SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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
ACCEL INTERNATIONAL CORPORATION
(Name of Registrant as Specified in Its Charter)
Nicholas Z. Alexander
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
- --- Item 22(a)(2) of Schedule 14A.
Previously paid with filing of Preliminary Proxy Statement
$500 per each party to the controversy pursuant to Exchange Act Rule
- ---- 14a-6(i)(3).
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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
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:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
ACCEL International Corporation
475 Metro Place North
Dublin, Ohio 43017
614-764-7000
May 20, 1996
DEAR STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of Stockholders to be
held at 10:00 A.M., local time, on Tuesday, June 11, 1996, at the Stouffer
Renaissance Dublin Hotel, 600 Metro Place North, Dublin, Ohio, located in the
Metro Center Complex. Formal notice of the Annual Meeting and the Proxy
Statement are attached. I hope that you will be able to attend and participate
in the meeting, at which time we will have the opportunity to review the
business and operations of the Company.
The matters to be acted upon by our stockholders are set forth in the attached
Notice of Annual Meeting. It is important that your shares be represented and
voted at the meeting, whether or not you are personally able to attend.
Accordingly, after reading the attached Proxy Statement, would you kindly
sign, date and return the enclosed proxy card.
Sincerely yours,
/s/ Thomas H. Friedberg
Thomas H. Friedberg
Chairman of the Board,
President, & Chief Executive Officer
ACCEL International Corporation
475 Metro Place North
Dublin, Ohio 43017
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 11, 1996
TO THE STOCKHOLDERS OF ACCEL INTERNATIONAL CORPORATION:
The Annual Meeting of Stockholders of ACCEL International Corporation (the
"Company"), a Delaware corporation, will be held at the Stouffer Renaissance
Dublin Hotel, 600 Metro Place North, Dublin, Ohio, on June 11 1996, at 10:00
A.M., to consider and vote on the following matters described in the attached
Proxy Statement:
1. The election of ten directors to serve for a one-year term.
2. A proposal to amend Article Fourth of the Certificate of
Incorporation of ACCEL International Corporation in order to
increase the total number of authorized shares of Common Stock,
$.10 par value, from 10,000,000 to 15,000,000.
3. A proposal to approve adoption of the 1996 Stock Incentive Plan.
4. The transaction of such other business as may properly come before
the meeting, or any adjournments thereof.
April 12, 1996 has been fixed as the record date for determining stockholders
entitled to notice of and to vote at the Annual Meeting. Only stockholders of
record at the close of business on that date are entitled to receive notice of
and to vote at the meeting or any adjournments thereof. A complete list of
stockholders entitled to vote at the meeting will be available for examination
by any stockholder at the Company's offices from May 28, 1996 until the day
before the Annual Meeting.
By Order of the Board of Directors
Nicholas Z. Alexander, Secretary
Dublin, Ohio
May 20, 1996
IF YOU ARE UNABLE TO BE PRESENT AT THE MEETING, WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ADDRESSED ENVELOPE WHICH IS INTENDED FOR
YOUR CONVENIENCE AND WHICH REQUIRES NO POSTAGE IF MAILED IN THE U.S.A. THE
PROXY IS REVOCABLE AT ANY TIME AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON IN THE EVENT YOU ATTEND THE MEETING.
ACCEL International Corporation
475 Metro Place North
Dublin, Ohio 43017
PROXY STATEMENT
Annual Meeting of Stockholders
To Be Held June 11, 1996
Furnished By The Board of Directors of The Company
May 20, 1996
The Board of Directors of ACCEL International Corporation (the "Company"),
a Delaware corporation is soliciting proxies, the form of which is
enclosed, for the Annual Meeting of Stockholders to be held on June 11, 1996.
The cost of such solicitation will be borne by the Company. Officers,
directors and regular employees of the Company may communicate with
stockholders personally or by mail, telephone, telegram or otherwise for the
purpose of soliciting such proxies, but the Company will pay no additional
compensation for such solicitation. The Company and any authorized agent of
the Company will request brokers and other custodians, nominees and
fiduciaries to forward proxy soliciting material to the beneficial owners of
shares held of record by such persons and will reimburse the reasonable
out-of-pocket expenses in forwarding such material. This Proxy Statement is
being mailed on or about May 21, 1996.
Any stockholder giving a proxy has the power to revoke it at any time before
it is voted by a later appointment received by the Secretary of the Company or
by giving notice of such revocation to the Secretary of the Company in writing
or in open meeting. All duly executed proxies received prior to the meeting
and not revoked will be voted at the meeting. The enclosed proxy contains
space in which the stockholder may insert instructions as to the way the
stockholder wishes his shares to be voted. When such proxy is properly
executed and returned, the shares it represents will be voted at the meeting
as directed. If no specification is indicated, the shares will be voted "For"
the election as directors of the nominees listed below under "Election of
Directors".
April 12, 1996 has been fixed as the record date for the determination of
stockholders entitled to such notice of and to vote at the Annual Meeting or
any adjournments thereof. On that date the total number of outstanding shares
of the Company entitled to vote at the meeting was 4,456,432 shares of Common
Stock, $.10 par value, (the "Common Stock"). The holder of each share of such
stock is entitled to one vote. Pursuant to applicable law, broker non-votes
and abstentions will not be counted in favor of or against the election of any
nominee for director or any of the other proposals to be presented at the
meeting. Any stockholder who abstains from voting on any such proposal will in
effect be voting against it.
1. ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the number of directors has been
fixed at ten by action of the Board of Directors. Directors are elected
annually to serve until the next Annual Meeting of Stockholders, and until
their successors are elected and qualified. The election of directors is
decided by a plurality of the votes cast by the shares entitled to vote in the
election. In the absence of instructions to the contrary, it is the intention
of the persons named in the proxy to vote the proxies for the election as
directors of the persons nominated below. Although the Board of Directors has
no reason to believe that any of the nominees set forth below will not serve,
in the event that vacancies occur, the proxies will be voted for the election
of such nominees, if any, as shall be designated by the Board of Directors or
a duly authorized committee thereof.
NOMINEES
TERM EXPIRES 1997
<TABLE>
<CAPTION>
Number of shares of
Common Stock owned
beneficially, directly
or indirectly, on
Name, Position with Principal Occupation January 31, 1996
the Company and Age for past five years/ Director (except as otherwise Percent
(as of January 31, 1996) other Directorships Since noted)(1) of Class
<S> <C> <C> <C> <C>
Robert Betagole President of Mike Albert 1970 49,529(5) 1.1%
Director, 67 Leasing, Inc., Cincinnati, OH.
David T. Chase (2) President and Chief Executive
Director, 66 Officer of D.T. Chase 1985 4,500(6) *
Enterprises, Inc., Hartford, CT.
Douglas J. Coats Executive Vice President of the 1995 - -
Director, 63 Company since May 23, 1995.
Prior thereto he was Executive
Vice President of Ranger Insurance
Company, Houston, TX since August,
1987.
Raymond H. Deck(2)(3)(4) President of Chase Insurance 1990 98,815 2.2%
Director, 73 Enterprises, Inc., Hartford, CT.
Also, is a director of SCOR U.S.
and Scor Re, New York, NY.
Robert E. Fowler, III Senior Vice President, 1995 - -
Director, 37 Chase Enterprises, Hartford, CT,
since July, 1990. Prior thereto, he
was a Vice President, CITIBANK,
N.A., New York, NY.
Thomas H. Friedberg (2) Chairman of the Board and Chief 1995 14,500 *
President, 57 Executive Officer of the Company
Chief Executive since May 23, 1995. Appointed
Officer and Director President as of October 15, 1995.
Previously served as a Director of the
Company form 1990 to March 1995.
Prior thereto he was Chairman of the
Board, President and Chief Executive
Officer of Ranger Insurance Company,
Houston, TX, since January, 1987.
Kermit G. Hicks(2)(3)(4) President of Hicks Chevrolet, 1981 28,087(7) *
Director, 60 Inc., Greencastle, PA. Also,
Chairman of the Board of Tower
Bancorp Inc., and its wholly owned
subsidiary First National Bank of
Greencastle.
Stephen M. Qua(2)(3)(4) President of Qua Buick/ 1970 18,698(8) *
Director, 63 Suzuki, Inc. Cleveland, OH.
Milton J. Taylor, Sr. President of the Taylor Team 1991 6,500(9) *
Director, 69 of Dealerships, Lancaster, OH:
Taylor Chevrolet, Inc., and Milt
Taylor Lincoln-Mercury, Inc.
Paul R. Whitters Consultant. Retired President 1991 5,050 *
Director, 70 of Frankona Reinsurance
Company, Kansas City, MO.
All Directors and Officers
as a group (14 persons) 371,002(10) 8.3%
<FN>
(1) On January 31, 1996, there were 4,456,432 shares of the Company's Common
Stock issued and outstanding. Except as noted, includes shares owned by
spouse, minor children or certain other family members, or held as
custodian or trustee for the benefit of spouse or children, or owned by
corporations of which such person is an officer or principal
stockholder, over which shares such directors have sole or shared voting
or investment power. With respect to each Director other than Messrs.
Coats and Fowler, includes an aggregate of 36,000 shares which are
subject to immediately exercisable options.
(2) Member of Executive Committee (Mr. Friedberg, Chairman).
(3) Member of Audit Committee (Mr. Qua, Chairman).
(4) Member of Compensation Committee (Mr. Deck, Chairman).
(5) Includes 7,581 shares as to which Mr. Betagole disclaims beneficial
ownership.
(6) David T. Chase disclaims beneficial ownership, for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), of 1,351,454 shares of Common Stock or 30.3% of the shares
outstanding, owned by Chase Insurance Holdings Corporation ("CIHC"),
which is a wholly-owned subsidiary of American Ranger, Inc. ("ARI"). ARI
is owned 100% by D.T. Chase Enterprises, Inc. ("DTCE"), which is owned
by David T. Chase (33.95%), his wife Rhoda L. Chase (2.21%), his son,
Arnold L. Chase (9.34%), and his daughter, Cheryl Chase Freedman
(14.74%), the Arnold Chase Accumulation Trusts I and II and the David T.
Chase Sprinkling Trusts IA through VA of which Arnold L. Chase and
Stanley N. Bergman are co-trustees (20.15% in the aggregate), and the
Cheryl Chase Freedman Accumulation Trusts I and II and the David T.
Chase Sprinkling Trusts IB through VB of which Cheryl Chase Freedman and
Stanley N. Bergman are co-trustees (19.61% in the aggregate). Pursuant
to an agreement, CIHC has loaned 812,842 shares of Common Stock to ARI
which has full use of the borrowed shares, including the right to sell,
pledge or otherwise transfer the shares until termination of the
agreement. Mr. Chase also disclaims beneficial ownership for purposes of
Section 13(d) of the Exchange Act, of 382,000 shares of Common Stock, or
8.6% of the shares outstanding, owned by Rhoda L. Chase. Pursuant to an
agreement, Rhoda L. Chase has loaned 335,000 shares of Common Stock to
Insurance Holdings Limited Partnership ("IHLP") which has full use of
the borrowed shares, including the right to sell, pledge or otherwise
transfer the shares until termination of the agreement. The general
partner of IHLP is Chase Insurance Corporation ("CIC"). David T. Chase,
Arnold L. Chase and Cheryl Chase Freedman are executive officers of CIC.
In filings on Schedule 13D with respect to the Company's Common Stock,
Rhoda L. Chase, ARI, CIHC and IHLP have each stated that such person has
not agreed to act together with any of the foregoing persons or with any
other person or entity for the purpose of acquiring, holding, voting or
disposing of shares of Common Stock, and disclaims membership in any
"group" with respect to the Common Stock for purposes of Section
13(d)(3) of the Exchange Act or Rule 13d-5(b)(1) adopted thereunder. If
such a group were deemed to exist, the group would be deemed to
beneficially own all shares of Common Stock beneficially owned by each
such person.
(7) Includes 8,696 shares as to which Mr. Hicks claims beneficial ownership
on an indirect basis.
(8) Includes 1,894 shares as to which Mr. Qua disclaims beneficial
ownership.
(9) Includes 1,000 shares as to which Mr. Taylor claims beneficial ownership
on an indirect basis.
(10) This amount includes 122,342 shares which are subject to immediately
exercisable options and 22,481 shares owned by officers in their
Acceleration Retirement Savings and Stock Ownership Plan accounts as of
December 31, 1995.
* Less than 1% of outstanding Common Stock.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more than
10% of the Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "SEC"). Officers, directors
and greater than 10% stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it or
written representations from certain reporting persons that no Forms 5 were
required of them, the Company believes that during the fiscal year ended
December 31, 1995, all filing requirements applicable to its officers,
directors and greater than 10% stockholders were complied with, except that
two reports covering an initial statement of beneficial ownership and one
transaction were filed late by Mr. Coats.
THE BOARD OF DIRECTORS;
COMMITTEES, MEETINGS AND FUNCTIONS
The Board of Directors of the Company met eight (8) times during 1995. No
director attended fewer than 75% of the total number of meetings of directors
and of any committees on which he served. The Board of Directors has
established an Executive Committee, an Audit Committee and a Compensation
Committee. It does not have a Nominating Committee.
The Executive Committee, which exercises the powers of the Board of Directors
between regular meetings of the Board, did not meet during 1995. The
membership of the Executive Committee consists of Messrs. Friedberg, Chase,
Deck, Hicks and Qua. The Audit Committee met one (1) time during 1995 to
review the results of the audit of the Company's 1994 financial statements by
the independent auditors, review the scope of the 1995 audit, consider
relevant matters pertaining to internal controls and accounting procedures,
perform other customary functions of Audit Committees, and to make a
recommendation to the Board of Directors on the engagement of independent
auditors for fiscal year 1995. The membership of the Audit Committee consists
of Messrs. Qua, Deck and Hicks.
The Compensation Committee met one (1) time during 1995 for the purpose of
reviewing employee compensation and benefit arrangements. The membership of
the Compensation Committee consists of Messrs. Deck, Hicks and Qua. The Report
of the Compensation Committee is contained below.
COMPENSATION OF DIRECTORS
During 1995, non-employee directors of the Company continued to abide by the
one-third reduction in compensation levels initiated in 1993, and accordingly
received an annual retainer of $5,000 plus a fee of $500 per meeting for
attending any regular or special meetings of the Board of Directors. The
members of each committee of the Board of Directors, other than officers of
the Company, received a fee of $500 for each meeting attended. Chairmen of
committees received a fee of $750 for each meeting attended.
The First Restatement of ACCEL International Corporation 1987 Stock Incentive
Plan (the "Restated Plan") provides for options to be granted every year to
non-employee directors of the Company for a predetermined number of shares of
Common Stock. In 1991, the year the Restated Plan was adopted, the
non-employee directors were granted options for 2,000 shares each. In
subsequent years, options for 1,000 shares each were granted and will continue
to automatically be granted according to the Restated Plan (subject to
adjustment for stock dividends, stock splits and other similar events). Newly
appointed or elected non-employee directors are granted options for 2,000
shares in the year they are appointed or elected, and thereafter will receive
the automatic grants. The exercise price is equal to the fair market value of
a share of stock on the date the option is granted. Options become exercisable
as to 50% of the shares subject to the option on completion of each full year
prior to termination of the director's status as director after the date the
option was granted. The options lapse on the earliest of the date 10 years
after the option was granted, or the date 180 days after the termination of
the director's status as director. The options shall fully vest and become
completely exercisable upon the death or voluntary retirement of a director.
COMPENSATION COMMITTEE
Executive Compensation including the grant of stock options is determined by
the Compensation Committee of the Board of Directors. The formal report of
the Compensation Committee with respect to 1995 compensation is as follows:
REPORT OF THE COMPENSATION COMMITTEE
The Company's compensation package for its executive officers consists of base
salary, participation in a profit sharing plan for senior officers, and
periodic stock option grants or awards. The base salary for Mr. Friedberg, the
Chairman of the Board, President and Chief Executive Officer, is fixed by the
Committee and may be adjusted as determined periodically by the Committee
after a performance review is conducted. Since Mr. Friedberg agreed to serve
without salary for the current year, the Committee was not required to make
any determination with respect to a salary or bonus. Base salary levels for
all other executive officers are determined by Mr. Friedberg and recommended
to the Committee. The amount of profit sharing compensation and stock option
grants or awards, if any, are also determined by this Committee.
The Committee believes that a significant or meaningful portion of total cash
compensation should be related to profitability and the achievement of fixed
objectives. Consequently, the profit sharing potential for the Company's
executive officers is conditioned on overall corporate performance
(profitability), and achieving individual and departmental objectives tied to
a percentage of total base salary.
Generally speaking, base salary levels are set and adjusted at levels which
are part of the Company's budgetary process, yet are believed by the Committee
to be sufficient to attract and retain qualified executives when considered
with the other components of the Company's compensation structure.
Profit sharing plans were adopted for all employees of the Company and for
senior officers. The overall objectives for establishing the Company's
incentive compensation programs in 1995 were to enhance total compensation
without adding fixed expense, modify the corporate reward systems and give
managers the discretion to reward contributors, better focus management's
attention on the achievement of objectives and drive accountability to all
levels of the Company, and foster teamwork.
For 1995, the profit sharing goal set for all employees and the senior
officers was the attainment of a predetermined level of profit by the Company.
Accordingly, no profit sharing compensation was paid to any employees or
senior officers in 1995. Furthermore, the freeze on base salaries put into
effect during 1993 for all senior officers of the Company and its subsidiaries
was continued into 1995.
In addition to approving the ACCEL Bonus Plan, the Compensation Committee
determines annual stock option grants or awards to executive officers and
other eligible employees. Stock options are intended to encourage key
employees to remain employed by the Company by providing them with a long-term
interest in the Company's overall performance as reflected by the performance
of the market of the Company's Common Stock.
Raymond H. Deck, Chairman Kermit G. Hicks, Member Stephen M. Qua, Member
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Qua is associated with two automobile dealerships which are master
policyholders of the Company and receive commissions from the Company in
connection with credit insurance sold by such dealerships. During the fiscal
year ended December 31, 1995, such dealerships received commissions in the
amount of $91,670.
EXECUTIVE COMPENSATION
SUMMARY
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Company's current Chief
Executive Officer, Executive Vice President, and each of the Company's other
most highly compensated executive officers whose total annual salary and bonus
for the fiscal year ended December 31, 1995, exceeded $100,000 (the "named
executives") during each of the last three fiscal years:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Year Name, Age, and Principal Salary ($) Bonus ($) Securities All Other
Position Underlying Compensation
Options/SARs (#) ($)(1)
<S> <C> <C> <C> <C> <C>
1995 Thomas H. Friedberg, 57 (2) -- -- 100,000 --
1994 Chairman of the Board, -- -- -- --
1993 President and Chief Executive -- -- -- --
Officer
1995 Douglas J. Coats, 63 (2) -- -- 50,000 --
1994 Executive Vice President. President -- -- -- --
1993 President and Chief Executive -- -- -- --
Officer
1995 R. Max Williamson, 58 (3) 225,000 -- 15,000 4,240
1994 Chairman of the Board, 225,000 -- 15,000 7,294
1993 President and Chief Executive 225,000 -- 15,000 6,152
Officer
1995 Larry L. Main, 47 Senior Vice 112,000 -- 10,000 2,639
1994 President Auto After Market 112,000 -- 10,000 2,605
1993 Product Group 112,000 -- 10,500 3,064
1995 Nicholas Z. Alexander, 60 109,000 -- 10,000 4,093
1994 Senior Vice President, 109,000 -- 10,000 4,061
1993 Secretary and General Counsel 109,000 -- 10,500 2,980
1995 William B. Johnson, 43 (4) 108,000 -- 10,000 2,144
1994 Senior Vice President Claims 108,000 -- 10,000 2,112
1993 108,000 -- 10,500 1,734
<FN>
(1) Represents approximate amounts contributed on behalf of each such
executive to the Acceleration Retirement Savings and Stock Ownership
Plan.
(2) Mr. Friedberg was appointed Chairman of the Board and Chief Executive
Officer of the Company on May 23, 1995. Mr. Coats was appointed
Executive Vice President of the Company and President of Acceleration
National Insurance Company on May 23, 1995. They agreed to serve without
salary for the first year of their employment. In lieu of salary, they
were granted stock options for 100,000 shares and 50,000 shares,
respectively, of Common Stock, which options vested immediately, become
exercisable one year following the date of grant, and lapse five years
from the date of grant.
(3) Mr. Williamson relinquished his positions with the Company as of October
15, 1995. Pursuant to the provisions of his Employment Agreement with
the Company, his compensation thereunder will continue until February
28, 1997.
(4) Mr. Johnson resigned effective December 31, 1995.
</TABLE>
The following table sets forth information concerning individual grants of
options to purchase the Company's Common Stock made to the named executives in
1995:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS IN 1995 Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term
Name Number of Percent of Exercise or Expiration 5% ($) 10% ($)
Securities Total Base Price Date
Underlying Options ($ Sh) (1)
Options/SARs Granted to
Granted (#) Employees in
Fiscal Year
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg 100,000 43.0% $2.125 5/23/00 $58,710 $129,733
Douglas J. Coats 50,000 21.5% $2.125 5/23/00 $29,355 $64,867
R. Max Williamson 15,000 6.5% $2.125 Expired N/A N/A
Larry M. Main 10,000 4.3% $2.125 5/23/05 $13,364 $33,867
Nicholas Z. Alexander 10,000 4.3% $2.125 5/23/05 $13,364 $33,867
William B. Johnson 10,000 4.3% $2.125 Expired N/A N/A
<FN>
(1) Market price of the Company's Common Stock on date of grant.
</TABLE>
The following table sets forth certain information regarding individual
exercises of stock options during 1995 by each of the named executives:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
Name Shares Value Number of Securities Value of Unexercised
Acquired on Realized Underlying Unexercised Options In-The-Money Options at Fiscal
Exercise (Mkt. Price at Fiscal Year End (#) Year End (1)
(#) at Exercise
Less
Exercise
Price)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg 0 N/A 4,500 100,000 N/A $62,500
Douglas J. Coats 0 N/A N/A 50,000 N/A $31,250
R. Max Williamson 0 N/A N/A N/A N/A N/A
Larry L. Main 0 N/A 35,931 14,000 $6,250 N/A
Nicholas Z. Alexander 0 N/A 39,404 14,000 $6,250 N/A
William B. Johnson 0 N/A N/A N/A N/A N/A
<FN>
(1) Intended to represent the amount by which the market price of the
Company's Common Stock on December 31, 1995 ($2.75) exceeded the
exercise prices of unexercised options on that date.
</TABLE>
BENEFICIAL OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the named
executive's beneficial ownership of the Common Stock of the Company as of
January 31, 1996:
Shares of Common Stock of
Company Beneficially
Owned
Title of Class Name of Officer Number (1) Percent of
Class
Common Stock Thomas H. Friedberg 14,500 *
Common Stock R. Max Williamson 5,419 *
Common Stock Larry L. Main 46,854 1%
Common Stock Nicholas Z. Alexander 44,642 1%
Common Stock William B. Johnson N/A N/A
[FN]
(1) The amounts shown represent the total shares owned outright by such
individuals together with shares which are issuable upon the exercise of
all stock options which are currently exercisable. Specifically, the
following individuals have the right to acquire the shares indicated
after their names, upon the exercise of such stock option: Mr.
Friedberg, 4,500; Mr. Main, 39,404; and Mr. Alexander, 35,931.
* Less than 1% of outstanding Common Stock.
EMPLOYMENT AGREEMENT
On August 1, 1990, the Company entered into an employment agreement with R.Max
Williamson pursuant to which Mr. Williamson served as Chairman, President and
Chief Executive Officer of the Company. The term of the agreement was for a
period of three years and provided that, unless terminated in accordance with
the provisions thereof, on the first day of each month that the agreement was
in effect, the remaining term thereof would automatically be extended one
additional month. On December 13, 1993, the Board of Directors notified Mr.
Williamson that the employment agreement would be terminated on February 28,
1997. Mr. Williamson's base salary under the agreement was $225,000 per year.
In addition to a base salary, the agreement provided for a cash bonus and
other employee benefits to be provided Mr. Williamson. Mr. Williamson
relinquished his positions with the Company as of October 15, 1995. Pursuant
to the provisions of this employment agreement with the Company, his
compensation thereunder will continue until February 28, 1997.
CERTAIN RELATIONSHIPS
Several of the Company's directors are associated with automobile dealerships.
These dealerships are master policyholders of the Company and receive
commissions from the Company in connection with credit insurance sold by them.
All commissions paid to automobile dealerships and agencies associated with
the Company's directors are at rates determined on a basis consistent with
commissions paid to non-related parties. Total commission on credit insurance
business paid to all agencies relating to all directors as a group during the
year ended December 31, 1995 was $180,231.
The following table sets forth those directors whose agencies received
commissions in connection with the credit insurance business of the Company in
excess of $60,000 in the year 1995:
Director 1995
-------------------------------------------------
Stephen M. Qua $91,670
Milton J. Taylor, Sr. $88,561
Also, an insurance agency of which Robert Betagole is a shareholder, received
$1,734,913 through a reinsurance arrangement.
FINANCIAL PERFORMANCE
The graph below summarizes the cumulative return experienced by the Company's
shareholders compared with the Russell 2,000 and NASDAQ Insurance Stocks.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
VS. RUSSELL 2000 AND NASDAQ INSURANCE STOCKS
(Performance results through 12/31/95)
Description of Graph:
The graph charts the Value of Investment from $0 to $300 for the time
period of December 31, 1990 to December 31, 1995 for ACCEL International
Corp., Russell 2000 and NASDAQ Insurance. Listed below is the
breakdown, by year, for each Company.
1991 1992 1993 1994 1995
ACCEL $100 $100 $45 $50 $23 $37
Russell 2000 $100 $146 $173 $206 $202 $260
NASDAQ Insurance Stocks $100 $141 $191 $204 $192 $273
* $100 invested on 1/1/90 in stock or index - including reinvestment of
dividends. Fiscal year ending December 31.
2. PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE TOTAL AUTHORIZED SHARES
In the judgment of the Board of Directors of the Company, it is deemed
advisable to increase the total number of authorized shares of Common Stock
from 10,000,000 to 15,000,000 by amending the Certificate of Incorporation so
that the first sentence of Article Fourth will read as follows:
FOURTH: The Corporation shall be authorized to issue two classes of
shares of stock to be designated, respectively, "Preferred Stock" and
"Common Stock"; the total number of shares which the Corporation shall
have authority to issue is sixteen million (16,000,000); the total
number of shares of Preferred Stock shall be one million (1,000,000) and
each such share shall have a par value of one dollar ($1.00); and the
total number of shares of Common Stock shall be fifteen million
(15,000,000) and each such share shall have a par value of ten cents
($.10).
The Company's Certificate of Incorporation currently authorizes the issuance
of 10,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.
As of April 12, 1996, 4,456,432 shares of Common Stock were issued and
outstanding.
The Board of Directors is asking the stockholders to approve the adoption of
the 1996 Stock Incentive Plan pursuant to which 1,000,000 shares of Common
Stock will be available for issuance. In addition, the Board of Directors has
authorized a rights offering ("Rights Offering") in which each stockholder of
record on a date yet to be determined would receive rights ("Rights") to
subscribe for additional shares of the Company's Common Stock. Holders of
Rights would also be entitled to an oversubscription privilege. Although the
number of shares which may be offered in the Rights Offering and the
subscription price have not been finally determined, the Board of Directors
has authorized the issuance of up to 7,000,000 shares of Common Stock.
Accordingly, it is possible that a significant number of shares of Common
Stock could be issued in the Rights Offering. The Rights Offering would be
subject to the effectiveness of a registration statement to be filed with the
Securities and Exchange Commission and would be made only by means of a
prospectus. Other than the adoption of the 1996 Stock Incentive Plan and the
proposed Rights Offering, no specific transaction is presently contemplated
which would result in the issuance of additional shares of Common Stock.
The Board of Directors believes it to be in the best interest of the Company
and its stockholders to increase the number of authorized shares of Common
Stock which would be readily available without further stockholder approval
for such activities as possible acquisitions, future financing, use in
connection with possible stock dividends or possible diversification into new
insurance programs through the issuance of stock or stock options to
independent agents and for any other corporate purposes.
The additional shares of Common Stock authorized by the proposed amendment
will, if and when issued, have the same rights and privileges as the shares of
Common Stock currently authorized and outstanding. Holders of shares of Common
Stock of the Company have no pre-emptive rights. If the proposed amendment is
adopted, additional shares of Common Stock could be issued in the discretion
of the Board of Directors of the Company without further stockholder approval.
The Certificate of Incorporation contains a provision which requires the
affirmative vote of not less than 80 percent of the outstanding shares of the
Company entitled to elect directors for the approval of certain business
combinations and other transactions with a corporation or any affiliate
thereof which acquires more than five percent of the beneficial ownership of
the outstanding shares of Common Stock of the Company unless such business
combination or other transaction was approved by resolution of the Board of
Directors of the Company prior to the acquisition by such corporation or
affiliate thereof of the beneficial ownership of more than five percent of the
outstanding Common Stock. This provision could have the effect of delaying,
deferring or preventing a change in control of the Company.
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock of the Company is required to authorize the proposed amendment to
the Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT.
3. APPROVAL OF THE ADOPTION OF THE 1996 STOCK INCENTIVE PLAN
1996 STOCK INCENTIVE PLAN
Subject to stockholder approval, on March 11, 1996, the Board of Directors of
the Company adopted the Company's 1996 Stock Incentive Plan (the "Plan"). The
Plan, if approved by the Stockholders, will become effective June 11, 1996.
The purpose of the Plan is to advance the long-term interests of the Company
by (i) motivating executive, other personnel and independent agents by means
of long-term incentive compensation; (ii) furthering the identity of interests
of participants with those of the stockholders of the Company through the
ownership and performance of the Common Stock of the Company; and (iii)
permitting the Company to attract and retain directors and executive personnel
upon whose judgment the successful conduct of the business of the Company
largely depends.
The maximum number of shares of Common Stock with respect to which awards may
be granted under the Plan is 1,000,000 and the maximum number of shares of
Common Stock that may be awarded during any calendar year may not exceed 10%
of the total number of issued and outstanding shares of Common Stock of the
Company. The Common Stock to be issued by the Company under the Plan will be
made available from authorized but unissued shares of Common Stock or from
treasury shares. The Plan contains customary provisions with respect to
adjustments for share splits and similar transactions and the rights of
participants upon mergers and other business combinations. The Plan provides
for stock option, stock appreciation rights, restricted stock, phantom stock
and performance awards. No award under the Plan may be granted after June 11,
2006. The Plan may be amended or terminated at any time by the Board of
Directors acting through a Committee, except that no amendment may be made
without stockholder approval if the Committee determines that such approval is
necessary to comply with any tax or regulatory requirement, including any
approval requirement which is a prerequisite for exemptive relief from Section
16 of the Exchange Act, for which or with which the Committee determines that
it is desirable to qualify or comply.
SUMMARY OF THE PROVISIONS OF THE PLAN
The following summary of the Plan is qualified in its entirety by the actual
provisions of the Plan included in this Proxy Statement as Exhibit A.
Overview. The Plan permits the granting of (1) options to purchase shares of
Common Stock which are either (a) non-statutory stock options ("Non-statutory
Stock Options") not intended to qualify for special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Code"), or (b) options which
are intended to qualify as incentive stock options under the Code ("Incentive
Stock Options"), (2) stock appreciation rights in conjunction with stock
options, (3) restricted stock awards, (4) phantom stock awards and (5)
performance shares. All employees of the Company and its subsidiaries who
hold a position of responsibility in an executive, managerial, administrative
or professional capacity or independent agents who market and sell insurance
written by a subsidiary of the Company, and whose performance, as determined
by the Committee (as defined below under the caption "Administration") in the
exercise of the Committee's sole and absolute discretion, can have an effect
on the growth, profitability and success of the Company, are eligible to be
participants in the Plan. In addition, the Plan provides for the grant of
stock options to Directors of the Company who are not employees of the Company
or any of its subsidiaries (the "Outside Directors"). The Plan is not subject
to the provisions of the Employee Retirement Income Security Act of 1974, as
amended, and is not qualified under Section 401(a) of the Code.
Common Stock Available. The total number of shares of Common Stock available
under the Plan is 1,000,000 shares. Of this number, up to 100,000 shares may
be issued pursuant to the exercise of Outside Directors' stock options.
Notwithstanding the foregoing, at no time shall the number of shares of Common
Stock deemed available for grant in any fiscal year exceed 10% of the total
number of issued and outstanding shares of Common Stock. The number of shares
of Common Stock available for grant to any individual participant in any
calendar year shall not exceed 250,000. The number of shares of Common Stock
which remain available for grant pursuant to the Plan and Common Stock subject
to outstanding awards will be appropriately and proportionately adjusted to
reflect changes in the Company's capitalization, including stock splits, stock
dividends, mergers, reorganizations, consolidations and recapitalizations.
The purchase price per share under outstanding options will also be
appropriately adjusted to reflect capitalization changes.
Administration. The Plan may be administered by the Compensation Committee of
the Board of Directors or such other committee designated by the Board to
administer the Plan under Section 3 of the Plan (the "Committee"). The
Committee shall be composed of at least three directors and shall serve at the
pleasure of the Board of Directors. Each member of the Committee must be a
director who is a "disinterested person" under Rule 16b-3 under the Exchange
Act and an "outside director" under Section 162(m) of the Code and the
regulations thereunder. The Committee has the authority to select the
employees and/or independent agents to be participants, to determine the type
and number of awards to be granted, and to establish rules and regulations for
the administration of the Plan.
Stock Options. For stock options granted to employees or independent agents
under the Plan, the option price per share will be not less than 100% of the
fair market value of Common Stock on the date of the grant. Payment of the
option price upon exercise of an option may be made in cash, Common Stock, or
a combination thereof, as set forth in the option agreement. The term of each
option will be fixed by the Committee, except that Incentive Stock Options
will not be exercisable after ten years from the grant date. The grant and
terms of Incentive Stock Options will be limited to the extent required by the
Code. Independent agents shall not be eligible to receive grants of Incentive
Stock Options. In the absence of any provision in an option to the contrary
(i) options will become exercisable as to 25% of the shares of Common Stock
subject to the option upon the completion of the first full year of employment
or retention and as to 25% of such shares upon the completion of each full
year thereafter prior to termination of the participant's relationship with
the Company, and (ii) options will lapse upon the earlier of (w) 180 days
after the termination of the participant's relationship with the Company if
the termination is due to due to death or disability or if the participant
dies within 90 days of such termination, (x) 90 after termination of the
participant's relationship with the Company for any other reason other than
death, disability or gross misconduct or neglect, (y) upon termination of
the participant's relationship with the Company if the termination is the
result of the participant's gross misconduct or neglect as determined by the
Committee, and (z) ten years after the option was granted. Each stock option
will be evidenced by an option agreement conforming to the provisions of the
Plan, in such form as is approved by the Committee from time to time. The
option agreement will set forth the number of shares of Common Stock that are
subject to the option, the type of option granted, the option price to be paid
upon exercise, the manner in which the option is to be exercised, the option
period, and such other terms as may be approved by the Committee.
Stock Appreciation Rights. Stock appreciation rights may be granted pursuant
to the Plan either separately or in conjunction with other awards. Stock
appreciation rights related to stock options may be granted when the option is
granted, and with respect to non-statutory options, also may be granted at any
time before exercise or expiration of the option. Upon exercise of a stock
appreciation right, the holder will receive payment from the Company in an
amount equal to the excess of the then fair market value of the Common Stock
covered by the stock appreciation right over the option or grant price of the
stock appreciation right. The Committee may impose such conditions or
restrictions on the exercise of any stock appreciation right it deems
appropriate.
Restricted Stock Awards. Restricted stock awards may be granted pursuant to
the Plan. Shares of Common Stock covered by restricted stock awards may not
be sold or otherwise transferred by the recipient until termination of the
restrictions applicable to the awards, which restrictions will be established
by the Committee and need not be the same for all such awards. Restricted
stock awards shall be subject to such terms, conditions, restrictions, or
limitations as the Committee deems appropriate. During the period in which
any shares of Common Stock are subject to restrictions, the Committee may, in
its discretion, grant to recipients all or any of the rights of stockholders
with respect to such Common Stock.
Phantom Stock Awards. Awards of phantom stock may be granted under the Plan
either separately or in conjunction with other awards. Phantom stock awards
entitle the recipient to receive the market value or appreciation in value of
a stated number of shares of Common Stock on a settlement date determined by
the Committee. The Committee has complete authority to determine the terms,
conditions, restrictions and limitations of such awards.
Performance Shares. Performance shares may be granted under the Plan.
Performance shares are convertible into Common Stock or cash, or a combination
thereof, upon the obtainment of predetermined performance targets during an
established performance period. The Committee shall establish the performance
targets, the performance period and the other terms, conditions, restrictions
or limitations on any award of performance shares.
Outside Director Stock Options. The Plan provides for the grant to Outside
Directors of options to purchase Common Stock ("Outside Director Stock
Options"). See "Compensation of Directors". Each Outside Director who is
elected or appointed to serve as a Director of the Company after the effective
date of the Plan and who is not a Director on the effective date of the Plan,
shall, upon his initial appointment or election, automatically be granted an
option to purchase 2,000 shares of Common Stock. At each year's annual
meeting of the stockholders of the Company commencing at the 1997 annual
meeting there shall be granted automatically to each Outside Director (other
than any Outside Director who first became a Director at any time during the
period following the immediately preceding annual meeting of stockholders),
the option to purchase 1,000 shares of Common Stock. All Outside Director
Stock Options will be Non-statutory Stock Options with a 10-year term, and the
purchase price per share will be 100% of the fair market value of Common Stock
on the date of grant. Payment of the option price may be made in cash, Common
Stock, or a combination thereof, as set forth in the option agreement. In the
absence of any provision in an option to the contrary, options will become
exercisable as to 50% of the shares of Common Stock subject to the option upon
the completion of the first full year after the date thereof and as to 50% of
such shares upon the completion of each full year thereafter prior to
termination. Outside Director Stock Options not otherwise exercisable at the
time of the termination of the Director's status as a Director may be
exercised for 180 days following the date of such termination, as long as such
period is within the original 10-year option term. Outside Director Options
not otherwise exercisable at the time of the death or voluntary retirement of
a Director may be exercised for a period of 180 days subject to the original
term of the option.
Tax Effects. For federal income tax purposes, under existing statutes,
regulations and authorities, an optionee does not realize taxable income at
the time of the grant of an Incentive Stock Option, a Non-statutory Stock
Option, phantom stock award or a stock appreciation right. Upon the exercise
of a Non-statutory Stock Option, the Company is entitled to a compensation
expense deduction in the amount by which the fair market value of the subject
Common Stock exceeds the option price and the optionee realizes ordinary
income in such amount. Upon the exercise of a stock appreciation right, the
Company is entitled to a deduction and the optionee realizes ordinary income
in the amount of the cash or fair market value of the Common Stock received.
On the subsequent sale of Common Stock received upon the exercise of a
Non-statutory Stock Option, the difference between the fair market value of
the Common Stock on the date of receipt and the amount realized on the sale
will be treated as capital gain or loss, which will be short or long term
depending on the period for which the Common Stock is held prior to the sale.
An optionee will have no taxable income upon the exercise of an Incentive
Stock Option (except that the alternative minimum tax may apply) and generally
does not realize taxable income until the sale of the Common Stock received
upon exercise of the option. If a sale does not take place until at least two
years after grant and one year after exercise of the option, any gain or loss
realized will be treated as long term capital gain or loss. Under such
circumstances, the Company will not be entitled to a deduction in connection
with the grant or the exercise of the option. If a disposition occurs prior
to two years after grant or one year after exercise, then the difference
between the option price and the fair market value of the Common Stock on the
date of exercise (or in certain cases, the amount realized on sale, if less
than the market value on the date of exercise) is taxable as ordinary income
to the optionee and is deductible by the Company for federal income tax
purposes.
With respect to awards of phantom stock, a participant will realize ordinary
income equal to the fair market value of the Common Stock or appreciation in
value of the Common Stock, as applicable, on the settlement date and the
Company will be entitled to a deduction in the same amount. With respect to
restricted stock awards, a participant generally will realize ordinary income
equal to the fair market value of the Common Stock received as of the first
day that such shares of Common Stock become transferable or are not subject to
substantial risk of forfeiture, whichever occurs earlier. The Company will be
entitled to a deduction at that time in the same amount.
Assignment of Interest. Except as expressly provided in the Plan with respect
to transfers by will or the laws of descent and distribution, no option,
phantom stock awards, stock appreciation right or restricted stock award may
be assigned or transferred by any participant.
Limitations on Resale of Securities. Participants who are officers or
directors of the Company, including those who may be deemed "affiliates" of
the Company, as such term is defined under the Securities Act, have certain
limitations on their ability to resell Common Stock acquired pursuant to the
Plan. Any sale of Common Stock by an employee or Outside Director also must
be made in compliance with the Company's policies on trading in securities of
the Company.
Amendment or Termination of the Plan. No awards may be granted under the Plan
after June 11, 2006. The Plan gives the Committee the power to suspend,
reinstate and terminate the Plan or any portion thereof at any time. In
addition, the Committee may amend the Plan, except that, without any required
stockholder approval, no such amendment may (1) materially increase the
benefits to participants in the Plan, (2) materially increase the total number
of shares of Common Stock that could be issued or (3) materially modify the
requirements as to eligibility for participation in the Plan. The provisions
of the Plan relating to the eligibility for, and the amount, price and timing
of, awards to Outside Directors may not be amended, nor shall the operation of
such provisions be suspended or reinstated, more than once every six months.
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of January 31, 1996
(except as otherwise noted) with respect to stockholders known to the Company
to be the beneficial owners of more than five percent of any class of the
Company's voting securities:
<TABLE>
<CAPTION>
Title of Class Name and Address of Beneficial Owner Amount of Beneficial Percent of Class
Ownership (1)
<S> <C> <C> <C>
Common Stock Chase Insurance Holdings Corporation 1,351,459 Shares (2) 30.3%
One Commercial Plaza
Hartford, CT 06103
Rhoda L. Chase 382,000 (2) 8.6%
96 High Ridge Road
West Hartford, CT 06117
Dimensional Fund Advisors Inc 315,119 Shares (3) 7.1%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Tweedy, Browne Company L.P. and TBK 246,000 Shares (4) 5.5%
Partners, L.P.
52 Vanderbilt Avenue
New York, NY 10017
<FN>
(1) Except as otherwise noted, the Company has no reason to believe that any
beneficial owner listed above does not have sole voting and investment
power with respect to these shares.
(2) As of January 31, 1996. See footnote (6) to the Nominees Table hereof.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 315,119 shares of
ACCEL International Corporation stock as of December 31, 1995, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group
Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors
Inc. serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(4) Tweedy, Browne Company L.P. ("TBC"), a registered broker-dealer and
registered investment advisor, and TBK Partners, L.P. ("TBK"), have
jointly filed amendments to their respective Schedule 13D Reports (the
"Schedule 13D") with the SEC. The Schedule 13D stated that TBC may be
deemed to have beneficial ownership of 246,000 shares, all of which
shares are held in accounts of various customers of TBC. TBC further
reported that it has investment discretion with respect to all 246,000
shares and sole power to vote 171,000 shares. As a result of a
disposition of shares, TBK reported that it does not beneficially own
any shares. Each of TBC and TBK disclaimed beneficial ownership of the
246,000 shares held in the TBC accounts and disclaimed beneficial
ownership of the shares held by the other. TBK and TBC also reported
that their respective general partners, four of whom are common to each,
may, solely by reason of their positions as such, be deemed to share
voting power and dispositive power with respect to the shares. Finally
TBC and TBK stated that the filing of the Schedule 13D should not be
deemed an admission that TBC and TBK comprise a group within the meaning
of Section 13(d)(3) of the Act.
RELATIONSHIP WITH INDEPENDENT PUBLIC AUDITORS
KPMG Peat Marwick LLP has served as the independent auditors for the company
for each of the years in the two-year period ended December 31, 1995. In
recent years, it has been the practice of the Board of Directors to annually
review and select independent auditors for the Company. The Board of Directors
intends to continue such practice and to make the selection of independent
auditors later in the year. The selection of independent auditors has not
therefore been made for the current fiscal year. Representatives of KPMG Peat
Marwick LLP will be present at the Annual Meeting of Stockholders with
an opportunity to make a statement and will be available to respond to
appropriate questions, if any, of the stockholders of the Company.
STOCKHOLDER PROPOSALS
Stockholders wishing to submit proposals for the Company's 1997 Proxy
Statement may do so prior to December 30, 1996 by letter addressed to the
Company in care of the Secretary.
OTHER MATTERS
Management does not know of any other business to be presented for
consideration at the meeting. If any other business properly comes before the
meeting, or any adjournment or adjournments thereof, the proxy holders will
vote in regard thereto according to their discretion insofar as such proxies
are not limited to the contrary. The 1995 Annual Report to Stockholders is
being furnished to stockholders along with this proxy statement.
By Order of the Board of
Directors
Nicholas Z. Alexander, Secretary
May 20, 1996
A COPY OF THE COMPANY'S LAST ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE, WITHOUT CHARGE, UPON WRITTEN
REQUEST OF A BENEFICIAL OWNER OF COMMON STOCK ENTITLED TO VOTE AT THE MEETING.
REQUESTS FOR A COPY OF THE REPORT SHOULD BE DIRECTED TO NICHOLAS Z. ALEXANDER,
SECRETARY, ACCEL INTERNATIONAL CORPORATION, 475 METRO PLACE NORTH, P.O. BOX
7000, DUBLIN, OHIO 43017.
EXHIBIT A
ACCEL INTERNATIONAL CORPORATION
1996 STOCK INCENTIVE PLAN
Proposal 3
Adopted by Board of Directors: March 11, 1996
ACCEL INTERNATIONAL CORPORATION
1996 Stock Incentive Plan
Section 1. Purpose
The purpose of this Plan is to advance the long-term interests of ACCEL
International Corporation by (i) motivating executive and other personnel and
independent agents by means of long-term incentive compensation, (ii)
furthering the identity of interests of participants with those of the
stockholders of the Company through the ownership and performance of the
Common Stock of the Company and (iii) permitting the Company to attract and
retain directors, executive personnel and independent agents upon whose
judgment the successful conduct of the business of the Company largely
depends. Toward this objective, the Committee may grant stock options, stock
appreciation rights, restricted stock awards, phantom stock and/or performance
shares to Key Employees of the Company, and shall grant stock options to
non-employee directors of the Company, on the terms and subject to the
conditions set forth in the Plan.
Section 2. Definitions
2.1. "Administrative Policies" means the administrative policies and
procedures adopted and amended from time to time by the Committee to
administer the Plan.
2.2. "Applicable Market" means the Nasdaq National Market or, if the
Common Stock is no longer traded in the Nasdaq National Market, then the
principal national securities exchange, if any, on which the Common Stock is
traded as determined by the Committee, or if the Common Stock is no longer
traded in the Nasdaq National Market or on any national securities exchange,
then such other market price reporting system pursuant to which the Common
Stock is traded or quoted as designated by the Committee.
2.3."Award" means any form of stock option, stock appreciation right,
restricted stock award, phantom stock or performance share granted under the
Plan, whether singly, in combination, or in tandem, granted, made or awarded
to a Participant by the Committee pursuant to such terms, conditions,
restrictions and limitations, if any, as the Committee may establish by the
Award Agreement or otherwise.
2.4."Award Agreement" means a written agreement with respect to an Award
between the Company and a Participant establishing the terms, conditions,
restrictions and limitations applicable to an Award. To the extent an Award
Agreement is inconsistent with the terms of the Plan, the Plan shall govern
the rights of the Participant thereunder.
2.5."Board of Directors" or "Board" means the directors of the Company,
as a group, serving as such from time to time.
2.6."Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.7."Committee" means the Compensation Committee of the Board of
Directors or such other committee designated by the Board to administer the
Plan under Section 3 hereof.
2.8. "Common Stock" means the Common Stock, $.10 par value, of the
Company.
2.9. "Company" means ACCEL International Corporation, a Delaware
corporation.
2.10. "Derivative Security" means any of the "derivative securities" as
defined in Rule 16a-1 under the Exchange Act as such rule may be amended or
superseded from time to time.
2.11. "Director" means a member of the Board of Directors.
2.12. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.13. "Key Employee" means an employee of the Company or a Subsidiary
who holds a position of responsibility in an executive, managerial,
administrative or professional capacity or an independent agent who markets
and sells insurance written by a Subsidiary and whose performance, as
determined by the Committee in the exercise of its sole and absolute
discretion, can have an effect on the growth, profitability and success of the
Company. For the purpose of any provision of this Plan relating to incentive
stock options, the term "Key Employee" shall be limited to mean any employee
who is eligible to receive the grant of an incentive stock option pursuant to
the provisions of Section 422 of the Code as amended or superseded from time
to time and shall exclude any independent agent unless at the time of the
Award is granted, such independent agent is eligible to receive the grant of
an incentive stock option.
2.14. "Participant" means any individual to whom an Award has been
granted by the Committee under this Plan.
2.15. "Plan" means this ACCEL International Corporation, 1996 Stock
Incentive Plan, as the same may be amended from time to time.
2.16. "Qualified Domestic Relations Order" means a qualified domestic
relations order as defined by the Code or the rules thereunder if so defined
therein, and, if not, as defined by Title I of the Employment Retirement
Income Security Act of 1974 ("ERISA"), or the rules thereunder.
2.17. "Section 16 Officer" means any Participant who is an "officer" of
the Company within the meaning of Rule 16a-1 under the Exchange Act as such
rule may be amended or superseded from time to time.
2.18. "Subsidiary" means a corporation or other business entity in
which the Company directly or indirectly has an ownership interest of
fifty-one percent or more.
2.19."Termination" means the termination of the Participant's
relationship with the Company including termination of the Participant's
employment, status as a Director or appointment as an independent agent. A
Participant who is absent from employment or other relationship with the
Company for a reason or purpose and for a period of time approved by the
Committee, in its sole discretion, shall not for the period of such absence be
deemed, solely because of such absence, to have suffered a Termination, unless
and until the Committee otherwise determines.
Section 3. Administration
The Plan shall be administered under the supervision of the Committee
composed of not less than three Directors each of whom shall be a
"disinterested person" under Rule 16b-3 under the Exchange Act as such rule
may be amended or superseded from time to time and an "outside director" under
Section 162(m) of the Code and the regulations thereunder.
Members of the Committee shall serve at the pleasure of the Board of
Directors, and may resign by written notice filed with the Chairman of the
Board, President or Secretary of the Company. A vacancy in the membership of
the Committee shall be filled by the appointment of a successor member by the
Board of Directors. Until such vacancy is filled, the remaining members shall
constitute a quorum and the action at any meeting of a majority of the entire
Committee, or an action unanimously approved in writing by all Committee
members, shall constitute action of the Committee. Subject to the express
provisions of this Plan, the Committee shall have exclusive and final
authority to: (i) construe and interpret the Plan and any Award Agreement
entered into hereunder; (ii) establish, amend and rescind Administrative
Policies for the administration of the Plan; and (iii) determine the "fair
market value" of the Common Stock of the Company (based on the Applicable
Market, if any, for the Common Stock). The Committee shall have such
additional authority as the Board of Directors may from time to time determine
to be necessary or desirable. Employees, agents and independent contractors
of the Company or the Committee may be assigned, or employed or retained to
perform, administrative, clerical and other duties of the Committee, subject
to the supervision and control of the Committee; provided, however, that only
the Committee may grant or award an Award under the Plan and make decisions
concerning the timing, pricing and amount of any Award, except for stock
options automatically granted to Directors who are not employees of the
Company under Section 13 hereof.
For so long as Directors and/or Section 16 Officers are or may be
Participants in the Plan, the Committee shall not knowingly take any action,
or decline to take any action, which shall cause the Plan not to meet the
requirements contained in Rule 16b-3 under the Exchange Act, as such rule is
amended or superseded from time to time, which permit the granting or making
of Awards under the Plan to be exempt from Section 16(b) of the Exchange Act
as amended or superseded from time to time.
Section 4. Eligibility
Except as otherwise provided herein, any Key Employee is eligible to
become a Participant in the Plan. Directors of the Company, other than
Directors who are employees of the Company, shall be eligible only to receive
stock options pursuant to Section 13 hereof.
Section 5. Shares Available
(a) Shares of Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares. Subject to the adjustments
provided for in Sections 17 and 18 hereof, the maximum number of shares of
Common Stock available for grant of Awards under the Plan is 1,000,000 shares.
Of this total number, up to 100,000 shares may be issued pursuant to the
exercise of Directors' Stock Options. Notwithstanding the foregoing, at no
time shall the number of shares of Common Stock deemed to be available for
grant in any fiscal year exceed ten percent of the total number of issued and
outstanding shares of Common Stock of the Company. The number of shares of
Common Stock available for grant to any individual Participant in any calendar
year shall not exceed 250,000 shares.
(b) For purposes of calculating the number of shares of Common Stock
deemed to be granted hereunder during any fiscal year, each Award, whether
denominated in stock options, stock appreciation rights, restricted stock,
performance shares or phantom stock, shall be deemed to be a grant of a number
of shares of Common Stock equal to the number of shares represented by the
stock options, shares of restricted stock, performance shares, shares of
phantom stock or stock appreciation rights set forth in the Award; provided
however
(i) in the case of any Award as to which the exercise of one right
nullifies the exercisability of another (including, by way of
illustration the grant of a stock option with Tandem SARs (as
hereinafter defined)), the number of shares deemed to have been granted
shall be the maximum number of shares (and/or cash equivalents) that
could have been acquired upon the maximum exercise or settlement of the
Award; and
(ii) in the case of Performance Share Awards (as hereinafter
defined) providing for payments in excess of 100% of the number of
shares set forth in the Award Agreement, the number of shares granted
shall be deemed to be the maximum number of shares (and/or the cash
equivalent thereof) issuable under the Award at the highest level of
performance.
(c) Shares of Common Stock covered by lapsed, canceled, surrendered or
terminated Awards shall be shares available for regrant under the Plan;
provided, however, that the portion of any Award that has been settled by the
payment of cash or the issuance of shares of Common Stock, or a combination
thereof, shall not be available for re-grant under the Plan, irrespective of
the value of the settlement or the method of its payment. The settlement of an
Award shall not be deemed to be the grant of an Award hereunder.
Section 6. Term
The Plan shall become effective as of June 11, 1996, subject to approval
of the Plan by the holders of a majority of the shares of Common Stock. No
Awards shall be exercisable or payable before approval of the Plan has been
obtained from the Company's stockholders and no Awards may be granted after
June 11, 2006.
Section 7. Participation
The Committee shall select, from time to time, Participants from those
Key Employees who, in the opinion of the Committee, can further the Plan's
purpose and the Committee shall determine the type or types of Awards, if any,
to be made to the Participant. Any selection by the Committee of an employee
or independent agent of the Company or a Subsidiary to be a Participant in the
Plan shall irrevocably constitute the Committee's concurrent and conclusive
determination that such employee or independent agent is a Key Employee. In
addition, all non-employee Directors shall participate in the Plan solely in
the manner specified in Section 13 hereof. The terms, conditions and
restrictions of each Award shall be set forth in an Award Agreement, and no
Participant shall have any rights to or interest in an Award unless and until
such Participant has exercised and delivered an Award Agreement with respect
to such Award.
Section 8. Stock Options
(a) Grants. Awards may be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of Section 422 of
the Code or nonqualified stock options (i.e., stock options which are not
incentive stock options), or a combination of both, or any particular type of
tax advantage option authorized by the Code from time to time.
(b) Terms and Conditions of Options. An option shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee; provided, however, that no stock option shall be exercisable more
than ten years after the date of grant thereof. In the absence of any
provision in an option to the contrary (i) the option will become exercisable
upon as to 25% of the shares of Common Stock subject to the option upon
completion of the first full year of employment or retention of the
Participant after the date thereof and as to 25% of such shares upon the
completion of each full year thereafter prior to Termination, and (ii) the
option will lapse upon the earliest of (A) 180 days after Termination of the
Participant's relationship with the Company if the Termination is due to death
or disability or if the Participant dies within 90 days of the Termination,
(B) 90 days after Termination if the Termination is for any reason other than
death, disability or gross misconduct or neglect, (C) upon Termination if the
Termination is the result of the Participant's gross misconduct or neglect as
determined by the Committee, or (D) ten years after the option was granted.
The option exercise price shall be established by the Committee, but such
price shall not be less than the per share fair market value of the Common
Stock, as determined by the Committee, on the date of the stock option's grant
subject to adjustment as provided in Sections 17 or 18 hereof.
(c) Restrictions Relating to Incentive Stock Options. Stock options
issued in the form of incentive stock options shall, in addition to being
subject to all applicable terms, conditions, restrictions and/or limitations
established by the Committee, comply with Section 422 of the Code. Incentive
stock options shall be granted only to those Key Employees who are employees
of the Company and its "subsidiaries" within the meaning of Section 424 of the
Code, shall not be granted to any independent agents unless permitted by
Section 422 of the Code or any successor provision and shall be granted within
ten years after the date the Plan was adopted by the Board of Directors. The
aggregate fair market value (determined as of the date the option is granted)
of shares with respect to which incentive stock options are exercisable for
the first time by an individual during any calendar year (under this Plan or
any other plan of the Company or any Subsidiary which provides for the
granting of incentive stock options) may not exceed $100,000 or such other
number as may be applicable under the Code from time to time. Any incentive
stock option that is granted to any employee who is, at the time the option is
granted, deemed for purposes of Section 422 of the Code, or any successor
provision, to own shares of the Company possessing more than ten percent (10%)
of the total combined voting power of all classes of shares of the Company or
of a parent or subsidiary of the Company shall have an option exercise price
that is at least 110 percent (110%) of the fair market value of the shares at
the date of grant and shall not be exercisable after the expiration of 5 years
from the date it is granted.
(d) Additional Terms and Conditions. The Committee may, in any manner
not inconsistent with the Plan, by way of the Award Agreement or otherwise,
establish such other terms, conditions, restrictions and/ or limitations, if
any, on any stock option Award and the exercise thereof.
(e) Payment. Upon exercise, a Participant may pay the option exercise
price of a stock option (i) in cash, (ii) in shares of Common Stock, or (iii)
a combination thereof, or (iv) in the sole discretion of the Committee,
through a cashless exercise procedure involving a broker; provided, however,
that such method and time for payment shall be permitted by and be in
compliance with applicable law, or (v) such other consideration as the
Committee may deem appropriate. The Committee shall establish appropriate
methods for accepting Common Stock and may impose such conditions as it deems
appropriate on the use of such Common Stock to exercise a stock option.
Section 9. Stock Appreciation Rights
(a) Grants. Awards may be granted in the form of stock appreciation
rights ("SARs"). SARs shall entitle the recipient to receive a payment equal
to the appreciation in market value of a stated number of shares of Common
Stock from the price stated in the Award Agreement to the market value of the
Common Stock on the date of exercise or surrender. A SAR may be granted in
tandem with all or a portion of a related stock option under the Plan ("Tandem
SARs"). Tandem SARs shall permit the optionee to surrender a stock option or
portion thereof and to receive the payment to which he is entitled under the
SAR Award Agreement with respect to the shares of Common Stock subject to the
surrendered stock option or portion thereof. A Tandem SAR may be granted
either at the time of the grant of the related stock option or at any time
thereafter during the term of the stock option.
(b) Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related stock
option is exercisable. The appreciation in value of a Tandem SAR shall be the
appreciation in fair market value from an amount not less than the option
exercise price of the related stock option or portion thereof being
surrendered to the market value of the Common Stock on the date of exercise.
Upon exercise of a Tandem SAR as to some or all of the shares covered by an
Award, the related stock option shall be canceled automatically to the extent
of the number of SARs exercised, and such shares shall not thereafter be
eligible for grant under Section 5 hereof.
(c) Deemed Exercise. The Committee may provide that an SAR shall be
deemed to be exercised at the close of business on the scheduled expiration
date of such SAR, if at such time the SAR by its terms is otherwise
exercisable and, if so exercised, would result in a payment to the
Participant.
(d) Additional Terms and Conditions. The Committee may, in any manner
not inconsistent with the Plan, by way of the Award Agreement or otherwise,
determine such other terms, conditions, restrictions and/or limitations, if
any, on any SAR Award.
Section 10. Restricted Stock Awards
(a) Grants. Awards may be granted in the form of Restricted Stock
Awards. Restricted Stock Awards consist of shares of Common Stock bearing
restrictions on their transfer or otherwise as authorized by Section 10(b),
below, and may be awarded to a Key Employee with or without payment of
consideration by the Key Employee.
(b) Award Restrictions. Restricted Stock Awards shall be subject to
such terms, conditions, restrictions, or limitations as the Committee deems
appropriate including, by way of illustration but not by way of limitation,
restrictions on transferability, requirements of continued employment or
individual performance or the financial performance of the Company. The
Committee may modify, or accelerate the termination of, the restrictions
applicable to a Restricted Stock Award under such circumstances as it deems
appropriate.
(c) Rights as Stockholders. During the period in which any shares of
Common Stock are subject to the restrictions imposed under this Section 10,
the Committee may, in its discretion, grant to the Participant to whom such
restricted shares have been awarded, all or any of the rights of a stockholder
with respect to such shares, including, by way of illustration but not by way
of limitation, the right to vote such shares and to receive dividends.
(d) Evidence of Award. Any Restricted Stock Award granted under the
Plan may be evidenced in such manner as the Committee deems appropriate,
including, without limitation, book entry registration or issuance of a stock
certificate or certificates.
(e) Additional Terms and Conditions. The Committee may, in any manner
not inconsistent with the Plan, by way of Award Agreement or otherwise,
determine such other terms, conditions, restrictions or limitations, if any,
on any Award of Restricted Stock.
Section 11. Phantom Stock
(a) Grants. Awards may be granted in the form of Phantom Stock Awards.
Phantom Stock Awards shall entitle the Participant to receive the market value
or the appreciation in value of a stated number of shares of Common Stock on a
settlement date determined by the Committee.
(b) Terms and Conditions. The Committee may, in any manner not
inconsistent with the Plan, by way of Award Agreement or otherwise, determine
such terms, conditions, restrictions or limitations, if any, on any Award of
Phantom Stock.
Section 12. Performance Shares
(a) Grants. Awards may be granted in the form of performance shares.
"Performance Shares" means interests the entitlement to which is based upon
the attainment of pre-determined Performance Targets as hereinafter defined
during a Performance Period as hereinafter defined. At the end of the
Performance Period, Performance Shares shall be converted into Common Stock
(or Common Stock and cash, as determined by the Award Agreement) and
distributed to Participants based upon such entitlement.
(b) Performance Criteria. The Committee may grant an Award of
Performance Shares to Participants as of the first day of each Performance
Period. As used herein, the term "Performance Period" means the period during
which a Performance Target is measured and the term "Performance Target" means
the predetermined goals established by the Committee. A Performance Target
will be established at the beginning of each Performance Period. If at the end
of the Performance Period, the Performance Target is fully met, the
Performance Shares will be converted 100% into shares of Common Stock (or the
cash equivalent thereof, as determined by the Award Agreement) and issued to
the Participant. Award payments in excess of 100% shall be permitted based
upon an attainment in excess of 100% of the Performance Target. If the
Performance Target has not been fully met, Performance Shares will be
converted and delivered only to the extent, if any, provided at the time of
the grant of such Award for conversion based upon partial attainment of the
Performance Target and the balance of the Performance Shares will be forfeited
to the Company and available for reissuance pursuant to Section 5 hereof.
(c) Additional Terms and Conditions. The Committee may, in any manner
not inconsistent with the terms of this Plan, by way of the Award Agreement or
otherwise, determine the manner of payment of Awards of Performance Shares and
other terms, conditions, restrictions or limitations, if any, on any Award of
Performance Shares.
Section 13. Directors' Stock Options
(a) Grants. Awards may be granted to non-employee Directors only in the
form of stock options satisfying the requirements of this Section 13. Each
person who is elected or appointed to serve as a Director of the Company after
the effective date of the Plan and who is not a Director on the effective date
of the Plan shall, upon his initial appointment or election as a Director,
automatically be granted an option for 2,000 shares of Common Stock. At each
year's annual meeting of the stockholders of the Company commencing at the
1997 annual meeting, there shall be granted automatically to each non-employee
Director (other than any non-employee Director who first became a Director at
any time during the period following the immediately preceding annual meeting
of the stockholders of the Company), the option to purchase 1,000 shares of
Common Stock. All stock options granted under this Section 13 shall be
nonqualified stock options.
(b) Option Exercise Price. The option exercise price of all stock
options granted under this Section 13 shall be the per share fair market value
of the outstanding shares of the Common Stock on the date such options are
automatically granted. Payment of the option exercise price may be made in
cash or in shares of Common Stock or a combination of cash and Common Stock to
the extent provided in the Award Agreement.
(c) Administration. Subject to the express provisions of this Section
13, the Committee shall have conclusive authority to construe and interpret
any Stock Option Award granted under this Section 13 and to adopt
Administrative Policies with respect thereto; provided, however, that no
action shall be taken which would prevent the options granted under this
Section 13 or any Award granted under the Plan from meeting the requirements
for exemption from Section 16(b) of the Exchange Act, or subsequent comparable
statute, as set forth in Rule 16b-3 of the Exchange Act or any subsequent
comparable rule.
(d) Option Agreement. The options granted hereunder shall be evidenced
by an option agreement, dated as of the date of the grant, which agreement
shall be in such form, consistent with the terms and requirements of this
Section 13, as shall be approved by the Committee from time to time and
executed on behalf of the Company by the President. The Option Agreement
shall require the optionee to refrain from selling or otherwise disposing of
shares so acquired for at least six months following the date of the grant of
such option.
(e) Option Period. In the absence of any provision in an option to the
contrary (i) the option will become exercisable as to 50% of the shares of
Common Stock subject to the option upon completion of the first full year
after the date thereof and as to 50% of such shares upon the completion of
each full year thereafter prior to Termination, and (ii) the option will lapse
upon the earliest of (A) 180 days after Termination of the Director's status
as a Director, or (B) ten years after the option was granted.
(f) Transferability. No option granted under this Section 13 shall be
transferable by the non-employee Director except by will or the laws of
descent and distribution, or pursuant to a Qualified Domestic Relations Order,
and during the Director's lifetime options may be exercised only by him or his
guardian or legal representative or his transferee under such Qualified
Domestic Relations Order.
(g) Limitations on Exercise. To the extent an option is not otherwise
exercisable at the date of the Director's death or voluntary retirement as a
Director, it shall become fully exercisable upon such retirement provided,
however, that Director Stock Options shall not become exercisable under this
sentence prior to the expiration of six months from the date of grant. Upon
such death or voluntary retirement, such options shall be exercisable for a
period of 180 days, subject to the original term of the option.
Section 14. Payment of Awards
Except as otherwise provided herein Award Agreements may provide that,
at the discretion of the Committee, payment of Awards may be made in cash,
Common Stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine. The terms of Award Agreements may
provide for payment of Awards in the form of a lump sum or installments, as
determined by the Committee. In connection with transactions involving the
exercise and cancellation of an Award (under this Section 14 or Section 25, or
otherwise) held by or through a Director or a Section 16 Officer (whether or
not the transaction also involves the related surrender and cancellation of a
stock option) and the receipt of cash in complete or partial settlement of the
Award, or the cash settlement of an equity security to satisfy the tax
withholding consequences of a Derivative Security, the Committee may require
that such transaction be consummated in compliance with Rule 16b-3(e) under
the Exchange Act, as such rule may be amended or superseded from time to time,
unless the holder of such Award waives such compliance in a writing executed
by such holder and delivered to the Committee and the Committee consents to
such waiver.
Section 15. Dividends and Dividend Equivalents
If an Award is granted in the form of a Restricted Stock Award or
Phantom Stock Award, the Committee may choose, at the time of the grant of the
Award, to include as part of such Award an entitlement to receive dividends or
dividend equivalents, subject to such terms, conditions, restrictions or
limitations, if any, as the Committee may establish. Dividends and dividend
equivalents shall be paid in such form and manner and at such time as the
Committee shall determine. All dividends or dividend equivalents which are not
paid currently may, at the Committee's discretion, accrue interest or be
reinvested into additional shares of Common Stock.
Section 16. Assignment and Transfer; Holding Period
The rights and interests of a Participant under the Plan, and in any
Derivative Security issued or granted under the Plan, may not be assigned,
sold, encumbered or transferred except, in the event of the death of a
Participant, by will or the laws of descent and distribution, or except
pursuant to a Qualified Domestic Relations Order.
Except as otherwise provided in the first paragraph of this Section 16
(but such exception shall not apply if its application would cause the grant
or award of the subject equity security or Derivative Security not to be
exempt from section 16(b) of the Exchange Act), an equity security of the
Company granted or awarded to a Director or Section 16 Officer as an Award
under the Plan shall not be assigned. sold, encumbered, transferred or
otherwise disposed of prior to the expiration of six months from the date of
grant, and neither a Derivative Security granted or awarded to a Director or
Section 16 Officer as an Award under the Plan, nor the underlying equity
security with respect to such Derivative Security, shall be assigned. sold,
encumbered, transferred or otherwise disposed of prior to the expiration of
six months from the date of acquisition of the Derivative Security to the date
of disposition of the Derivative Security (other than upon exercise or
conversion) or such underlying equity security, unless, in either case, the
holder of such equity security or Derivative Security requests waiver of such
restrictions in a writing delivered to the Committee and the Committee
consents to such waiver.
Section 17. Adjustments Upon Changes in Capitalization
In the event of any change in the outstanding shares of Common Stock by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or shares of the Company, the maximum aggregate number and
class of shares as to which Awards may be or are required to be granted under
the Plan and the shares issuable pursuant to and the exercise or purchase
price payable under then outstanding Awards, shall be appropriately adjusted
by the Committee whose determination shall be final. Any such adjustments may
be provided for in Award Agreements.
Section 18. Extraordinary Distributions and Pro Rata Repurchases
In the event the Company shall at any time when an Award is outstanding
make an Extraordinary Distribution (as hereinafter defined) in respect of
Common Stock or effect a Pro Rata Repurchase of Common Stock (as hereinafter
defined), the Committee may consider the economic impact of the Extraordinary
Distribution or Pro Rata Repurchase on Participants and make such adjustments
as it deems equitable under the circumstances. The determination of the
Committee shall, subject to revision by the Board of Directors, be final and
binding upon all Participants.
(a) As used herein, the term "Extraordinary Distribution" means any
dividend or other distribution by the Company of:
(i) cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and
distributions made during the twelve months preceding the date of
payment of such dividend or other distribution, when combined with the
aggregate amount of all Pro Rata Repurchases (for this purpose,
including only that portion of the aggregate purchase price of such Pro
Rata Repurchases which is in excess of the fair market value (as
determined by the Committee) of the Common Stock repurchased during such
twelve month period), exceeds ten percent (10%) of the aggregate fair
market value (as determined by the Committee) of all shares of Common
Stock outstanding on the record date for determining the shareholders
entitled to receive such Extraordinary Distribution; or
(ii) any shares of capital stock of the Company (other than shares
of Common Stock), other securities of the Company (including evidences
of indebtedness of the Company), or any other investments, assets or
property of the Company (including shares of any Subsidiary of the
Company), or any combination thereof.
(b) As used herein "Pro Rata Repurchase" means any purchase of shares of
Common Stock by the Company or any Subsidiary thereof, pursuant to any tender
offer or exchange offer subject to section 13(e) of the Exchange Act or any
successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided, however, that no purchase
of shares of the Company or any Subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase.
Section 19. Withholding Taxes
The Company or the applicable Subsidiary shall be entitled to deduct
from any payment under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment tax required by law to be
withheld with respect to such payment or may require the Participant to pay to
it such tax prior to and as a condition of the making of such payment. In
accordance with any applicable Administrative Policies it establishes, the
Committee may allow a Participant to pay the amount of taxes required by law
to be withheld from an Award by withholding from any payment of Common Stock
due as a result of such Award, or by permitting the Participant to deliver to
the Company shares of Common Stock having a fair market value, as determined
by the Committee, equal to the amount of such required withholding taxes.
Section 20. Regulatory Approvals and Listings
Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing Restricted Stock Awards or any other Award payable in Common
Stock prior to (a) the obtaining of any approval from any governmental agency
which the Company shall, in its sole discretion, determine to be necessary or
advisable, (b) the admission of such shares to trading on the Applicable
Market and (c) the completion of any registration or other qualification of
said shares under any state or Federal law or ruling of any governmental body
which the Company shall, in its sole discretion, determine to be necessary or
advisable. The Company shall have the right to require that any certificate
for Common Stock issued pursuant. to the Plan or an Award bear any restrictive
legend required by law and/or to evidence restrictions on the transfer of the
shares under applicable law, the Award Agreement or the Plan.
Section 21. No Right to Continued Employment or Grants
Participation in the Plan shall not give any Key Employee any right to
remain in the employ of, or continue to be retained by, the Company or any
Subsidiary. The Company or, in the case of employment with, or retention by, a
Subsidiary, the Subsidiary, reserves the right to terminate the employment or
retention of any Key Employee at any time, subject to the terms of any
agreement with such Key Employee. The adoption of this Plan shall not be
deemed to give any Key Employee or any other individual any right to be
selected as a Participant, to be granted any Awards hereunder or, if granted
an Award, to receive any additional Awards at any subsequent time.
Section 22. Rights as Stockholder
No Participant shall have any rights as a stockholder as a result of
participation in the Plan until the date of issuance of and only as the holder
of a stock certificate in his name except, in the case of Restricted Stock
Awards, to the extent such rights are granted to the Participant under Section
10(c) hereof. To the extent any person acquires a right to receive payments
from the Company under this Plan, such rights shall be no greater than the
rights of an unsecured creditor of the Company.
Section 23. Responsibility and Indemnification
No member of the Board of Directors or the Committee shall be liable to
the Company, any Participant or any third party for any action or
determination made in good faith with respect to the Plan and Awards
thereunder, or for any matter as to which the Company's certificate of
incorporation or bylaws, or any valid contract between the Company and such
member, limits or negates the liability of Directors. Such members shall be
entitled to indemnification and reimbursement in the manner provided in the
Company's certificate of incorporation and bylaws, in any valid contract
between the Company and such member, and under any directors' and officers'
liability insurance coverage which may be in effect from time to time.
Section 24. Substitution, Extension, Renewal and Regrant of Awards
Awards may be granted under the Plan from time to time in substitution
for stock options and other rights or awards held by employees of
organizations who become or are about to become Key Employees of the Company
or a Subsidiary as the result of a merger or consolidation of the employing
organization with the Company or a Subsidiary, or the acquisition by the
Company or a Subsidiary of the assets of the employing organization, or the
acquisition by the Company or a Subsidiary of equity interests in the
employing organization as the result of which it becomes a Subsidiary. The
Committee may extend or renew outstanding Awards granted under the Plan on
terms not inconsistent with the Plan.
The Committee may accept the surrender or cancellation of outstanding
Awards (to the extent not theretofore exercised, paid or settled) and grant or
award new Awards in substitution therefor, which new Awards may be different
types of Awards than the Awards so surrendered and/or canceled.
Section 25. Amendment
The Committee may suspend, reinstate and terminate the Plan or any
portion thereof at any time. In addition, the Committee may, from time to
time, amend the Plan in any manner, but may not without stockholder approval
adopt any amendment (i) which would (a) materially increase the benefits
accruing to Participants under the Plan, (b) materially increase the number of
shares of Common Stock which may be issued under the Plan (except as specified
in Section 17 or 18), or (c) materially modify the requirements as to
eligibility for participation in the Plan, or (ii) that requires stockholder
approval in order for the Plan to comply with Section 162(m) of the Code.
Notwithstanding the foregoing, the provisions of Section 13 relating to the
eligibility for, and the amount, price and timing of, Awards to Directors
thereunder shall not be amended, nor shall the operation of Section 13 be
suspended or reinstated, more than once every six months other than to conform
with changes in the Code, ERISA, or the rules thereunder.
Section 26. Corporate Changes; Use of Funds
The grant of an Award pursuant to the Plan shall not affect the right or
power of the Company to make adjustments, reclassifications, reorganizations,
or changes of its stock, securities, capital or business structure, or to
merge, consolidate, dissolve, or liquidate, or to sell, lease or transfer all
or any part of its business or assets. The funds received by the Company upon
any exercise or settlement of an Award may be used by the Company for any
corporate purpose or purposes.
Section 27. Governing Law
The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware, except as preempted by applicable Federal law.
Section 28. Interpretation
The Plan is designed and intended to comply with Rule 16b-3 promulgated
under the Exchange Act and, to the extent applicable, with Section 162(m) of
the Code and all provisions hereof shall be construed in a manner to so
comply.
[End of Plan]
ACCEL INTERNATIONAL CORPORATION
475 Metro Place North
Dublin, Ohio 43017
Proxy THIS PROXY IS SOLICITED
Annual Meeting of Stockholders BY THE BOARD OF DIRECTORS
OF THE COMPANY
The undersigned hereby appoints Thomas H. Friedberg and Nicholas Z. Alexander
as Proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote as designated below, all of the shares of ACCEL
International Corporation held of record by the undersigned on April 12, 1996
at the Annual Meeting of Stockholders to be held at the Stouffer Renaissance
Dublin Hotel, Dublin, Ohio at 10:00 A.M. on June 11, 1996, or at any
adjournment thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) to vote for all listed below
Robert Betagole Douglas J. Coats Robert E. Fowler, III
Kermit G. Hicks Milton J. Taylor, Sr. David T. Chase
Raymond H. Deck Thomas H. Friedberg Stephen M. Qua
Paul R. Whitters
(INSTRUCTION: To withhold authority to vote for any individual, write
that nominee's name in the space provided below.)
------------------------------------------------------------------------
(Continued and to be signed, on the other side)
- ------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of the proposed amendment to the
Certificate of Incorporation to increase
the total number of authorized shares of
Common Stock, $.10 par value, from
10,000,000 to 15,000,000. [ ] [ ] [ ]
3. Approval of adoption of 1996 Stock Incentive
Plan. [ ] [ ] [ ]
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE DIRECTOR NOMINEES LISTED ON THE REVERSE SIDE. The
undersigned acknowledges receipt of this Notice of Annual Meeting of
Stockholders to be held on June 11, 1996 and the related Proxy Statement.
Please sign below exactly as name appears. When
shares are held by joint tenants, both should
sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
Dated , 1996
-------------------------------------
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Signature
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Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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