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As filed with the Securities and Exchange Commission on May 28, 1996
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ACCEL INTERNATIONAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 31-0788334
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
NICHOLAS Z. ALEXANDER, Secretary
475 Metro Place North 475 Metro Place North
Dublin, Ohio 43017 Dublin, Ohio 43107
(614) 764-7000 (614) 764-1000
(Address of principal executive offices) (Name and address of agent for service)
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Copy to:
FRED A. SUMMER, ESQ.
Squire, Sanders & Dempsey
41 South High Street
Columbus, Ohio 43215
(614) 365-2700
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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Proposed Proposed maximum
Title of each class of securities to Amount to be maximum offering aggregate offering Amount of
be registered registered price per unit(1) price(1) registration fee
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Common Stock, $.10 Par Value 7,000,000 $2.625 $18,375,000 $6,336.21
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Non-Transferable Subscription
Rights Evidencing Rights to
Purchase Common Stock 7,000,000 (2) (2) (3)
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<FN>
(1) Estimated solely for purpose of calculating the filing fee pursuant to Rule
457(c) under the Securities Act of 1933 (the "Act"), based on the average of the
high and low prices per share on the Nasdaq National Market on May 22, 1996.
(2) No consideration will be received by the Registrant upon distribution of
Rights.
(3) No filing fee is required for the registration of Rights pursuant to Rule
457(g) of the Act.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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ACCEL INTERNATIONAL CORPORATION
CROSS-REFERENCE SHEET
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Item Number
Form S-2
(Reg. S-K Item,
if applicable) Caption or Location in Prospectus
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1(501) Outside front cover page
2(502) Outside front cover page; Inside front cover page; Outside back cover page
3(503) SUMMARY; RISK FACTORS
4(504) USE OF PROCEEDS
5(505) THE RIGHTS OFFERING -- Determination of Subscription Price
6(506) Inapplicable
7(507) Inapplicable
8(508) PLAN OF DISTRIBUTION
9(202) DESCRIPTION OF THE CAPITAL STOCK
10(509) Inapplicable
11(a) INCORPORATION OF CERTAIN INFORMATION BY REFERENCE; RECENT DEVELOPMENTS
11(b) Inapplicable
11(c) Inapplicable
12 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
13(510) Inapplicable
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SUBJECT TO COMPLETION, DATED MAY 28, 1996
PROSPECTUS __ SHARES
ACCEL INTERNATIONAL CORPORATION
[LOGO]
COMMON STOCK
---------------
ACCEL International Corporation (the "Company"), a Delaware
corporation, is offering (the "Rights Offering") to holders of record (the
"Rights Holders") of shares of its Common Stock, par value $.10 per share (the
"Common Stock"), non-transferable subscription rights (the "Rights") to
subscribe for and purchase additional shares of the Common Stock for a price of
$__ per share (the "Subscription Price"). Such Rights Holders will receive one
Right for every share of Common Stock held by them as of the close of business
on __, 1996 (the "Record Date"). Rights Holders may purchase __ share[s] of
Common Stock (the "Underlying Shares") for each Right held upon payment of the
Subscription Price (the "Basic Subscription Privilege"). Each Right also carries
the right to subscribe (the "Oversubscription Privilege") at the Subscription
Price for additional shares of Common Stock that are not otherwise purchased
pursuant to the exercise of Rights up to an amount equal to one-half of the
number of Underlying Shares each Rights Holder is eligible to purchase pursuant
to the Basic Subscription Privilege. If an insufficient number of shares of
Common Stock is available to satisfy fully all elections to exercise the
Oversubscription Privilege, the available shares of Common Stock will be
prorated among Rights Holders who exercised their Oversubscription Privilege
based on the respective number of Underlying Shares purchased by such Rights
Holders pursuant to their Basic Subscription Privilege. See "The Rights
Offering--Subscription Privileges--Oversubscription Privilege." [No fractional
Rights will be issued and no fractional shares of Common Stock will be issued
upon exercise of the Rights.] To the extent that the Oversubscription Privilege
is not exercised in full, the Company may determine to offer the shares of
Common Stock not subscribed for sale to others, including current directors or
stockholders of the Company and their affiliates, employees and independent
agents, either directly or through underwriters or agents (the "Additional
Offering"). See "Plan of Distribution." The Rights will be evidenced by
non-transferable certificates. Once a Rights Holder has exercised any Rights,
such exercise may not be revoked.
The Rights will expire at 5:00 p.m., Columbus, Ohio time, on __, 1996,
unless extended (as it may be extended, the "Expiration Date"), provided that
the Expiration Date shall in no event be later than __, 1996. Rights Holders who
do not exercise their Rights will experience a decrease in their proportionate
interest in the equity ownership and voting power of the Company. See "Risk
Factors--Decrease in Proportionate Equity Ownership if Rights Not Exercised."
The Common Stock is traded on the Nasdaq National Market under the
symbol "ACLE." On May 23, 1996, the last reported sale price of the Common Stock
was $2.50.
After the Expiration Date, the Rights will no longer be exercisable and
will have no value. Since the Rights are non-transferable, the Rights may not be
sold and there will be no trading market for the Rights.
POTENTIAL PURCHASERS OF THE COMMON STOCK PURSUANT TO AN EXERCISE OF THE
RIGHTS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER "RISK FACTORS"
BEGINNING ON PAGE __.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Price to Underwriting Proceeds to
Public Discount Company (1)
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Per Share $ None $
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Total(2) $ None $
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(1) Before deducting expenses payable by the Company estimated to be $__ .
(2) The Total amount assumes the purchase of all __ shares of Common Stock offered hereby.
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The date of this Prospectus is __ , 1996
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-2 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission") with respect to the Rights and the shares of Common Stock offered
pursuant to this Prospectus. For further information, reference is made to the
Registration Statement and amendments thereof and exhibits thereto.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information are
available for inspection without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549-1004, as well as the Regional Offices of the Commission at 7 World Trade
Center, 13th Floor, New York, New York 10048, and Northwestern Atrium Center,
500 West Madison Street, 14th Floor, Chicago, Illinois 60661- 2511. Copies of
the Registration Statement and amendments thereof and the exhibits thereto may
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File
No. 0-8162) are incorporated in this Prospectus by reference:
(1) Annual Report on Form 10-K for the year ended December 31, 1995 (a
copy of which accompanies this Prospectus).
(2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996
(a copy of which accompanies this Prospectus).
Any statement contained in a document which is incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including
beneficial owners, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the foregoing
documents, other than the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to ACCEL International Corporation, 475 Metro Place North, Dublin, Ohio
43017, Attention: Nicholas Z. Alexander, Senior Vice President, (614) 764-7000.
2
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the information
appearing elsewhere in this Prospectus and in the documents incorporated in this
Prospectus by reference.
The Company
The Company is an insurance holding company incorporated in Delaware in
June 1978 as the successor to an Ohio corporation, formerly Acceleration
Corporation, organized in 1969. The Company, through its subsidiaries, is
engaged in the sale and underwriting of credit life and credit accident and
health insurance, extended service contracts and other specialty casualty
products. The credit insurance and extended service contract products are
offered to consumers principally through automobile dealers, financial
institutions and other business entities. For more detailed information
concerning the business of the Company and its financial statements see the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 (the
"10-K") and Quarterly Report on Form 10-Q for the quarter ended March 31, 1996
(the "10-Q"), copies of which accompany this Prospectus and which are
incorporated herein by reference.
The Company's home office is located at 475 Metro Place North, Dublin,
Ohio 43017 and its telephone number is (614) 764-7000.
Risk Factors
There are certain risks in connection with the Rights Offering that
should be considered by Rights Holders prior to determining whether to exercise
the Rights and purchase the Common Stock. The following is a summary of certain
of these risks: (i) The Company has experienced net losses since 1992 and may
incur net losses in the future; (ii) the Company's gross premiums derived from
its credit insurance business are substantially dependent upon consumer credit
transactions involving the purchase of automobiles, (iii) the Company does not
expect to pay dividends in the foreseeable future and is limited under a note
purchase agreement from doing so; (iv) Chase Insurance Holdings Corporation
("CIHC"), a corporation which is beneficially owned by David T. Chase, a
director of the Company, his wife, his children and various family trusts
(collectively, the "Chase Stockholders"), beneficially owns, directly or
indirectly, approximately 30.3% of the outstanding shares of Common Stock of the
Company and the Chase Stockholders and certain affiliates of CIHC beneficially
own an additional 8.6% of the Common Stock of the Company. It is possible that
the Rights Offering will result in CIHC, either alone or together with the Chase
Stockholders and such affiliates, beneficially owning over 50% of the Common
Stock and having actual control over the Company. Mr. Chase disclaims beneficial
ownership of the shares of Common Stock owned by CIHC, its affiliates and the
Chase Stockholders other than Mr. Chase; and (v) there can be no assurance that
the market price of the Common Stock will not decline.
The Rights Offering
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Rights.............................................. Each record holder of Common Stock at the close of business
on __, 1996 (the "Record Date") is receiving one non-
transferable subscription right ("Right") for each share of
Common Stock held of record on the Record Date. Each
Right will entitle the holder thereof ("Rights Holder") to
purchase from the Company __ share[s] of Common Stock (the
"Underlying Shares") for a price of $__ per share (the
"Subscription Price"). An aggregate of up to __ shares of
Common Stock will be sold in the Rights Offering upon
exercise of the Rights. The Rights will be evidenced by non-
transferable certificates (the "Subscription Rights Certificates").
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Basic Subscription Privilege........................ Rights Holders are entitled to purchase, at the Subscription
Price, __ Underlying Share[s] for each Right held (the "Basic
Subscription Privilege"). [No fractional Rights will be issued
and no fractional shares of common stock will be issued upon
exercise of the Rights.] See "The Rights Offering --
Subscription Privileges -- Basic Subscription Privilege."
Oversubscription Privilege.......................... Each Rights Holder who exercises in full his or her Basic
Subscription Privilege may also subscribe at the Subscription
Price for additional Underlying Shares available as a result of
unexercised Rights, if any, up to an amount equal to one-half
of the total Underlying Shares purchased by such Rights
Holder pursuant to the Basic Subscription Privilege (the
"Oversubscription Privilege"). If an insufficient number of
Underlying Shares is available to satisfy fully the elections to
exercise the Oversubscription Privilege, the available
Underlying Shares will be prorated among Rights Holders who
exercise their Oversubscription Privilege based on the
respective number of Underlying Shares purchased by such
Rights Holders pursuant to the Basic Subscription Privilege.
To the extent that the Oversubscription Privilege is not
exercised in full, the Company may determine to offer any or
all of the shares of Common Stock not subscribed for sale to
others, including current directors or stockholders of the
Company or their affiliates, employees and independent agents,
either directly or through underwriters or agents. See "The
Rights Offering -- Subscription Privileges -- Oversubscription
Privilege" and "Plan of Distribution."
Subscription Price.................................. $__ per Underlying Share, payable in cash. See "The Rights
Offering -- Exercise of Rights" and "The Rights Offering --
Determination of Subscription Price."
Shares of Common Stock Outstanding
After the Rights Offering........................... As of the Record Date there were 4,456,432 Shares of
Common Stock outstanding. An aggregate of up to __ shares
of Common Stock will be sold in the Rights Offering if all of
the Rights are exercised. If all Rights are exercised, an
aggregate of __ shares of Common Stock will be outstanding
upon completion of the Rights Offering.
Transferability of Rights........................... The Rights, including the Basic Subscription Privilege and the
Over Subscription Privilege, are not transferable.
Expiration Date..................................... 5:00 p.m., Columbus, Ohio time, __, 1996, or such later date
and time to which the Rights Offering may be extended (the
"Expiration Date"). See "The Rights Offering -- Expiration
Date." Rights not exercised prior to the Expiration Date will
expire and become worthless.
Procedure for Exercising Rights..................... The Basic Subscription Privilege and Oversubscription
Privilege may be exercised by properly completing and signing
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the Subscription Certificate evidencing the Rights (a
"Subscription Certificate") and forwarding such Subscription
Certificate (or following the Guaranteed Delivery
Procedures), with payment of the Subscription Price for each
Underlying Share subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege,
to the Subscription Agent on or prior to the Expiration
Date. Any Rights Holder subscribing for an aggregate of more
than [5,000] Underlying Shares pursuant to the
Oversubscription Privilege prior to the Expiration Date
shall not be required to deliver payment for such number of
Underlying Shares in excess of [5,000] until the Expiration
Date. The Company, in its sole discretion, may determine to
waive payment for such number of Underlying Shares in excess
of [5,000] subscribed for pursuant to the Oversubscription
Privilege until after the Expiration Date and after all
prorations and adjustments contemplated by the terms of the
Rights Offering have been effected. If Subscription Rights
are sent by mail, Rights Holders are urged to use insured,
registered mail. No interest will be paid on funds delivered
in payment of the Subscription Price. See "The Rights
Offering -- Exercise of Rights."
No Revocation of Exercise........................... Once a Rights Holder has exercised the Basic Subscription
Privilege or the Oversubscription Privilege, such exercise may
not be revoked.
Persons Holding Common Stock or Wishing
to Exercise Rights, Through Others.................. Persons holding shares of Common Stock beneficially, and
receiving the Rights issuable with respect thereto, through a
broker, dealer, commercial bank, trust company or other
nominee, as well as persons holding certificates for Common
Stock directly who would prefer to have such institutions effect
transactions relating to the Rights on their behalf, should
contact the appropriate institution or nominee and request it to
effect such transactions for them. See "The Rights Offering --
Exercise of Rights".
Issuance of Common Stock............................ Certificates representing shares of Common Stock purchased
pursuant to the exercise of the Basic Subscription Privilege
will be delivered to subscribers as soon as practicable after the
corresponding Rights have been validly exercised and payment
therefor has been received by the Company. Certificates of
Common Stock purchased pursuant to the Oversubscription
Privilege will be delivered to subscribers as soon as practicable
after all prorations and adjustments contemplated by the terms
of the Rights Offering have been effected. See "The Rights
Offering -- Subscription Privileges."
Use of Proceeds..................................... The Company intends to use the net cash proceeds from the
Rights Offering for general corporate purposes, including
investments in, and advances to, its insurance company
subsidiaries and the redemption of any Subordinated Notes
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which are not tendered in the Rights Offering. Since the
Company has decided to permit holders of its outstanding $__
principal amount of 10.125% Subordinated Notes due July 2000
(the "Subordinated Notes") to tender their respective
Subordinated Notes for cancellation as consideration (in
lieu of cash) for the purchase of shares of Common Stock,
the net cash proceeds of the Rights Offering assuming all
Subordinated Notes held by stockholders are tendered and all
of the Rights are exercised in full are estimated to be $__.
CIHC and one of its affiliates collectively hold $5,481,046
principal amount of Subordinated Notes as of March 31, 1996.
CIHC has indicated that it and such affiliate intend to
tender all of the Subordinated Notes held by them.
Subordinated Notes will be accepted by the Company as
consideration in an amount equal to the full principal
amount of such Subordinated Notes.
Subscription Agent.................................. National City Bank, Cleveland, Ohio. The Subscription
Agent's telephone number is (800) 622-6757.
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RISK FACTORS
The following risk factors, in addition to other information in this
Prospectus and in the documents incorporated by reference, should be considered
carefully by potential purchasers in evaluating the Company, its business and an
investment in shares of the Common Stock offered hereby.
Continuing Net Losses
The Company has experienced net losses since 1992 and may incur net
losses in the future. The Company incurred net losses of $1,460,000, $5,238,000,
$5,281,000 and $22,124,000 for the years ended December 31, 1995, 1994, 1993 and
1992, respectively. There can be no assurance that the Company will not
experience net losses in the future.
Dependence Upon Automobile Purchases
The Company sells credit insurance and extended warranty contracts
primarily in connection with consumer credit transactions involving automobile
purchases. Automobile purchases have been and will continue to be affected,
directly and indirectly, by automobile prices, interest rates, the availability
of consumer credit and general economic conditions, all of which are beyond the
Company's control.
Effect of Downgrading of Insurance Ratings
Life Insurance
The Company's life insurance subsidiary is rated C+ (Fair) by Best
Company ("Best"). Best downgraded the life insurance subsidiary's rating from A-
to C+ in 1991. The Best rating is based on factors relevant to policyholders and
are not directed toward the protection of stockholders. The Best rating is based
upon its current opinion of the life insurance subsidiary's lack of consistently
profitable operating results in recent years as well as its concern regarding
the weak financial results, high debt level and poor liquidity position of the
Company. The weaknesses noted by Best are partially offset by the general
profitability of the life insurance subsidiary's core credit life insurance
operations and the high quality of its investment portfolio. Although the
Company has not experienced a material reduction in the level of its sales of
credit insurance products through automobile dealers following Best's
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downgrading, the insurance company subsidiary's current rating adversely affects
its ability to market those products through financial institutions.
Property and Casualty Insurance
The Company's property and casualty insurance company subsidiary is
rated B (Adequate) by Best. Best downgraded the property and casualty insurance
company subsidiary's rating from A to B in 1991. The Best rating reflects its
analysis of the property and casualty insurance company subsidiary's continued
operating losses and corresponding decline in surplus and ongoing reserve
strengthening for the lines of business in runoff. The property and casualty
insurance company subsidiary's current rating may have an adverse affect on its
ability to market its products through certain quality agents and brokers.
Uncertain Profitability of New Programs
The property and casualty insurance subsidiary has recently introduced
two new insurance programs. See "Recent Developments." Because the property and
casualty insurance company subsidiary has had little or no experience in writing
coverage for the new insurance programs, there can be no assurance that either
of such programs will be profitable. The Company has, however, employed
individuals to develop these programs who have extensive experience.
Limitations on Payment of Dividends
The Company has not paid dividends on the Common Stock since 1991 due
to the Company's lack of profitability in recent years and does not expect to
pay dividends until the Company has returned to a level of profitability which
will sustain the payment of cash dividends. In addition, the Company's
outstanding 9.50% Notes due April 1, 2001 (the "Senior Notes"), were issued
pursuant to a note purchase agreement which limits the Company's ability to pay
dividends to 50% of net income computed on a cumulative basis from January 1,
1996 to and including the date of the dividend payment. Even if the Company does
have net income in the future, its principal source of cash flow with which to
pay dividends will be dependent upon the ability of its insurance company
subsidiaries to pay dividends to the Company. Ohio domiciled insurance companies
are subject to laws and regulations which, among other things, limit the amount
of dividends and other payments that can be made by such insurance companies
without prior regulatory approval. See "Price Range of Common Stock and Dividend
Policy" included herein and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Consolidated Financial Statements and
notes thereto included in the 10-K which accompanies this Prospectus.
Decrease in Proportionate Equity Ownership if Rights Not Exercised
Rights Holders who do not exercise their Rights will experience a
decrease in their proportionate interest in the equity ownership and voting
power of the Company. In addition, CIHC beneficially owns, directly or
indirectly, approximately 30.3% of the outstanding shares of Common Stock of the
Company and the Chase Stockholders and certain affiliates of CIHC beneficially
own an additional 8.6% of the Common Stock of the Company. It is possible that
if a sufficient number of Rights Holders do not exercise their rights, the
Rights Offering will result in CIHC, either alone or together with the Chase
Stockholders and such affiliates, beneficially owning over 50% of the Common
Stock and having actual control over the Company. Mr. Chase disclaims beneficial
ownership of the shares of Common Stock owned by CIHC, its affiliates and the
Chase Stockholders other than Mr. Chase.
Potential Conflicts of Interest
CIHC is a principal stockholder of the Company which in turn is
beneficially owned by Mr. Chase and the other Chase Stockholders. CIHC and one
of its affiliates collectively hold $5,481,046 principal amount of
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Subordinated Notes. The Company has decided to permit holders of Subordinated
Notes to tender their respective Subordinated Notes for cancellation as
consideration (in lieu of cash) for the purchase of the Common Stock and
anticipates that CIHC will so tender its Subordinated Notes.
Nature of the Rights Offering
The Company does not have a commitment for the purchase of shares of
Common Stock which may remain unsold at the expiration of the Rights Offering.
Accordingly, there can be no assurance as to the number of shares of Common
Stock which will be sold by the Company in the Rights Offering or in the
Additional Offering.
Market Price Risks Associated With the Common Stock
There can be no assurance that the market price of the Common Stock
will not decline during the period the Rights are outstanding or that, following
the issuance of the Rights and the sale of the Underlying Shares upon exercise
of the Rights, a subscribing Rights Holder will be able to sell shares purchased
in the Rights Offering at a price equal to or greater than the Subscription
Price. Once a Rights Holder has exercised the Basic Subscription Privilege or
the Oversubscription Privilege, such exercise may not be revoked. See "The
Rights Offering -- No Revocation." Moreover, until certificates are delivered,
subscribing Rights Holders may not be able to sell the shares of Common Stock
that they have purchased in the Rights Offering.
USE OF PROCEEDS
The Company intends to use the net cash proceeds from the Rights
Offering for general corporate purposes, including investments in, and advances
to, its insurance company subsidiaries and the redemption of any Subordinated
Notes which are not tendered in the Rights Offering. Since the Company has
decided to permit holders of its outstanding $6,182,446 principal amount of
10.125% Subordinated Notes due July 2000 to tender their respective
Subordinated Notes for cancellation as consideration (in lieu of cash) for the
purchase of shares of Common Stock, the net cash proceeds of the Rights
Offering, assuming all Subordinated Notes held by stockholders are tendered and
all of the Rights are exercised in full, are estimated to be $__. The
Subordinated Notes bear interest at 10.125% per annum and are scheduled to
mature in July 2000. No principal payments are required to be paid on the
Subordinated Notes prior to maturity but the Subordinated Notes may be prepaid
at any time without penalty.
RECENT DEVELOPMENTS
The property and casualty insurance subsidiary has recently introduced
two new insurance programs, one for truckers and charter buses and the other for
automobile dealers. The truckers and charter bus program is a limited coverage
program while the automobile dealers program is a multi-peril package program
which provides property, liability and related coverages. During the first
quarter of 1996, the trucking and charter bus program produced approximately $5
million of annualized premiums. The Company anticipates that the automobile
dealer program will begin production during the second quarter of 1996.
On May 16, 1996, the Company publicly announced that it had reached an
agreement to settle its $5.16 million judgment against Homeowners Marketing
Services, Inc. ("HMS") for $4.4 million in cash. Homeowners Group, Inc.
("HOMG"), the parent of HMS, has entered into a definitive merger agreement with
Cross Country Group, Inc. which has agreed to pay the amount of the settlement
at the time of the closing of its acquisition of HOMG. HOMG announced that the
closing of the acquisition, which is subject to regulatory and stockholder
approval, is anticipated in late September. When and if the amount of the
settlement is paid, the Company intends to use such amount to increase the
capital of the two insurance company subsidiaries to enable them to develop
existing and new insurance programs.
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The Company has had an arrangement with a financial institution
pursuant to which it ceded credit life and credit accident and health insurance
originated by the financial institution to a reinsurance company owned by the
financial institution. During the most recent fiscal year, the Company wrote
$1,486,000 in net premiums for which it received a ceding commission. The
Company has received a notice from the financial institution that effective
June 1, 1996, the arrangement will be terminated. Although the Company does
have the right to recapture the ceded insurance and retain 100% of the profits
and losses thereof during runoff, the Company's premiums written in the
future will be reduced unless it is able to replace the insurance originated by
the financial institution with new business.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is traded on the Nasdaq National Market under the
symbol "ACLE." The following table sets forth the high and low sales prices of
the Common Stock for each of the periods indicated through __, 1996 as reported
by the Nasdaq National Market. The prices have been rounded up to the nearest
eighth and do not include retail markups, markdowns or commissions.
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High Low
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<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994
First Quarter.............................................................. $6.000 $3.750
Second Quarter............................................................. 5.000 3.000
Third Quarter.............................................................. 3.750 2.250
Fourth Quarter............................................................. 3.125 1.750
YEAR ENDED DECEMBER 31, 1995
First Quarter.............................................................. 2.875 1.750
Second Quarter............................................................. 3.125 2.000
Third Quarter.............................................................. 4.875 2.750
Fourth Quarter............................................................. 3.875 2.375
YEAR ENDING DECEMBER 31, 1996
First Quarter.............................................................. 3.375 2.875
Second Quarter (through __)................................................
</TABLE>
Prior to 1992 the Company had historically paid stock or cash
dividends. On June 2, 1992, the Board of Directors of the Company decided to
suspend payment of cash dividends on the Common Stock until the Company returned
to a level of profitability which will sustain the payment of cash dividends.
Moreover, the note agreement pursuant to which the Company's $16,500,000
principal amount of Senior Notes were issued restricts the payment of dividends
on the Common Stock to an amount equal to 50% of net income computed on a
cumulative basis from January 1, 1996 to and including the date of the dividend
payment. Accordingly, there is presently no amount available for paying
dividends after giving effect to this restriction. Even if the Company does have
net income in the future, its principal source of cash flow with which to pay
dividends will be dependent upon the ability of its insurance company
subsidiaries to pay dividends to the Company. Ohio domiciled insurance companies
are subject to laws and regulations which, among other things, limit the amount
of dividends and other payments than can be made by such insurance companies
without prior regulatory approval. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Consolidated Financial
Statements and notes thereto included in the 10-K which accompanies this
Prospectus.
THE RIGHTS OFFERING
The Rights
9
<PAGE> 12
The Company is hereby issuing Rights to each holder of Common Stock as
of the close of business on __, 1996 (the "Record Date") at no charge to such
holders. The Company will issue one Right for each share of Common Stock held on
the Record Date. Each Right will entitle the holder thereof (the "Rights
Holder") to subscribe for __ share[s] of Common Stock. The Rights will be
evidenced by non-transferable Subscription Rights Certificates which are being
distributed to each Rights Holder contemporaneously with the delivery of this
Prospectus. The issuance by the Company of shares of Common Stock pursuant to
the Rights Offering is not conditioned upon the subscription of any minimum
number of shares of Common Stock by the Rights Holders. The opportunity to
exercise the Oversubscription Privilege is available to all Rights Holders on
the same terms. [No fractional Rights will be issued and no fractional shares of
Common Stock will be issued upon exercise of the Rights.] See "The Rights
Offering -- Subscription Privileges -- Oversubscription Privilege."
BEFORE EXERCISING ANY RIGHTS, POTENTIAL INVESTORS ARE URGED TO READ CAREFULLY
THE INFORMATION SET FORTH UNDER "RISK FACTORS."
Expiration Date
The Rights will expire at 5:00 p.m., Columbus, Ohio time, on __, 1996,
subject to extension at the discretion of the Company (as it may be extended,
the "Expiration Date"), provided that the Expiration Date shall in no event be
later than __, 1996. After the Expiration Date, unexercised Rights will be null
and void. The Company will not be obligated to honor any purported exercise of
Rights received by the Subscription Agent after 5:00 p.m., Columbus, Ohio time,
on the Expiration Date, regardless of when the documents relating to such
exercise were sent, except pursuant to the Guaranteed Delivery Procedures
described below. The Company may extend the Expiration Date by giving oral or
written notice to the Subscription Agent on or before the Expiration Date,
followed by a press release no later than 9:00 a.m., Columbus, Ohio time on the
next business day after the previously scheduled Expiration Date.
Subscription Privileges
Basic Subscription Privilege. Each Right will entitle the Rights Holder
to receive, upon payment of the Subscription Price, __ share[s] of Common Stock
(the "Basic Subscription Privilege"). Each Rights Holder is entitled to
subscribe for all, or any portion, of such Right Holder's Rights [subject to the
elimination of fractional shares]. Certificates representing Underlying Shares
purchased pursuant to the Basic Subscription Privilege will be delivered to
subscribers as soon as practicable after the corresponding Rights have been
validly exercised and full payment for shares has been received and cleared.
Oversubscription Privilege. Subject to the allocation described below,
each Right also carries the right to subscribe at the Subscription Price for
additional shares of Common Stock (the "Oversubscription Privilege") up to an
amount equal to one-half of the Underlying Shares purchased by each Rights
Holder pursuant to the Basic Subscription Privilege. All beneficial owners of
Rights who exercise the Basic Subscription Privilege in full will be entitled to
exercise the Oversubscription Privilege.
Underlying Shares will be available for purchase pursuant to the
Oversubscription Privilege only to the extent that any Underlying Shares are not
subscribed for through the Basic Subscription Privilege. If the Underlying
Shares not subscribed for through the Basic Subscription Privilege (the "Excess
Shares") are not sufficient to satisfy all subscriptions pursuant to the
Oversubscription Privilege, the Excess Shares will be allocated pro rata
(subject to the elimination of fractional shares) among those Rights Holders
exercising the Oversubscription Privilege, in proportion, not to the number of
shares requested pursuant to the Oversubscription Privilege, but to the number
of shares each beneficial owner of Rights exercising the Oversubscription
Privilege has purchased pursuant to the Basic Subscription Privilege; provided,
however, that if such pro rata allocation results in any Rights Holder being
allocated a greater number of Excess Shares than such Rights Holder subscribed
for pursuant to the exercise of such Rights Holder's Oversubscription Privilege,
then such Rights Holder will be allocated only such number of Excess Shares
10
<PAGE> 13
as such Rights Holder subscribed for and the remaining Excess Shares will be
allocated among all other Rights Holders exercising the Oversubscription
Privilege. Certificates representing shares of Common Stock purchased pursuant
to the Oversubscription Privilege will be delivered to subscribers as soon as
practicable after the Expiration Date and after all prorations and adjustments
contemplated by the terms of the Rights Offering have been effected.
Banks, brokers and other nominee holders of Rights who exercise the
Basic Subscription Privilege and the Oversubscription Privilege on behalf of
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company, in connection with the exercise of the Oversubscription
Privilege, as to the aggregate number of Rights that have been exercised and the
number of Underlying Shares that are being subscribed for pursuant to the
Oversubscription Privilege by each beneficial owner of Rights on whose behalf
such nominee holder is acting.
Exercise of Rights
Rights may be exercised by delivering to National City Bank (the
"Subscription Agent"), at or prior to 5:00 p.m., Columbus, Ohio time, on the
Expiration Date, the properly completed and executed Subscription Certificate
evidencing such Rights with any signatures required to be guaranteed so
guaranteed, together with payment in full of the Subscription Price for each
Underlying Share subscribed for pursuant to the Basic Subscription Privilege and
the Oversubscription Privilege. Any Rights Holder subscribing for an aggregate
of more than [5,000] Underlying Shares pursuant to the Oversubscription
Privilege prior to the Expiration Date shall not be required to deliver payment
for such number of Underlying Shares in excess of [5,000] until the Expiration
Date. The Company, at its sole discretion, may determine to waive payment for
such excess number of Underlying Shares until after the Expiration Date and
after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected. All payments must be by (i) check or bank draft
(cashier's check) drawn upon a U.S. bank or postal or express money order
payable to National City Bank, as Subscription Agent, or (ii) by wire transfer
of same-day funds to an account designated by the Subscription Agent, in which
case please contact the Subscription Agent at (800) 622-6757 for information
concerning such account. Payments will be deemed to have been received by the
Subscription Agent only upon (i) clearance of any uncertified check, (ii)
collection by the Subscription Agent of any certified check or bank draft upon a
U.S. bank or of any postal or express money order or (iii) receipt of good funds
in the account designated by the Subscription Agent. If paying by uncertified
personal check, please note that the funds paid thereby may take up to ten
business days to clear. Accordingly, Rights Holders who wish to pay the
Subscription Price by means of uncertified personal check are urged to make
payment sufficiently in advance of the Expiration Date to ensure that such
payment is received and clears by such date and are urged to consider payment by
means of certified or cashier's check, money order or wire transfer of funds.
The address to which the Subscription Certificates and payment of the
Subscription Price should be delivered is:
By Mail:
National City Bank, Subscription Agent
Corporate Trust Operations
P.O. Box 94720
Cleveland, Ohio 44101-4720
By Hand or Overnight Courier:
National City Bank, Subscription Agent
Corporate Trust Operations
3rd Floor -- North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
11
<PAGE> 14
If a Rights Holder wishes to exercise Rights, but time will not permit
such Rights Holder to cause the Subscription Certificate or Subscription
Certificates evidencing such Rights to reach the Subscription Agent on or prior
to the Expiration Date, such Rights may nevertheless be exercised if all of the
following conditions (the "Guaranteed Delivery Procedures") are met:
(i) such holder has caused payment in full of the Subscription
Price for each Underlying Share being subscribed for pursuant to the Basic
Subscription Privilege and the Oversubscription Privilege to be received (in the
manner set forth above) by the Subscription Agent on or prior to the Expiration
Date;
(ii) the Subscription Agent receives, on or prior to the
Expiration Date, a guarantee notice ("Notice of Guaranteed Delivery"),
substantially in the form provided with the instructions (the "Instructions")
distributed with the Subscription Certificates, from a member firm of a
registered national securities exchange or a member of the National Association
of Securities Dealers, Inc. ("NASD"), or from a commercial bank or trust company
having an office or correspondent in the United States or from a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program, pursuant to Rule 17Ad-15 of the
Exchange Act (each, an "Eligible Institution"), stating the name of the
exercising Rights Holder, the number of Rights represented by the Subscription
Certificate or Subscription Certificates held by such exercising Rights Holder,
the number of Underlying Shares being subscribed for pursuant to the Basic
Subscription Privilege and the number of Underlying Shares, if any, being
subscribed for pursuant to the Oversubscription Privilege, and guaranteeing the
delivery to the Subscription Agent of any Subscription Certificate evidencing
such Rights within five business days following the Expiration Date; and
(iii) the properly completed Subscription Certificate
evidencing the Rights being exercised, with any signatures required to be
guaranteed so guaranteed, is received by the Subscription Agent within five
business days following the Expiration Date. The Notice of Guaranteed Delivery
may be delivered to the Subscription Agent in the same manner as Subscription
Certificates at the address set forth above, or may be transmitted to the
Subscription Agent by facsimile transmission (telecopy no. (216) 476-8367 ).
Additional copies of the form of Notice of Guaranteed Delivery are available
upon request from the Subscription Agent.
Funds received in payment of the Subscription Price for Excess Shares
subscribed for pursuant to the Oversubscription Privilege will be held in a
segregated account pending issuance of such Excess Shares. If a Rights Holder
exercising the Oversubscription Privilege is allocated less than all of the
shares of Common Stock which such Rights Holder subscribed for pursuant to the
Oversubscription Privilege, the excess funds paid by such Rights Holder in
respect of the Subscription Price for shares not issued shall be returned by
mail without interest or deduction as soon as practicable after the Expiration
Date and after all prorations and adjustments contemplated by the terms of the
Rights Offering have been effected.
Unless a Subscription Certificate (i) provides that the shares of
Common Stock to be issued pursuant to the exercise of Rights represented thereby
are to be issued in the name of the Rights Holder and/or are to be delivered to
the Rights Holder or (ii) is submitted for the account of an Eligible
Institution, signatures on such Subscription Certificate must be guaranteed by
an Eligible Institution or other eligible guarantor institution which is a
member of or a participant in a medallion guarantee program acceptable to the
Subscription Agent.
Rights Holders who hold shares of Common Stock for the account of others,
such as brokers, trustees or depositories for securities, should notify the
respective beneficial owners of such shares as soon as possible to ascertain
such beneficial owners' intentions and to obtain instructions with respect to
the Rights. If the beneficial owner so instructs, the nominee holder should
complete Subscription Certificates and submit them to the Subscription Agent
with the proper payment. In addition, beneficial owners of Common Stock or
Rights held through such a nominee holder should contact the nominee holder and
request the nominee holder to act in accordance with such beneficial owner's
instructions. If a beneficial owner wishes to obtain a separate Subscription
Right Certificate, such
12
<PAGE> 15
beneficial owner should contact the nominee holder as soon as possible and
request that a separate Subscription Right Certificate be issued. A nominee
holder may request any Subscription Right Certificate held by it to be split
into such smaller denominations as it wishes, provided that the Subscription
Right Certificate is received by the Subscription Agent, properly endorsed, no
later than the Expiration Date.
The instructions accompanying the Subscription Certificates should be
read carefully and followed in detail. DO NOT SEND SUBSCRIPTION CERTIFICATES TO
THE COMPANY.
THE METHOD OF DELIVERY OF SUBSCRIPTION CERTIFICATES AND PAYMENT OF THE
SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND RISK OF
THE RIGHTS HOLDERS, BUT IF SENT BY MAIL, IT IS RECOMMENDED THAT SUCH
CERTIFICATES AND PAYMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH
RETURN RECEIPT REQUESTED, AND THAT A SUFFICIENT NUMBER OF DAYS BE ALLOWED TO
ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO 5:00
P.M., COLUMBUS, OHIO TIME, ON THE EXPIRATION DATE. BECAUSE UNCERTIFIED PERSONAL
CHECKS MAY TAKE UP TO TEN BUSINESS DAYS TO CLEAR, YOU ARE STRONGLY URGED TO PAY,
OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY ORDER OR
WIRE TRANSFER OF FUNDS.
All questions concerning the timeliness, validity, form and eligibility
of any exercise of Rights will be determined by the Company, whose
determinations will be final and binding. The Company in its sole discretion may
waive any defect or irregularity, or permit a defect or irregularity to be
corrected within such time as it may determine, or reject the purported exercise
of any Right. Subscriptions will not be deemed to have been received or accepted
until all irregularities have been waived or cured within such time as the
Company determines in its sole discretion. Neither the Company nor the
Subscription Agent will be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Certificates or
incur any liability for failure to give such notification.
Any questions or requests for assistance concerning the method of
exercising Rights or requests for additional copies of this Prospectus, the Form
10-K, the Form 10-Q, the Instructions or the Notice of Guaranteed Delivery
should be directed to the Subscription Agent, at its address set forth under
"Exercise of Rights", above (telephone: (800) 622-6757).
No Revocation
ONCE A RIGHTS HOLDER HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE
AND/OR THE OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED.
Non-Transferability of Rights
The Rights are not transferable and will not be traded on any
securities exchange or quoted on any inter-dealer quotation system. Rights may
only be exercised or permitted to expire. Rights Holders who determine not to
exercise their Rights may not transfer their rights and, at the Expiration Date,
Rights which have not been exercised will expire and be null and void and have
no value, provided that Rights may be transferred by operation of law in the
case of death, dissolution, liquidation or bankruptcy of the Rights Holder, or
pursuant to an order of an appropriate court. A Rights Holder may, however,
elect to have the Underlying Shares registered in the name of, and/or delivered
to, a person other than the Rights Holder provided that the signature on the
related Subscription Certificate is guaranteed by an Eligible Institution or
other eligible guarantor institution as more fully described under "-- Exercise
of Rights", above, and in the accompanying Subscription Certificate and
Instructions.
Tender of Subordinated Notes in Lieu of Cash
13
<PAGE> 16
The Company has decided to permit holders of Subordinated Notes to
tender their respective Subordinated Notes to the Company for cancellation as
consideration (in lieu of cash) for the purchase of shares of Common Stock.
Upon receipt of such Subordinated Notes, the Company will direct the
Subscription Agent to accept such Subordinated Notes as consideration for the
issuance of the related Underlying Shares. See "Use of Proceeds."
Determination of Subscription Price
The Subscription Price was determined by the Company. In making this
determination, the material factors considered by the Company were the amount of
proceeds that the Company desires to raise, the average market price of the
Common Stock, the pro rata nature of the offering and pricing policies customary
for transactions of this type. The Subscription Price should not be considered
an indication of the actual value of the Company or the Common Stock.
Foreign and Certain Other Stockholders
Subscription Certificates will not be mailed to Rights Holders whose
addresses are outside the United States or who have an APO or FPO address, but
will be held by the Subscription Agent for their account. To exercise such
Rights, such a Rights Holder must notify the Subscription Agent, and must
establish to the satisfaction of the Subscription Agent and the Company that
such exercise is permitted under applicable law. If the procedures set forth in
the preceding sentence are not followed prior to the Expiration Date, the Rights
will expire.
Other Matters
The Rights Offering is not being made in any state or other
jurisdiction in which it is unlawful to do so, nor is the Company selling or
accepting any offers to purchase any shares of Common Stock from Rights Holders
who are residents of any such state or other jurisdiction. The Company may delay
the commencement of the Rights Offering in certain states or other
jurisdictions, or change the terms of the Rights Offering, in order to comply
with the securities law requirements of such states or other jurisdictions. It
is not anticipated that there will be any changes in the terms of the Rights
Offering. If any such change is made that is material and has an adverse effect
on any Rights Holder that has previously exercised Rights, such Rights Holder
will be provided the opportunity to revoke such exercise. The Company, if it so
determines in its sole discretion, may decline to make modifications to the
terms of the Rights Offering requested by certain states or other jurisdictions,
in which event Rights Holders resident in those states or jurisdictions will not
be eligible to participate in the Rights Offering.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income
tax considerations applicable to U.S. Rights Holders who hold Common Stock as a
capital asset and who receive Rights in respect of such Common Stock in the
initial issuance of the Rights (the "Issuance"). This summary is based upon
laws, regulations, rulings and decisions currently in effect. This summary does
not discuss all aspects of federal income taxation that may be relevant to a
particular investor or to certain types of investors subject to special
treatment under the federal income tax laws (for example, banks, dealers in
securities, life insurance companies, tax exempt organizations and foreign
taxpayers), nor does it discuss any aspect of state, local or foreign tax laws.
Issuance of Rights
Holders of Common Stock will not recognize taxable income in connection
with the receipt of Rights.
Basis and Holding Period of the Rights
14
<PAGE> 17
Except as provided in the following sentence, the basis of the Rights
received by a stockholder as a distribution with respect to such stockholder's
Common Stock will be zero. If either (i) the fair market value of the Rights on
the date of Issuance is 15% or more of the fair market value (on the date of
Issuance) of the Common Stock with respect to which they are received or (ii)
the stockholder elects, in his or her federal income tax return for the taxable
year in which the Rights are received, to allocate part of the basis of such
Common Stock to the Rights, then upon exercise of the Rights, the stockholder's
basis in such Common Stock will be allocated between the Common Stock and the
Rights in proportion to the fair market values of each on the date of Issuance.
The holding period of a stockholder with respect to the Rights received as a
distribution on such stockholder's Common Stock will include the stockholder's
holding period for the Common Stock with respect to which the Rights were
issued.
Lapse of the Rights
Rights Holders who allow the Rights received by them in the Issuance to
lapse will not recognize any gain or loss, and no adjustment will be made to the
basis of the Common Stock, if any, owned by such Rights Holders.
Exercise of the Rights; Basis and Holding Period of Common Stock
Rights Holders will not recognize any gain or loss upon the exercise of
such Rights. The basis of the Common Stock acquired through exercise of the
Rights will be equal to the sum of the Subscription Price therefor and the
Rights Holder's basis in such Rights (if any) as described above. The holding
period for the Common Stock acquired through exercise of the Rights will begin
on the date the Rights are exercised.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH STOCKHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE RIGHTS OFFERING ON HIS OR
HER OWN PARTICULAR TAX SITUATION, INCLUDING THE APPLICATION AND EFFECT OF STATE
AND LOCAL INCOME AND OTHER TAX LAWS.
DESCRIPTION OF THE CAPITAL STOCK
Common Stock
The Company has 10,000,000 authorized shares of Common Stock, of which
4,456,432 shares were issued and outstanding as of March 31, 1996. At the Annual
Meeting of Stockholders to be held June 11, 1996, the stockholders will be asked
to adopt an amendment to the Company's Restated Certificate of Incorporation
(the "Certificate of Incorporation") which will increase the authorized shares
of Common Stock from 10,000,000 to 15,000,000. The holders of the Common Stock
are entitled to one vote per share on all matters requiring stockholder action.
The Certificate of Incorporation does not permit cumulative voting for the
election of directors. The holders of Common Stock have no preemptive or other
subscription rights and there are no redemption, sinking fund or conversion
privileges applicable thereto. The holders of Common Stock are entitled to
receive dividends when, as and if declared by the Board of Directors out of
funds legally available therefor. Upon liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities. All outstanding shares of Common Stock
are fully paid and nonassessable and the shares of Common Stock to be issued in
the Rights Offering will, upon delivery and payment therefor in accordance with
the terms of the Rights Offering, be fully paid and nonassessable.
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
15
<PAGE> 18
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 registrar and transfer agent for the Company's Common Stock is
National City Bank.
Preferred Stock
The Company has 1,000,000 authorized shares of Preferred Stock, par
value $1.00 per share, none of which were issued and outstanding as of March 31,
1996. The Certificate of Incorporation provides that the Board of Directors is
authorized to fix the voting rights, redemption rights, conversion rights,
sinking fund provisions, designations, preferences and the relative,
participating, optional or other rights, if any, and the qualifications,
limitations or restrictions of the Preferred Stock. The Company has no present
intention to issue any shares of Preferred Stock.
LEGAL MATTERS
The validity of the issuance of Common Shares in the Rights Offering will
be passed upon by counsel for the Company, Squire, Sanders & Dempsey, Columbus,
Ohio.
EXPERTS
The Company's consolidated financial statements and schedules as of
December 31, 1995 and 1994, and for each of the years in the two-year period
ended December 31, 1995, included in the Form 10-K, a copy of which accompanies
this Prospectus and which is incorporated by reference in this Prospectus, have
been incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, with respect to the Company's
consolidated financial statements and schedules as of December 31, 1995 and
1994, and for each of the years in the two-year period ended December 31, 1995
and in reliance on the report of Ernst & Young LLP, independent certified public
accountants, with respect to the Company's consolidated financial statements and
schedules for the year ended December 31, 1993 and are incorporated herein in
reliance upon the authority of said firms as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP dated March 15, 1996 contains an
explanatory paragraph that states that as discussed in Note D to the
consolidated financial statements, on March 30, 1994, the Company and its
principal lender agreed to waive compliance with certain loan agreement
covenants through January 1, 1995. On February 7, 1995, the Company and the
lender again renegotiated the credit agreement and certain of the covenants. The
amended agreement stated that the loan was payable in full on June 30, 1997. On
December 29, 1995, the Company issued senior notes with a different lender and
retired the aforementioned credit agreement. The most recent loan agreement
requires that during the period the loan is outstanding, the Company maintain
consolidated tangible net worth, as defined. At December 31, 1995, required
tangible net worth was $15,000,000 and the Company's consolidated tangible net
worth, as defined, was $19,738,000.
16
<PAGE> 19
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THIS PROSPECTUS RELATES OR
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
--------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information........................................................................................... 2
Incorporation of Certain Documents by Reference................................................................. 2
Prospectus Summary.............................................................................................. 3
Risk Factors.................................................................................................... 6
Use of Proceeds................................................................................................. 8
Recent Developments............................................................................................. 8
Price Range of Common Stock and Dividend Policy................................................................. 9
The Rights Offering............................................................................................. 9
Certain Federal Income Tax Consequences......................................................................... 14
Description of the Capital Stock................................................................................ 15
Legal Matters................................................................................................... 16
Experts......................................................................................................... 16
</TABLE>
ACCEL INTERNATIONAL
CORPORATION
__ SHARES OF
COMMON STOCK
--------------------
PROSPECTUS
--------------------
__, 1996
================================================================================
17
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table presents an itemized estimate of all expenses in
connection with the issuance and distribution of the Common Shares, other than
underwriting discounts and commissions.
<TABLE>
<CAPTION>
Nature of Expense Amount
----------------- ------
<S> <C>
SEC Registration Fee ................................................................ $6,336.21
Printing and Engraving Costs ........................................................ _________*
Counsel Fees and Expenses ........................................................... _________*
Accounting Fees and Expenses ........................................................ _________*
Blue Sky Expenses and Counsel Fees .................................................. _________*
Subscription Agent Fees and Expenses ................................................ _________*
Miscellaneous ....................................................................... _________*
TOTAL ............................................................................... $__________*
<FN>
*To be filed by amendment.
</TABLE>
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law (the "DGCL") and the
Registrant's Bylaws provide for the indemnification of directors and officers
against certain liabilities. Officers and directors of the Registrant and its
subsidiaries are indemnified generally against expenses actually and reasonably
incurred in connection with proceedings, whether civil or criminal, if such
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the Registrant, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe was
unlawful. The Registrant is empowered by Section 102(b)(7) of the DGCL to
include a provision in its Restated Certificate of Incorporation that limits a
director's liability to the Registrant or its stockholders for monetary damages
for breaches of his or her fiduciary duty as a director. Article Fifteenth of
the Registrant's Restated Certificate of Incorporation provides that no director
or former director of the Registrant shall be personally liable to the
Registrant or its stockholders for breach of fiduciary duty as a director except
for (i) any breach of the director's duty of loyalty, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) approving the payment of a dividend, stock repurchase or redemption
which is unlawful under the DGCL, or (iv) any transaction from which the
director derived an improper personal benefit. The Registrant maintains
insurance policies under which directors and officers are insured, within the
limits and subject to the limitations of the policies, against expenses in
connection with the defense of actions, suits or proceedings and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been
directors or officers of the Registrant.
ITEM 16. EXHIBITS. The following Exhibits are filed as part of this
Registration Statement:
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
-------- -----------
<S> <C> <C>
5.1 Opinion of Squire, Sanders & Dempsey (including consents)
23.1 Consent of KPMG Peat Marwick LLP
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
<S> <C> <C>
23.2 Consent of Ernst & Young LLP
23.3 Consent of Squire, Sanders & Dempsey (see Exhibit 5.1)
24.1 Power of Attorney (included elsewhere in the signature page to this Registration
Statement)
99.1 Form of Subscription Certificate
99.2 Form of Instructions for Subscription Certificates
99.3 Form of Notice of Guaranteed Delivery
99.4 Form of Subscription Agency Agreement
99.5 Form of Nominee Holder Oversubscription Exercise Form
99.6 Form of Nominee Holder Certification
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement:
Provided, however that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(c) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set
forth the results of the subscription offer and the terms of any
subsequent reoffering thereof. If any public offering is to be made on
terms differing from those set forth on the cover page of the
prospectus, a post-effective amendment will be filed to set forth the
terms of such offering.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
II-2
<PAGE> 22
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbus, State of Ohio, on May 24, 1996.
ACCEL INTERNATIONAL CORPORATION
By: /s/ Thomas H. Friedberg
-------------------------------------
Thomas H. Friedberg
Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of ACCEL INTERNATIONAL
CORPORATION, hereby severally constitute and appoint Thomas H. Friedberg,
Nicholas Z. Alexander and Kurt L. Mueller, and each of them, our lawful
attorneys-in-fact and agents, for us and in our stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and all documents relating thereto, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing necessary or advisable to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents may lawfully
do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
and on 24, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Thomas H. Friedberg Chairman of the Board, President and
- ------------------------- Chief Executive Officer (principal executive officer) and
Thomas H. Friedberg Director
/s/ Kurt L. Mueller Vice President and Controller
- ------------------------ (principal financial officer and controller)
Kurt L. Mueller
/s/ Robert Betagole Director
- ------------------------
Robert Betagole
/s/ David T. Chase Director
- ------------------------
David T. Chase
</TABLE>
II-4
<PAGE> 24
Signature Title
--------- -----
/s/ Douglas J. Coats Director
- ---------------------------------
Douglas J. Coats
/s/ Raymond H. Deck Director
- ---------------------------------
Raymond H. Deck
/s/ Robert E. Fowler Director
- ---------------------------------
Robert E. Fowler III
Director
- ---------------------------------
Kermit G. Hicks
Director
- ---------------------------------
Stephen M. Qua
/s/ Milton J. Taylor Director
- ---------------------------------
Milton J. Taylor, Sr.
/s/ Paul R. Whitters Director
- ---------------------------------
Paul R. Whitters
II-5
<PAGE> 25
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1. Opinion of Squire, Sanders & Dempsey (including consents)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Squire, Sanders & Dempsey (see Exhibit 5.1)
24.1 Power of Attorney (included elsewhere in the signature page this Registration Statement)
99.1 Form of Subscription Certificate
99.2 Form of Instructions for Subscription Certificates
99.3 Form of Notice of Guaranteed Delivery
99.4 Form of Subscription Agency Agreement
99.5 Form of Nominee Holder Oversubscription Exercise Form
99.6 Form of Nominee Holder Certification
</TABLE>
<PAGE> 1
Exhibit 5.1
May 28, 1996
(614) 365-2743
ACCEL International Corporation
475 Metro Place North
Dublin, Ohio 43017
Re: Common Stock, $.10 Par Value
Gentlemen:
We have acted as counsel to ACCEL Internantional Corporation (the
"Company") in connection with the Registration Statement on Form S-2 to be filed
by the Company with the Securities and Exchange Commission ("SEC") on May 28,
1996 (the "Registration Statement"). The Registration Statement relates to (i)
the distribution to holders of record the Common Stock, $.10 par value, of
Company (the "Common Stock") of one non-tranferable subscription right (the
"Rights") for each share of Common Stock held on such record date, and (ii) the
shares of Common Stock to be issued upon exercise of the Rights (the "Underlying
Shares").
At the Company's Annual Stockholders' Meeting to be held on June 11, 1996,
the stockholders will be asked to approve a proposal to amend the Company's
Certificate of Incorporation to increase the total number of authorized shares
of Common Stock from 10,000,000 to 15,000,000 (the "Amendment"). For purposes of
this opinion, we are assuming that the Underlying Shares will not be issued
before the Amendment has been approved by the stockholders of the Company and
the appropriate certificate setting forth the Amendment has been duly filed with
the Secretary of State of the State of Delaware.
In connection with the transactions described herein, we have examined such
corporate records and other documents and certificates of public officials as we
have deemed necessary in order for us to render the opinion set forth below.
Based on the foregoing, we are of the opinion that:
<PAGE> 2
ACCEL International Corporation
May 28, 1996
Page 2
1. The Rights have been duly authorized and when validly issued in
accordance with such authorization, will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally.
2. The Underlying Shares issuable upon exercise of the Rights, when
issued, delivered and paid for as contemplated in the Registration Statement,
will be validly issued, fully paid and nonassessable.
We are admitted to the bar of the State of Ohio. In rendering the
opinion set forth above, we have not passed on and do not purport to pass upon
the application of any laws of any jurisdiction other than the federal
securities laws, the corporate law of the State of Delaware and the laws of the
State of Ohio.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Registration Statement.
Very truly yours,
SQUIRE, SANDERS & DEMPSEY
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS'
The Board of Directors
ACCEL International Corporation:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Registration Statement
(Form S-2) and related prospectus.
Our report dated March 15, 1996 contains an explanatory paragraph that as
discussed in Note D to the consolidated financial statements, on March 30,
1994, the Company and its principal lender agreed to waive compliance with
certain loan agreement covenants through January 1, 1995. On February 7, 1995
the Company and the lender again renegotiated the credit agreement and certain
of the covenants. The amended agreement stated that the loan was payable in
full on June 30, 1997. On December 29, 1995, the Company issued senior notes
with a different lender and retired the aforementioned credit agreement. The
most recent loan agreement requires that during the period the loan is
outstanding, the Company maintain consolidated tangible net worth, as defined.
At December 31, 1995, required tangible net worth was $15,000,000 and the
Company's consolidated tangible net worth, as defined, was $19,738,000.
KPMG Peat Marwick LLP
Columbus, Ohio
May 24, 1996
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-2) and related Prospectus of ACCEL International
Corporation for the registration of 7,000,000 non-transferable subscription
rights and to the incorporation by reference therein of our report dated March
30, 1994, with respect to the cosolidated financial statements and schedules of
ACCEL International Corporation for the year ended December 31, 1993 included
in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Columbus, Ohio
May 21, 1996
<PAGE> 1
Exhibit 99.1
ACCEL International Corporation SUBSCRIPTION CERTIFICATE NO.
CUSIP NO.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY'S
PROSPECTUS DATED MAY ___, 1996 (THE "PROSPECTUS") AND ARE INCORPORATED HEREIN BY
REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE
SUBSCRIPTION AGENT. THIS CERTIFICATE OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY 5:00 P.M., COLUMBUS,
OHIO TIME, ON __________________, 1996, UNLESS EXTENDED (AS IT MAY BE EXTENDED,
THE "EXPIRATION DATE"), PROVIDED THAT THE EXPIRATION DATE SHALL IN NO EVENT BE
LATER THAN _________________, 1996.
The Rights represented by this subscription certificate may be exercised by duly
completing Form 1. Rights holders are advised to review the Prospectus and
instructions, copies of which are available from the Subscription Agent, before
exercising their Rights. IMPORTANT: Complete FORM 1 and, if applicable, special
delivery instructions in FORM 2, and special issuance instructions in FORM 3,
and SIGN on reverse side.
SUBSCRIPTION PRICE $_______ ______ NON-TRANSFERABLE RIGHTS TO
PER SHARE PURCHASE COMMON STOCK OF ACCEL
International Corporation
Name and Address of Registered Holder: _________________________________________
The registered owner whose name is inscribed hereon is entitled to subscribe for
shares of Common Stock upon the terms and subject to the conditions set forth in
the Prospectus and instructions relating thereto.
By _________________________________ By ___________________________________
Thomas H. Friedberg Nicholas Z. Alexander
Chairman of the Board, Senior Vice President and
President and Chief Secretary
Executive Officer
THIS SUBSCRIPTION CERTIFICATE IS NOT TRANSFERABLE AND MAY NOT BE COMBINED OR
DIVIDED EXCEPT BY THE COMPANY IN THE EVENT A HOLDER SHALL CHOOSE TO EXERCISE
LESS THAN ALL OF THE RIGHTS EVIDENCED HEREBY.
<PAGE> 2
RIGHTS HOLDERS SHOULD BE AWARE THAT IF THEY CHOOSE TO EXERCISE LESS THAN ALL OF
THE RIGHTS EVIDENCED HEREBY, THEY MAY NOT RECEIVE A NEW SUBSCRIPTION CERTIFICATE
IN SUFFICIENT TIME TO EXERCISE THE REMAINING RIGHTS EVIDENCED THEREBY.
FORM 1--EXERCISE AND SUBSCRIPTION: The undersigned hereby irrevocably exercises
one or more Rights to subscribe for shares of Common Stock, as indicated below,
on the terms and subject to the conditions specified in the Prospectus, receipt
of which is hereby acknowledged.
(a) Number of shares subscribed for pursuant to the Basic Subscription Privilege
(_____ Right[s] needed to subscribe for each full share): __________
(b) Number of shares subscribed for pursuant to the Oversubscription Privilege:
__________
(c) Total Subscription Price (total number of shares subscribed for--pursuant to
both the Basic Subscription Privilege and the Oversubscription Privilege--times
the Subscription Price of $_____): $______________(1)
(1) If the amount enclosed or transmitted is not sufficient to pay the
Subscription Price for all shares that are stated to be subscribed for, or if
the number of shares being subscribed for is not specified, the number of shares
subscribed for will be assumed to be the maximum number that could be subscribed
for upon payment of such amount. If the number of shares to be subscribed for
pursuant to the Oversubscription Privilege is not specified and the amount
enclosed or transmitted exceeds the Subscription Price for all shares
represented by this Subscription Certificate (the "Subscription Excess"), the
person subscribing pursuant hereto shall be deemed to have exercised the
Oversubscription Privilege to purchase, to the extent available, that number of
whole shares of Common Stock equal to the quotient obtained by dividing the
Subscription Excess by $_________. Any amount remaining after such division
shall be returned to the subscriber.
METHOD OF PAYMENT (CHECK ONE):
/ / CHECK, BANK DRAFT OR MONEY ORDER PAYABLE TO "NATIONAL CITY
BANK"
/ / WIRE TRANSFER DIRECTED TO ABA NO. 041000124 (MARKED: "ACCEL
International Corporation SUBSCRIPTION").
(d) If the number of Rights being exercised pursuant to the Basic Subscription
Privilege is less than all of the Rights represented by the Subscription
Certificate, deliver to me a new Subscription Certificate evidencing the
remaining Rights to which I am entitled.
<PAGE> 3
/ / CHECK HERE IF RIGHTS ARE BEING EXERCISED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY DELIVERED TO THE SUBSCRIPTION AGENT PRIOR TO THE
DATE HEREOF AND COMPLETE THE FOLLOWING.
Name(s) of Registered Owner(s):______________________________
Window Ticket number (if any):_______________________________
Date of Execution of Notice of Guaranteed Delivery:____________________________
Name of Institution which Guaranteed Delivery:_________________________________
FORM 2--SPECIAL DELIVERY INSTRUCTIONS: Name and address for mailing any stock
certificates and/or cash payment if other than shown on the reverse hereof:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
(Including Zip Code)
FORM 3--SPECIAL ISSUANCE INSTRUCTIONS: Name and address of person(s) to whom
shares of Common Stock are to be issued if other than registered holder(s) whose
name(s) appear(s) on this Subscription Certificate:
Name___________________________________________________________________________
Address________________________________________________________________________
_______________________________________________________________________________
(Including Zip Code)
Taxpayer Identification or
Social Security Number:____________________________________
IMPORTANT
RIGHTS HOLDER SIGN HERE
AND, IF RIGHTS ARE BEING EXERCISED,
COMPLETE SUBSTITUTE FORM W-9
________________________________________
(Signature(s) of Holder(s))
Dated:_______________________________, 1996
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on this
Subscription Certificate. If signature is by trustee(s), executor(s),
administrator(s), guardian(s),
<PAGE> 4
attorney(s)-in-fact, agent(s), officer(s) of a corporation or another acting in
a fiduciary or representative capacity, please provide the following
information. See Instructions.)
Name(s):________________________________________________
(Please Print)
Capacity: _________________________________________
Address: _________________________________________
________________________________________________________
(Including Zip Code)
Area Code and
Telephone Number: _______________________________________
(Home)
_______________________________________
(Business)
Tax Identification
or Social Security No:___________________________________
(Complete Substitute Form W-9)
GUARANTY OF SIGNATURE(S)
Note: See Section 3(c) of Instructions
(Affix Medallion Guarantee, Below)
<PAGE> 1
Exhibit 99.2
INSTRUCTIONS AS TO USE OF ACCEL INTERNATIONAL CORPORATION
SUBSCRIPTION CERTIFICATES
CONSULT THE INFORMATION AGENT, YOUR BANK
OR BROKER AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the "Rights Offering")
by ACCEL International Corporation (the "Company"), a Delaware corporation, to
the holders of record of its Common Stock, par value $0.10 per share (the
"Common Stock"), as described in the Company's Prospectus dated ______________,
1996 (the "Prospectus"). Holders of record of Common Stock at the close of
business on ________________, 1996 (the "Record Date") are receiving one
non-transferable subscription right (the "Rights") for every one share of Common
Stock held by them on the Record Date. An aggregate of 4,456,432 Rights
exercisable to purchase an aggregate of ______________ shares of Common Stock
(the "Underlying Shares") are being distributed in connection with the Rights
Offering. Each Right is exercisable, upon payment of $___________ in cash (the
"Subscription Price"), to purchase [______] share[s] of Common Stock (the "Basic
Subscription Privilege"). In addition, subject to the allocation described
below, each Right also carries the right to subscribe at the Subscription Price
for additional shares of Common Stock available as a result of unexercised
Rights, if any (the "Oversubscription Privilege") up to the amount offered by
the Prospectus. Any Rights holder subscribing for an aggregate of more than
[5,000] Underlying Shares pursuant to the Oversubscription Privilege prior to
5:00 p.m., Columbus, Ohio time, on ________________, 1996, unless extended (as
it may be extended, the "Expiration Date"), provided that the Expiration Date
shall in no event be later than _______________, 1996, shall not be required to
deliver payment for such number of Underlying Shares in excess of [5,000] until
the Expiration Date. The Company, in its sole discretion, may determine to waive
payment for such excess number of Underlying Shares until after the Expiration
Date and after all prorations and adjustments contemplated by the terms of the
Rights Offering have been effected. Underlying Shares will be available for
purchase pursuant to the Oversubscription Privilege only to the extent that all
the Underlying Shares are not subscribed for through the exercise of the Basic
Subscription Privilege by the Expiration Date. If the Underlying Shares so
available (the "Excess Shares") are not sufficient to satisfy all subscriptions
pursuant to the Oversubscription Privilege, the available Excess Shares will be
allocated pro rata (subject to the elimination of fractional shares) among the
holders of Rights who exercise the Oversubscription Privilege, in proportion,
not to the number of shares requested pursuant to the Oversubscription
Privilege, but to the number of shares each beneficial holder has purchased
pursuant to the Basic Subscription Privilege; provided, however, that if such
pro rata allocation results in any holder being allocated a greater number of
Excess Shares than such holder subscribed for pursuant to the exercise of such
holder's Oversubscription Privilege, then such holder will be allocated only
such number of Excess Shares as such holder subscribed for and the remaining
Excess Shares
1
<PAGE> 2
will be allocated among all other holders exercising the Oversubscription
Privilege. See "The Rights Offering-Subscription Privileges" in the Prospectus.
The Rights will expire at 5:00 p.m., Columbus, Ohio time, on the Expiration
Date. The Rights are not transferable and will not be traded on any securities
exchange or quoted on any inter-dealer quotation system. See "The Rights
Offering --Non-Transferability of Rights" in the Prospectus.
The number of Rights to which you are entitled is printed on the face of your
subscription certificate. You should indicate your wishes with regard to the
exercise of your Rights by completing the appropriate form or forms on your
subscription certificate and returning the certificate to the Subscription Agent
in the envelope provided.
YOUR SUBSCRIPTION CERTIFICATES MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, OR
GUARANTEED DELIVERY REQUIREMENTS WITH RESPECT TO YOUR SUBSCRIPTION CERTIFICATES
MUST BE COMPLIED WITH, AND PAYMENT OF THE SUBSCRIPTION PRICE, INCLUDING FINAL
CLEARANCE OF ANY CHECKS, MUST BE RECEIVED BY THE SUBSCRIPTION AGENT, ON OR
BEFORE 5:00 P.M., COLUMBUS, OHIO TIME, ON THE EXPIRATION DATE. ONCE A HOLDER OF
RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION PRIVILEGE AND/OR THE
OVERSUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED EXCEPT UNDER
LIMITED CIRCUMSTANCES AS DESCRIBED IN THE PROSPECTUS.
1. Subscription Privilege.
To exercise Rights, complete Form 1 and send your properly completed and
executed subscription certificate, together with payments in full of the
Subscription Price for each Underlying Share subscribed for pursuant to the
Basic Subscription Privilege and the Oversubscription Privilege, to the
Subscription Agent. Any Rights holder subscribing for an aggregate of more than
[5,000] Underlying Shares pursuant to the Oversubscription Privilege prior to
the Expiration Date shall not be required to deliver payment for such number of
Underlying Shares in excess of [5,000] until the Expiration Date. The Company,
in its sole discretion, may determine to waive payment for such excess number of
Underlying Shares until after the Expiration Date and after all prorations and
adjustments contemplated by the terms of the Rights Offering have been effected.
All payments must be made in U.S. dollars (a) by check or bank draft drawn upon
a U.S. bank or postal or express money order payable to National City Bank, as
Subscription Agent, or (b) if by wire transfer, please contact the National City
Bank for further instructions. Payments will be deemed to have been received by
the Subscription Agent only upon (i) the clearance of any uncertified check,
(ii) the receipt by the Subscription Agent of any certified check or bank draft
drawn upon a U.S. bank or any postal express money order or (iii) the receipt of
good funds in the Subscription Agent's account. If paying by uncertified
personal check, please note that the funds paid thereby may take up to ten
business days to clear. Accordingly, holders of Rights who wish to pay the
Subscription Price by means of uncertified personal check are urged to make
payment sufficiently in advance of the
2
<PAGE> 3
Expiration Date to ensure that such payment is received and clears by such date
and are urged to consider payment by means of certified or cashiers check, money
order or wire transfer of funds. You may cause a written guaranty substantially
in the form available from the Subscription Agent (the "Notice of Guaranteed
Delivery") from a member firm of a registered national securities exchange or a
member of the National Association of Securities Dealers, Inc., or from a
commercial bank or trust company having an office or correspondent in the United
States or from a bank, stockbroker, savings and loan association or credit union
with membership in an approved signature guarantee medallion program, pursuant
to Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934 (each of
the foregoing being an "Eligible Institution"), to be received by the
Subscription Agent at or prior to the Expiration Date together with payment in
full of the applicable Subscription Price. Such Notice of Guaranteed Delivery
must state your name, the number of Rights represented by your subscription
certificate, the number of Rights being exercised pursuant to the Basic
Subscription Privilege and the number of Underlying Shares, if any, being
subscribed for pursuant to the Oversubscription Privilege, and will guarantee
the delivery to the Subscription Agent of your properly completed and executed
subscription certificate within five business days following the date of the
Notice of Guaranteed Delivery. If this procedure is followed, your subscription
certificate must be received by the Subscription Agent within five business days
of the Notice of Guaranteed Delivery. Additional copies of the Notice of
Guaranteed Delivery may be obtained upon request from the Subscription Agent at
the address, or by calling the telephone number, indicated below.
Banks, brokers and other nominee holders of Rights who exercise the Basic
Subscription Privilege and the Oversubscription Privilege on behalf of
beneficial owners of Rights will be required to certify to the Subscription
Agent and the Company (by delivery to the Subscription Agent of a Nominee Holder
Certification substantially in the form available from the Subscription Agent),
the aggregate number of Rights that have been exercised, and the number of
Underlying Shares that are being subscribed for pursuant to the Oversubscription
Privilege, by each beneficial owner of Rights (including such nominee itself) on
whose behalf such nominee holder is acting. In the event a Nominee Holder
Certification is not delivered in respect of a Subscription Certificate, the
Subscription Agent shall for all purposes (including for purposes of any
allocation in connection with the Oversubscription Privilege) be entitled to
assume that such certificate is exercised on behalf of a single beneficial
owner. If more Excess Shares are subscribed for pursuant to the Oversubscription
Privilege than are available for sale, Excess Shares will be allocated, as
described above, among beneficial owners exercising the Oversubscription
Privilege in proportion to such owners' exercise of Rights pursuant to the Basic
Subscription Privilege.
The address and telecopier numbers of the Subscription Agent are as follows:
3
<PAGE> 4
If by Mail: If by Hand:
National City Bank, Subscription Agent National City Bank, Subscription Agent
Corporate Trust Operations Corporate Trust Operations
P.O. Box 94720 3rd Floor - North Annex
Cleveland, Ohio 44101-4720 4100 West 150th Street
Cleveland, Ohio 44135-1385
Telecopier: (216) 476-8367
If you exercise less than all of the Rights evidenced by your subscription
certificate by so indicating in Form 1 of your subscription certificate, the
Subscription Agent will issue to you a new non-transferable subscription
certificate evidencing the unexercised Rights. However, if you choose to have a
new subscription certificate sent to you, you may not receive any such new
subscription certificate in sufficient time to permit exercise of the Rights
evidenced thereby. If you have not indicated the number of Rights being
exercised, or if the amount you have forwarded is not sufficient (subject to the
second sentence of Section 1 above) to purchase the number of shares subscribed
for, you will be deemed to have exercised the Basic Subscription Privilege with
respect to the maximum number of whole Rights which may be exercised for the
Subscription Price payment delivered by you, and to the extent that the
Subscription Price payment delivered by you exceeds the product of the
Subscription Price multiplied by the number of Rights evidenced by the
subscription certificates delivered by you (such excess being the "Subscription
Excess"), you will be deemed to have exercised your Oversubscription Privilege
to purchase, to the extent available, that number of whole shares of Common
Stock equal to the quotient obtained by dividing the Subscription Excess by the
Subscription Price.
2. Issuance and Delivery of Stock Certificates, Etc.
The following issuances, deliveries and payments will be made to the name and
the address shown on the face of your subscription certificate unless you
provide special instructions to the contrary in Form 2 and/or Form 3.
(a) BASIC SUBSCRIPTION PRIVILEGE. As soon as practicable after the valid
exercise of Rights, the Subscription Agent will issue and mail to each
exercising Rights Holder certificates representing shares of Common Stock
purchased pursuant to the Basic Subscription Privilege.
(b) OVERSUBSCRIPTION PRIVILEGE. As soon as practicable after the Expiration Date
and after all prorations and adjustments contemplated by the terms of the Rights
Offering have been effected, the Subscription Agent will issue and mail to each
Rights Holder who validly exercises the Oversubscription Privilege the number of
shares allocated to such Rights Holder pursuant to the Oversubscription
Privilege. See "The Rights Offering-Subscription Privileges-Oversubscription
Privilege" in the Prospectus.
4
<PAGE> 5
(c) CASH PAYMENTS. As soon as practicable after the Expiration Date and after
all prorations and adjustments contemplated by the terms of the Rights Offering
have been effected, the Subscription Agent will mail to each Rights Holder who
exercises the Oversubscription Privilege any excess funds received in payment of
the Subscription Price for Excess Shares that are subscribed for by such Rights
holder but not allocated to such Rights Holder pursuant to the Oversubscription
Privilege.
3. Execution.
(a) EXECUTION BY REGISTERED HOLDER. The signature on the subscription
certificate must correspond with the name of the registered holder exactly as it
appears on the face of the subscription certificate without any alteration or
change whatsoever. Persons who sign the subscription certificate in a
representative or other fiduciary capacity must indicate their capacity when
signing and, unless waived by the Subscription Agent in its sole and absolute
discretion, must present to the Subscription Agent satisfactory evidence of
their authority to so act.
(b) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the subscription
certificate is executed by a person other than the holder named on the face of
the subscription certificate, proper evidence of authority of the person
executing the subscription certificate must accompany the same unless, for good
cause, the Subscription Agent dispenses with proof of authority.
(c) SIGNATURE GUARANTIES. Your signature must be guaranteed by an Eligible
Institution if you wish to specify special issuance, payment or delivery
instructions pursuant to Form 2 and/or Form 3.
4. Method of Delivery.
The method of delivery of subscription certificates and payment of the
Subscription Price to the Subscription Agent will be at the election and risk of
the Rights Holder, but, if sent by mail, it is recommended that they be sent by
registered mail, properly insured, with return receipt requested, and that a
sufficient number of days be allowed to ensure delivery to the Subscription
Agent and the clearance of any checks sent in payment of the Exercise Price
prior to 5:00 p.m., Columbus, Ohio time, on the Expiration Date.
5. Special Provisions Relating to the Delivery of Rights Through Depository
Facility Participants.
In the case of holders of Rights that are held of record through The Depository
Trust Company and Philadelphia Depository Trust Company or any other depository
(each a "Depository"), exercises of the Basic Subscription Privilege (but not
the Oversubscription Privilege) may be effected by instructing the Depository to
transfer Rights (such Rights "Depository Rights") from the Depository's account
of such holder to the Depository account of the Subscription Agent, together
with payment of the Subscription Price for each Underlying Share subscribed for
pursuant to the Basic Subscription Privilege. The Oversubscription Privilege in
respect of
5
<PAGE> 6
Depository Rights may not be exercised through the Depository. The holder of a
Depository Right may exercise the Oversubscription Privilege in respect of such
Depository Right by properly executing and delivering to the Subscription Agent
at or prior to 5:00 p.m., Columbus, Ohio time, on the Expiration Date, a Nominee
Holder Oversubscription Exercise Form, in the form available from the
Subscription Agent, or a Notice of Guaranteed Delivery, together with payment of
the appropriate Subscription Price for the number of Underlying Shares for which
the Oversubscription Privilege is to be exercised. Any Rights holder subscribing
for an aggregate of more than [5,000] Underlying Shares pursuant to the
Oversubscription Privilege prior to the Expiration Date shall not be required to
deliver payment for such number of Underlying Shares in excess of [5,000] until
the Expiration Date. The Company, in its sole discretion, may determine to waive
payment for such excess number of Underlying Shares until after the Expiration
Date and after all prorations and adjustments contemplated by the terms of the
Rights Offering have been effected.
If a Notice of Guaranteed Delivery relates to Rights with respect to which
exercise of the Basic Subscription Privilege will be made through a Depository
and such Notice of Guaranteed Delivery also relates to the exercise of the
Oversubscription Privilege, a Nominee Holder Oversubscription Exercise Form must
also be received by the Subscription Agent in respect of such exercise of the
Oversubscription Privilege within five business days of the Notice of Guaranteed
Delivery.
6. Substitute Form W-9.
Each Rights holder who elects to exercise Rights should provide the Subscription
Agent with a correct Taxpayer Identification Number ("TIN") on Substitute Form
W-9, substantially in the form provided with these instructions. A copy of
Substitute Form W-9 may be obtained upon request from the Subscription Agent at
the address indicated above. Failure to provide the information on the form may
subject such holder to a $50.00 penalty and to 31% federal income tax
withholding with respect to dividends that may be paid by the Company on shares
of Common Stock purchased upon the exercise of Rights.
6
<PAGE> 1
Exhibit 99.3
NOTICE OF GUARANTEED DELIVERY
for
SUBSCRIPTION CERTIFICATES
issued by
ACCEL INTERNATIONAL CORPORATION
This form, or one substantially equivalent hereto, must be used to exercise
Rights pursuant to the Basic Subscription Privilege and the Oversubscription
Privilege pursuant to the Rights Offering described in the Prospectus dated
________________, 1996 (the "Prospectus") of ACCEL International Corporation
(the "Company"), a Delaware corporation, if a holder of Rights cannot deliver
the subscription certificate(s) evidencing the Rights (the "Subscription
Certificate(s)"), to the Subscription Agent listed below (the "Subscription
Agent") at or prior to 5:00 p.m., Columbus, Ohio time, on _______________, 1996,
unless extended (as it may be extended, the "Expiration Date"), provided that
the Expiration Date shall in no event be later than _______________, 1996. Such
form must be delivered by hand or sent by facsimile transmission or mail to the
Subscription Agent, and must be received by the Subscription Agent on or prior
to the Expiration Date. See "The Rights Offering--Exercise of Rights" in the
Prospectus. Payment of the Subscription Price of $_________ per share for each
share of the Company's Common Stock, par value $0.10 per share (the "Common
Stock"), subscribed for upon exercise of such Rights must be received by the
Subscription Agent in the manner specified in the Prospectus at or prior to 5:00
p.m., Columbus, Ohio time, on the Expiration Date even if the Subscription
Certificate evidencing such Rights is being delivered pursuant to the procedure
for guaranteed delivery thereof.
The Subscription Agent is:
National City Bank
If by Mail: Facsimile Transmission: If by Hand or Overnight Courier:
National City Bank, (216) 476-8367 National City Bank,
Subscription Agent Subscription Agent
Corporate Trust Operations Corporate Trust Operations
P. O. Box 94720 3rd Floor -- North Annex
Cleveland, Ohio 44101-4720 4100 West 150th Street
Cleveland, Ohio 44135-1385
1
<PAGE> 2
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby represents that (i) he or she is the holder of
Subscription Certificate(s) representing ___________________ Rights, and (ii)
that such Subscription Certificate(s) cannot be delivered to the Subscription
Agent at or before 5:00 p.m., Columbus, Ohio time, on the Expiration Date. Upon
the terms and subject to the condition set forth in the Prospectus, receipt of
which is hereby acknowledged, the undersigned hereby elects to exercise (i) the
Basic Subscription Privilege to subscribe for [______] share[s] of Common Stock
per Right with respect to each of _________________ Rights represented by such
Subscription Certificate and (ii) the Oversubscription Privilege relating to
each such Right, to the extent that Excess Shares (as defined in the Prospectus)
are available therefor, for an aggregate of up to ___________________ Excess
Shares. The undersigned understands that payment of the Subscription Price of
$_______ per share for each share of Common Stock subscribed for pursuant to the
Basic Subscription Privilege and Oversubscription Privilege must be received by
the Subscription Agent at or before 5:00 p.m., Columbus, Ohio time, on the
Expiration Date and represents that such payment, in the aggregate amount of
$________________, either (check appropriate box):
/ / is delivered herewith or / / was delivered separately;
in the manner set forth below (check appropriate box and complete information
relating thereto):
/ / - wire transfer of funds
- name of transferor institution:
- date of transfer:
- confirmation number (if available):
/ / money order
- name of maker:
- date and number of check, draft or money order number:
- bank on which check is drawn or issuer of money order:
/ / uncertified check (Payment by uncertified check will
not be deemed to have been received by the
Subscription Agent until such check has cleared.
Holders paying by such means are urged to make
payment sufficiently in advance of the Expiration
Date to ensure that such payment clears by such
date.)
/ / certified check or / / bank draft (cashier's check)
2
<PAGE> 3
Signature(s)_______________________ Address________________________________
Name(s)____________________________ Area Code and Tel No.(s)_______________
Please Type or Print
Subscription Certificate No.(s) (if available)____________________________
GUARANTY OF DELIVERY
(Not to be used for Subscription Certificate signature guaranty)
The undersigned, a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office or correspondent in the United States or a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guaranty medallion program, guarantees that the undersigned
will deliver to the Subscription Agent the certificates representing the Rights
being exercised hereby, with any required signature guaranties and any other
required documents, all within five business days after the date hereof.
________________________________ Dated:____________________________, 1996
(Name of Firm)
________________________________ _________________________________________
(Address) (Authorized Signature)
________________________________ _________________________________________
(Area Code and Telephone Number) (Printed Name of Authorized Signer)
The institution which completes this form must communicate the guaranty to the
Subscription Agent and must deliver the Subscription Certificate(s) to the
Subscription Agent within the time period shown herein. Failure to do so could
result in a financial loss to such institution.
3
<PAGE> 1
Exhibit 99.4
SUBSCRIPTION AGENCY AGREEMENT
This Subscription Agency Agreement (the "Agreement") is made as of May ___, 1996
between ACCEL International Corporation (the "Company") and National City Bank,
as subscription agent (the "Agent"). All terms not defined herein shall have the
meaning given in the prospectus (the "Prospectus") included in the Registration
Statement on Form S-2 (File No. ________) filed by the Company with the
Securities and Exchange Commission on ________, 1996, as amended by any
amendment filed with respect thereto (the "Registration Statement").
WHEREAS, the Company proposes to make a subscription offer by issuing
certificates or other evidences of non-transferable subscription rights, in the
form designated by the Company (the "Subscription Certificates") to holders of
record of shares (each a "Stockholder") of its Common Stock, par value $.10 per
share (the "Common Stock"), as of a record date specified by the Company (the
"Record Date"), pursuant to which each stockholder will receive non-transferable
subscription rights (the "Rights") to subscribe for shares of Common Stock, as
described in and upon such terms as are set forth in the Prospectus included as
a part of the Registration Statement; a final copy of the Prospectus has been
or, upon availability will promptly be, delivered to the Agent; and
WHEREAS, the Company wishes the Agent to perform certain acts on behalf of the
Company, and the Agent is willing to so act, in connection with the distribution
of the Subscription Certificates and the issuance and exercise of the Rights to
subscribe for Common Stock as therein set forth, all upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements
set forth herein, the parties agree as follows:
1. Appointment.
-----------
The Company hereby appoints the Agent to act as subscription agent for
the Company in connection with the distribution of Subscription Certificates and
the issuance and exercise of the Rights in accordance with the terms set forth
in this Agreement and the Prospectus and the Agent hereby accepts such
appointment.
2. Form and Execution of Subscription Certificates.
------------------------------------------------
(a) Each Subscription Certificate shall be irrevocable and
non-transferable. The Agent shall maintain a register of
Subscription Certificates and the holders of record thereof
(each of whom shall be deemed a "Stockholder" hereunder for
purposes of determining the rights of holders of Subscription
Certificates). Each Subscription Certificate shall, subject to
the provisions thereof, entitle the Stockholder in whose name
it is recorded to the following:
<PAGE> 2
(1) The right to purchase from the Company until the Expiration Date, at
the Subscription Price, a number of shares of Common Stock equal to
[______] share[s] of Common Stock for each Right evidenced thereby (the
"Basic Subscription Privilege"); and
(2) The right to subscribe for additional shares of Common Stock, subject
to the availability of such shares and to the allotment of such shares
as may be available among Stockholders who exercise the
Oversubscription Privilege on the basis specified in the Prospectus;
provided, however, that such Stockholder has exercised the Basic
Subscription Privilege in respect of all Rights which he or she holds
(the "Oversubscription Privilege").
3. Rights and Issuance of Subscription Certificates.
------------------------------------------------
(a) Each Subscription Certificate shall evidence the Rights of the
Stockholder therein named to purchase shares of Common Stock
upon the terms and conditions therein and herein set forth.
(b) Upon the written authorization of the Company, signed by any
of its duly authorized officers, as to the Record Date, the
Agent shall, from a list of the Stockholders of Common Stock
as of the Record Date to be prepared by the Agent in its
capacity as transfer agent of the Company (the "Transfer
Agent"), prepare and record Subscription Certificates in the
names of the Stockholders, setting forth the number of
Rights to subscribe for shares of the Common Stock
calculated on the basis of one Right for each one share of
Common Stock recorded on the books in the name of each such
Stockholder as of the Record Date.
(c) Each Subscription Certificate shall be dated as of the Record
Date and shall be executed manually or by facsimile
signature of a duly authorized officer of the Agent. Upon
the written advice, signed as aforesaid, as to the effective
date of the Registration Statement, the Agent shall promptly
countersign and deliver the Subscription Certificates,
together with a copy of the Prospectus, instructions as to
the use of the Subscription Certificates and any other
document as the Company deems necessary or appropriate, to
all Stockholders with record addresses in the United States
(including its territories and possessions and the District
of Columbia). No Subscription Certificate shall be valid for
any purpose unless so executed. Delivery to Stockholders
with record address inside the United States shall be by
first class mail (without registration or insurance).
(d) The Rights evidenced by Subscription Certificates issued to
Foreign Stockholders will be held by the Agent for such
Foreign Stockholders' accounts until instructions are received
to exercise the Rights. To exercise such rights, such a
Foreign Stockholder must notify the Agent and must establish
to the satisfaction of the Agent that such exercise is
permitted under applicable law. If such a holder does not
follow the procedures set forth in the preceding sentence
prior to the Expiration Date, such Rights represented thereby
will expire.
- 2 -
<PAGE> 3
4. Exercise.
--------
(a) Stockholders may acquire shares of Common Stock pursuant to
the Basic Subscription Privilege, and, if available,
pursuant to the Oversubscription Privilege by delivery to
the Agent as specified in the Prospectus of (i) the
Subscription Certificate with respect thereto, duly executed
by such Stockholder in accordance with and as provided by
the terms and conditions of the Subscription Certificate,
together with (ii) the purchase price of $_______ for each
share of Common Stock subscribed for by exercise of such
Rights (the "Subscription Price"), in U.S. dollars by wire
transfer or by money order or check drawn on a bank in the
United States, in each case payable to the order of the
Agent. In the case of holders of Rights that are held of
record through a Depository (as defined below), exercises of
the Basic Subscription Privilege (but not the
Oversubscription Privilege) may be effected by instructing
the Depository to transfer Rights (such Rights "Depository
Rights") from the Depository's account of such holder to the
Depository account of the Agent, together with payment of
the Subscription Price for each Underlying Share subscribed
for pursuant to the Basic Subscription Privilege. The
Oversubscription Privilege in respect of Depository Rights
may not be exercised through the Depository. The holder of
Depository Rights may exercise the Oversubscription
Privilege in respect of such Depository Rights by properly
executing and delivering to the Agent at or prior to 5:00
p.m., Columbus, Ohio time, on the Expiration Date, a Nominee
Holder Oversubscription Exercise Form or a Notice of
Guaranteed Delivery, together with payment of the
appropriate Subscription Price for the number of Underlying
Shares for which the Oversubscription Privilege is to be
exercised. Any Rights holder subscribing for an aggregate of
more than [5,000] shares pursuant to the Oversubscription
Privilege prior to the Expiration Date shall not be required
to deliver payment for such number of underlying shares in
excess of [5,000] until the Expiration Date. The Company, in
its sole discretion, may determine to waive payment for such
excess number of Underlying Shares until after the
Expiration Date and after all prorations and adjustments
contemplated by the terms of the Rights Offering have been
effected. Payments will be deemed to have been received by
the Agent only upon (i) clearance of any uncertified check
(for purposes hereof, an uncertified check will be deemed to
clear upon presentation to, and payment at, the drawee
bank), (ii) receipt by the Agent of any certified check or
money order or (iii) receipt of good funds by wire transfer
to the Agent's account. Nominees (as defined below) who, on
behalf of beneficial owners, exercise the Basic Subscription
Privilege and who wish to exercise the Oversubscription
Privilege, must properly execute and deliver to the Agent at
or prior to 5:00 p.m., Columbus, Ohio time, on the
Expiration Date a Nominee Holder Oversubscription Exercise
Form and a Nominee Holder Certification.
(b) Rights may be exercised at any time after the date of issuance
of the Subscription Certificates with respect thereto but no
later than 5:00 p.m., Columbus, Ohio time, on the Expiration
Date. For the purpose of determining the time of the
- 3 -
<PAGE> 4
exercise of any Rights, delivery of any material to the Agent
shall be deemed to occur when such materials are received at
the Corporate Trust Operations of the Agent specified in the
Prospectus. Once a Stockholder has exercised the Basic
Subscription Privilege or the Oversubscription Privilege, such
exercise may not be revoked except as provided in the
Prospectus.
(c) Notwithstanding the provisions of Section 4(a) and 4(b)
regarding delivery of an executed Subscription Certificate
to the Agent prior to 5:00 P.M. Columbus, Ohio time on the
Expiration Date, if prior to such time the Agent receives a
Notice of Guaranteed Delivery by facsimile (telecopy) or
otherwise from a member firm of a registered national
securities exchange or a member of the National Association
of Securities Dealers, Inc., or from a commercial bank or
trust company having an office or correspondent in the
United States (each, an "Eligible Institution") guaranteeing
delivery of a properly completed and executed Subscription
Certificate, then such exercise of the Basic Subscription
Privilege and Oversubscription Privilege shall be regarded
as timely, subject, however, to receipt of (i) the duly
executed Subscription Certificate by the Agent within five
business days following the Expiration Date (the "Protect
Period") and (ii) payment in full of the subscription price
(subject to the right of the Company to waive advance
payment in respect of the Oversubscription Privilege as
described above) prior to 5:00 p.m., Columbus, Ohio time, on
the Expiration Date.
(d) As soon as practicable after the valid exercise of Rights
(for purposes hereof an exercise will not be treated as
valid until such time as the Agent receives good funds) the
Agent shall send to each exercising Stockholder (an
"Exercising Stockholder") or, if shares of Common Stock on
the Record Date are held by Depository Trust Company and
Philadelphia Depository Trust Company (each a "Depository")
or any other depository or nominee (together with the
Depositories, "Nominees"), to such Nominee the share
certificates representing the shares of Common Stock
acquired pursuant to the Basic Subscription Privilege. As
soon as practicable after the Expiration Date and after all
pro rations and adjustments contemplated by the terms of the
Rights Offering have been effected, the Agent shall send to
each Exercising Stockholder or Nominee who exercises an
Oversubscription Privilege certificates representing the
shares of Common Stock acquired pursuant to the
Oversubscription Privilege, along with a letter explaining
the allocation of shares of Common Stock pursuant to the
Oversubscription Privilege. Any excess payment to be
refunded by the Company to an Exercising Stockholder who is
not allocated the full amount of shares of Common Stock
subscribed for pursuant to the Oversubscription Privilege,
shall be mailed by the Agent to him or her without interest
or deduction as soon as practicable after the Expiration
Date and after all prorations and adjustments contemplated
by the terms of the Rights Offering have been effected.
(e) If an exercising Rights Holder has not indicated the number of
Rights being exercised, or if the Subscription Price payment
forwarded by such holder to the Agent is not sufficient
(subject to the fifth sentence of Section 4(a) above) to
- 4 -
<PAGE> 5
purchase the number of shares subscribed for, the Rights
holder will be deemed to have exercised the Basic Subscription
Privilege with respect to the maximum number of whole Rights
which may be exercised for the Subscription Price delivered to
the Agent and, to the extent that the Subscription Price
payment delivered by such holder exceeds the Subscription
Price multiplied by the number of Rights exercised (such
excess being the "Subscription Excess"), the holder will be
deemed to have exercised its Oversubscription Privilege to
purchase, to the extent available, a number of whole
Underlying Shares equal to the quotient obtained by dividing
the Subscription Excess by the Subscription Price.
(f) Pursuant to the terms of the Rights Offering, the Company may
permit holders of Subordinated Notes to tender their
respective Subordinated Notes to the Company for
cancellation as consideration (in lieu of cash) for the
purchase of Underlying Shares. Upon receipt of such
Subordinated Notes, the Company shall instruct the
Subscription Agent to accept such Subordinated Notes as
consideration, in an amount equal to the outstanding
principal balance of such Subordinated Notes, for the
issuance of the related Underlying Shares and the
Subscription Agent shall be protected in relying upon such
instruction.
5. Non-Transferability of Rights.
-----------------------------
The Rights are not transferable. Stockholders who determine not to
exercise their Rights may not transfer their Rights and, at the Expiration Date,
Rights which have not been exercised will expire and be null and void and have
no value, provided that Rights may be transferred by operation of law in the
case of death, dissolution, liquidation or bankruptcy of the Rights holder, or
pursuant to an order of an appropriate court. A Stockholder may subdivide a
Subscription Certificate into multiple Subscription Certificates having in the
aggregate the same number of Rights, provided that all such new Subscription
Certificates shall be registered in the same name as the old Subscription
Certificate.
6. Validity of Subscriptions.
-------------------------
Irregular subscriptions not otherwise covered by specific instructions
herein shall be submitted to an appropriate officer of the Company and handled
in accordance with his or her instructions. Such instructions will be documented
by the Agent indicating the instructing officer and the date thereof.
7. Oversubscription.
----------------
If, after allocation of shares of Common Stock to Exercising
Stockholders, there remain Underlying Shares not subscribed for through the
Basic Subscription Privilege (the "Excess Shares"), then the Agent shall
allocate such Excess Shares to Stockholders who have exercised all the Rights
initially issued to them and who have exercised the right to subscribe for
additional shares of Common Stock (the "Oversubscription Privilege") to acquire
more than the number of shares for which the Rights issued to them are
exercisable. If the number of shares for which the Oversubscription Privilege
has been exercised is greater than the Excess Shares, the Agent
- 5 -
<PAGE> 6
shall allocate pro rata the Excess Shares among the Stockholders exercising the
Oversubscription Privilege based on the number of shares each Stockholder
exercising the Oversubscription Privilege has purchased pursuant to the Basic
Subscription Privilege; provided, however, that if such pro rata allocation
results in any Stockholder being allocated a greater number of Excess Shares
than such Stockholder subscribed for pursuant to the exercise of such
Stockholder's Oversubscription Privilege, then such Stockholder will be
allocated only such number of Excess Shares as such Stockholder subscribed for
and the remaining Excess Shares will be allocated among all other Stockholders
exercising the Oversubscription Privilege. The percentage of Excess Shares each
oversubscribing Stockholder may acquire will be rounded up or down to result in
delivery of whole shares of Common Stock. The Agent shall advise the Company
immediately upon the completion of the allocation set forth above as to the
total number of shares subscribed and distributable.
8. Delivery of Certificates.
------------------------
The Agent will deliver (i) certificates representing those shares of
Common Stock purchased pursuant to exercise of the Basic Subscription Privilege
as soon as practicable after the corresponding Rights have been validly
exercised and full payment for such shares has been received and cleared and
(ii) certificates representing those shares purchased pursuant to the exercise
of the Oversubscription Privilege as soon as practicable after the Expiration
Date and after all prorations and adjustments contemplated by the Rights
Offering have been effected, but in no event shall share certificates be
delivered after the time period set forth in Section 4(d) hereof.
9. Holding Proceeds of Rights Offering in Escrow.
---------------------------------------------
(a) All proceeds received by the Agent from Stockholders in
respect of the exercise of Rights shall be held by the Agent,
on behalf of the Company, in a segregated, interest-bearing
escrow account (the "Escrow Account"). As soon as practicable
after the receipt of any proceeds in respect of the exercise
of the Basic Subscription Privilege, the Agent shall deliver
all such proceeds to the Company, together with any interest
thereon.
(b) The Agent shall deliver all proceeds received in respect of
the exercise of the Oversubscription Privilege (including
interest earned thereon) to the Company as promptly as
practicable, but in no event later than 10 business days after
all prorations and adjustments contemplated by the terms of
the Rights Offering have been effected. Pending delivery to
the Company as provided herein or disbursement in the manner
described in Section 4(d) above, funds held in the Escrow
Account shall be invested by the Agent at the direction of the
Company.
10. Reports.
-------
Daily, during the period commencing with the mailing of the
Subscription Certificates and ending on the Expiration Date (and in the case of
guaranteed deliveries pursuant to Section 4(c), the period ending five business
days after the Expiration Date) the Agent will report by
- 6 -
<PAGE> 7
telephone or telecopier (by 12:00 Noon, Columbus, Ohio time), confirmed by
letter, to an officer of the Company, data regarding Rights exercised, the total
number of shares of Common Stock subscribed for, and payments received therefor,
bringing forward the figures from the previous day's report in each case so as
to show the cumulative totals and any such other information as may be
reasonably requested by the Company.
11. Loss or Mutilation; Cancellation.
--------------------------------
(a) If any Subscription Certificate is lost, stolen, mutilated or
destroyed, the Agent may, on such terms which will indemnify
and protect the Company and the Agent as the Agent and the
Company shall agree (which shall, in the case of a mutilated
Subscription Certificate include the surrender and
cancellation thereof), issue a new Subscription Certificate of
like denomination in substitution for the Subscription
Certificate so lost, stolen, mutilated or destroyed.
(b) All Subscription Certificates surrendered for the purpose of
exercise or, subject to Section 5, exchange, substitution or
transfer shall be canceled by the Agent, and no Subscription
Certificates shall be issued in lieu thereof except as
expressly permitted by provisions of this Agreement. The
Company shall deliver to the Agent for cancellation and
retirement, and the Agent shall so cancel and return, any
other Subscription Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Agent
shall deliver all canceled Subscription Certificates to the
Company, or shall, at the written request of the Company,
destroy such canceled Subscription Certificates, and in such
case shall deliver a certificate of destruction thereof to
the Company.
12. Compensation for Services.
-------------------------
The Company agrees to pay to the Agent certain fees, as set forth in
the schedule hereto, for services performed hereunder, which services include
any other services not described herein but customarily performed by the
Subscription/Escrow Agent in a rights offering. The Company further agrees that
it will reimburse the Agent for its reasonable out-of-pocket expenses incurred
in the performance of its duties as such.
13. Instructions and Indemnification.
--------------------------------
The Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions:
(a) The Agent shall be entitled to rely upon any instructions or
directions furnished to it by an appropriate officer of the
Company, whether in conformity with the provisions of this
Agreement or constituting a modification hereof or a
supplement hereto. Without limiting the generality of the
foregoing or any other provision of this Agreement, the Agent,
in connection with its duties hereunder, shall not be under
any duty or obligation to inquire into the validity or
invalidity or authority or lack thereof of any instruction or
direction from an appropriate
- 7 -
<PAGE> 8
officer of the Company which conforms to the applicable
requirements of this Agreement and which the Agent reasonably
believes to be genuine and shall not be liable for any delays,
errors or loss of data occurring by reason of circumstances
beyond the Agent's control, including, without limitation,
acts of civil or military authority, national emergencies,
labor difficulties, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
(b) The Company will indemnify the Agent for, and hold it harmless
against, any liability and expense which may arise out of or
in connection with the services described in this Agreement
or the instructions or directions furnished to the Agent
relating to this Agreement by an appropriate officer of the
Company; provided, however, that such agreement does not
extend to, and the Agent shall not be indemnified or held
harmless with respect to any liability or expense which
shall arise out of, or be incurred or suffered as a result
of, the Agent's gross negligence, bad faith, wilful
misconduct or breach of this Agreement. The Company shall
not indemnify the Agent with respect to any claim or action
settled without its consent, which consent shall not be
unreasonably withheld.
(c) The Agent will promptly notify the Company of any claim with
respect to which it may seek indemnity hereunder. The
Company shall be entitled to participate at its own expense
in the defense of any suit brought to enforce any such
claim, and if the Company so elects, the Company shall
assume the defense of any such suit. In the event that the
Company assumes such defense, the Company shall not
thereafter be liable for the fees and expenses of any
additional counsel that the Agent retains, so long as the
Company shall retain counsel reasonably satisfactory to the
Agent, to defend such suit
14. Changes in Subscription Certificate.
-----------------------------------
The Agent may, without the consent or concurrence of the Stockholders
in whose names Subscription Certificates are registered, by supplemental
agreement or otherwise, concur with the Company in making any changes or
corrections in a Subscription Certificate that it shall have been advised by
counsel (who may be counsel for the Company) is appropriate to cure any
ambiguity or to correct any defective or inconsistent provision or clerical
omission or mistake or manifest error therein or herein contained, and which
shall not be inconsistent with the provision of the Subscription Certificate
except insofar as any such change may confer additional rights upon the
Stockholders.
15. Assignment, Delegation.
----------------------
(a) Neither this Agreement nor any rights or obligations hereunder
may be assigned or delegated by either party without the
written consent of the other party.
(b) This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors
and assigns. Nothing in this Agreement is
- 8 -
<PAGE> 9
intended or shall be construed to confer upon any other person
any right, remedy or claim or to impose upon any other person
any duty, liability or obligation.
16. Governing Law.
-------------
The validity, interpretation and performance of this Agreement shall be
governed by the law of the State of Ohio.
17. Severability.
------------
The parties hereto agree that if any of the provisions contained in
this Agreement shall be determined invalid, unlawful or unenforceable to any
extent, such provisions shall be deemed modified to the extent necessary to
render such provisions enforceable. The parties hereto further agree that this
Agreement shall be deemed severable, and the invalidity, unlawfulness or
enforceability of any term or provision thereof shall not affect the validity,
legality or enforceability of this Agreement or of any other term or provision
hereof.
18. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
19. Captions.
--------
The captions and descriptive headings herein are for the convenience of
the parties only. They do not in any way modify, amplify, alter or give full
notice of the provisions hereof.
20. Facsimile Signatures.
--------------------
Any facsimile signature of any party hereto shall constitute a legal,
valid and binding execution hereof by such party.
21. Further Actions.
---------------
Each party agrees to perform such further acts and execute such further
documents as are necessary to effect the purposes of this Agreement.
22. Additional Provisions.
---------------------
Except as specifically modified by this Agreement, the Agent's rights
and responsibilities set forth in the Agreement for Stock Transfer Services
between the Company and the Agent are hereby ratified and confirmed and continue
in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
- 9 -
<PAGE> 10
NATIONAL CITY BANK
By:__________________________________
Name:________________________________
Title:_______________________________
ACCEL INTERNATIONAL CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
- 10 -
<PAGE> 11
SCHEDULE OF FEES
FOR SUBSCRIPTION/ESCROW AGENT SERVICES
between
ACCEL International Corporation
and
NATIONAL CITY BANK
[to be provided by National City Bank]
- 11 -
<PAGE> 1
Exhibit 99.5
ACCEL INTERNATIONAL CORPORATION
RIGHTS OFFERING
NOMINEE HOLDER OVERSUBSCRIPTION EXERCISE FORM
PLEASE COMPLETE ALL APPLICABLE INFORMATION
By Mail: By Hand or Overnight Courier:
National City Bank, Subscription Agent National City Bank, Subscription Agent
Corporate Trust Operations Corporate Trust Operations
P.O. Box 94720 3rd Floor -- North Annex
Cleveland, Ohio 44101-4720 4100 West 150th Street
Cleveland, Ohio 44135-1385
THIS FORM IS TO BE USED ONLY BY NOMINEE HOLDERS TO EXERCISE THE OVERSUBSCRIPTION
PRIVILEGE IN RESPECT OF RIGHTS WITH RESPECT TO WHICH THE BASIC SUBSCRIPTION
PRIVILEGE WAS EXERCISED TO THE FULLEST EXTENT POSSIBLE AND DELIVERED THROUGH THE
FACILITIES OF A COMMON DEPOSITORY. ALL OTHER EXERCISES OF OVERSUBSCRIPTION
PRIVILEGES MUST BE EFFECTED BY THE DELIVERY OF SUBSCRIPTION CERTIFICATES.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN ACCEL
INTERNATIONAL CORPORATION'S ("THE COMPANY'S") PROSPECTUS DATED _______________,
1996 (THE PROSPECTUS") AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE
PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE SUBSCRIPTION AGENT, NATIONAL CITY
BANK AT (800) 622-6757.
THIS FORM OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE
SUBSCRIPTION AGENT WITH PAYMENT IN FULL BY 5:00 P.M., COLUMBUS, OHIO TIME, ON
_________________, 1996, UNLESS EXTENDED (AS IT MAY BE EXTENDED, THE EXPIRATION
DATE"), PROVIDED THAT THE EXPIRATION DATE SHALL IN NO EVENT BE LATER THAN
________________, 1996.
<PAGE> 2
1. The undersigned hereby certifies to the Company and the Subscription Agent
that it is a participant in _________________________________ (the Depository")
Name of Depository
and that it has either (i) exercised the Basic Subscription Privilege in respect
of Rights and delivered such exercised Rights to the Subscription Agent by means
of transfer to the Depository Account of the Company or (ii) delivered to the
Subscription Agent a Notice of Guaranteed Delivery in respect of the exercise of
the Basic Subscription Privilege and will deliver the Rights called for in such
Notice of Guaranteed Delivery to the Subscription Agent by means of transfer to
such Depository Account of the Company.
2. The undersigned hereby exercises the Oversubscription Privilege to purchase,
to the extent available, ___________ shares of Common Stock and certifies to the
Company and the Subscription Agent by execution of a Nominee Holder
Certification that such Oversubscription Privilege is being exercised for the
account or accounts of persons (which may include the undersigned) on whose
behalf all Basic Subscription Rights have been exercised to the fullest extent
possible.
3. The undersigned understands that payment of the Subscription Price of $______
per share for each share of Common Stock subscribed for pursuant to the
Oversubscription Privilege must be received by the Subscription Agent at or
before 5:00 p.m., Columbus, Ohio time, on the Expiration Date and represents
that such payment, in the aggregate amount of $______________, either (check
appropriate box):
/ / has been or is being delivered to the Subscription Agent pursuant to the
Notice of Guaranteed Delivery referred to above
or
/ / is being delivered to the Subscription Agent herewith
or
/ / has been delivered separately to the Subscription Agent and, in the case of
funds not delivered pursuant to a Notice of Guaranteed Delivery, is or was
delivered in the manner set forth below (check appropriate box and complete
information relating thereto):
/ / wire transfer of funds
- -- name of transferor institution____________________________________________
- -- date of transfer__________________________________________________________
- 2 -
<PAGE> 3
- -- confirmation number (if available)________________________________________
/ / uncertified check
/ / certified check
/ / bank draft (cashier's check)
Basic Subscription Confirmation Number:_____________
Depository Participant Number:______________________
Name of Depository Participant:_____________________
By:_________________________________________________
Name:______________________________________
Title:_____________________________________
Dated: _________________, 1996
PARTICIPANTS EXERCISING THE OVERSUBSCRIPTION PRIVILEGE PURSUANT
HERETO MUST SEPARATELY SUBMIT A NOMINEE HOLDER CERTIFICATION TO
THE SUBSCRIPTION AGENT. SUCH NOMINEE HOLDER CERTIFICATIONS ARE
AVAILABLE FROM THE SUBSCRIPTION AGENT.
- 3 -
<PAGE> 1
Exhibit 99.6
ACCEL INTERNATIONAL CORPORATION
RIGHTS OFFERING
NOMINEE HOLDER CERTIFICATION
The undersigned, a bank, broker or other nominee holder of Rights ( Rights") to
purchase shares of Common Stock, par value $.10 per share ( Common Stock"), of
ACCEL International Corporation (the Company") pursuant to the rights offering
(the "Rights Offering") described and provided for in the Company's prospectus
dated ____, 1996, (the Prospectus"), hereby certifies to the Company and to
National City Bank, as Subscription Agent for such Rights Offering, that (1) the
undersigned has exercised, on behalf of beneficial owners thereof, (which may
include the undersigned), the number of Rights specified below pursuant to the
Basic Subscription Privilege (as defined in the Prospectus) on behalf of
beneficial owners of Rights who have subscribed for the purchase of additional
shares of Common Stock pursuant to the Oversubscription Privilege (as defined in
the Prospectus); (2) the undersigned has listed below each such exercised Basic
Subscription and the corresponding Oversubscription Privilege (without
identifying any such beneficial owner) and (3) each such beneficial owner's
Basic Subscription has been exercised to the fullest extent possible:
Number of Rights Number of Shares
Exercised Pursuant to Subscribed for Pursuant
Basic Subscription to Oversubscription Rights Certificate
Privilege Privilege Number
-----------------------------------------------------------------------------
1. ______________________ _______________________ _________________________
2. ______________________ _______________________ _________________________
3. ______________________ _______________________ _________________________
4. ______________________ _______________________ _________________________
5. ______________________ _______________________ _________________________
6. ______________________ _______________________ _________________________
7. ______________________ _______________________ _________________________
8. ______________________ _______________________ _________________________
9. ______________________ _______________________ _________________________
10. ______________________ _______________________ _________________________
___________________________
Name of Nominee Holder
Depository Participant Number (if applicable) ___________________________
Address
________________________________________
Basic Subscription Confirmation Number(s) By:________________________
Name:______________________
Title:_____________________
________________________________________ Telephone Number:__________
