of two defined benefit
pension schemes, both run in conjunction with the Lloyd's Superannuation
Scheme (the "Abbey Plan" and the "Lloyds Plan," respectively). The Abbey Plan
provides benefits which are similar to those in the Pension Plan, the
principal difference being that the multiple is 1/60th and retirement age is
60. The Lloyd's Plan provides benefits which are in addition to
14
<PAGE>
those under SERPS at a retirement age of 60. The formula for computing
pensions is similar to that in the Pension Plan, the principal difference
being that the multiple is 1/100th.
Service Agreements
The Company has entered into employment agreements with Messrs. Dwyer and
Rogers, and Ms. Waggett, that require them to maintain the confidentiality of
information concerning the Company's business and not to work for a competitor
of the Company for two years (one year for Ms. Waggett) after termination of
employment. The employment agreements provide for a period of employment of
three years (two for Ms. Waggett), which is automatically extended for
subsequent one-year periods. Under these agreements, if the employment of
Messrs. Dwyer or Rogers, or Ms. Waggett, is involuntarily terminated other
than for cause (including termination for gross misconduct or dishonesty), or
if the executive terminates employment for a defined good reason or in the
event of a change of control of the Company, the following benefits will be
paid: three years of salary continuation (two years for Ms. Waggett), which
includes annual base pay in the year of termination and a bonus amount equal
to the greater of target bonus in the year of termination or the highest of
the last three years, and all Company benefits during the salary continuation
period or until the executive becomes eligible for comparable benefits under a
similar plan with a subsequent employer.
The Company had previously entered into a service agreement with Nigel H.J.
Rogers that was superseded by the new employment agreement with respect to all
terms and conditions, except an annual bonus plan related to the performance
of the Lloyd's syndicates managed by Octavian Syndicate Management.
Terra Nova entered into a service agreement with John Riddick, as Managing
Director, which provides for a base salary subject to annual review, an annual
bonus, and the right to participate in Terra Nova's pension and health
insurance plans, to be reimbursed for out-of-pocket expenses incurred in the
ordinary course of business and to receive the use of a company automobile.
The service agreement was superseded by a subsequent letter agreement dated
December 9, 1998 between the Company and Mr. Riddick, which described the
terms of his retirement from the Company and its subsidiaries with effect from
December 31, 1998 and the continuation of his contractual salary and benefits
through June 1, 2000: this provided for accrued but unpaid salary, and
continuation of benefits, including a bonus and vesting of share options to
the date of termination. Mr. Riddick also will receive additional pension
service credits so that his pension will be calculated as of June 1, 2000 on
the basis of 24 years of pensionable service.
The Company has entered into an employment arrangement with William J.
Wedlake, which provides for a base salary subject to annual review, an annual
bonus, a cash allowance in lieu of the use of a company automobile, the right
to participate in the Company's health insurance plan and the right to
participate in Terra Nova's approved and funded non-approved pension plans and
to receive an additional year of pensionable past service credit for each
complete year of actual service with the Company up to an agreed maximum less
years of service vested in a previous employer's pension plans.
The employment arrangement provides that Mr. Wedlake's employment is
terminable by either party's giving 12-months notice to the other. The Company
also can terminate Mr. Wedlake's employment at any time for cause.
Approved Executive Share Option Plans
On January 9, 1995, the Board of Directors of the Company adopted The Terra
Nova Executive Share Option Schemes (the "Stock Option Plans") as amended on
March 13, 1996, August 4, 1996, and May 5, 1998.
15
<PAGE>
The Stock Option Plans provide for the grant of options to eligible employees
to purchase Shares (the "Option Shares"). The maximum number of Option Shares
for which options may be granted is limited: the total number of Option Shares
for which options have not yet been granted, the number of options
outstanding, and Option Shares issued within the previous ten years under the
Stock Option Plans may not exceed 15% of the aggregate number of Ordinary
Shares of the Company outstanding on the date preceding any option grant.
Unexercised options will expire either seven or ten years after the date
granted, as provided in the respective Stock Option Plans, subject to certain
limited exceptions. The Stock Option Plans are administered by the
Compensation Committee, which determines those employees who will be granted
any future options.
Octavian Stock Option Plan
In connection with the Octavian Acquisition, the Company, on January 5,
1996, established the Octavian Stock Option Plan providing for the grant of
options to certain individual members of the management of Octavian, including
Mr. Rogers, based on profit commissions received by Octavian for the 1996 to
2000 years of account. Under the Octavian Stock Option Plan, such members of
management will receive annual option grants to purchase a number of Shares
equal in the aggregate to (i) 90% of the profit commission received by
Octavian from the Octavian Syndicates (less underwriters' and management
bonuses relating thereto and corporate taxes) for each year of account,
divided by (ii) the fully-diluted net asset value (as defined in the Octavian
Stock Option Plan) per Ordinary Share of the Company as at the end of such
year. The aggregate Profit Commission Component for the 1996 to 2000
underwriting years of account is subject to a maximum of (Pounds)10.0 million
and no further options shall be issued once such maximum has been reached. The
options will be granted upon receipt of the profit commissions by Octavian on
closure of each year of account under applicable Lloyd's regulations, which
currently are the years 1999 to 2003 with regard to each of the years 1996 to
2000, respectively. The options have a nominal exercise price and become
exercisable on or after the January 1 next succeeding the date of grant,
commencing January 1, 2000, provided that all options granted after January 1,
2002 become immediately exercisable. Options expire seven years after the date
of grant. The Octavian Stock Option Plan will be administered by the
Compensation Committee with respect to persons subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act of 1934, as
amended.
16
<PAGE>
PERFORMANCE GRAPH
CUMMULATIVE TOTAL RETURN
The following graph compares the cumulative total shareholder return on the
Company's Class A Ordinary Shares from April 17, 1996 (the date on which the
Company's shares were first traded on the New York Stock Exchange) through
December 31, 1998 to the cumulative total return of the Standard & Poor's 500
Stock Index and the Standard & Poor's Property-Casualty Insurance Index.
The chart shows the value at the end of each calendar quarter of a $100
investment made on April 17, 1996, with all dividends reinvested.
[LINE GRAPH APPEARS HERE]
Terra Nova S&P 500 Index S&P Property-Casualty Index
---------- ------------- ---------------------------
4/17/96 100 100 100
6/28/96 94.1 104.5 108.9
9/30/96 120.6 107.1 109.9
12/31/96 126.5 115.5 125.7
3/31/97 114.7 118 128.6
6/30/97 123.5 138 154.3
9/30/97 159.6 147.6 167.1
12/31/97 154.4 151.3 179.8
3/31/98 179.4 171.7 186.5
6/30/98 184.6 176.7 187.8
9/30/98 158.8 158.6 158.1
12/31/98 148.5 191.6 165
(Assumes U.S. $100 invested at April 17, 1996)
17
<PAGE>
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Item 2 on Proxy Card
Item 2 is the approval of the Audit Committee's recommendation that
PricewaterhouseCoopers, Bermuda be appointed auditors for 1999.
PricewaterhouseCoopers, Bermuda currently serves as the Company's independent
auditors, and served in that capacity as Coopers & Lybrand, Bermuda prior to
the merger of the businesses of Coopers & Lybrand and Price Waterhouse during
1998. Coopers & Lybrand had served as the auditors of the Company since the
Company's reorganization in 1994.
Upon recommendation of the Audit Committee, the Board proposes that the
shareholders appoint PricewaterhouseCoopers, Bermuda to serve as the
independent auditors of the Company for the 1999 fiscal year.
It is anticipated that one or more representatives of
PricewaterhouseCoopers, Bermuda will be present at the Annual General Meeting
with an opportunity to make a statement, if desired, and will be available to
respond to questions.
The Board of Directors recommends a vote FOR appointment of
PricewaterhouseCoopers, Bermuda as the independent auditors of the Company for
the 1999 fiscal year.
18
<PAGE>
OTHER MATTERS
The Board knows of no other business to be brought before the meeting other
than as set forth above. If any other business should properly come before the
Annual General Meeting, it is the intention of the persons named in the
enclosed proxy card to vote such proxies in accordance with their best
judgement.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 2000 Annual Meeting of shareholders must be
received at the principal offices of the Company, Richmond House, 12 Par-La-
Ville Road, Hamilton HM 08 Bermuda, by no later than November 21, 1999, in
order to be considered for inclusion in the Company's Proxy Statement for such
Meeting.
MISCELLANEOUS
The cost of preparing and mailing this notice and statement and the enclosed
form of proxy will be borne by the Company. In addition to solicitation by
mail, proxies may be solicited in person or by telephone, by directors,
officers and regular employees of the Company, without extra compensation and
at the Company's expense. Proxy cards and materials also will be distributed
to beneficial owners of Ordinary Shares through brokers, custodians, nominees
and other parties, and the Company will reimburse them for their reasonable
charges. Kissel-Blake, Inc. will assist in the distribution of proxy
solicitation materials, and the solicitation of proxies by personal interview,
telephone and telegram for a fee estimated at $2,500, plus out-of-pocket
expenses.
The Company will furnish without charge to any shareholder, and has included
in the Annual Report being mailed to shareholders on March 30, 1999, a copy of
the Company's Form 10-K that it filed with the Securities and Exchange
Commission on March 15, 1999. A copy of this report for the fiscal year ended
December 31, 1998 may be obtained by writing to the Company's Secretary at
Terra Nova (Bermuda) Holdings Ltd., Richmond House, 12 Par-La-Ville Road,
Hamilton HM 08 Bermuda.
By order of the Board of Directors,
John J. Dwyer
Chairman
March 30, 1999
19
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TERRA NOVA (BERMUDA) HOLDINGS LTD.
The undersigned hereby appoints of Nigel H.J. Rogers and Jean M. Waggett as
proxies, with power to act without the other and with power of substitution, and
hereby authorizes them to represent and vote, as designated on the other side,
all the shares of stock of Terra Nova (Bermuda) Holdings Ltd. standing in the
name of the undersigned with all powers which the undersigned would possess if
present at the Annual General Meeting of Stockholders of the Company to be held
May 5, 1999 or any adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
The Board of Directors recommends a vote FOR Items 1 and 2.
Please mark
your votes as
indicated in
this example [X]
Item 1 - Election of Directors
FOR all nominees WITHHOLD
listed below AUTHORITY
(except as to vote for all
marked to the nominees
contrary listed
[ ] [ ]
Nominees:
John J. Byrne Allan W. Fulkerson Philip F. Petronis
Mark J. Byrne Steven J. Gilbert Nigel H.J. Rogers
John J. Dwyer David L. Jaffe Jerry S. Rosenbloom
Robert S. Fleischer Hugh P. Lowenstein
Item 2 - Appointment of PricewaterhouseCoopers,
Bermuda as the Independent Accountants
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Date: _________________________________________________________ , 1999
- ---------------------------------------------------------------------
Signature
Date: _________________________________________________________ , 1999
- ---------------------------------------------------------------------
Signature (if held jointly)
Please sign exactly as name appears on stock certificate. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give full title as such. If
corporation, please sign in full corporate name by President or other authorized
officer. If partnership, please sign in partnership name by authorized person.
FOLD AND DETACH HERE
2
