UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
--------------- ----------------
COMMISSION FILE NUMBER 0-8162
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 No.)
475 METRO PLACE NORTH, DUBLIN, OHIO 43017
(Address of principal executive offices) (Zip Code)
614-764-7000
(Registrant's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of each class
-------------------
COMMON STOCK, $.10 PAR VALUE
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulations S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
---
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
----- -----
The aggregate market value of Common Stock held by non-affiliates on January
31, 1996 was approximately $7,280,000.
As of January 31, 1996, there were 4,456,432 shares of Common Stock, $.10 par
value per share outstanding.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers, their respective ages and business experience are as
follows: Thomas H. Friedberg (56), Chairman of the Board, President and Chief
Executive Officer; Douglas J. Coats (62), Executive Vice President; Nicholas
Z. Alexander (60), Senior Vice President, Secretary and General Counsel; Larry
L. Main (47), Senior Vice President-Auto After Market Group; Kurt L. Mueller
(47), Vice President and Controller; and Alan M. Weiner (45), Vice President
and Treasurer.
Mr. Friedberg joined the Company on May 23, 1995, when he was appointed
Chairman & CEO. He was also appointed President as of October 15, 1996. Prior
thereto, he was Chairman, President and CEO of Ranger Insurance Company,
Houston, Texas for more than five years.
Mr. Coats joined the Company on May 23, 1995, when he was appointed Executive
Vice President and a member of the Board of Directors. Prior thereto, he was
Executive Vice President of Ranger Insurance Company, Houston, Texas for more
than five years.
Mr. Alexander was named Senior Vice President, Secretary and General Counsel
of the Company in 1992 and prior thereto was Vice President, Secretary and
General Counsel of the Company for more than five years.
Mr. Main was named Senior Vice President in 1992 and prior thereto was Vice
President of the Company for more than five years.
Mr. Mueller was named Vice President and Controller of the Company in 1994 and
prior thereto had been Vice President-General Accounting of the subsidiaries
of the Company for more than five years.
Mr. Weiner was named Treasurer of the Company in 1994 and prior thereto had
been Vice President-Reinsurance Accounting of the subsidiaries of the Company
for more than five years.
The following Table sets forth certain information relating to the Directors
of the Company:
<TABLE>
<CAPTION>
Name, Position with the Principal Occupation for Director Number of shares of Common Stock owned Percent
Company and Age (as of past five years/other Since beneficially, directly or indirectly, of Class
January 31, 1996) Directorships on January 31, 1996 (except as
otherwise noted) (1)
<S> <C> <C> <C> <C>
Robert Betagole President of Mike Albert 1970 49,529 (5) 1.1%
Director, 67 Leasing, Inc.,
Cincinnati, OH.
David T. Chase (2) President and Chief 1985 4,500 (6) *
Director, 66 Executive Officer of D.T.
Chase Enterprises, Inc.,
Hartford, CT.
Douglas J. Coats Executive Vice President 1995 -- --
Director, 63 of the Company since May
23, 1995. Prior thereto
he was Executive Vice
President of Ranger
Insurance Company,
Houston, TX since
August, 1987.
Raymond H. Deck (2)(3)(4) President of Chase 1990 98,815 2.2%
Director, 73 Insurance Enterprises,
Inc., Hartford, CT. Also,
is a director of SCOR
U.S.and Scor Re, New
York, NY.
Robert E. Fowler, III Senior Vice President, 1995 -- --
Director, 37 Chase Enterprises,
Hartford, CT, since July,
1990. Prior thereto, he
was a Vice President,
CITIBANK, N.A., New York,
NY
Thomas H. Friedberg (2) Chairman of the Board and 1995 10,000 *
President, 57 Chief Executive Officer
Chief Executive Officer and of the Company since May
Director 23, 1995. Appointed
President as of October
15, 1996. Prior thereto
he was Chairman of the
Board, President and
Chief Executive Officer
of Ranger Insurance
Company, Houston, TX,
since January, 1987.
Kermit G. Hicks (2)(3)(4) President of Hicks 1981 28,087 (7) *
Director, 60 Chevrolet, Inc.,
Greencastle, PA. Also,
Chairman of the Board of
Tower Bancorp Inc., and
its wholly owned
subsidiary First National
Bank of Greencastle.
Stephen M. Qua (2)(3)(4) President of Qua 1970 18,698 (8) *
Director, 63 Buick/Suzuki, Inc.
Cleveland, OH.
Milton J. Taylor, Sr. President of the Taylor 1991 6,500 (9) *
Director, 69 Team of Dealerships,
Lancaster, OH: Taylor
Chevrolet, Inc., and Milt
Taylor Lincoln-Mercury,
Inc.
Paul R. Whitters Consultant. Retired 1991 5,050 *
Director, 70 President of Frankona
Reinsurance Company,
Kansas City, MO.
All Directors and Officers 366,502 (10) 8.2%
as a group (14 persons)
<FN>
(1) On January 31, 1996, there were 4,456,432 shares of the Company
Common Stock issued and outstanding. Except as noted, includes shares
owned by spouse, minor children or certain other family members, or
held as custodian or trustee for the benefit of spouse or children,
or owned by corporations of which such person is an officer or
principal stockholder, over which shares such directors have sole or
shared voting or investment power. With respect to each Director
other than Messrs. Coats, Fowler and Friedberg, includes an aggregate
of 31,500 shares which are subject to immediately exercisable
options.
(2) Member of Executive Committee (Mr. Friedberg, Chairman).
(3) Member of Audit Committee (Mr. Qua, Chairman).
(4) Member of Compensation Committee (Mr. Deck, Chairman).
(5) Includes 7,581 shares as to which Mr. Betagole disclaims beneficial
ownership.
(6) David T. Chase disclaims beneficial ownership, for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Act"), of 1,351,454 shares of Common Stock or 30.3% of the shares
outstanding, owned by Chase Insurance Holdings Corporation ("CIHC"),
which is a wholly-owned subsidiary of American Ranger, Inc. ("ARI").
ARI is owned 100% by D.T. Chase Enterprises, Inc. ("DTCE"), which is
owned by David T. Chase (33.95%), his wife Rhoda L. Chase (2.21%),
his son, Arnold L. Chase (9.34%), and his daughter, Cheryl Chase
Freedman (14.74%), the Arnold Chase Accumulation Trusts I and II and
the David T. Chase Sprinkling Trusts IA through VA of which Arnold L.
Chase and Stanley N. Bergman are co-trustees (20.15% in the
aggregate), and the Cheryl Chase Freedman Accumulation Trusts I and
II and the David T. Chase Sprinkling Trusts IB through VB of which
Cheryl Chase Freedman and Stanley N. Bergman are co-trustees (19.61%
in the aggregate). Pursuant to an agreement, CIHC has loaned 812,842
shares of Common Stock to ARI which has full use of the borrowed
shares, including the right to sell, pledge or otherwise transfer the
shares until termination of the agreement. Mr. Chase also disclaims
beneficial ownership for purposes of Section 13(d) of the Act, of
382,000 shares of Common Stock, or 8.6% of the shares outstanding,
owned by Rhoda L. Chase. Pursuant to an agreement, Rhoda L. Chase has
loaned 335,000 shares of Common Stock to Insurance Holdings Limited
Partnership ("IHLP") which has full use of the borrowed shares,
including the right to sell, pledge or otherwise transfer the shares
until termination of the agreement. The general partner of IHLP is
Chase Insurance Corporation ("CIC"). David T. Chase, Arnold L. Chase
and Cheryl Chase Freeman are executive officers of CIC. In filings on
Schedule 13D with respect to the Company's Common Stock, Rhoda L.
Chase, ARI, CIHC and IHLP have each stated that such person has not
agreed to act together with any of the foregoing persons or with any
other person or entity for the purpose of acquiring, holding, voting
or disposing of shares of Common Stock, and disclaims membership in
any "group" with respect to the Common Stock for purposes of Section
13(d)(3) of the Exchange Act or Rule 13d-5(b)(1) adopted thereunder.
If such a group were deemed to exist, the group would be deemed to
beneficially own all shares of Common Stock beneficially owned by
each such person.
(7) Includes 8,696 shares as to which Mr. Hicks claims beneficial
ownership on an indirect basis.
(8) Includes 1,894 shares as to which Mr. Qua disclaims beneficial
ownership.
(9) Includes 1,000 shares as to which Mr. Taylor claims beneficial
ownership on an indirect basis.
(10) This amount includes 122,342 shares which are subject to immediately
exercisable options and 22,481 shares owned by officers in their
Acceleration Retirement Savings and Stock Ownership Plan accounts as
of December 31, 1995.
* Less than 1% of outstanding Common Stock.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more
than 10% of the Common Stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC").
Officers, directors and greater than 10% stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it or
written representations from certain reporting persons that no Forms 5 were
required of them, the Company believes that during the fiscal year ended
December 31, 1995, all filing requirements applicable to its officers,
directors and greater than 10% stockholders were complied with, except that
two reports covering an initial statement of beneficial ownership and one
transaction were filed late by Mr. Coats.
ITEM 11. EXECUTIVE COMPENSATION
Summary
-------
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Company's chief
executive officer and each of the Company's other three most highly
compensated executive officers whose total annual salary and bonus for the
fiscal year ended December 31, 1995, exceeded $100,000 (the "named
executives") during each of the last three fiscal years:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long Term Compensation
Year Name, Age, and Principal Salary ($) Bonus ($) Securities All Other
Position Underlying Compensation
Options/SARs (#) ($)(2)
<S> <C> <C> <C> <C> <C>
1995 Thomas H. Friedberg, 57 (1) -- -- 100,000 --
1994 Chairman of the Board, -- -- -- --
1993 President and Chief Executive -- -- -- --
Officer
1995 R. Max Williamson, 58 (3) 225,000 -- 15,000 4,240
1994 Chairman of the Board, 225,000 -- 15,000 7,294
1993 President and Chief Executive 225,000 -- 15,000 6,152
Officer
1995 Larry L. Main, 47 Senior Vice 112,000 -- 10,000 2,639
1994 President Auto After Market 112,000 -- 10,000 2,605
1993 Product Group 112,0000 -- 10,500 3,064
1995 Nicholas Z. Alexander, 60 109,000 -- 10,000 4,093
1994 Senior Vice President, 109,000 -- 10,000 4,061
1993 Secretary and General Counsel 109,000 -- 10,500 2,980
1995 William B. Johnson, 43 (4) 108,000 -- 10,000 2,144
1994 Senior Vice President Claims 108,000 -- 10,000 2,112
1993 108,000 -- 10,500 1,734
<FN>
(1) Mr. Friedberg was appointed Chairman of the Board and Chief Executive
Officer of the Company on May 23, 1995. He accepted appointment to
such offices without entitlement to salary for the first year of the
appointment. In lieu of salary, he was granted a stock option for
100,000 shares of Common Stock which vested immediately, becomes
exercisable one year following the date of grant, and lapses five
years from the date of grant.
(2) Represents approximate amounts contributed on behalf of each such
executive to the Acceleration Retirement Savings and Stock Ownership
Plan.
(3) Mr. Williamson relinquished his positions with the Company as of
October 15, 1995. Pursuant to the provisions of his Employment
Agreement with the Company, his compensation thereunder will continue
until February 28, 1997.
(4) Mr. Johnson resigned effective December 31, 1995.
</TABLE>
The following table sets forth information concerning individual grants of
options to purchase the Company's Common Stock made to the named executives
in 1995:
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS IN 1995 Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term
Name Number of Percent of Exercise or Expiration 5% ($) 10% ($)
Securities Total Base Price Date
Underlying Options ($ Sh) (1)
Options/SARs Granted to
Granted (#) Employees in
Fiscal Year
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg 100,000 43.0% $2.125 5/23/00 $58,710 $129,733
R. Max Williamson 15,000 6.5% $2.125 Expired N/A N/A
Larry M. Main 10,000 4.3% $2.125 5/23/05 $13,364 $33,867
Nicholas Z. Alexander 10,000 4.3% $2.125 5/23/05 $13,364 $33,867
William B. Johnson 10,000 4.3% $2.125 Expired N/A N/A
<FN>
(1) Market price of the Company's Common Stock on date of grant.
</TABLE>
The following table sets forth certain information regarding individual
exercises of stock options during 1995 by each of the named executives:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<CAPTION>
Name Shares Value Number of Securities Value of Unexercised
Acquired on Realized Underlying Unexercised Options In-The-Money Options at Fiscal
Exercise (Mkt. Price at Fiscal Year End (#) Year End (1)
(#) at Exercise
Less
Exercise
Price)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg 0 N/A 0 100,000 0 $62,500
R. Max Williamson 0 N/A N/A N/A N/A N/A
Larry L. Main 0 N/A 35,931 14,000 $6,250 N/A
Nicholas Z. Alexander 0 N/A 39,404 14,000 $6,250 N/A
William B. Johnson 0 N/A N/A N/A N/A N/A
<FN>
(1) Intended to represent the amount by which the market price of the
Company's Common Stock on December 31, 1995 ($2.75), exceeded the
exercise prices of unexercised options on that date.
</TABLE>
Employment Agreement
On August 1, 1990, the Company entered into an employment agreement with
R.Max Williamson pursuant to which Mr. Williamson served as Chairman,
President and Chief Executive Officer of the Company. The term of the
agreement was for a period of three years and provided that, unless
terminated in accordance with the provisions thereof, on the first day of
each month that the agreement was in effect, the remaining term thereof
would automatically be extended one additional month. On December 13, 1993,
the Board of Directors notified Mr. Williamson that the employment
agreement would be terminated on February 28, 1997. Mr. Williamson's base
salary under the agreement was $225,000 per year. In addition to a base
salary, the agreement provided for a cash bonus and other employee benefits
to be provided Mr. Williamson. Mr. Williamson relinquished his positions
with the Company as of October 15, 1995. Pursuant to the provisions of this
employment agreement with the Company, his compensation thereunder will
continue until February 28, 1997.
Compensation of Directors
During 1995, non-employee directors of the Company continued to abide by
the one-third reduction in compensation levels initiated in 1993, and
accordingly received an annual retainer of $5,000 plus a fee of $500 per
meeting for attending any regular or special meetings of the Board of
Directors. The members of each committee of the Board of Directors, other
than officers of the Company, received a fee of $500 for each meeting
attended. Chairmen of committees received a fee of $750 for each meeting
attended.
The First Restatement of ACCEL International Corporation 1987 Stock
Incentive Plan (the "Restated Plan") provides for options to be granted
every year to non-employee directors of the Company for a predetermined
number of shares of Common Stock. In 1991, the year the Restated Plan was
adopted, the non-employee directors were granted options for 2,000 shares
each. In subsequent years, options for 1,000 shares each were granted and
will continue to automatically be granted according to the Restated Plan
(subject to adjustment for stock dividends, stock splits and other similar
events). Newly appointed or elected non-employee directors are granted
options for 2,000 shares in the year they are appointed or elected, and
thereafter will receive the automatic grants. The exercise price is equal
to the fair market value of a share of stock on the date the option is
granted. Options become exercisable as to 50% of the shares subject to the
option on completion of each full year prior to termination of the
director's status as director after the date the option was granted. The
options lapse on the earliest of the date 10 years after the option was
granted, or the date 180 days after the termination of the director's
status as director. The options shall fully vest and become completely
exercisable upon the death or voluntary retirement of a director.
Compensation Committee Interlocks and Insider Participation
Mr. Qua is associated with two automobile dealerships which are master
policyholders of the Company and receive commissions from the Company in
connection with credit insurance sold by such dealerships. During the
fiscal year ended December 31, 1995, such dealerships received commissions
in the amount of $91,670
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the named
executive's beneficial ownership of the Common Stock of the Company as of
January 31, 1996:
Shares of Common Stock of
Company Beneficially
Owned
Title of Class Name of Officer Number (1) Percent of
Class
Common Stock Thomas H. Friedberg 10,000 *
Common Stock R. Max Williamson 5,419 *
Common Stock Larry L. Main 46,854 1%
Common Stock Nicholas Z. 44,642 1%
Alexander
Common Stock William B. Johnson N/A N/A
(1) The amounts shown represent the total shares owned outright by such
individuals together with shares which are issuable upon the exercise
of all stock options which are currently exercisable. Specifically,
the following individuals have the right to acquire the shares
indicated after their names, upon the exercise of such stock option:
Mr. Main, 39,404; Mr. Alexander, 35,931.
* Less than 1% of outstanding Common Stock.
The following table sets forth certain information as of January 31, 1996
(except as otherwise noted) with respect to stockholders known to the
Company to be the beneficial owners of more than five percent of any class
of the Company's voting securities:
<TABLE>
<CAPTION>
Title of Class Name and Address of Beneficial Owner Amount of Beneficial Percent of Class
Ownership (1)
<S> <C> <C> <C>
Common Stock Chase Insurance Holdings Corporation 1,351,459 Shares (2) 30.3%
One Commercial Plaza
Hartford, CT 06103
Rhoda L. Chase 382,000 (2) 8.6%
96 High Ridge Road
West Hartford, CT 06117
Dimensional Fund Advisors Inc 315,119 Shares (3) 7.1%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Tweedy, Browne Company L.P. and TBK 246,000 Shares (4) 5.5%
Partners, L.P.
52 Vanderbilt Avenue
New York, NY 10017
<FN>
(1) Except as otherwise noted, the Company has no reason to believe that
any beneficial owner listed above does not have sole voting and
investment power with respect to these shares.
(2) As of January 31, 1996. See footnote (6) in Item 10 hereof.
(3) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 315,119
shares of ACCEL International Corporation stock as of December 31,
1995, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business
trust, or the DFA Group Trust and DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of all such shares.
(4) Tweedy, Browne Company L.P. ("TBC"), a registered broker-dealer and
registered investment advisor, and TBK Partners, L.P. ("TBK"), have
jointly filed amendments to their respective Schedule 13D Reports
(the "Schedule 13D") with the SEC. The Schedule 13D stated that TBC
may be deemed to have beneficial ownership of 246,000 shares, all of
which shares are held in accounts of various customers of TBC. TBC
further reported that it has investment discretion with respect to
all 246,000 shares and sole power to vote 171,000 shares. As a result
of a disposition of shares, TBK reported that it does not
beneficially own any shares. Each of TBC and TBK disclaimed
beneficial ownership of the 246,000 shares held in the TBC accounts
and disclaimed beneficial ownership of the shares held by the other.
TBK and TBC also reported that their respective general partners,
four of whom are common to each, may, solely by reason of their
positions as such, be deemed to share voting power and dispositive
power with respect to the shares. Finally TBC and TBK stated that the
filing of the Schedule 13D should not be deemed an admission that TBC
and TBK comprise a group within the meaning of Section 13(d)(3) of
the Act.
</TABLE>
Information concerning official ownership of Common Stock of the Company is
included in the Table set forth under Item 10 hereof.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Several of the Company's directors are associated with automobile
dealerships. These dealerships are master policyholders of the Company and
receive commissions from the Company in connection with credit insurance
sold by them. All commissions paid to automobile dealerships and agencies
associated with the Company's directors are at rates determined on a basis
consistent with commissions paid to non-related parties. Total commission
on credit insurance business paid to all agencies relating to all directors
as a group during the year ended December 31, 1995 was $180,231.
The following table sets forth those directors whose agencies received
commissions in connection with the credit insurance business of the Company
in excess of $60,000 in the year 1995:
DIRECTOR 1994
Stephen M. Qua $91,670
Milton J. Taylor, Sr. $88,561
Also, an insurance agency of which Robert Betagole is a shareholder,
received $1,734,913 through a reinsurance arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
ACCEL INTERNATIONAL CORPORATION
By: /S/ Kurt L. Mueller
------------------------------------
Kurt L. Mueller
Vice President & Controller
Date: April 29, 1996
-----------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
