SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
ACCEL International Corporation
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(Name of Issuer)
Common Stock, par value $0.10 per share
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(Title of Class of Securities)
004299 10 3
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(CUSIP Number)
William H. Cuddy, Esq.
Day, Berry & Howard
CityPlace I, Hartford, Connecticut 06103-3499
(860) 275-0100
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 15, 1995, July 28, 1997
and January 14, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on the following pages)
(Page 1 of 15 Pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
Cusip No. 004299 10 3 Page 2 of 15 Pages
1 NAME OF REPORTING PERSONS
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Chase Insurance Corporation
06-1388731
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Connecticut
7 SOLE VOTING POWER
335,000 shares (see Row 11, below)
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0 shares
OWNED BY EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 335,000 shares (see Row 11, below)
WITH
10 SHARED DISPOSITIVE POWER
0 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
335,000 shares, as general partner of Insurance Holdings Limited
Partnership ("IHLP"), to the extent that IHLP has been temporarily
transferred dispositive power and voting power over such shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* /X/
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.9% (see Row 11, above)
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Item 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on
Schedule 13D relates is the common stock, par value $0.10 per share (the
"Common Stock"), of ACCEL Corporation ("ACCEL"), a Delaware corporation
whose principal executive offices are located at 475 Metro Place North,
Dublin, Ohio 13017.
Item 2. IDENTITY AND BACKGROUND
(a) NAME:
Chase Insurance Corporation
(b) RESIDENCE OR BUSINESS ADDRESS:
c/o Chase Enterprises
One Commercial Plaza
Hartford, Connecticut 06103
(c) PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT:
The reporting person is a the general partner of Insurance
Holdings Limited Partnership ("IHLP"), a limited partnership which provides
consulting services to affiliated and non-affiliated insurance companies.
The information required by subsections (a) through (c) of this
Item 2 with respect to the executive officers, directors and controlling
persons of the reporting person as of the date hereof is incorporated
herein by reference to such information in Schedule I hereto.
(d) During the past five years, none of the reporting person or the
executive officers, directors or controlling persons of the reporting
person has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) During the past five years, none of the reporting person or the
executive officers, directors or controlling persons of the reporting
person has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to
such laws.
(f) CITIZENSHIP: The reporting person is a corporation organized
under the laws of the State of Connecticut. Each of the executive
officers, directors and controlling persons of the reporting person is a
citizen of the United States of America.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS
The reporting person is the general partner of IHLP. The
reporting person's beneficial ownership of Common Stock exists only to the
extent that the reporting person is deemed to share voting or dispositive
power with respect to the shares of Common Stock owned by IHLP by reason of
the reporting person's affiliation with IHLP.
IHLP borrowed 335,000 shares of Common Stock from Rhoda L. Chase,
pursuant to a letter agreement dated December 15, 1995 (the "1995 Letter
Agreement") between IHLP and Rhoda L. Chase. On July 28, 1997, IHLP
borrowed an additional 335,000 shares of Common Stock from Rhoda L. Chase
pursuant to the 1995 Letter Agreement, as modified by a letter agreement
dated July 31, 1997 (the "1997 Letter Agreement") between IHLP and Rhoda L.
Chase. On January 14, 1998, IHLP returned to Rhoda L. Chase 335,000 of the
670,000 shares of Common Stock that it had borrowed from Rhoda L. Chase.
Such return was reflected in a letter agreement dated January 14, 1998 (the
"1998 Letter Agreement", and, together with the 1995 Letter Agreement and
the 1997 Letter Agreement, the "IHLP Loan Agreement"). The 335,000 shares
of Common Stock returned to Rhoda L. Chase were deposited by Rhoda L. Chase
into the brokerage account to which her Trading Authorization described in
Item 6 hereof relates. In exchange for Rhoda L. Chase lending the above
securities, IHLP agreed to pay quarterly to Rhoda L. Chase a service fee
(the "Service Fee") equal to six percent (6%) per annum of the average
monthly market value of the borrowed securities pro rated over the number
of days the IHLP Loan Agreement is in effect. The terms of the IHLP Loan
Agreement are more fully described in Item 6 hereof. IHLP intends to use
working capital to pay the Service Fee.
On December 24, 1997, Rhoda L. Chase, the sole shareholder of the
reporting person, loaned 1,000,000 shares of Common Stock to David T.
Chase, President and Director of the reporting person, pursuant to a loan
agreement (the "Chase Loan Agreement") dated December 24, 1997, between
Rhoda L. Chase and David T. Chase. The terms of the Chase Loan Agreement
are more fully described in Item 6 hereof.
Item 4. PURPOSE OF TRANSACTION
IHLP pledged the 335,000 shares of Common Stock loaned to it by
Rhoda L. Chase to provide additional collateral for a working capital loan.
Based on its ongoing evaluation of the business, prospects and financial
condition of ACCEL, the market for and price of the Common Stock, other
opportunities available to it, offers for its shares of Common Stock,
general economic conditions and other future developments, IHLP may decide
to sell, seek the sale of or otherwise transfer, or continue to pledge or
otherwise encumber all or part of its present or future beneficial holdings
of Common Stock, or may decide to borrow or acquire additional Common Stock
either in the open market, in private transactions, or by any other
permissible means. Any such transactions may be effected at any time and
from time to time. David T. Chase, Arnold L. Chase and Rhoda L. Chase are
each holding the shares of Common Stock owned by them for investment
purposes. David T. Chase pledged the 1,000,000 shares of Common Stock
loaned to him by Rhoda L. Chase to secure a loan with Comerica Bank
pursuant to a security agreement (the "Security Agreement") dated December
30, 1997. The terms of the Security Agreement are more fully described in
Item 6 hereof. David T. Chase, Arnold L. Chase and Rhoda L. Chase each
reserve the same rights and may make the same evaluations as IHLP.
Other than the above, as of the date hereof, the reporting person, and
the executive officers, directors and controlling persons of the reporting
person do not have any plans or proposals that relate to or would result in
any of the following:
(a) The acquisition by any person of additional securities of ACCEL,
or the disposition of securities of ACCEL;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving ACCEL or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of ACCEL or of
any of its subsidiaries;
(d) Any change in the present board of directors or management of
ACCEL, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of ACCEL;
(f) Any other material change in ACCEL's business or corporate
structure;
(g) Changes in ACCEL's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
ACCEL by any person;
(h) Causing a class of securities of ACCEL to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of ACCEL becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or
(j) Any action similar to any of those enumerated above.
Item 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date hereof, IHLP may be deemed to beneficially own the
335,000 shares of Common Stock, or 3.9% of the 8,637,042 shares of Common
Stock reported to be outstanding as of November 17, 1997 (as reported in
ACCEL's Definitive Proxy Statement dated December 18, 1997), that it
borrowed from Rhoda L. Chase pursuant to the IHLP Loan Agreement.
Information with respect to the Common Stock owned by the executive
officers, directors and controlling persons of the reporting person is set
forth in Schedule I hereto, which is incorporated herein by reference, and
in the following paragraph.
This statement does not relate to, and, in accordance with Rule
13d-4 under the Exchange Act, IHLP expressly declares that the filing of
this statement shall not be construed as an admission that it is, for the
purposes of Section 13(d) or Section 13(g) of the Exchange Act, the
beneficial owner of, any of (i) the 1,167,824 shares of Common Stock, or
13.5% of the shares of Common Stock reported to be outstanding as of
November 17, 1997, owned by Arnold L. Chase, an Executive Vice President
and director of the reporting person, (ii) the 5,350 shares of Common
Stock, or less than 0.1% of the shares of Common Stock reported to be
outstanding as of November 17, 1997, owned by Sandra M. Chase, a limited
partner of IHLP and the spouse of Arnold L. Chase, (iii) the
1,167,824 shares of Common Stock, or 13.5% of the shares of Common Stock
reported to be outstanding as of November 17, 1997, owned by The Darland
Trust (the "Trust"), a trust of which Cheryl A. Chase (a limited partner of
IHLP and an Executive Vice President and director of the reporting person)
and her children are the beneficiaries, (iv) the 6,500 shares of Common
Stock, or less than 0.1% of the shares of Common Stock reported to be
outstanding as of November 17, 1997, currently issuable upon the exercise
of options held by David T. Chase (President and a director of the
reporting person), or (v) 1,665,000 shares of Common Stock, or 19.3% of the
shares of Common Stock reported to be outstanding as of November 17, 1997,
owned by Rhoda L. Chase, a limited partner of IHLP and the owner of all of
the Capital Stock of the reporting person. David T. Chase may be deemed to
be a beneficial owner of the 1,167,824 shares of Common Stock referred to
in clause (i) of the immediately preceding sentence, the 1,167,824 shares
of Common Stock referred to in clause (iii) of the immediately preceding
sentence and the 1,665,000 shares of Common Stock referred to in clause (v)
of the immediately preceding sentence. David T. Chase and Rhoda L. Chase
are husband and wife and are the parents of Arnold L. Chase and Cheryl A.
Chase.
(b) As described in greater detail in Item 6 hereof, IHLP has the
sole power to vote, direct the voting of, dispose of, and direct the
disposition of, the 335,000 shares of Common Stock it has borrowed from
Rhoda L. Chase during the term of the IHLP Loan Agreement.
As described in greater detail in Item 6 hereof, David T. Chase
has the sole power to vote, direct the vote of, dispose of, and direct the
disposition of the 1,000,000 shares of Common Stock he borrowed from Rhoda
L. Chase during the term of the Chase Loan Agreement. Upon the exercise of
any of his currently exercisable options for 6,500 shares of Common Stock,
David T. Chase will have the sole power to vote or direct the vote of, and
the sole power to dispose or to direct the disposition of, the shares of
Common Stock received by him as a result of such exercise. David T. Chase
shares the power to dispose or to direct the disposition of (i) 665,000
shares of Common Stock owned by Rhoda L. Chase with Rhoda L. Chase, (ii)
1,167,824 shares of Common Stock owned by Arnold L. Chase with Arnold L.
Chase and (iii) 1,167,824 shares of Common Stock owned by the Trust with
the Trust.
Arnold L. Chase has the sole power to vote or to direct the vote
of the 1,167,824 shares of Common Stock owned by him. Arnold L. Chase
shares the power to dispose or to direct the disposition of the 1,167,824
shares of Common Stock owned by him with David T. Chase.
Rhoda L. Chase has the sole power to vote or to direct the vote
of the 2,000,000 shares of Common Stock owned by her, except to the extent
that (i) she has temporarily transferred to IHLP the sole power to vote or
to direct the vote of the 335,000 shares of Common Stock on loan to IHLP
during the term of the IHLP Loan Agreement, as described in greater detail
in Item 6 hereof, and (ii) she has temporarily transferred to David T.
Chase the sole power to vote or to direct the vote of the 1,000,000 shares
of Common Stock on loan to David T. Chase during the term of the Chase Loan
Agreement, as described in greater detail in Item 6 hereof. Rhoda L.
Chase shares the power to dispose or to direct the disposition of 665,000
of the shares of Common Stock owned by her with her husband, David T.
Chase. Rhoda L. Chase has the sole power to dispose or to direct the
disposition of 1,335,000 of the shares of Common Stock owned by her, except
to the extent that (i) she has temporarily transferred to IHLP the sole
power to dispose or to direct the disposition of 335,000 shares of Common
Stock during the term of the IHLP Loan Agreement, as described in greater
detail in Item 6 hereof, and (ii) she has temporarily transferred to David
T. Chase the sole power to dispose or to direct the disposition of
1,000,000 shares of Common Stock during the term of the Chase Loan
Agreement, as described in greater detail in Item 6 hereof.
The Trust is a trust for which Rothschild Trust Cayman Limited
serves as trustee and of which Cheryl A. Chase and her children are the
beneficiaries. The Trust's address is FBO: The Darland Trust, P.O. Box
472, St. Peter's House, Le Bordage, St. Peter Port, Guernsey GYI6AX,
Channel Islands. The Trust is an entity of the Cayman Islands.
During the past five years, the Trust has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the past five years, the Trust has not been a party to a civil
proceeding of a judicial or an administrative body of competent
jurisdiction and as a result of such proceeding is or was subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(c) To the reporting person's knowledge, no transactions in the
Common Stock were effected by or on behalf of the reporting person, or any
of its executive officers, directors and controlling persons during the
past 60 days other than the transactions described in Item 3 hereof.
(d) As described in greater detail in Item 6 hereof, Rhoda L. Chase
may be deemed to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the 335,000
shares of Common Stock that IHLP borrowed from Rhoda L. Chase during the
term of the IHLP Loan Agreement.
As described in greater detail in Item 6 hereof, Rhoda L. Chase
may be deemed to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the 1,000,000
shares of Common Stock that David T. Chase borrowed from Rhoda L. Chase
during the term of the Chase Loan Agreement. Upon the exercise of any of
his currently exercisable options for 6,500 shares of Common Stock, David
T. Chase will have the sole right to receive or direct the receipt of
dividends from, or the proceeds from the sale of, the shares of Common
Stock received by him as a result of such exercise. Each of David T. Chase
and, with respect to (i) 665,000 shares of Common Stock owned by Rhoda L.
Chase, Rhoda L. Chase, (ii) 1,167,824 shares of Common Stock owned by
Arnold L. Chase, Arnold L. Chase and (iii) 1,167,824 shares of Common Stock
owned by the Trust, The Trust, has the power to direct the dividends from,
and the proceeds from the sale of, the shares of Common Stock owned by
David T. Chase. No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of Common Stock owned by David T. Chase.
Each of David T. Chase and Arnold L. Chase has the power to
direct the dividends from, and the proceeds from the sale of, the shares of
Common Stock owned by Arnold L. Chase. No other person is known to have
the right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the shares of Common Stock owned by
Arnold L. Chase.
Each of David T. Chase and Rhoda L. Chase has the power to direct
the dividends from, and the proceeds from the sale of, 665,000 of the
shares of Common Stock owned by Rhoda L. Chase. As described in greater
detail in Item 6 hereof, IHLP may be deemed to have the right, during the
term of the IHLP Loan Agreement, to receive or to direct the receipt of
dividends from, or the proceeds from the sale of, the 335,000 shares of
Common Stock loaned by Rhoda L. Chase to IHLP. As described in greater
detail in Item 6 hereof, David T. Chase may be deemed to have the right,
during the term of the Chase Loan Agreement, to receive or to direct the
receipt of dividends from, or the proceeds from the sale of, the 1,000,000
shares of Common Stock loaned by Rhoda L. Chase to David T. Chase. No
other person, other than Rhoda L. Chase, is known to have the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the shares of Common Stock owned by Rhoda L.
Chase.
(e) Not Applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
On December 15, 1995, IHLP borrowed 335,000 shares of Common Stock
from Rhoda L. Chase pursuant to the 1995 Letter Agreement. On July 28,
1997, IHLP borrowed an additional 335,000 shares of Common Stock from Rhoda
L. Chase pursuant to the 1997 Letter Agreement. On January 14, 1998, IHLP
returned to Rhoda L. Chase 335,000 shares of the 670,000 shares of Common
Stock that IHLP previously borrowed from Rhoda L. Chase pursuant to the
1998 Letter Agreement. Under the terms of the IHLP Loan Agreement, IHLP
has full use of the 335,000 shares of Common Stock it currently holds on
loan from Rhoda L. Chase, including the right to sell, pledge or otherwise
transfer or encumber the 335,000 shares of Common Stock, until termination
of the IHLP Loan Agreement. In exchange for use of the Borrowed
Securities, IHLP is to pay Rhoda L. Chase the Service Fee. In addition,
IHLP is to pay to Rhoda L. Chase any cash dividends or distributions
declared by ACCEL on the Common Stock during the term of the IHLP Loan
Agreement. Upon the termination of the IHLP Loan Agreement, IHLP is to
deliver to Rhoda L. Chase securities that are identical in kind and amount
to the 335,000 share of Common Stock IHLP borrowed from Rhoda L. Chase and
including all dividends and distributions in the form of stock, rights,
warrants or other securities which ACCEL makes during the term of the IHLP
Loan Agreement. The IHLP Loan Agreement is to terminate December 31, 2001
unless terminated sooner by one of the parties pursuant to the terms of the
IHLP Loan Agreement.
IHLP has pledged the shares of Common Stock on loan to it pursuant to
the IHLP Loan Agreement to Comerica Bank ("Comerica") to secure a
$4,300,000 term loan facility pursuant to a Letter Agreement, Term Note and
Security Agreement, each dated December 22, 1995 (collectively, the
"Comerica Agreement").
Rhoda L. Chase has loaned David T. Chase 1,000,000 shares of Common
Stock pursuant to the Chase Loan Agreement. Under the terms of the Chase
Loan Agreement, David T. Chase has full use of the 1,000,000 shares of
Common Stock, including the right to sell, pledge or otherwise transfer or
encumber the 1,000,000 shares of Common Stock, until termination of the
Chase Loan Agreement. In exchange for use of the 1,000,000 shares of
Common Stock, David T. Chase is to pay Rhoda L. Chase quarterly a service
fee of six percent (6%) per annum of the average monthly market value of
the 1,000,000 shares of Common Stock prorated over the number of days the
Chase Loan Agreement is in effect. In addition, David T. Chase is to pay
to Rhoda L. Chase any cash dividends or distributions declared by ACCEL on
the Common Stock during the term of the Chase Loan Agreement. Upon the
termination of the Chase Loan Agreement, David T. Chase is to deliver to
Rhoda L. Chase securities that are identical in kind and amount to the
1,000,000 shares of Common Stock and including all dividends and
distributions in the form of stock, rights, warrants or other securities
which ACCEL makes with respect to the 1,000,000 shares of Common Stock
during the term of the Chase Loan Agreement. The Chase Loan Agreement is
to terminate December 31, 2001, unless terminated sooner by one of the
parties pursuant to the terms of the Chase Loan Agreement.
David T. Chase has pledged the 1,000,000 shares of Common Stock to
secure a loan with Comerica pursuant to the Security Agreement. In
connection with the Security Agreement, David T. Chase has executed and
delivered to Comerica Securities, Inc. ("CSI"), the brokerage company
through which he holds the 1,000,000 shares of Common Stock, a Notice to
Financial Intermediary of Security Interest in Securities and Brokerage
Account (the "Notice to Financial Intermediary") dated December 30, 1997,
informing CSI of the pledge and instructing CSI (i) not to sell, transfer
or take any other action with respect to the 1,000,000 shares of Common
Stock until it receives written instructions to the contrary from Comerica
and (ii) to follow the instructions of Comerica with respect to the
1,000,000 shares of Common Stock.
The foregoing description of the 1995 Letter Agreement, the 1997
Letter Agreement, the 1998 Letter Agreement, the Comerica Agreement, the
Chase Loan Agreement, the Security Agreement, and the Notice to Financial
Intermediary is subject to, and is qualified in its entirety by reference
to, the 1995 Letter Agreement, the 1997 Letter Agreement, the 1998 Letter
Agreement, the Comerica Agreement, the Chase Loan Agreement, the Security
Agreement, and the Notice to Financial Intermediary, each of which is filed
as an exhibit to this Statement on Schedule 13D.
Pursuant to a General Trading Authorization for Securities and/or
Options Accounts (each, a "Trading Authorization"), each of Rhoda L. Chase,
Arnold L. Chase and the Trust has granted to David T. Chase the power to
enter orders to purchase and sell securities for the brokerage account in
which such person or entity holds the Common Stock referred to in the last
sentence of the second paragraph of Item 5(b). Each Trading Authorization
also confers upon David T. Chase the power to buy and sell on margin, to
sell short for such account and to give instructions as to the transfer of
money and property from such account. The powers granted by each Trading
Authorization remain effective until terminated by the grantor of such
Trading Authorization.
The foregoing description of the Trading Authorizations is subject to,
and is qualified in its entirety by reference to, the forms of Trading
Authorizations, which are filed as exhibits to this Statement on Schedule
13D.
David T. Chase manages certain funds on behalf of the Trust. In such
capacity and pursuant to the Trading Authorization granted by the Trust,
David T. Chase may effect the sale of some or all of the shares of Common
Stock owned by the Trust or effect the purchase of additional shares of
Common Stock for the account of the Trust.
Pursuant to the First Restatement of the ACCEL International
Corporation 1987 Stock Incentive Plan (the "1987 Plan") and Stock Option
Agreements (the "Old Stock Option Agreements") dated June 4, 1991, June 2,
1992, May 25, 1993, May 24, 1994 and May 23, 1995, between David T. Chase
and ACCEL, David T. Chase has been granted options to purchase 6,000 shares
of Common Stock, all of which are currently exercisable. The exercise
price for each option is equal to the fair market value of a share of
Common Stock on the date such option was granted. Each such option will
expire ten years after the date it was granted or, if earlier, 180 days
after David T. Chase ceases to be a director of ACCEL. Such options are
not transferable other than by will or the laws of descent and
distribution.
The foregoing description of the 1987 Plan, the Old Stock Option
Agreements and the options granted to David T. Chase thereunder is subject
to, and is qualified in its entirety by reference to, the 1987 Plan and the
Old Stock Option Agreements, which are each filed as exhibits to this
Statement on Schedule 13D.
Pursuant to the ACCEL International Corporation 1996 Stock Incentive
Plan (the "1996 Plan"), each person who becomes a director of ACCEL is
granted, upon his initial appointment or election as a director, the option
to purchase 2,000 shares of Common Stock, and each non-employee director of
ACCEL (other than a non-employee director who first became a director
during the period following the immediately preceding annual meeting of
stockholders of ACCEL) is granted, at each annual meeting of stockholders
of ACCEL, the option to purchase 1,000 shares of Common Stock, provided
that no options will be granted under the 1996 Plan after June 11, 2006.
As non-employee directors of ACCEL, David T. Chase and John P. Redding are
each entitled to receive such options under the 1996 Plan. Each such
option will become exercisable as to 50% of the shares of Common Stock
subject to it on the first anniversary of the date it was granted and as to
the remaining shares of Common Stock on the second anniversary of the date
it was granted. The per share exercise price for each such option will be
equal to the fair market value of a share of Common Stock on the date such
option was granted. Each such option will expire ten years after the date
it was granted or, if earlier, 180 days after the grantee ceases to be a
director of ACCEL. Such options are not transferable other than by will,
the laws of descent and distribution or pursuant to certain domestic
relations orders.
David T. Chase has been granted options to purchase 2,000 shares of
Common Stock, one quarter of which are currently exercisable, pursuant to
the 1996 Plan and to Stock Option Agreements (the "New Stock Option
Agreements") dated June 11, 1996 and May 20, 1997, between David T. Chase
and ACCEL. John P. Redding has been granted options to purchase 2,000
shares of Common Stock, none of which are currently exercisable, pursuant
to the 1996 Plan and to a Stock Option Agreement (the "John P. Redding
Stock Option Agreement") dated May 20, 1997, between John P. Redding and
ACCEL. All such options have the terms described in the immediately
preceding paragraph.
The foregoing description of the 1996 Plan, the New Stock Option
Agreements, the John P. Redding Stock Option Agreement and the options
granted thereunder is subject to, and is qualified in its entirety by
reference to, the 1996 Plan, the New Stock Option Agreements and the John
P. Redding Stock Option Agreement, which are each filed as exhibits to this
Statement on Schedule 13D.
Except as described in this Statement on Schedule 13D, the reporting
person knows of no contracts, arrangements, understandings or relationships
(legal or otherwise) between any of the persons named in Item 2 or between
such persons and any other person with respect to any securities of ACCEL,
including, but not limited to, transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
The reporting person has not agreed to act together with any other
person or entity for the purpose of acquiring, holding, voting or disposing
of shares of Common Stock and the reporting person disclaims membership in
any "group" with respect to the Common Stock for purposes of Section 13(d)
(3) of the Exchange Act and Rule 13d-5(b) (1) adopted thereunder.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
(1) 1995 Letter Agreement
(2) 1997 Letter Agreement
(3) 1998 Letter Agreement
(4) Comerica Agreement
(5) Chase Loan Agreement
(6) Security Agreement
(7) Notice to Financial Intermediary
(8) Form of Trading Authorization granted by Rhoda L. Chase
(9) Form of Trading Authorization granted by Arnold L. Chase
(10) Form of Trading Authorization granted by the Trust
(11) 1987 Plan
(12) Old Stock Option Agreement dated June 4, 1991
(13) Old Stock Option Agreement dated June 2, 1992
(14) Old Stock Option Agreement dated May 25, 1993
(15) Old Stock Option Agreement dated May 24, 1994
(16) Old Stock Option Agreement dated May 23, 1995
(17) 1996 Plan
(18) New Stock Option Agreement dated June 11, 1996
(19) New Stock Option Agreement dated May 20, 1997
(20) John P. Redding Stock Option Agreement
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the reporting person certifies that the information set forth in this
Statement is true, complete and correct.
Dated: February 10, 1998
CHASE INSURANCE CORPORATION
By: /s/ Cheryl A. Chase
Name: Cheryl A. Chase
Title: Executive Vice President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
IDENTITY AND BACKGROUND OF THE EXECUTIVE OFFICERS,
DIRECTORS AND CONTROLLING PERSONS OF CHASE INSURANCE CORPORATION
Aggregate #
of Shares of Percentage of
Residence or Principal Occupation Title With Common Stock Common Stock
Name Business Address Or Employment Reporting Person Owned Owned
----- ---------------- -------------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
David T. Chase C/O Chase Enterprises Chairman of the Board of President and Director 4,007,148{2} 46.4%
One Commercial Plaza, Directors and President
Hartford, CT 06103 of D.T. Chase
Enterprises, Inc.
("DTCE"){1}
Arnold L. Chase C/O Chase Enterprises Executive Vice President Executive Vice 1,167,824 13.5%
One Commercial Plaza, and Director of DTCE President and Director
Hartford, CT 06103
Cheryl A. Chase C/O Chase Enterprises Executive Vice President, Executive Vice None 0%
One Commercial Plaza, General Counsel and President and Director
Hartford, CT 06103 Director of DTCE
John P. Redding C/O Chase Enterprises Senior Vice President of Vice President None 0%
One Commercial Plaza, David T. Chase
Hartford, CT 06103 Enterprises, Inc. and
Vice President of DTCE
Rhoda L. Chase 96 High Ridge Road Not applicable None{3} 2,000,000{4} 23.2%
West Hartford, CT 06117
</TABLE>
**FOOTNOTES**
{1} DTCE is a holding company for various Chase Family Interests.
Its principal business address is: One Commercial Plaza, Hartford, Connecticut
06103.
{2} Includes 1,167,824 shares owned by Arnold L. Chase, 1,167,824
shares owned by The Darland Trust, and 665,000 shares owned by Rhoda L. Chase
as to which David T. Chase shares dispositive power; 6,500 shares of Common
Stock currently issuable upon the exercise of options held by David T. Chase;
and 1,000,000 shares of Common Stock on loan from Rhoda L. Chase.
{3} Rhoda L. Chase owns all of the outstanding capital stock of the
reporting person.
{4} Includes 335,000 shares of Common Stock on loan to Insurance
Holdings Limited Partnership and 1,000,000 shares of Common Stock on loan to
David T. Chase.
EXHIBIT 1
RHODA L. CHASE
C/O Chase Enterprises, One Commercial Plaza
Hartford, CT 06103
December 15, 1995
Insurance Holdings Limited Partnership
C/O Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth and confirm the agreement entered into
between Insurance Holdings Limited Partnership ("Borrower") and Rhoda L.
Chase ("Lender") regarding shares of common stock of ACCEL International
Corporation (the "Company").
1. Lender hereby confirms that it has loaned to Borrower 335,000
shares of the common stock, par value, $.10 per share, of the Company
("Borrowed Securities").
2. Until this Agreement is terminated, Borrower shall have the full
use of the Borrowed Securities including the right to sell, pledge or
otherwise transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities
and including all dividends and distributions in the form of stock,
rights, warrants or other securities which the Company has made during
the term of this Agreement with respect to the Borrowed Securities.
During the term of this agreement and from time to time but in no event
later than ten (10) days after the date of any distributions, Borrower
shall pay over to Lender in cash the amount of any cash dividends or
distributions made by the Company respecting the Borrowed Securities. In
the event of a recapitalization, stock split or other exchange by the
Company with respect to the Borrowed Securities, the exchanged or newly
issued shares shall be deemed identical in kind to the Borrowed
Securities.
4. Borrower agrees to pay Lender a service fee for the use of the
Borrowed Securities. The service fee shall be six percent (6%) per annum
of the average monthly market value of the Borrowed Securities pro rated
over the number of days this Agreement is in effect. Such fee shall be
due and payable quarterly on the last day of each March, June, September
and December for which this Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this
agreement by delivering the Lender marketable securities, or other
property having a market value of at least one hundred and five percent
(105%) of the market value of the Borrowed Securities. Such transfer of
property as security shall be accompanied by such instruments and
documents as shall be adequate to provide Lender with a good and valid
security interest therein. The said security interest shall give
Borrower the right to substitute collateral. Except in the event of
default by Borrower, Lender shall not have any right to sell or otherwise
dispose of the collateral.
6. Lender and Borrower agree that the loan of the Borrowed
Securities shall not reduce Lender's risk of loss or opportunity for gain
respecting the Borrowed Securities.
7. Borrower and Lender agree that they shall maintain their
respective books and records with respect to the Borrowed Securities to
reflect the transfer of said securities under this Agreement; to record
any obligation that may arise with respect to any dividends or
distributions respecting the Borrowed Securities which may be made by the
Company; to record the transfer of any property or cash in satisfaction
of any dividend or distribution obligation; and to record the transfer of
stock in whole or partial satisfaction of the obligation respecting
return of the Borrowed Securities. Borrower and Lender further agree
that they will, upon reasonable request, confirm to the other or any
auditors of the other their respective obligations with respect to the
Borrowed Securities. The obligation hereunder regarding the records of
the parties shall also apply with respect to any collateral which may be
transferred to secure Borrower's obligation.
8. Unless otherwise sooner terminated as herein provided, this
Agreement shall terminate on December 31, 1998. Borrower reserves the
right to terminate this Agreement by return of the Borrowed Securities
upon two (2) days' notice to Lender. Such right of termination shall be
exercisable in whole or in apart. Lender reserves the right to terminate
this agreement on written notice to Borrower of five (5) business days at
which time Borrower shall fulfill its obligations to Lender as provided
in paragraph 3 hereof.
9. This Agreement shall be binding upon the respective successors
and assigns of Lender and Borrower.
Please confirm that the foregoing sets forth our understanding
regarding the Borrowed Securities by signature below.
Very truly yours,
/S/ RHODA L. CHASE
Rhoda L. Chase
THE FOREGOING IS HEREBY
CONFIRMED AND AGREED TO:
Chase Insurance Corporation
/S/ CHERYL CHASE FREEDMAN
Cheryl Chase Freedman
Executive Vice President
EXHIBIT 2
RHODA L. CHASE
C/O CHASE ENTERPRISES, ONE COMMERCIAL PLAZA
HARTFORD, CT 06103
July 31, 1997
Insurance Holdings Limited Partnership
C/O Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth a modification to an Agreement entered into
between Rhoda L. Chase (the "Lender") and Insurance Holdings Limited
Partnership (the "Borrower") regarding shares of stock of ACCEL
International Corporation (the "Company") dated December 15, 1995. The
purpose of this modification is to increase the number of shares from
335,000 to 670,000. To this end, paragraph 1 of the Agreement is amended
to read as follows:
1. Lender hereby confirms that it has loaned to Borrower 670,000
shares of the common stock, no par value of the Company ("Borrowed
Securities").
Please confirm that the foregoing sets forth our understanding regarding
the modification of the Agreement for the Borrowed Securities by
signature below.
Very truly yours,
/s/ Rhoda L. Chase
Rhoda L. Chase
THE FOREGOING IS HEREBY
CONFIRMED AND AGREED TO:
Insurance Holdings Limited Partnership
By: Chase Insurance Corporation
Its: General Partner
/S/ CHERYL A. CHASE
By: Cheryl A. Chase
Its: Executive Vice President
EXHIBIT 3
RHODA L. CHASE
C/O CHASE ENTERPRISES, ONE COMMERCIAL PLAZA
HARTFORD, CT 06103
January 14, 1998
Insurance Holdings Limited Partnership
C/O Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth a modification to an Agreement entered into
between Rhoda L. Chase (the "Lender") and Insurance Holdings Limited
Partnership (the "Borrower") regarding shares of stock of ACCEL
International Corporation (the "Company") dated December 15, 1995 and
amended July 31, 1997 ("the Agreement"). The purpose of this
modification is to decrease the number of shares from 670,000 to 335,000.
To this end, effective January 14, 1998 paragraph 1 of the Agreement is
amended to read as follows:
1. Lender hereby confirms that it has loaned to Borrower 335,000
shares of the common stock, no par value of the Company ("Borrowed
Securities").
Please confirm that the foregoing sets forth our understanding regarding
the modification of the Agreement for the Borrowed Securities by
signature below.
Very truly yours,
/s/ Rhoda L. Chase
Rhoda L. Chase
THE FOREGOING IS HEREBY
CONFIRMED AND AGREED TO:
Insurance Holdings Limited Partnership
By: Chase Insurance Corporation
Its: General Partner
/S/ CHERYL A. CHASE
By: Cheryl A. Chase
Its: Executive Vice President
EXHIBIT 4
December 22, 1995
Insurance Holdings Limited Partnership
One Commercial Plaza
Hartford, CT 06603
Gentlemen:
Comerica Bank ("Bank") is pleased to advise you that it has approved a
$4,300,000 term loan facility ("Loan") for Insurance Holdings Limited
Partnership, a Connecticut limited partnership ("Borrower"), to be
evidenced by a promissory note ("Note") in the form attached hereto as
Exhibit "A"), subject to the terms and conditions of this letter
agreement.
Upon execution of this Note, Three Hundred Thousand Dollars ($300,000)
in proceeds of the Note shall be deposited into interest-bearing money
market investment account number ________ maintained at Bank ("Interest
Reserve Account"). On each date on which interest on the indebtedness
outstanding under the Note shall be due and payable in accordance with
the terms of the Note, Bank shall automatically debit the Interest
Reserve Account in an amount equal to the accrued but unpaid interest on
the Note as of such date ("Interest Payment"), and apply the proceeds
thereof to such Interest Payment.
The Loan shall be secured by a pledge of Borrower's interest in the
Interest Reserve Account and Borrower's right, title and interest to
certain shares of the capital stock of Accel International, Security
Connecticut Corp. and Bank of Boston as set forth on Exhibit "B" attached
hereto and by an assignment of Borrower's interest in that certain
Consulting Agreement between Borrower and Ranger Insurance Company
("Ranger") dated January 6, 1994 ("Consulting Agreement").
As a condition to the Loan, Borrower shall cause Ranger and CRC
(Bermuda) Insurance Limited ("CRC") to execute the Consent to Assignment
of Collateral Security ("Consent") in the form attached hereto as Exhibit
"C". Pursuant to paragraph (f) of the Consent, Ranger and CRC are
required to pay directly to Bank each of the annual $2,000,000 payments
(excluding the $2,000,000 payment which is due and payable on December
31, 1995 ("1995 Payment")) which shall become due and payable to Borrower
under the Consulting Agreement (each a "Ranger Payment"). The proceeds
of each Ranger Payment (or any other monies or other proceeds received by
Bank pursuant to any collateral security agreement ("Collateral
Proceeds")) shall be applied by Bank as follows:
(i) there shall be deposited to the Interest Reserve Account an
amount equal to the difference between $300,000 and the balance
of the Interest Reserve Account as of such date;
(ii) the balance of the proceeds of the Ranger Payment or Collateral
Proceeds, as applicable, shall be applied to the principal
outstanding under the Note (the "Prepayment Amount"); PROVIDED,
however, if such application would result in the prepayment of
any portion of the Note which bears interest at the Eurodollar-
based Rate, then such Prepayment Amount shall be deposited to the
Interest Reserve Account until the earlier of (A) thirty (30)
days following the date of such deposit, (B) the next succeeding
expiration of an Interest Period and (C) such other date selected
by Borrower in writing to Bank, at which time the Bank shall
debit the Interest Reserve Account in an amount equal to the
Prepayment Amount and apply the proceeds thereof to the principal
outstanding under the Note; and
(iii)any excess over principal outstanding under the Note shall
be paid to Borrower.
The proceeds of each Ranger Payment applied to reduce the principal
outstanding under the Note shall be subject to the terms and conditions
of the Note, including, without limitation, the prepayment penalty
provisions thereof.
On or before January 5, 1996, Borrower shall provide Bank with
evidence satisfactory to Bank that the 1995 Payment has been made by
Ranger or CRC to Borrower.
Within five (5) business days after written demand by Bank from time
to time, Borrower shall deposit additional funds to the Interest Reserve
Account in an amount as determined by Bank as shall be necessary to meet
all required Interest Payments under the Note, but in no event shall
Borrower be required at any time to maintain a balance of more than
$300,000 in the Interest Reserve Account (plus any Prepayment Amount
deposited therein pursuant to the terms of this letter agreement which
has not yet been applied to prepay principal).
So long as any indebtedness remains outstanding under the Note,
Borrower shall have no right to withdraw any funds from the Interest
Reserve Account.
A default under this letter agreement shall constitute an Event of
Default under the Note.
Please indicate your consent to the terms of this letter agreement by
signing below.
Sincerely,
COMERICA BANK
By: /S/ JOHN E. SASINOWSKI
Jon E. Sasinowski
Its: Vice President
Agreed to and Accepted by:
INSURANCE HOLDINGS LIMITED PARTNERSHIP,
a Connecticut limited partnership
By: Chase Insurance Corporation, a Connecticut
Corporation
Its: General Partner
By: /S/ JOHN P. REDDING
Its: VICE PRESIDENT
TERM NOTE
(EURODOLLAR INSTALLMENT NOTE)
Tax I.D. No.: 06-1388818
$4,300,000 Detroit, Michigan
December 22, 1995
ON OR BEFORE DECEMBER 31, 1998, FOR VALUE RECEIVED, the undersigned,
Insurance Holdings Limited Partnership, a Connecticut limited
partnership ("Borrower"), promises to pay to the order of COMERICA BANK,
a Michigan banking corporation ("Bank"), the principal sum of Four
Million Three Hundred Thousand Dollars ($4,300,000) in lawful money of
the United States of America, together with interest thereon as
hereinafter set forth.
This Note shall be subject to the terms and conditions of that certain
letter agreement dated December 22, 1995 between Borrower and Bank, as
the same may be amended, restated, supplemented or replaced from time to
time ("Letter Agreement").
The indebtedness outstanding hereunder from time to time shall bear
interest either at the Eurodollar-based Rate or the Prime-based Rate, as
elected by Borrower from time to time, or as otherwise determined under
the terms and conditions of this Note. With respect to any portion of
this Note with respect to which the Applicable Interest Rate is the
Prime-based Rate, interest shall be payable monthly in arrears on the
first Business Day of each month, commencing February 1, 1996, and at
maturity (whether by acceleration or otherwise). With respect to any
portion of this Note with respect to which the Applicable Interest Rate
is the Eurodollar-based Rate, interest shall be payable in arrears on the
last day of each Interest Period applicable thereto; PROVIDED, however,
if such Interest Period is longer than three (3) months, interest shall
be payable quarterly commencing three months following the first day of
such Interest Period and on the same day of each quarter thereafter and
on the last day of such Interest Period.
Interest accruing at the Prime-based Rate shall be computed on the
basis of a 360-day year and shall be assessed for the actual number of
days elapsed, and in such computation, effect shall be given to any
change in the Prime-based Rate as a result of any change in the Prime
Rate on the date of each such change.
Interest accruing at the Eurodollar-based Rate shall be computed on
the basis of a 360-day year and shall be assessed for the actual number
of days elapsed from the first day of the Interest Period applicable
thereto, but not including the last day thereof.
The amount from time to time outstanding under this Note, the
Applicable Interest Rates, the Interest Periods, if applicable, and the
amount and date of any repayment shall be noted on Bank's books and
records, which shall be conclusive evidence thereof, absent manifest
error; PROVIDED, however, any failure by Bank to make any such notation,
or any error in any such notation, shall not relieve Borrower of its
obligation to repay Bank all principal, all accrued and unpaid interest
thereon, and all other amounts payable by Borrower to Bank under or
pursuant to this Note in accordance with the terms hereof.
Borrower shall elect the initial Interest Period applicable to this
Note or portion thereof by delivering to Bank, by 11:00 a.m. (Detroit,
Michigan time), three (3) Business Days prior to the proposed effective
date of any Eurodollar-based Rate, a Notice of Term Rate executed by the
duly authorized general partner of the Borrower. Without limiting any
other provisions of this Note, the Borrower's right and ability to elect
the Eurodollar-based Rate as the Applicable Interest Rate hereunder shall
be subject to the following:
(a) the principal indebtedness outstanding under this Note must be at
least Two Hundred Fifty Thousand Dollars ($250,000.00);
(b) no Event of Default, or any condition or event which, with the
giving of notice or the running of time, or both, would
constitute an Event of Default, shall have occurred and be
continuing as of the date of such Notice of Term Rate; and
(c) any election by Borrower of the Eurodollar-based Rate as the
Applicable Interest Rate for any Interest Period under this Note
is not revocable by Borrower.
Provided that no Event of Default shall have occurred and be
continuing, Borrower may elect to continue a portion of this Note with
respect to which the Applicable Interest Rate is the Eurodollar-based
Rate by giving irrevocable written notice thereof to the Bank by its
Notice of Term Rate specifying the duration of the succeeding Interest
Period therefor. Except as provided in the following paragraph, for any
period of time for which a Notice of Term Rate has not been delivered to
Bank, or for any period of time during which Borrower is not entitled to
elect the Eurodollar-based Rate in accordance with the terms hereof or
the Eurodollar-based Rate is not otherwise available to Borrower as the
Applicable Interest Rate in accordance with the terms of this Note, the
Prime-based Rate shall automatically be the Applicable Interest Rate
hereunder, subject to the provisions hereof with regard to the payment of
interest at the Default Rate.
Notwithstanding anything set forth in the preceding paragraph to the
contrary, unless Borrower notifies Bank in writing to the contrary by
delivering to Bank a Notice of Term Rate or written notice of intent to
prepay a portion of the indebtedness hereunder which bears interest at
the Eurodollar-based Rate three (3) Business Days prior to the expiration
of an Interest Period, Borrower shall be deemed to have elected (subject
to its right and ability to so elect as of such date) to continue that
portion of the indebtedness outstanding hereunder to which such Interest
Period is applicable at the Eurodollar-based Rate with an Interest Period
of thirty (30) days.
This Note may be prepaid in whole or in part without penalty or
premium, but with accrued interest on the principal being prepaid to the
date of such prepayment, provided that: in the case of that portion of
this Note bearing interest at the Eurodollar-based Rate, each partial
prepayment shall be in an amount not less than $250,000, and such
prepayment may only be made on the last Business Day of the then current
Interest Period with respect thereto and the undersigned shall give
written notice of intent to prepay that portion of this Note which bears
interest at the Eurodollar-based Rate not less than three (3) Business
Days prior to the expiration of the applicable Interest Period. In the
event that the Eurodollar-based Rate is the Applicable Interest Rate with
respect to the principal indebtedness outstanding under this Note, and
any payment or prepayment of such indebtedness shall occur on any day
other than the last day of the Interest Period then applicable thereto
(whether voluntarily, by acceleration, or otherwise) or if an Applicable
Interest Rate shall be changed during any Interest Period under or
otherwise in accordance with the terms of this Note, or if Borrower shall
fail to make any payment of principal or interest hereunder at any time
with respect to which the Eurodollar-based Rate is the Applicable
Interest Rate hereunder, Borrower shall reimburse Bank on demand for any
resulting loss, cost or expense incurred by Bank as a result thereof,
including, without limitation, any such loss, cost or expense incurred in
obtaining, liquidating, employing or redeploying deposits from third
parties. Such amount payable by Borrower to Bank hereunder may include,
without limitation, an amount equal to the excess, if any, of (a) the
amount of interest which would have accrued on the amounts so prepaid for
the period from the date of such prepayment through the last day of the
relevant Interest Period therefor, at the Applicable Interest Rate for
such indebtedness, as provided under this Note, over (b) the amount of
interest (as reasonably determined by Bank) which would have accrued to
Bank on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph shall be
made as though Bank shall have actually funded or committed to fund the
relevant indebtedness hereunder through the purchase of an underlying
deposit in an amount equal to the amount of such indebtedness and having
a maturity comparable to the relevant Interest Period; PROVIDED, however,
that Bank may fund the indebtedness hereunder in any manner it deems fit,
and the foregoing assumption shall be utilized only for the purpose of
the calculation of amounts payable under this paragraph. Upon the
written request of Borrower, Bank shall deliver to Borrower a certificate
setting forth bases for determining such losses, costs and expenses,
which certificate shall be conclusively presumed correct, absent manifest
effort. Any partial prepayment under this Note shall be applied to the
installments due under this Note in the inverse order of their
maturities.
For purposes of this Note, the Ranger Payments (as defined in the
Letter Agreement) shall be applied to reduce the principal outstanding of
this Note as set forth in the Letter Agreement and shall be subject to
the prepayment penalty provisions of this Note.
For any portion of this Note for which the Applicable Interest Rate is
the Eurodollar-based Rate, if Bank shall designate a Eurodollar Lending
Office which maintains books separate from those of the rest of Bank,
Bank shall have the option of maintaining and carrying this Note, and the
indebtedness hereunder, on the books of such Eurodollar Lending Office.
If, with respect to any Interest Period, Bank determines that, (a) by
reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in Eurodollars in the applicable amounts or
for the relative maturities are not being offered to the Bank for such
Interest Period, or (b) that the Eurodollar-based Rate will not
adequately reflect the cost to Bank of maintaining the indebtedness under
this Note at the Eurodollar-based Rate for such Interest Period, then
Bank shall forthwith give notice thereof to the Borrower. Thereafter,
until Bank notifies Borrower that such circumstances no longer exist, the
obligation of Bank to maintain the indebtedness outstanding under this
Note or any portion thereof at the Eurodollar-based Rate, and the right
of Borrower to elect the Eurodollar-based Rate as the Applicable Interest
Rate for the indebtedness under this Note or any portion thereof, shall
be suspended.
If, after the date hereof, the introduction of, or any change in, any
applicable law, rule or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by Bank (or its
Eurodollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for the Bank (or its Eurodollar Lending Office) to honor its
obligations hereunder to maintain the indebtedness under this Note with
interest at the Eurodollar-based Rate, Bank shall forthwith give notice
thereof to Borrower. Thereafter, (a) the obligation of Bank to maintain
the indebtedness outstanding under this Note or any portion thereof at
the Eurodollar-based Rate, and the right of Borrower to elect the
Eurodollar-based Rate as the Applicable Interest Rate for the
indebtedness under this Note or any portion thereof, shall be suspended,
and thereafter, until Bank gives notice to Borrower that the conditions
or circumstances causing or giving rise to such suspension no longer
exist, the Prime-based Rate shall be the Applicable Interest Rate for the
indebtedness outstanding under this Note; and (b) if Bank may not
lawfully continue to maintain the indebtedness outstanding under this
Note or any portion thereof at the Eurodollar-based Rate to the end of
the then current Interest Period applicable thereto, the Prime-based Rate
shall be the Applicable Interest Rate for the remainder of such Interest
Period.
If the adoption after the date hereof, or any change after the date
hereof in, any applicable law, treaty, rule, or regulation (whether
domestic or foreign) of any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by Bank (or its Eurodollar Lending Office) with
any request or directive (whether or not having the force of law) made by
any such authority, central bank or comparable agency after the date
hereof, including, without limitation, any risk-based capital guidelines:
(a) shall subject Bank (or its Eurodollar Lending Office) to any tax,
duty or other charge with respect to this Note or the
indebtedness hereunder or shall change the basis of taxation of
payments to Bank (or its Eurodollar Lending Office) of the
principal of or interest on this Note or any other amounts due
under this Note in respect thereof (except for changes in the
rate of tax on the overall net income of Bank or its Eurodollar
Lending Office imposed by the jurisdiction in which Bank's
principal executive office or Eurodollar Lending Office is
located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by Bank (or its Eurodollar Lending Office) or shall
impose on Bank (or its Eurodollar Lending Office) or the foreign
exchange and interbank markets any other condition affecting
this Note or the indebtedness hereunder;
and the result of any of the foregoing is to increase the cost to Bank of
maintaining any part of the indebtedness hereunder or to reduce the
amount of any sum received or receivable by Bank under this Note by an
amount deemed by Bank to be material, then Bank shall promptly notify
Borrower of such fact and demand compensation therefor from Borrower,
and, within fifteen (15) days after such demand by Bank, Borrower agrees
to pay to Bank such additional amounts as are sufficient to compensate
Bank for such increased cost or reduction. A certificate of Bank,
prepared in good faith and in reasonable detail by Bank and submitted by
the Bank to the Borrower, setting forth the basis for determining such
additional amount or amounts necessary to compensate Bank shall be
conclusively presumed, absent manifest error.
In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or
not presently applicable to the Bank, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Bank with
any guideline, request or directive of any such authority (whether or not
having the force of law) including any risk-based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by the Bank (or any corporation controlling the Bank) and the
Bank determines that the amount of such capital is increased by or based
upon the existence of any obligations of the Bank hereunder or the making
of the loan under this Note or maintaining the indebtedness hereunder and
such increase has the effect of reducing the rate of return on the Bank's
(or such controlling corporation's) capital as a consequence of such
obligations or the making of such loan or maintaining of such
indebtedness hereunder to a level below that which the Bank (or such
controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy)
by an amount deemed by the Bank to be material, then the Borrower shall
pay to the Bank, within fifteen (15) days of Borrower's receipt of
written notice from Bank demanding such compensation, additional amounts
sufficient to compensate the Bank (or such controlling corporation) for
any increase in the amount of capital and reduced rate of return which
the Bank reasonably determines to be allocable to the existence of any
obligations of the Bank hereunder or to the making of such loan or
maintaining the indebtedness hereunder. A certificate of Bank as to the
amount of such compensation, prepared in good faith and in reasonable
detail by the Bank and submitted by the Bank to the Borrower, shall be
conclusive and binding for all purposes, absent manifest error.
Upon the occurrence and during the continuance of any Event of
Default, Bank may at any time and from time to time, without notice to
the Borrower (any requirement for such notice being expressly waived by
the Borrower) set off and apply against any and all of the indebtedness
of any of the Borrower to Bank any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Bank to or for the credit or the
account of the Borrower and any property of the Borrower from time to
time in possession of Bank, irrespective of whether or not Bank shall
have made any demand hereunder and although such obligations may be
contingent and unmatured. The rights of Bank under this paragraph are in
addition to other rights and remedies (including, without limitation,
other rights of setoff) which Bank may otherwise have.
Upon the occurrence of an Event of Default, Bank may declare this Note
due forthwith and collect, deal with and dispose of all or any part of
any security in any manner permitted or authorized by the Michigan
Uniform Commercial Code or other applicable law (including public or
private sale) and after deducting reasonable expenses (including, without
limitation, reasonable attorneys' fees and expenses) Bank may apply the
proceeds and any deposits or credits in part or full payment of any said
liabilities, whether due or not, in any manner or order Bank elects.
In the event that and so long as any Event of Default shall have
occurred and be continuing, the indebtedness outstanding under this Note
shall bear interest at the Default Rate.
For the purposes of this Note the following terms will have the
following meanings:
"Applicable Interest Rate" shall mean the Eurodollar-based Rate or the
Prime-based Rate, as selected by Borrower from time to time, subject to
the terms and conditions of this Note.
"Business Day" shall mean any day other than a Saturday, Sunday or
holiday on which Bank is open for all or substantially all of its
domestic and international commercial banking business (including
dealings in foreign exchange) in Detroit, Michigan.
"Eurodollar-based Rate" shall mean a per annum interest rate which is
the sum of one and one-half percent (1-1/2%) plus the quotient of:
(a) the per annum interest rate at which Bank's Eurodollar
Lending Office offers deposits to prime banks in the
eurodollar market in an amount comparable to the principal
amount outstanding under this Note and for a period equal to
the respective Interest Period at approximately 11:00 a.m.,
Detroit, Michigan time, two (2) Business Days prior to the
first day of such Interest Period;
divided by
(b) a percentage equal to 100% minus the maximum rate on such
date at which Bank is required to maintain reserves on
"Euro-currency Liabilities" as defined in and pursuant to
Regulation D of the Board of Governors of the Federal
Reserve System or, if such regulation or definition is
modified, and as long as Bank is required to maintain
reserves against a category of liabilities which includes
eurodollar deposits or includes a category of assets which
includes eurodollar loans, the rate at which such reserves
are required to be maintained on such category.
"Default Rate" means the sum of three percent (3%) plus the Applicable
Interest Rate under this Note.
"Eurodollar Lending Office" shall mean Bank's office located in the
Grand Cayman Islands, British West Indies, or such other branch of Bank,
domestic or foreign, as it may hereafter designate as its Eurodollar
Lending Office by notice to Borrower.
"Event of Default" means the occurrence of any one of the following:
(a) Borrower shall fail to pay the principal or interest
hereunder or shall fail to pay any other amount owing by the
Borrower to Bank, whether under this Note or otherwise, when
due in accordance with the terms hereof or thereof; or
(b) any representation, warranty, certification or statement
made or deemed to have been made by Borrower herein or in
any certificate, financial statement or other document or
agreement by the terms hereof or thereof delivered to Bank
pursuant hereto shall prove to be untrue in any material
respect; or
(c) Borrower shall fail to comply with any of the terms or
provisions of any agreement between Borrower and the Bank;
or
(d) if without the written consent of Bank there is any
termination, notice of termination or breach of any
guaranty, pledge, collateral assignment or subordination
agreement relating to all or any part of the indebtedness
evidenced by this Note; or
(e) if there is any failure by Borrower to pay when due any of
its indebtedness (other than to the Bank) or in the
observance or performance of any term, covenant or
condition in any document evidencing, securing or relating
to such indebtedness; or
(f) if the Bank deems itself insecure, believing that the
prospect of payment of this Note or any of the indebtedness
is impaired or shall fear deterioration, removal or waste of
any of the collateral securing the indebtedness evidenced by
this Note; or
(g) Borrower becomes insolvent or the subject of a voluntary or
involuntary proceeding in bankruptcy, or a reorganization,
arrangement or creditor composition proceeding, ceases
doing business as going concern or dissolves; or any general
partner of Borrower dies, becomes incompetent or becomes
the subject of a bankruptcy proceeding; if there is filed or
issued a levy or writ of attachment or garnishment or other
like judicial process upon Borrower or any of the collateral
securing the indebtedness evidenced by this Note, including
without limit, any accounts with the Bank; or
(h) the failure for any reason of Ranger Insurance Company
("Ranger") or any successor in interest of Ranger to make
any of the annual payments (including, without limitation
the $2,000,000 payment due on December 31, 1995) required
under paragraph 2 of that certain Consulting Agreement dated
January 6, 1994 by and between Ranger and Borrower, Ranger's
interest having been assigned to CRC (Bermuda) Reinsurance
Limited pursuant to that certain Assignment and Assumption
of Rights and Obligations dated as of January 1, 1995
between Ranger and CRC; or
(i) the failure of Ranger or CRC to comply with the terms and
conditions of that certain Consent to Assignment as
Collateral Security, dated as of December 22, 1995, by and
among Ranger, CRC and Bank, as the same may be amended from
time to time.
"Interest Period" shall mean a period of one (1) month, two (2)
months, three (3) months or six (6) months as selected by Borrower
pursuant to the terms of the Note, commencing on the effective date of an
election of the Eurodollar-based Rate made in accordance with the terms
of this Agreement, provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Business Day shall be extended to the next
succeeding Business Day, except that if the next
succeeding Business Day falls in another calendar month, the
Interest Period shall end on the next preceding Business
Day, and when an Interest Period begins on a day which has
no numerically corresponding day in the calendar month
during which such Interest Period is to end, it shall end on
the last Business Day of such calendar month;
(b) no Interest Period with respect to that portion of the Term
Note required to be paid on any principal installment date
shall end past such principal installment date; and
(c) no Interest Period shall extend beyond the maturity date set
forth in this Note.
"Notice of Term Rate" shall mean a Notice of Term Rate in form similar
to that attached to this Note as Exhibit "A" issued and delivered by
Borrower to Bank in accordance with the terms of this Note.
"Prime Rate" means the per annum interest rate established by Bank as
its prime rate for its borrowers, as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Bank
at any such time.
"Prime-based Rate" shall mean a per annum interest rate which is equal
to the greater of (i) the Prime Rate; or (ii) the rate of interest equal
to the sum of (a) one percent (1%) and (b) the rate of interest equal to
the average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers
(the "Overnight Rates") as published by the Federal Reserve Bank of New
York, or, if the overnight Rates are not so published for any day, the
average of the quotations for the Overnight Rates received by Bank from
three (3) Federal funds brokers of recognized standing selected by Bank,
as the same may be changed from time to time. Effect shall be given to
any change in the Prime-based Rate as a result of any change in the Prime
Rate or Overnight Rates on the date of any such change in the Prime Rate
or Overnight Rates, as applicable.
Borrower agrees to make all payments to Bank of any and all amounts
due and owing by Borrower to Bank hereunder, including, without
limitation, monthly installments of principal and interest, on the date
provided for such payment, in United States Dollars in immediately
available funds at the office of Bank located at One Detroit Center, 500
Woodward Avenue, Detroit, Michigan 48226, or such other address as Bank
may notify Borrower in writing.
No delay or failure of Bank in exercising any right, power or
privilege hereunder shall affect such right, power or privilege, nor
shall any single or partial exercise thereof preclude any further
exercise thereof, or the exercise of any other power, right or privilege.
The rights of Bank under this Agreement are cumulative and not exclusive
of any right or remedies which Bank would otherwise have, whether by
other instruments or by law.
This Note shall bind the Borrower and the Borrower's successors and
assigns.
THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY
IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES
ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE
PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS NOTE.
This Note has been deemed to have been delivered at Detroit, Michigan,
and shall be governed by and construed and enforced in accordance with
the laws of the State of Michigan. Whenever possible, each provision of
this Note shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Note.
INSURANCE HOLDINGS
LIMITED PARTNERSHIP,
a Connecticut limited partnership
By: CHASE INSURANCE
CORPORATION, a Connecticut
corporation
Its: General Partner
By: /S/ JOHN P. REDDING
Its: VICE PRESIDENT
<PAGE>
EXHIBIT "A"
NOTICE OF TERM RATE
With reference to the $4,300,000 Term Note dated as of December 22,
1995 made by the undersigned payable to Comerica Bank ("Bank") subject to
the terms and conditions of said Note, the undersigned hereby elects the
________________________{5} Rate as the Applicable Interest Rate for
________________________________ _______________________ Dollars
($__________) of the principal indebtedness outstanding under said Note.
Such election shall be effective as of ________________, 19___ and the
Interest Period applicable thereto, if any, shall be
____________________.{6}
The undersigned hereby certifies that as of the date hereof, no Event
of Default, and no condition or event which, with the running of time or
the giving of notice, or both, would constitute an Event of Default, has
occurred and is continuing under said Promissory Note.
**FOOTNOTES**
{****}Insert, as applicable, "Eurodollar-based" or "Prime-based".
{*****}For a Eurodollar-based Rate, insert 1, 2, 3 or 6 months.
<PAGE>
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in said Promissory Note.
Dated this _______ day of _______________________, 19__.
INSURANCE HOLDINGS LIMITED PARTNERSHIP, a
Connecticut limited partnership
By: CHASE INSURANCE CORPORATION, a Connecticut
corporation
Its: General Partner
By:
Its:
<PAGE>
SECURITY AGREEMENT
(Negotiable Collateral)
For value received, the undersigned ("Debtor") assigns, transfers,
delivers, and pledges to Comerica Bank, a Michigan banking corporation,
whose address is 100 Renaissance Center, Detroit, Michigan 48243
("Bank"), a continuing security interest in (a) the following securities,
stocks, bonds, notes, instruments, documents of title, and/or other
property; (b) interest, dividends, increase, profits, new securities or
other increments, distributions or rights of any kind received on account
of this property; (c) Debtor's Property in Possession of Bank; and (d)
all property substituted therefor or for any part thereof, all records
(including computer software) pertaining thereto and all rights, products
or Proceeds thereof (whether cash or non-cash Proceeds) resulting from
any sale or exchange or transfer thereof or arising by virtue of
ownership thereof (such as, but not limited to, the rights to additional
or other securities or property upon any corporate reorganization,
merger, consolidation, liquidation, or dissolution, offering of stock
rights, stock split or stock or liquidating dividend or the rights to any
goods evidenced by such property or insurance proceeds with respect
thereto), and all subscription, voting, and preferential rights:
See Exhibit "A"
to secure payment of any and all sums, indebtedness and liabilities of
any and every kind now owing or later to become due to the Bank from
Debtor during the term of this Agreement, however created, incurred,
evidenced, acquired or arising, whether under any note(s), guaranty(ies),
letter of credit agreement(s), evidence(s) of indebtedness or under any
other instrument, obligation, guaranty, contract or agreement or dealing
of any and every kind now existing or later entered into between the
Debtor and the Bank, or otherwise, and whether direct, indirect, primary,
secondary, fixed, contingent, joint or several, due or to become due,
together with interest and charges, and including, without limit, all
present and future indebtedness or obligations of third parties to the
Bank which is guaranteed by the Debtor and the present or future
indebtedness originally owing by the Debtor to third parties and assigned
by third parties to the Bank, and any and all renewals, extensions or
modifications of any of them (the "Indebtedness").
1. Definitions. As used in this Agreement:
1.1 "Collateral" means any and all property of Debtor in which Bank
now has or by this Agreement now or later acquires a security
interest.
1.2 "Debtor's Property in Possession of Bank" means goods,
instruments, documents, policies and certificates of insurance,
deposits, money or other property now owned or later acquired by
Debtor or in which Debtor now has or later acquires an interest
and which are now or later in possession of Bank, or as to which
Bank now or later controls possession by documents or otherwise.
1.3 "Environmental Law" means any laws, ordinances, directives,
orders, statutes, or regulations an object of which is to
regulate or improve health, safety, or the environment,
including, without limit, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42
USC 9601 et seq.), the Resource Conservation and Recovery Act, as
amended (42 USC 6901 et seq.), and the Michigan Environmental
Response Act, as amended (MCL 299.601 et seq.).
1.4 "Hazardous Materials" means each and all of the following:
hazardous materials and/or substances as defined in any
Environmental Law, petroleum, petroleum by-products, natural gas,
flammable explosives, radioactive materials, and toxic materials.
1.5 "Proceeds" has the meaning assigned it in Article 9 of the
Uniform Commercial Code, as of the date of this Agreement, and
also includes, without limit, cash or other property which were
proceeds and are recovered by a bankruptcy trustee or otherwise
as a preferential transfer by Debtor.
1.6 "Uniform Commercial Code" means Act No. 174 of the Michigan
Public Acts of 1962, as amended.
1.7 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or,
absent definition in Article 9, in any other Article) of the
Uniform Commercial Code, as of the date of this Agreement.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the
seller of any Collateral to be acquired with proceeds of loans
from Bank.
2.2 Bank, at its option, may require delivery of any Collateral to
Bank at any time with such endorsements or assignments of the
Collateral as Bank may request.
2.3 Debtor shall (a) keep adequate records of the Collateral and
other records as Bank shall determine to be appropriate; and (b)
allow Bank to examine, inspect and make abstracts from, or copy
any of Debtor's books and records (relating to the Collateral or
otherwise and whether printed or in magnetic tape or discs or in
other machine readable form).
2.4 At any time and without notice during the continuation of an
Event of Default, the Bank may (a) cause the Collateral or any
portion of it to be transferred to its name or to the name of its
nominee or nominees; (b) receive or collect by legal proceedings
or otherwise all dividends, interest, principal payments and
other sums and all other distributions at any time payable or
receivable on account of the Collateral, and hold the same as
Collateral, or apply the same to the Indebtedness, the manner and
distribution of the application to be in the sole discretion of
the Bank; (c) enter into any extension, subordination,
reorganization, deposit, merger or consolidation agreement or any
other agreement relating to or affecting the Collateral, and
deposit or surrender control of the Collateral, and accept other
property in exchange for the Collateral and hold or apply the
property or money so received in accordance with the provisions
of this Agreement.
2.5 The Bank may assign any of the Indebtedness and deliver all or
any part of the Collateral to its assignee, who then shall have
with respect to the Collateral so delivered all the rights and
powers of the Bank under this Agreement, and after that the Bank
shall be fully discharged from all liability and responsibility
with respect to the Collateral so delivered.
2.6 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(2) the ultimate sale or exchange thereof, or
(2) presentation, collection, renewal, or registration of
transfer thereof, or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing therewith
preliminary to sale or exchange, such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest therein or in the
proceeds or products thereof unless Bank specifically so
agrees in writing. If Debtor requests any such redelivery,
Debtor will deliver with such request a duly executed
financing statement in form and substance satisfactory to
Bank. Any proceeds of Collateral coming into Debtor's
possession as a result of any such redelivery shall be held
in trust for Bank and forthwith delivered to Bank for
application on the Indebtedness. Bank may (if, in its sole
discretion, it elects to do so) deliver the Collateral or
any part of the Collateral to Debtor, and such delivery by
Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.7 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of the
Indebtedness, and Debtor is not relying upon assets in which the
Bank has or may have a lien or security interest for payment of
the Indebtedness.
2.8 Debtor shall at the request of Bank (a) mark its records and the
Collateral to clearly indicate the security interest of Bank
under this Agreement, and (b) deliver to Bank all accounting and
other records pertaining to, and all writings evidencing, the
Collateral or any portion of it, together with all books, records
and documents of Debtor related to it in whatever form kept by
Debtor, whether printed or in magnetic tape or discs or in other
machine readable form or otherwise, and all forms, programs,
software and other materials and instructions necessary or useful
to Bank, to monitor the Collateral or enforce its rights under
this Agreement.
2.9 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall be
deemed to have warranted that (a) Debtor has the right and
authority to subject it to a security interest granted to Bank
and (b) none of the Collateral is subject to any security
interest other than that in favor of Bank and there are no
financing statements on file, other than in favor of Bank.
2.10 Debtor will keep the Collateral free at all times from any and
all claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit or
suffer to be sold, transferred or leased, any or all of the
Collateral. Bank pr its agents or attorneys may at all
reasonable times inspect the Collateral and may enter upon all
premises where the Collateral is kept or might be located.
2.11 Debtor shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and
other writings requested by Bank to establish, maintain,
reinstate, and/or continue the perfected and first priority
status of the security interest of Bank in the Collateral or to
implement or further effectuate the terms or purpose of this
Agreement, although the failure of the Debtor to do so shall not
affect in any way Bank's perfected and first priority security
interest in the Collateral, and will on demand pay all costs and
expenses of filing and recording, including the costs of any
record searches, deemed necessary by Bank from time to time, to
establish or determine the validity and the priority of Bank's
security interest. Debtor further makes, constitutes and
appoints Bank its true and lawful attorney-in-fact with full
power of substitution during the continuation of an Event of
Default to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing
statements, endorsing of instruments, and the execution and
delivery of all documents and agreements necessary to obtain or
accomplish any protection for or collection or disposition of any
part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
2.12 Debtor will pay promptly and within the time that they can be
paid without interest or penalty all taxes, assessments and
similar imposts and charges which at any time are or may become a
lien, charge, or encumbrance upon any of the Collateral, except
to the extent contested in good faith and bonded in a manner
satisfactory to Bank. If Debtor fails to pay any of these taxes,
assessments or other charges in the time provided above, Bank has
the option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest default rate which could be
charged by Bank to Debtor on any Indebtedness.
2.13 [Reserved]
2.14 [Reserved]
2.15 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the
Indebtedness or any part of it (through formal or informal
collection actions, workouts or otherwise), in defending the
validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other
agreement between Bank and Debtor; (b) in connection with any
proceeding (including, without limit, bankruptcy, insolvency,
administrative, appellate, or probate proceedings or any lawsuit)
in which Bank at any time is involved as a result of any lending
relationship or other financial accommodation involving Bank and
Debtor; or (c) incurred by Bank during the continuance of an
Event of Default, which fees and expenses relate to or would not
have been incurred but for any lending relationship or other
financial accommodation involving Bank and Debtor. The fees and
expenses include, without limit, court costs, legal expenses,
reasonable attorneys' fees, paralegal fees, internal transfer
charges for in-house attorneys and paralegals and other services,
and audit expenses.
2.16 Debtor at all times shall be in material compliance with all
applicable laws.
2.17 (a) Debtor is and shall be in strict compliance with all
Environmental Laws. There are not and will not be Hazardous
Materials on, in or under any real or personal property
("Property") now or at any time owned, occupied, or operated
by Debtor which in any manner violates any Environmental Law
or which could be subject to remediation pursuant to any
Environmental Law. Debtor has not disposed of,
manufactured, treated, stored, handled, used, transported,
or generated Hazardous Materials, and shall not in the
future do any of the above acts in violation of any
Environmental Law.
(b) Debtor shall promptly conduct all investigations, testing,
removal and other actions necessary to clean up and remove
all Hazardous Materials on or affecting the Property in
accordance with all Environmental Laws. These actions will
not be deemed to cure any breach of this Section.
(c) Debtor shall defend, indemnify and hold harmless Bank, its
employees, agents, shareholders, officers and directors from
and against any and all claims, damages, fines, expenses,
liabilities or causes of action of whatever kind, including
without limit consultant fees, legal expenses, and
reasonable attorneys' fees, suffered by any of them as a
direct or indirect result of any actual or asserted
violation of any Environmental Law or of any remediation
relating to the Property required by any Environmental Law.
(d) Upon ten days notice to Debtor except in an emergency or
where not practical under applicable law), Bank may (but is
not obligated to) enter on the Property or take such other
actions as it deems appropriate to inspect, test for, clean
up, remove, minimize the impact of, or advise governmental
agencies of the possible existence of any Hazardous
Materials upon Bank's receipt of any notice from any source
asserting the existence of any Hazardous Materials in
violation of Environmental Laws. All costs and expenses so
incurred by Bank, including without limit consultant fees,
legal expenses and reasonable attorneys' fees, shall be
payable by Debtor upon demand, together with interest at the
highest default rate which could be charged by Bank to
Debtor on any Indebtedness.
(e) The provisions of this section shall survive the repayment
of the Indebtedness, the satisfaction of all other
obligations of Debtor to Bank, the discharge or termination
by Bank of any lien or security interest from Debtor, and
the foreclosure of or exercise of rights as to any
Collateral.
2.18 Debtor acknowledges and agrees that if any Guaranty is executed
by the Debtor in connection with or related to this Agreement,
all waivers contained in that Guaranty shall be and are
incorporated by reference into this Agreement.
3. Collection of Proceeds.
3.1 Immediately upon notice to Debtor by Bank and at all times after
that, Debtor agrees to hold in trust for Bank all payments
received in connection with the Collateral and from the sale,
lease or other disposition of any Collateral, all rights by way
of suretyship or guaranty and all rights in the nature of a
mortgage, lien or security interest which Debtor now has or may
later acquire regarding the Collateral. Debtor agrees to collect
and enforce payment of all Collateral until Bank shall direct
Debtor to the contrary and, from and after this direction, Debtor
agrees to fully and promptly cooperate and assist Bank (or any
other person as Bank shall designate) in the collection and
enforcement of all Collateral. Immediately upon notice to such
effect to Debtor by Bank and at all times after that, Debtor
agrees to (a) endorse to Bank and immediately deliver to Bank all
payments received by Debtor on Collateral or from the sale, lease
or other disposition of any Collateral or arising from any other
rights or interests of Debtor in the Collateral, in the form
received by Debtor without commingling with any other funds, and
(b) immediately deliver to Bank all property in Debtor's
possession or later coming into Debtor's possession through
enforcement of Debtor's rights or interests.
3.2 During the continuation of an Event of Default, Debtor
irrevocably authorizes Bank or any Bank employee or agent to
endorse the name of Debtor upon any Collateral, checks, or other
items which are received in payment of any Collateral, and to do
any and all things necessary in order to reduce these items to
money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of
any related rights, beyond the use of reasonable care in the
custody and preservation of Collateral in the possession of Bank.
Debtor agrees to take all steps necessary to preserve rights
against prior parties with respect to Debtor's Property in
Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness,
Debtor understands that Bank imposes a minimum one business day
delay in crediting payments received by Bank against the
Indebtedness to allow time for collection and Debtor agrees that
Bank may, at Bank's option, make such credits only when payments
are actually collected by Bank in immediately available funds.
Any credit of payment by Bank prior to receipt by Bank of
immediately available funds is conditional upon Bank's receipt of
those funds. For the purpose of calculating the principal amount
which Debtor may request to borrow from Bank under any borrowing
arrangements with Bank, Debtor understands that Bank may, at
Bank's option, use a method different from that used for the
purpose of calculating interest.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an
"Event of Default"), Debtor shall be in default under this
Agreement:
(4) Any failure or neglect to comply with, or breach of, any of
the terms, provisions, warranties or covenants of this
Agreement, or any other agreement or commitment between
Debtor or any guarantor of any of the Indebtedness
("guarantor") and Bank; or
(4) Any failure to pay the Indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise;
or
(4) Any warranty, representation, financial statement or other
information made, given or furnished to Bank by or on behalf
of Debtor or any guarantor shall be, or shall prove to have
been, false or materially misleading when made, given, or
furnished; or
(4) Any loss, theft, substantial damage or destruction to or of
any of the Collateral, or the issuance or filing of any
attachment, levy, garnishment or the commencement of any
proceeding in connection with any of the Collateral or of
any other judicial process of, upon or in respect of Debtor
or any guarantor or any of the Collateral; or
(4) Sale or other disposition by Debtor or guarantor of any
substantial portion of its assets or property or voluntary
suspension of the transaction of business by Debtor or any
guarantor, or death, dissolution, termination of existence,
merger, consolidation, insolvency, business failure or
assignment for the benefit of creditors of or by Debtor or
any guarantor; or commencement of any proceedings under any
state or federal bankruptcy or insolvency laws or laws for
the relief of debtors by or against Debtor or any guarantor;
or the appointment of a receiver, trustee, court appointee,
sequestrator or otherwise, for all or any part of the
property of Debtor or any guarantor; or
(4) Any termination or notice of termination of any guaranty of
collection or payment of, or any breach, termination or
notice of termination of any subordination agreement,
pledge, or collateral assignment relating to, all or any
part of the Indebtedness; or
(4) Any failure by Debtor or any guarantor to pay when due any
of its indebtedness (other than to Bank) or in the
observance or performance of any term, covenant or condition
in any agreement evidencing, securing or relating to that
indebtedness; or
(4) Bank deems the margin of Collateral insufficient or itself
insecure, in good faith believing that the prospect of
payment of the Indebtedness or performance of this Agreement
is impaired or shall fear deterioration, removal or waste of
the Collateral.
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or all
of the Indebtedness to be immediately due and payable, and shall
have and may exercise any one or more of the following rights and
remedies:
(4) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties
under the provisions of the Uniform Commercial Code and
other applicable law;
(4) institute legal proceedings to foreclose upon and against
the lien and security interest granted by this Agreement, to
recover judgment for all amounts then due and owing as
Indebtedness, and to collect the same out of any of the
Collateral or the proceeds of any sale of it;
(4) institute legal proceedings for the sale, under the judgment
or decree of any court of competent jurisdiction, of any or
all of the Collateral; and/or
(4) personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where the Collateral or
any part of it may then be located, and take possession of
all or any part of it and/or render it unusable; and without
being responsible for loss or damage to such Collateral,
(4) hold, store, and keep idle, or lease, operate, remove
or otherwise use or permit the use of the Collateral or
any part of it, for that time and upon those terms as
Bank, in its sole discretion, deems to be in its own
best interest, and demand, collect and retain all
resulting earnings and other sums due and to become due
from any party, accounting only for net earnings, if
any (unless the Collateral is retained in satisfaction
of the Indebtedness, in which case no accounting will
be necessary), arising from that use (which net
earnings may be applied against the Indebtedness) and
charging against all receipts from the use of the
Collateral or from its sale, by court proceedings or
pursuant to subsection (ii) below, all other costs,
expenses, charges, damages and other losses resulting
from that use; and/or
(4) sell, lease, dispose of, or cause to be sold, leased or
disposed of, all or any part of the Collateral at one
or more public or private sales, leasings or other
dispositions, at places and times and on terms and
conditions as Bank may deem fit, without any previous
demand or advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to sell,
lease or otherwise dispose of the Collateral or as to
the application by Bank of the proceeds of sale or
otherwise, which would otherwise be required by, or
available to Debtor under, applicable law are expressly
waived by Debtor to the fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under
the power of sale, by virtue of judicial proceedings or
otherwise, it shall not be necessary for Bank or a
public officer under order of a court to have present
physical or constructive possession of the Collateral
to be sold. The recitals contained in any conveyances
and receipts made and given by Bank or the public
officer to any purchaser at any sale made pursuant to
this Agreement shall, to the extent permitted by
applicable law, conclusively establish the truth and
accuracy of the matters stated (including, without
limit, as to the amounts of the principal of and
interest on the Indebtedness, the accrual and
nonpayment of it and advertisement and conduct of the
sale); and all prerequisites to the sale shall be
presumed to have been satisfied and performed. Upon
any sale of any of the Collateral, the receipt of the
officer making the sale under judicial proceedings or
of Bank shall be sufficient discharge to the purchaser
for the purchase money, and the purchaser shall not be
obligated to see to the application of the money. Any
sale of any of the Collateral under this Agreement
shall be a perpetual bar against Debtor with respect to
that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
obligors of the security interest of Bank in any Collateral and
direct payment of it to Bank. Bank may, itself, upon the
occurrence of any Event of Default so notify and direct any
obligor and may take control of any proceeds to which it may be
entitled under this Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorney fees and legal expenses incurred by Bank; the
balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest,
then to principal, then to remaining Indebtedness and the
surplus, if any, shall be paid over to Debtor or to such other
person(s) as may be entitled to it under applicable law. Debtor
shall remain liable for any deficiency, which it shall pay to
Bank immediately upon demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed,
to preclude Bank from pursuing any other remedy provided by law
for the collection of any or all of the Indebtedness or for the
recovery of any other sum to which Bank may be or become entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Debtor and Bank, nor shall anything in this Agreement
modify the terms of any Indebtedness owing to Bank on a demand
basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer
of Bank. No waiver of any default or forbearance on the part of
Bank in enforcing any of its rights under this Agreement shall
operate as a waiver of any other default or of the same default
on a future occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any employee or agent of Bank
(which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in
the name, place and stead of, and at the expense of, Debtor to do
any of the following during a continuation of an Event of
Default:
(4) to demand, receive, sue for and give receipts or
acquittances for any moneys due or to become due on any
Collateral and to endorse any item representing any payment
on or proceeds of the Collateral;
(4) with respect to any Collateral, to assent to any or all
extensions or postponements of the time of its payment or
any other indulgence in connection with it, to the
substitution, exchange, or release of Collateral, to the
addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments on it and the
settlement, compromise or adjustment of it, all in a manner
and at times as Bank shall deem advisable;
(4) to make all necessary transfers of all or any part of the
Collateral in connection with any sale, lease or other
disposition made pursuant to this Agreement;
(4) to adjust and compromise any insurance loss on the
Collateral and to endorse checks or drafts payable to Debtor
in connection with the insurance;
(4) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments
in connection with any sale, lease or other disposition of
the Collateral. Debtor ratifies and confirms all that its
said attorney (or any substitute) shall lawfully do under
this Agreement. Nevertheless, if requested by Bank or a
purchaser or lessee, Debtor shall ratify and confirm any
sale, lease or other disposition by executing and delivering
to Bank or the purchaser or lessee all proper bills of sale,
assignments, releases, leases and other instruments as may
be designated in any request; and
(4) to execute and file in the name of and on behalf of Debtor
all financing statements or other filings deemed necessary
or desirable by Bank to evidence, perfect or continue the
security interests granted in this Agreement.
4.8 Upon the occurrence and continuation of an Event of Default,
Debtor also agrees, upon request of Bank, to assemble the
Collateral and make it available to Bank at any place designated
by Bank which is reasonably convenient to Bank and Debtor.
5. Miscellaneous.
5.1 This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of Michigan.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with and when required under
the applicable provisions of the Uniform Commercial Code, but the
obligations contained in Section 2.17 of this Agreement shall
survive termination. Until terminated, the security interest
created by this Agreement shall continue in full force and effect
and shall secure and be applicable to all advances now or later
made by Bank to Debtor, whether or not Debtor is indebted to Bank
immediately prior to the time of any advance, and to all other
Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement
shall automatically continue or be reinstated, as the case may
be, in the event that (a) any payment received or credit given by
the Bank in respect of the Indebtedness is returned, disgorged or
rescinded as a preference, impermissible setoff, fraudulent
conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation,
laws pertaining to bankruptcy or insolvency, in which case this
Agreement shall be enforceable against Debtor as if the returned,
disgorged or rescinded payment or credit had not been received or
given, whether or not the Bank relied upon this payment or credit
or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Bank
relating to the environmental condition of, or the presence of
Hazardous Materials on, in or about, any Property given as
Collateral to the Bank whether this condition is known or
unknown, now exists or subsequently arises (excluding only
conditions which arise after any acquisition by the Bank of any
such Property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful act or omission of
the Bank), in which case this Agreement shall be enforceable to
the extent of all liability, costs and expenses (including
without limit reasonable attorney fees) incurred by the Bank as
the direct or indirect result of any environmental condition or
Hazardous Materials. In the event of continuation or
reinstatement of this Agreement, Debtor agree(s) upon demand by
the Bank to execute and deliver to the Bank those documents which
the Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or reinstatement,
although the failure of Debtor to do so shall not affect in any
way the reinstatement or continuation. If Debtor does not
execute and deliver to the Bank upon demand such documents, the
Bank and each Bank officer is irrevocably appointed (which
appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) to execute
and deliver such documents in the name and on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and
assigns and to any other holder who derives from Bank title to or
an interest in the Indebtedness or any portion of it, and shall
bind Debtor and the heirs, legal representatives, successors and
assigns of Debtor.
5.5 It there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.6 In addition to Bank's other rights, any indebtedness owing from
Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to it at
least five days before the date of the act shall be reasonable
notice of the act and, specifically, reasonable notification of
the time and place of any public sale or of the time after which
any private sale, lease or other disposition is to be made,
unless a shorter notice period is reasonable under the
circumstances. A notice shall be deemed to be given under this
Agreement when delivered to Debtor or when placed in an envelope
addressed to Debtor and deposited, with postage prepaid, in a
post office or official depository under the exclusive care and
custody of the United States Postal Service. The mailing shall
be registered, certified, or first class mail.
5.9 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power under this Agreement, shall preclude other or
further exercise of the rights and powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No waiver, consent, modification or change of the terms of this
Agreement shall bind the Debtor or the Bank unless in writing and
signed by the waiving party or an authorized officer of the
waiving party, and then this waiver, consent, modification or
change shall be effective only in the specific instance and for
the specific purpose given.
5.13 This Agreement constitutes the entire agreement of Debtor and
Bank with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate payment
of any or all of that Indebtedness at any time(s), whether or not
an Event of Default has occurred.
6. Statement of Business Name, Residence and Location of Collateral.
Debtor warrants, covenants and agrees as follows:
6.1 Debtor's chief executive office is located in the County of
_______________________.
6.2 [Reserved]
6.3 Any other place of business and/or residence of Debtor are
indicated below:____________________________________________________
____________________________________________________________________
____________________________________________________________________
_____________________.
6.4 Debtor's correct legal name is set forth at the end of this
Agreement. During the past five years, Debtor has not conducted
business under any other name except as set forth in any
appropriately labeled schedule attached to this Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by
law shall be given to, or made upon, Debtor at the address
indicated in Section 6.2 above.
6.6 The Collateral (or any records concerning the Collateral) will be
kept at Debtor's address(es) above and/or in the County
of________________________.
Mailing
Address:________________________________________________________________.
No. and Street City State Zip Code
6.7 Debtor will give Bank not less than ninety (90) days' prior
written notice of all contemplated changes in Debtor's name,
identity, corporate structure, and/or any of the above addresses,
but the giving of this notice shall not cure any default caused
by this change.
7. JURY WAIVER.
7.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
8. SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT.
If on the last day of any of Debtor's fiscal quarters the value of the
Collateral (excluding the money market investment account identified on
Exhibit "A" attached hereto) as determined by Bank in its sole but
reasonable discretion shall be less than ninety percent (90%) of the
Collateral Value Requirement, Debtor shall upon ten (10) days' prior
written notice from Bank provide or cause to be provided to Bank additional
marketable securities acceptable to Bank as collateral security for the
Indebtedness having a value, as determined by Bank in its sole but
reasonable discretion, that when added to the Collateral (excluding the
money market investment account identified on Exhibit "A" attached hereto)
shall not be less than ninety percent (90%) of the Collateral Value
Requirement.
"Collateral Value Requirement" initially shall mean $2,000,000. Upon
Bank's receipt of each Ranger Payment (as defined in that certain letter
agreement dated December __, 1995 by and between Debtor and Bank, as the
same may be amended from time to time ("Letter Agreement")), the Collateral
Value Requirement shall be reduced by amount equal to amount of the
Collateral Value Requirement immediately prior to the receipt of the Ranger
Payment times a fraction equal to the corresponding Prepayment Amount (as
defined in the Letter Agreement) divided by the aggregate outstanding
principal Indebtedness.
Notwithstanding anything to the contrary set forth herein, so long as
no Event of Default has occurred and is continuing, upon the written
request of Debtor from time to time delivered to Bank not more than five
(5) business days before the last day of any of Debtor's fiscal quarters,
Bank shall release from its lien and security interest granted hereunder
that portion of the Collateral (excluding the money market investment
account described on Exhibit "A" attached hereto) having a value (as of the
last day of such fiscal quarter) in excess of one hundred ten percent
(110%) of the Collateral Value Requirement.
Dated and delivered on: INSURANCE HOLDINGS LIMITED PARTNERSHIP, a
Connecticut limited partnership
December 22, 1995
at Detroit, Michigan By: Chase Insurance Corporation
Its: General Partner
By:/S/ JOHN P. REDDING
Its: VICE PRESIDENT
<PAGE>
EXHIBIT "A"
All of the Debtor's right, title and interest, including security
entitlement in
(a) (i) the following securities, stocks, bonds, notes,
instruments, documents of title, and/or other property of Debtor
which are credited to participant account of Bank maintained with
Depository Trust Company and/or on deposit in the brokerage
accounts of the Debtor at Comerica Securities, Inc. including the
account for Debtor, Account No. _____________ (the "Brokerage
Account"); (ii) interest, dividends, increase, profits, new
securities or other increments, distributions or rights of any
kind received on account of this property; (iii) Debtor's
property in possession of Bank; and (iv) all property substituted
therefor or for any part thereof, all records (including computer
software) pertaining thereto and all rights, products or proceeds
thereof (whether cash or non-cash proceeds) resulting from any
sale or exchange or transfer thereof or arising by virtue of
ownership thereof (such as, but not limited to, the rights to
additional or other securities or property upon any corporate
reorganization, merger, consolidation, liquidation, or
dissolution, offering of stock rights, stock split or stock or
liquidating dividend or the rights to any goods evidenced by such
property or insurance proceeds with respect thereto), and all
subscription, voting, and preferential rights:
335,000 shares of the capital stock of Accel International;
and
20,000 shares of the capital stock of Security Connecticut
Corp.; and
10,500 shares of the capital stock of Bank of Boston;
(b) Money Market Investment Account #_____________ maintained at
Bank and all cash, securities and other financial assets at any
time deposited therein;
(c) the Brokerage Account and all cash, securities and other
financial assets at any time deposited therein;
(d) and all monies due or to become due to Debtor under or in
connection with the Consulting Agreement dated January 6, 1994
between Debtor and Ranger Insurance Company and all documents and
instruments executed and delivered from time to time in
connection therewith and all collateral security for the
obligations arising under such agreement and under any and all
additions, amendments, supplements or other modifications
thereof, now or hereafter in effect; and
(e) any proceeds of the foregoing.
EXHIBIT 5
RHODA L. CHASE
c/o Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
December 24, 1997
David T. Chase
c/o Chase Enterprises
One Commercial Plaza
Hartford, CT 06103
Re: LOAN OF COMMON STOCK OF ACCEL INTERNATIONAL CORPORATION
This letter will set forth and confirm the agreement entered into between
David T. Chase ("Borrower") and Rhoda L. Chase ("Lender") regarding shares
of common stock of ACCEL International Corporation (the "Company").
1. Lender hereby confirms that it has loaned to Borrower 1,000,000
shares of the common stock, no par value, of the Company ("Borrowed
Securities").
2. Until this Agreement is terminated, Borrower shall have the full
use of the Borrowed Securities including the right to sell, pledge or
otherwise transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities
and including all dividends and distributions in the form of stock, rights,
warrants or other securities which the Company has made during the term of
this Agreement with respect to the Borrowed Securities. During the term of
this Agreement and from time to time, but in no event later than ten (10)
days after the date of any distributions, Borrower shall pay over to Lender
in cash the amount of any cash dividends or distributions made by the
Company respecting the Borrowed Securities. In the event of a
recapitalization, stock split or other exchange by the Company with respect
to the Borrowed Securities, the exchanged or newly issued shares shall be
deemed identical in kind to the Borrowed Securities.
4. Borrower agrees to pay Lender a service fee for the use of the
Borrowed Securities. The service fee shall be six percent (6%) per annum
of the average monthly market value of the Borrowed Securities pro rated
over the number of days this Agreement is in effect. Such fee shall be due
and payable Borrowed Securities pro rated over the number of days this
Agreement is in effect. Such feel shall be due and payable quarterly on
the last day of each March, June, September and December for which this
Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this
agreement by delivering to Lender marketable securities or other property
having a market value of at least one hundred and five percent (105%) of
the market value of the Borrowed Securities. Such transfer of property as
security shall be accompanied by such instruments and documents as shall be
adequate to provide Lender with a good and valid security interest therein.
The said security interest shall give Borrower the right to substitute
collateral. Except in the event of a default by Borrower, Lender shall not
have any right to sell or otherwise dispose of the collateral.
6. Lender and Borrower agree that the loan of the Borrowed
Securities shall not reduce Lender's risk of loss or opportunity for gain
respecting the Borrowed Securities.
7. Borrower and Lender agree that they shall maintain their
respective books and records with respect to the Borrowed Securities to
reflect the transfer of said securities under this Agreement; to record any
obligation that may arise with respect to any dividends or distributions
respecting the Borrowed Securities which may be made by the Company; to
record the transfer of any property or cash in satisfaction of any dividend
or distribution obligation; and to record the transfer of stock in whole or
partial satisfaction of the obligation respecting return of the Borrowed
Securities. Borrower and Lender further agree that they will, upon
reasonable request, confirm to the other or any auditors of the other their
respective obligations with respect to the Borrowed Securities. The
obligation hereunder regarding the records of the parties shall also apply
with respect to any collateral which may be transferred to secure
Borrower's obligation.
8. Unless otherwise sooner terminated as herein provided, this
Agreement shall terminate on December 31, 2001. Borrower reserves the
right to terminate this Agreement by return of the Borrowed Securities upon
two (2) days' notice to Lender. Such right of termination shall be
exercisable in whole or in part. Lender reserves the right to terminate
this Agreement on written notice to Borrower of five (5) business days at
which time Borrower shall fulfill its obligations to Lender as provided in
paragraph 3 hereof.
9. This Agreement shall be binding upon the respective successors
and assigns of Lender and Borrower.
Please confirm that the foregoing sets forth our understanding
regarding the Borrowed Securities by signature below.
Very truly yours,
/s/ Rhoda L. Chase
Rhoda L. Chase
THE FOREGOING IS HEREBY
CONFIRMED AND AGREED TO:
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 6
SECURITY AGREEMENT
(Negotiable Collateral)
For value received, the undersigned ("Debtor") assigns, transfers,
delivers, and pledges to Comerica Bank, a Michigan banking corporation,
whose address is 500 Woodward Avenue, Detroit, Michigan 48226 ("Bank"), a
continuing security interest in (a) the following securities, stocks,
bonds, notes, instruments, documents of title, and/or other property; (b)
interest, dividends, increase, profits, new securities or other increments,
distributions or rights of any kind received on account of this property;
(c) Debtor's Property in Possession of Bank; and (d) all property
substituted therefor or for any part thereof, all records (including
computer software) pertaining thereto and all rights, products or Proceeds
thereof (whether cash or non-cash Proceeds) resulting from any sale or
exchange or transfer thereof or arising by virtue of ownership thereof
(such as, but not limited to, the rights to additional or other securities
or property upon any corporate reorganization, merger, consolidation,
liquidation, or dissolution, offering of stock rights, stock split or stock
or liquidating dividend or the rights to any goods evidenced by such
property or insurance proceeds with respect thereto), and all subscription,
voting, and preferential rights:
See Exhibit "A"
to secure payment of any and all indebtedness of Debtor to Bank under that
certain Installment Note dated as of the date hereof made in the principal
amount of Twelve Million Dollars ($12,000,000) by Debtor payable to Bank,
and any and all renewals, extensions or modifications thereof (the
"Indebtedness").
1. Definitions. As used in this Agreement:
1.1 "Collateral" means any and all property of Debtor in which Bank
now has or by this Agreement now or later acquires a security
interest.
1.2 "Debtor's Property in Possession of Bank" means goods,
instruments, documents, policies and certificates of insurance,
deposits, money or other property now owned or later acquired by
Debtor or in which Debtor now has or later acquires an interest
and which are now or later in possession of Bank, or as to which
Bank now or later controls possession by documents or otherwise.
1.3 "Proceeds" has the meaning assigned it in Article 9 of the
Uniform Commercial Code, as of the date of this Agreement, and
also includes, without limit, cash or other property which were
proceeds and are recovered by a bankruptcy trustee or otherwise
as a preferential transfer by Debtor.
1.4 "Uniform Commercial Code" means Act No. 174 of the Michigan
Public Acts of 1962, as amended.
1.5 Except as otherwise provided in this Agreement, all terms in this
Agreement have the meanings assigned to them in Article 9 (or,
absent definition in Article 9, in any other Article) of the
Uniform Commercial Code, as of the date of this Agreement.
2. Warranties, Covenants and Agreements. Debtor warrants, covenants and
agrees as follows:
2.1 Bank at its option may disburse loan proceeds directly to the
seller of any Collateral to be acquired with proceeds of loans
from Bank.
2.2 Bank, at its option, may require delivery of any Collateral to
Bank at any time with such endorsement or assignments of the
Collateral as Bank may request.
2.3 Debtor shall (a) keep adequate records of the Collateral and
other records as Bank shall determine to be appropriate; and (b)
allow Bank to examine, inspect and make abstracts from, or copy
any of Debtor's books and records (relating to the Collateral or
otherwise and whether printed or in magnetic tape or discs or in
other machine readable form).
2.4 At any time and without notice during the continuation of an
Event of Default, the Bank may (a) cause the Collateral or any
portion of it to be transferred to its name or to the name of its
nominee or nominees; (b) receive or collect by legal proceedings
or otherwise all dividends, interest, principal payments and
other sums and all other distributions at any time payable or
receivable on account of the Collateral, and hold the same as
Collateral, or apply the same to the Indebtedness, the manner and
distribution of the application to be in the sole discretion of
the Bank; (c) enter into an extension, subordination,
reorganization, deposit, merger or consolidation agreement or any
other agreement relating to or affecting the Collateral, and
deposit or surrender control of the Collateral, and accept other
property in exchange for the Collateral and hold or apply the
property or money so received in accordance with the provisions
of this Agreement.
2.5 The Bank may assign any of the Indebtedness and deliver all or
any part of the Collateral to its assignee, who then shall have
with respect to the Collateral so delivered all the rights and
powers of the Bank under this Agreement, and after that the Bank
shall be fully discharged from all liability and responsibility
with respect to the Collateral so delivered.
2.6 If Bank, acting in its sole discretion, redelivers Collateral to
Debtor or Debtor's designee for the purpose of
(2) the ultimate sale or exchange thereof, or
(2) presentation, collection, renewal, or registration of
transfer thereof, or
(2) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing therewith
preliminary to sale or exchange, such redelivery shall be in
trust for the benefit of Bank and shall not constitute a
release of Bank's security interest therein or in the
proceeds or products thereof unless Bank specifically so
agrees in writing. If Debtor requests any such redelivery,
Debtor will deliver with such request a duly executed
financing statement in form and substance satisfactory to
Bank. Any proceeds of collateral coming into Debtor's
possession as a result of any such redelivery shall be held
in trust for Bank and forthwith delivered to Bank for
application on the Indebtedness. Bank may (if, in its sole
discretion, it elects to do so) deliver the Collateral or
any part of the Collateral to Debtor, and such delivery by
Bank shall discharge Bank from any and all liability or
responsibility for such Collateral.
2.7 Debtor acknowledges and agrees that the Bank has no obligation to
acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of the
Indebtedness, and Debtor is not relying upon assets in which the
Bank has or may have a lien or security interest for payment of
the Indebtedness.
2.8 Debtor shall at the request of Bank (a) mark its records and the
Collateral to clearly indicate the security interest of Bank
under this Agreement, and (b) deliver to Bank all accounting and
other records pertaining to, and all writings evidencing, the
Collateral or any portion of it, together with all books, records
and documents of Debtor related to it in whatever form kept by
Debtor, whether printed or in magnetic tape or discs or in other
machine readable form or otherwise, and all forms, programs,
software and other materials and instructions necessary or useful
to Bank, to monitor the Collateral or enforce its rights under
this Agreement.
2.9 At the time any Collateral becomes, or is represented to be,
subject to a security interest in favor of Bank, Debtor shall be
deemed to have warranted that (a) Debtor has the right and
authority to subject it to a security interest granted to Bank
and (b) none of the Collateral is subject to any security
interest other than that in favor of Bank and there are no
financing statements on file, other than in favor of Bank.
2.10 Debtor will keep the Collateral free at all times from any and
all claims, liens, security interests and encumbrances other than
those in favor of Bank. Debtor will not, without the prior
written consent of Bank, sell, transfer or lease, or permit or
suffer to be sold, transferred or leased, any or all of the
Collateral. Bank or its agents or attorneys may at all
reasonable times inspect the Collateral and may enter upon all
premises where the Collateral is kept or might be located.
2.11 Debtor shall take or cause to be taken and execute or cause to be
executed all financing statements, endorsements, assignments and
other writings requested by Bank to establish, maintain,
reinstate, and/or continue the perfected and first priority
status of the security interest of Bank in the Collateral or to
implement or further effectuate the terms or purpose of this
Agreement, although the failure of the Debtor to do so shall not
affect in any way Bank's perfected and first priority security
interest in the Collateral, and will on demand pay all costs and
expenses of filing and recording, including the costs of any
record searches, deemed necessary by Bank from time to time, to
establish or determine the validity and the priority of Bank's
security interest. Debtor further makes, constitutes and
appoints Bank its true and lawful attorney-in-fact with full
power of substitution during the continuation of an Event of
Default to take any action in furtherance of this Agreement,
including, without limitation, the signing of financing
statements, endorsing of instruments, and the execution and
delivery of all documents and agreements necessary to obtain or
accomplish any protection for or collection or disposition of any
part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest.
2.12 Debtor will pay promptly and within the time that they can be
paid without interest or penalty all taxes, assessments and
similar imposts and charges which at any time are or may become a
lien, charge, or encumbrance upon any of the Collateral, except
to the extent contested in good faith and bonded in a manner
satisfactory to Bank. If Debtor fails to pay any of these taxes,
assessments or other charges in the time provided above, Bank has
the option (but not the obligation) to do so and Debtor agrees to
repay all amounts so expended by Bank immediately upon demand,
together with interest at the highest default rate which could be
charged by Bank to Debtor on any Indebtedness.
2.13 [Reserved]
2.14 [Reserved]
2.15 Debtor agrees to reimburse Bank upon demand for all fees and
expenses incurred by Bank (a) in seeking to collect the
Indebtedness or any part of it (through formal or informal
collection actions, workouts or otherwise), in defending the
validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other
agreement between Bank and Debtor; (b) in connection with any
proceeding (including, without limit, bankruptcy, insolvency,
administrative, appellate, or probate proceedings or any lawsuit)
in which Bank at any time is involved as a result of any lending
relationship or other financial accommodation involving Bank and
Debtor; or (c) incurred by Bank during the continuance of an
Event of Default, which fees and expenses relate to or would not
have been incurred but for any lending relationship or other
financial accommodation involving Bank and Debtor. The fees and
expenses include, without limit, court costs, legal expenses,
reasonable attorneys' fees, paralegal fees, internal transfer
charges for in-house attorneys and paralegals and other services,
and audit expenses.
2.16 Debtor at all times shall be in material compliance with all
applicable laws with respect to which Debtor's failure to comply
would have a material adverse effect on the value of the
Collateral or Bank's rights with respect to the Collateral.
2.17 [Reserved].
2.18 Debtor acknowledges and agrees that if any Guaranty is executed
by the Debtor in connection with or related to this Agreement,
all waivers contained in that Guaranty shall be and are
incorporated by reference into this Agreement.
3. Collection of Proceeds.
3.1 Upon the occurrence and during the continuance of an Event of
Default, immediately upon notice to Debtor by Bank, Debtor agrees
to hold in trust for Bank all payments received in connection
with the Collateral and from the sale, lease or other disposition
of any Collateral, all rights by way of suretyship or guaranty
and all rights in the nature of a mortgage, lien or security
interest which Debtor now has or may later acquire regarding the
Collateral. Debtor agrees to collect and enforce payment of all
Collateral until Bank shall direct Debtor to the contrary and,
from and after this direction, Debtor agrees to fully and
promptly cooperate and assist Bank (or any other person as Bank
shall designate) in the collection and enforcement of all
Collateral. Immediately upon notice to such effect to Debtor by
Bank and at all times after that, Debtor agrees to (a) endorse to
Bank and immediately deliver to Bank all payments received by
Debtor on Collateral or from the sale, lease or other disposition
of any Collateral or arising from any other rights or interests
of Debtor in the Collateral, in the form received by Debtor
without commingling with any other funds, and (b) immediately
deliver to Bank all property in Debtor's possession or later
coming into Debtor's possession through enforcement of Debtor's
rights or interests.
3.2 During the continuation of an Event of Default, Debtor
irrevocably authorizes Bank or any Bank employee or agent to
endorse the name of Debtor upon any Collateral, checks, or other
items which are received in payment of any Collateral, and to do
any and all things necessary in order to reduce these items to
money.
3.3 Bank shall have no duty as to the collection or protection of
Collateral or the proceeds of it, nor as to the preservation of
any related rights, beyond the use of reasonable care in the
custody and preservation of Collateral in the possession of Bank.
Debtor agrees to take all steps necessary to preserve rights
against prior parties with respect to Debtor's Property in
Possession of Bank.
3.4 For the purpose of calculating interest on the Indebtedness,
Debtor understands that Bank imposes a minimum one business day
delay in crediting payments received by Bank against the
Indebtedness to allow time for collection and Debtor agrees that
Bank may, at Bank's option, make such credits only when payments
are actually collected by Bank in immediately available funds.
Any credit of payment by Bank prior to receipt by Bank of
immediately available funds is conditional upon Bank's receipt of
those funds. For the purpose of calculating the principal amount
which Debtor may request to borrow from Bank under any borrowing
arrangements with Bank, Debtor understands that Bank may, at
Bank's option, use a method different from that used for the
purpose of calculating interest.
4. Defaults, Enforcement and Application of Proceeds.
4.1 Upon the occurrence of any of the following events (each an
"Event of Default"), Debtor shall be in default under this
Agreement:
(4) Any failure or neglect to comply with, or breach of, the
provisions of Sections 2.10 or 8.1 hereof,
(4) Any failure or neglect to comply with, or breach of, any of
the other terms, provisions, warranties or covenants of this
Agreement, or any other agreement or commitment between
Debtor or any guarantor of any of the Indebtedness
("guarantor") and Bank which is not cured within fifteen
(15) days after notice by Bank to Debtor; or
(4) Any failure to pay the Indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise;
or
(4) Any warranty, representation, financial statement or other
information made, given or furnished to Bank by or on behalf
of Debtor or any guarantor shall be, or shall prove to have
been, false in any material respect or materially misleading
when made, given, or furnished; or
(4) Any loss, theft, substantial damage or destruction to or of
any of the Collateral, or the issuance or filing of any
attachment, levy, garnishment or the commencement of any
proceeding in connection with any of the Collateral or of
any other judicial process of, upon or in respect of Debtor
or any guarantor or any of the Collateral which proceeding
or judicial process is not stayed, lifted, dismissed or
bonded within thirty (30) days after commencement; or
(4) Sale or other disposition by Debtor of any substantial
portion of his assets or property or assignment for the
benefit of creditors of or by Debtor or any guarantor; or
commencement of any proceedings under any state or federal
bankruptcy or insolvency laws or laws for the relief of
debtors by or against Debtor or any guarantor; or the
appointment of a receiver, trustee, court appointee,
sequestrator or otherwise, for all or any part of the
property of Debtor or any guarantor which proceedings are
not dismissed or stayed within forty-five (45) days after
commencement; or
(4) Any termination or notice of termination of any guaranty of
collection or payment of, or any breach, termination or
notice of termination of any subordination agreement,
pledge, or collateral assignment relating to, all or any
part of the Indebtedness; or
(4) Any failure by Debtor to pay when due any of his direct
indebtedness for money borrowed by him (other than to Bank)
in excess of One Million Dollars ($1,000,000) or in the
observance or performance of any term, covenant or condition
in any agreement evidencing, securing or relating to that
indebtedness which results in an acceleration of such
indebtedness in an amount in excess of One Million Dollars
($1,000,000).
4.2 Upon the occurrence of any Event of Default, Bank may at its
discretion and without prior notice to Debtor declare any or all
of the Indebtedness to be immediately due and payable, and, after
giving Debtor ten (10) days notice, if notice is required by law,
shall have and may exercise any one or more of the following
rights and remedies:
(4) exercise all the rights and remedies upon default, in
foreclosure and otherwise, available to secured parties
under the provisions of the Uniform Commercial Code and
other applicable law;
(4) institute legal proceedings to foreclose upon and against
the lien and security interest granted by this Agreement, to
recover judgment for all amounts then due and owing as
Indebtedness, and to collect the same out of any of the
Collateral or the proceeds of any sale of it;
(4) institute legal proceedings for the sale, under the judgment
or decree of any court of competent jurisdiction, of any or
all of the Collateral; and/or
(4) personally or by agents, attorneys, or appointment of a
receiver, enter upon any premises where the Collateral or
any part of it may then be located, and take possession of
all or any part of it and/or render it unusable; and without
being responsible for loss or damage to such Collateral,
(i) hold, store, and keep idle, or lease, operate, remove
or otherwise use or permit the use of the Collateral or
any part of it, for that time and upon those terms as
Bank, in its sole discretion, deems to be in its own
best interest, and demand, collect and retain all
resulting earnings and other sums due and to become due
from any party, accounting only for net earnings, if
any (unless the Collateral is retained in satisfaction
of the Indebtedness, in which case no accounting will
be necessary), arising from that use (which net
earnings may be applied against the Indebtedness) and
charging against all receipts from the use of the
Collateral or from its sale, by court proceedings or
pursuant to subsection (ii) below, all other costs,
expenses, charges, damages and other losses resulting
from that use; and/or
(ii) sell, lease, dispose of, or cause to be sold, leased or
disposed of, all or any part of the Collateral at one
or more public or private sales, leasings or other
dispositions, at places and times and on terms and
conditions as Bank may deem fit, without any previous
demand or advertisement; and except as provided in this
Agreement, all notice of sale, lease or other
disposition, and advertisement, and other notice or
demand, any right or equity of redemption, and any
obligation of a prospective purchaser or lessee to
inquire as to the power and authority of Bank to sell,
lease or otherwise dispose of the Collateral or as to
the application by Bank of the proceeds of sale or
otherwise, which would otherwise be required by, or
available to Debtor under, applicable law are expressly
waived by Debtor to the fullest extent permitted.
At any sale pursuant to this Section 4.2, whether under
the power of sale, by virtue of judicial proceedings or
otherwise, it shall not be necessary for Bank or a
public officer under order of a court to have present
physical or constructive possession of the Collateral
to be sold. The recitals contained in any conveyances
and receipts made and given by Bank or the public
officer to any purchaser at any sale made pursuant to
this Agreement shall, to the extent permitted by
applicable law, conclusively establish the truth and
accuracy of the matters stated (including, without
limit, as to the amounts of the principal of and
interest on the Indebtedness, the accrual and
nonpayment of it and advertisement and conduct of the
sale); and all prerequisites to the sale shall be
presumed to have been satisfied and performed. Upon
any sale of any of the Collateral, the receipt of the
officer making the sale under judicial proceedings or
of Bank shall be sufficient discharge to the purchaser
for the purchase money, and the purchaser shall not be
obligated to see to the application of the money. Any
sale of any of the Collateral under this Agreement
shall be a perpetual bar against Debtor with respect to
that Collateral.
4.3 Debtor shall (at any time) at the request of Bank, notify the
obligors of the security interest of Bank in any Collateral and
direct payment of it to Bank. Bank may, itself, upon the
occurrence of any Event of Default so notify and direct any
obligor and may take control of any proceeds to which it may be
entitled under this Agreement.
4.4 The proceeds of any sale or other disposition of Collateral
authorized by this Agreement shall be applied by Bank first upon
all expenses authorized by the Uniform Commercial Code and all
reasonable attorney fees and legal expenses incurred by Bank; the
balance of the proceeds of the sale or other disposition shall be
applied in the payment of the Indebtedness, first to interest,
then to principal, then to remaining Indebtedness and the
surplus, if any, shall be paid over to Debtor or to such other
person(s) as may be entitled to it under applicable law. Debtor
shall remain liable for any deficiency, which it shall pay to
Bank immediately upon demand.
4.5 Nothing in this Agreement is intended, nor shall it be construed,
to preclude Bank from pursuing any other remedy provided by law
for the collection of any or all of the Indebtedness or for the
recovery of any other sum to which Bank may be or become entitled
for the breach of this Agreement by Debtor. Nothing in this
Agreement shall reduce or release in any way any rights or
security interests of Bank contained in any existing agreement
between Debtor and Bank, nor shall anything in this Agreement
modify the terms of any Indebtedness owing to Bank on a demand
basis.
4.6 No waiver of default or consent to any act by Debtor shall be
effective unless in writing and signed by an authorized officer
of Bank. No waiver of any default or forbearance on the part of
Bank in enforcing any of its rights under this Agreement shall
operate as a waiver of any other default or of the same default
on a future occasion or of any rights.
4.7 Debtor irrevocably appoints Bank or any employee or agent of Bank
(which appointment is coupled with an interest) the true and
lawful attorney of Debtor (with full power of substitution) in
the name, place and stead of, and at the expense of, Debtor to do
any of the following during a continuation of an Event of
Default:
(4) to demand, receive, sue for and give receipts or
acquittances for any moneys due or to become due on any
Collateral and to endorse any item representing any payment
on or proceeds of the Collateral;
(4) with respect to any Collateral, to assent to any or all
extensions or postponements of the time of its payment or
any other indulgence in connection with it, to the
substitution, exchange, or release of Collateral, to the
addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments on it and the
settlement, compromise or adjustment of it, all in a manner
and at times as Bank shall deem advisable;
(4) to make all necessary transfers of all or any part of the
Collateral in connection with any sale, lease or other
disposition made pursuant to this Agreement;
(4) to adjust and compromise any insurance loss on the
Collateral and to endorse checks or drafts payable to Debtor
in connection with the insurance;
(4) to execute and deliver for value all necessary or
appropriate bills of sale, assignments and other instruments
in connection with any sale, lease or other disposition of
the Collateral. Debtor ratifies and confirms all that its
said attorney (or any substitute) shall lawfully do under
this Agreement. Nevertheless, if requested by Bank or a
purchaser or lessee, Debtor shall ratify and confirm any
sale, lease or other disposition by executing and delivering
to Bank or the purchaser or lessee all proper bills of sale,
assignments, releases, leases and other instruments as may
be designated in any request; and
(4) to execute and file in the name of and on behalf of Debtor
all financing statements or other filings deemed necessary
or desirable by Bank to evidence, perfect or continue the
security interests granted in this Agreement.
4.8 Upon the occurrence and continuation of an Event of Default,
Debtor also agrees, upon request of Bank, to assemble the
Collateral and make it available to Bank at any place designated
by Bank which is reasonably convenient to Bank and Debtor.
5. Miscellaneous.
5.1 This Agreement shall in all respects be governed by and construed
in accordance with the laws of the State of Michigan.
5.2 This Agreement shall be terminated only by the filing of a
termination statement in accordance with and when required under
the applicable provisions of the Uniform Commercial Code, but the
obligations contained in Section 2.17 of this Agreement shall
survive termination. Until terminated, the security interest
created by this Agreement shall continue in full force and effect
and shall secure and be applicable to all advances now or later
made by Bank to Debtor, whether or not Debtor is indebted to Bank
immediately prior to the time of any advance, and to all other
Indebtedness.
5.3 Notwithstanding any prior revocation, termination, surrender or
discharge of this Agreement, the effectiveness of this Agreement
shall automatically continue or be reinstated, as the case may
be, in the event that (a) any payment received or credit given by
the Bank in respect of the Indebtedness is returned, disgorged or
rescinded as a preference, impermissible setoff, fraudulent
conveyance, diversion of trust funds, or otherwise under any
applicable state or federal law, including, without limitation,
laws pertaining to bankruptcy or insolvency, in which case this
Agreement shall be enforceable against Debtor as if the returned,
disgorged or rescinded payment or credit had not been received or
given, whether or not the Bank relied upon this payment or credit
or changed its position as a consequence of it; or (b) any
liability is imposed, or sought to be imposed, against the Bank
relating to the environmental condition of, or the presence of
Hazardous Materials on, in or about, any Property given as
Collateral to the Bank whether this condition is known or
unknown, now exists or subsequently arises (excluding only
conditions which arise after any acquisition by the Bank of any
such Property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful act or omission of
the Bank), in which case this Agreement shall be enforceable to
the extent of all liability, costs and expenses (including
without limit reasonable attorney fees) incurred by the Bank as
the direct or indirect result of any environmental condition or
Hazardous Materials. In the event of continuation or
reinstatement of this Agreement, Debtor agree(s) upon demand by
the Bank to execute and deliver to the Bank those documents which
the Bank determines are appropriate to further evidence (in the
public records or otherwise) this continuation or reinstatement,
although the failure of Debtor to do so shall not affect in any
way the reinstatement or continuation. If Debtor does not
execute and deliver to the Bank upon demand such documents, the
Bank and each Bank officer is irrevocably appointed (which
appointment is coupled with an interest) the true and lawful
attorney of Debtor (with full power of substitution) to execute
and deliver such documents in the name and on behalf of Debtor.
5.4 This Agreement and all the rights and remedies of Bank under this
Agreement shall inure to the benefit of Bank's successors and
assigns and to any other holder who derives from Bank title to or
an interest in the Indebtedness or any portion of it, and shall
bind Debtor and the heirs, legal representatives, successors and
assigns of Debtor.
5.5 If there is more than one Debtor, all undertakings, warranties
and covenants made by Debtor and all rights, powers and
authorities given to or conferred upon Bank are made or given
jointly and severally.
5.6 In addition to Bank's other rights, any indebtedness owing from
Bank to Debtor can be set off and applied by Bank on any
Indebtedness at any time(s) either before or after maturity or
demand without notice to anyone.
5.7 Bank assumes no duty of performance or other responsibility under
any contracts contained within the Collateral.
5.8 In the event that applicable law shall obligate Bank to give
prior notice to Debtor of any action to be taken under this
Agreement, Debtor agrees that a written notice given to it at
least ten days before the date of the act shall be reasonable
notice of the act and, specifically, reasonable notification of
the time and place of any public sale or of the time after which
any private sale, lease or other disposition is to be made,
unless a shorter notice period is reasonable under the
circumstances. A notice shall be deemed to be given under this
Agreement when delivered to Debtor or when placed in an envelope
addressed to Debtor and deposited, with postage prepaid, in a
post office or official depository under the exclusive care and
custody of the United States Postal Service. The mailing shall
be registered, certified, or first class mail.
5.9 A carbon, photographic or other reproduction of this Agreement
shall be sufficient as a financing statement under the Uniform
Commercial Code and may be filed by Bank in any filing office.
5.10 No single or partial exercise, or delay in the exercise, of any
right or power under this Agreement, shall preclude other or
further exercise of the rights and powers under this Agreement.
5.11 The unenforceability of any provision of this Agreement shall not
affect the enforceability of the remainder of this Agreement.
5.12 No waiver, consent, modification or change of the terms of this
Agreement shall bind the Debtor or the Bank unless in writing and
signed by the waiving party or an authorized officer of the
waiving party, and then this waiver, consent, modification or
change shall be effective only in the specific instance and for
the specific purpose given.
5.13 This Agreement constitutes the entire agreement of Debtor and
Bank with respect to the subject matter of this Agreement.
5.14 To the extent that any of the Indebtedness is payable upon
demand, nothing contained in this Agreement shall modify the
terms and conditions of that Indebtedness nor shall anything
contained in this Agreement prevent Bank from making demand,
without notice and with or without reason, for immediate payment
of any or all of that Indebtedness at any time(s), whether or not
an Event of Default has occurred.
6. Statement of Business Name, Residence and Location of Collateral.
Debtor warrants, covenants and agrees as follows:
6.1 Debtor's principal residence is located at 96 High Ridge Road,
West Hartford, Connecticut, 06117 in the County of Hartford.
6.2 [Reserved]
6.3 Any other residence of Debtor is indicated below: None.
6.4 Debtor's correct legal name is set forth at the end of this
Agreement.
6.5 Until Bank is advised in writing by Debtor to the contrary, all
notices, requests and demands required under this Agreement or by
law shall be given to, or made upon, Debtor at the address
indicated in Section 6.1 above, with a copy to:
John P. Redding
DT Chase Enterprises
One Commercial Plaza
Hartford, Connecticut 06103
and to:
Kronish, Lieb, Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036
Attention: Chet F. Lipton, Esq.
6.6 The Collateral (or any records concerning the Collateral) will be
kept at Debtor's address(es) above and/or in the County of
Hartford.
Mailing Address: DT Chase Enterprises, One Commercial Plaza, Hartford,
CT 06103.
6.7 Debtor will give Bank not less than ninety (90) days prior
written notice of all contemplated changes in Debtor's name,
identity, corporate structure, and/or any of the above addresses,
but the giving of this notice shall not cure any default caused
by this change.
7. JURY WAIVER.
7.1 DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF
LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.
8. Special Provisions Applicable to this Agreement.
8.1 If at any time the value of the Collateral consisting of the
money market investment account described in Exhibit "A" hereto
("Cash Collateral Account") and the shares of stock described in
Exhibit "A" hereto ("Pledged Shares"), as such value is
determined from time to time in the sole, but reasonable
discretion of Bank, is less than fifty percent (50%) of the
outstanding principal balance of the Indebtedness ("Collateral
Value Requirement"), Debtor shall, upon ten (10) days prior
written notice from Bank, pay or cause to be paid to Bank an
amount sufficient to reduce the Indebtedness such that the value
of the Collateral is equal to or greater than fifty percent (50%)
of the outstanding principal balance of the Indebtedness. Bank
shall apply payments made under this paragraph in payment of the
Indebtedness in such order and manner of application as Bank in
its sole discretion elects. In the alternative, Debtor may, at
his election, provide or cause to be provided to Bank additional
collateral in the form of cash or other property acceptable to
Bank and with a value, as determined by Bank, that when added to
the Collateral will constitute compliance with the Collateral
Value Requirement. Shares of capital stock of Accel
International Corporation and The United Illuminating Company
shall be deemed acceptable additional collateral, provided that,
in the Bank's sole discretion, there is no material adverse
change in the value of such shares after the date of this
Agreement.
8.2 If the value of the Collateral consisting of the Cash Collateral
Account and the Pledged Shares, as determined by Bank in its sole
but reasonable discretion, at any time exceeds seventy-five
percent (75%) of the outstanding principal balance of the
Indebtedness, Debtor may remove Pledged Shares from the Brokerage
Account (as defined in Exhibit "A" hereto), provided that the
quantity of shares of each type of stock to be removed is
acceptable to the Bank in its sole discretion, and provided
further that after such removal, the value of such Collateral
shall not be less than 75% of the outstanding principal balance
of the Indebtedness.
8.3 Subject to Section 8.1, and provided there is no Event of
Default, Debtor may withdraw from the Brokerage Account dividends
paid in the ordinary course of business on account of the Pledged
Shares.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Dated and delivered on this 30th day of December, 1997 at Detroit,
Michigan.
WITNESS:
/S/ ILLEGIBLE /S/ DAVID T. CHASE
David T. Chase
/S/ SCOTT UNSWORTH
STATE OF CT )
)
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30 day of
December, 1997 by David T. Chase.
/S/ SCOTT UNSWORTH
Notary Public
_________County, ______________
My Commission expires: _________
SCOTT D. UNSWORTH
NOTARY PUBLIC
MY COMMISSION EXPIRES OCT. 31, 1998
EXHIBIT 7
NOTICE TO FINANCIAL INTERMEDIARY OF SECURITY
INTEREST IN SECURITIES AND BROKERAGE ACCOUNT
TO: Comerica Securities, Inc.
100 Renaissance Center
13th Floor
Mail Code 3089
Detroit, Michigan 48243
The undersigned is the registered or present owner(s) of the following
securities ("Securities") that you hold in Account No. ORJ-605727
("Account") for the undersigned:
1,000,000 shares of Accel International Corporation
100,000 shares of The United Illuminating Company
On December 30, 1997, the undersigned granted a security interest in
the Securities, the Account, all cash, securities or other financial assets
at any time deposited in the Account and any brokerage accounts substituted
therefor and the proceeds of all of the above (collectively, the
"Collateral") to Comerica Bank of 500 Woodward Avenue, MC 3239, Detroit,
Michigan 48226, taxpayer identification no. 38-0477375 ("Secured Party")
pursuant to a Security Agreement, a copy of which is attached hereto. The
Secured Party has required that the undersigned obtain your confirmation
that you will hold the Collateral subject to the security interest in favor
of the Secured Party.
Until you receive written instructions to the contrary from the
Security Party, you shall not sell, transfer or take any action with
respect to any of the Collateral, notwithstanding any direction by the
undersigned to the contrary. You are authorized and directed to follow the
instructions of the Secured Party with respect to Collateral or any part
thereof. The Secured Party will notify you when its security interest in
the Collateral has been terminated.
Please sign the enclosed Confirmation to confirm that you hold the
Collateral subject to the security interest in favor of the Secured Party
and that you have identified the Collateral in your records as being
subject to the security interest. Please deliver or send the Confirmation
to the Secured Party at the following address:
<PAGE>
Comerica Bank, 500 Woodward Avenue, MC 3239, Detroit, Michigan 48226, attn:
Eric Rolf ((313) 222-4865).
WITNESSES: Very truly yours,
/S/ ILLEGIBLE /S/ DAVID T. CHASE
David T. Chase
/S/ SCOTT UNSWORTH
One Commercial Plaza
Hartford, CT 06103
Taxpayer ID No.__________________
Dated: December 30, 1997
Signature Guaranteed:
/S/ ILLEGIBLE, V.P. NEAL CHORNEY
(Name of Guarantor)
By:/S/ ILLEGIBLE
(Authorized Signature)
Title:
<PAGE>
STATE OF CT )
)SS.
COUNTY OF HARTFORD )
The foregoing instrument was acknowledged before me this 30 day of
December, 1997, by David T. Chase.
/S/ SCOTT UNSWORTH
Notary Public
_____________ County,
My commission expires:___________
SCOTT D. UNSWORTH
Notary Public
My Commission Expires Oct. 31, 1998
PAINEWEBBER MICROFILM I.D. NUMBER EXHIBIT 8
GENERAL TRADING AUTHORIZATION FOR SECURITIES AND/OR OPTIONS ACCOUNTS
(AUTHORIZATION MAY NOT BE EXTENDED TO EMPLOYEES OF PAINEWEBBER)
ACCOUNT NAME Branch Account Number Broker
Rhoda L. Chase | X | X | | X | X | X | X | X | | X | X |
THIS WILL CONFIRM THE AUTHORITY OF
David T. Chase
(Agent name)
C/O CHASE ENTERPRISES
ONE COMMERCIAL PLAZA, HARTFORD CT 06103
(Complete address)
to enter orders with you as brokers, or as dealers acting for your own account,
or as brokers for some other person, and in accordance with your terms and
conditions for my account and risk. To purchase and sell securities and
similar property and enter into those option contracts indicated below. I
hereby ratify and confirm any and all transactions, trades or dealings effected
in and for my account by my agent in connection with the authority granted
hereunder.
(INITIAL BOXES TO INDICATE AGENCY GRANTED)
(1) |RLC| To buy and sell on margin: (cash account only if not initialed)
(2) |RLC| To sell short: (box (1) must also be initialed)
(3) |RLC| To give you instructions as to the transfer of money and property
from my account to me, or to others
(4) |RLC| To do Options as follows: (THE TERM "OPTIONS" IS INCLUSIVE OF PUTS
AND CALLS)
| | COVERED | | BUY OPTIONS AND COVERED |RLC| ALL OPTION TRANSACTIONS
WRITING ONLY WRITING ONLY (INCLUDING UNCOVERED OPTIONS)
This authorization is in addition to (and in no way limits or restricts)
any and all rights which you may have under any other agreement(s) between your
firm and me and is to remain effective until you receive written notice from me
to the contrary, shall survive my disability or incompetence, shall bind my
estate on all transactions by you after but without knowledge of my death and
shall inure to your benefit and the benefit of any successor corporation or
firms.
Signed, sealed and delivered by /S/ Rhoda L. Chase DATE
(Signature of Principal)
In the presence of: DATE
(Signature of Witness)
INSTRUCTIONS AS TO NOTICES
Please send all confirmation, statements, and other communications as checked
below:
| | Send to me only
|RLC| Send to me and to agent. /s/ Rhoda L. Chase
(Signature of Principal)
ACCEPTANCE OF AGENCY
/s/ David T. Chase DATE
(Signature of Agent Authorized to Act)
DATE
(Branch Office Manager's approval)
OPTION ACCOUNTS:
LIMITATIONS
SENIOR ROP APPROVAL: DATE
I N A C 4 REV. 12/95 IMPORTANT - REVERSE SIDE MUST BE COMPLETED BY AGENT
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
TO BE COMPLETED BY AUTHORIZED AGENT
<S> <C> <C> <C> <C>
Age
Mr.
Mrs.
Ms.
Home Phone
Home Address
Occupation Employer Employer's Business
Business Phone
Business Address
Citizen Of Agent's Relationship,
If Any, To The Principal Agent's Account No.
With PW (if any)
Agent's Investment Experience:
(Years of Experience) Reason for Agency
Options:
Stock/Bonds:
Commodities:
Other (Specify)
Authorized Agent's
Signature
</TABLE>
PAINEWEBBER MICROFILM I.D. NUMBER EXHIBIT 9
GENERAL TRADING AUTHORIZATION FOR SECURITIES AND/OR OPTIONS ACCOUNTS
(AUTHORIZATION MAY NOT BE EXTENDED TO EMPLOYEES OF PAINEWEBBER)
ACCOUNT NAME Branch Account Number Broker
Arnold L.Chase | X | X | | X | X | X | X | X | | X | X |
THIS WILL CONFIRM THE AUTHORITY OF
David T. Chase
(Agent name)
CHASE ENTERPRISES ONE COMMERCIAL PLAZA HARTFORD CT 06103
(Complete address)
to enter orders with you as brokers, or as dealers acting for your own account,
or as brokers for some other person, and in accordance with your terms and
conditions for my account and risk. To purchase and sell securities and
similar property and enter into those option contracts indicated below. I
hereby ratify and confirm any and all transactions, trades or dealings effected
in and for my account by my agent in connection with the authority granted
hereunder.
(INITIAL BOXES TO INDICATE AGENCY GRANTED)
(1) |X| To buy and sell on margin: (cash account only if not initialed)
(2) |X| To sell short: (box (1) must also be initialed)
(3) |X| To give you instructions as to the transfer of money and property
from my account to me, or to others
(4) |X| To do Options as follows: (THE TERM "OPTIONS" IS INCLUSIVE OF PUTS
AND CALLS)
| | COVERED | | BUY OPTIONS AND COVERED |X| ALL OPTION TRANSACTIONS
WRITING ONLY WRITING ONLY (INCLUDING UNCOVERED OPTIONS)
This authorization is in addition to (and in no way limits or restricts)
any and all rights which you may have under any other agreement(s) between your
firm and me and is to remain effective until you receive written notice from me
to the contrary, shall survive my disability or incompetence, shall bind my
estate on all transactions by you after but without knowledge of my death and
shall inure to your benefit and the benefit of any successor corporation or
firms.
Signed, sealed and delivered by /S/ Arnold L. Chase DATE 10/10/95
(Signature of Principal)
In the presence of: /S/ John P. Redding DATE 10/10/95
(Signature of Witness)
INSTRUCTIONS AS TO NOTICES
Please send all confirmation, statements, and other communications as checked
below:
| | Send to me only
| | Send to me and to agent. /s/ Arnold L. Chase
(Signature of Principal)
Arnold L. Chase
ACCEPTANCE OF AGENCY
/s/ David T. Chase DATE 10/10/95
(Signature of Agent Authorized to Act)
/s/ William V. Guerin DATE 10/10/95
(Branch Office Manager's approval)
OPTION ACCOUNTS:
LIMITATIONS
SENIOR ROP APPROVAL: DATE
I N A C 4 REV. 12/95 IMPORTANT - REVERSE SIDE MUST BE COMPLETED BY AGENT
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
TO BE COMPLETED BY AUTHORIZED AGENT
<S> <C> <C> <C> <C>
Age
Mr.
Mrs.
Ms.
Home Phone
Home Address
Occupation Employer Employer's Business
Business Phone
Business Address
Citizen Of Agent's Relationship,
If Any, To The Principal Agent's Account No.
With PW (if any)
Agent's Investment Experience:
(Years of Experience) Reason for Agency
Options:
Stock/Bonds:
Commodities:
Other (Specify)
Authorized Agent's
Signature
</TABLE>
PAINEWEBBER MICROFILM I.D. NUMBER EXHIBIT 10
GENERAL TRADING AUTHORIZATION FOR SECURITIES AND/OR OPTIONS ACCOUNTS
(AUTHORIZATION MAY NOT BE EXTENDED TO EMPLOYEES OF PAINEWEBBER)
ACCOUNT NAME Branch Account Number Broker
The Darland Trust | X | X | | X | X | X | X | X | | X | X |
THIS WILL CONFIRM THE AUTHORITY OF
David T. Chase
(Agent name)
96 High Ridge Road, West Hartford, CT 06117
(Complete address)
to enter orders with you as brokers, or as dealers acting for your own account,
or as brokers for some other person, and in accordance with your terms and
conditions for my account and risk. To purchase and sell securities and
similar property and enter into those option contracts indicated below. I
hereby ratify and confirm any and all transactions, trades or dealings effected
in and for my account by my agent in connection with the authority granted
hereunder.
(INITIAL BOXES TO INDICATE AGENCY GRANTED)
(1) |X| To buy and sell on margin: (cash account only if not initialed)
(2) |X| To sell short: (box (1) must also be initialed)
(3) |X| To give you instructions as to the transfer of money and property
from my account to me, or to others
(4) |X| To do Options as follows: (THE TERM "OPTIONS" IS INCLUSIVE OF PUTS
AND CALLS)
| | COVERED | | BUY OPTIONS AND COVERED |X| ALL OPTION TRANSACTIONS
WRITING ONLY WRITING ONLY (INCLUDING UNCOVERED OPTIONS)
This authorization is in addition to (and in no way limits or restricts)
any and all rights which you may have under any other agreement(s) between your
firm and me and is to remain effective until you receive written notice from me
to the contrary, shall survive my disability or incompetence, shall bind my
estate on all transactions by you after but without knowledge of my death and
shall inure to your benefit and the benefit of any successor corporation or
firms.
Signed, sealed and delivered by /S/ Jane Betley DATE 30 October 1995
(Signature of Principal)
X ROTHSCHILD TRUST GUERNSEY LIMITED AS
TRUSTEE AUTHORIZED SIGNATORIES
In the presence of: DATE
(Signature of Witness)
INSTRUCTIONS AS TO NOTICES
Please send all confirmation, statements, and other communications as checked
below:
| | Send to me only
|X| Send to me and to agent. /s/ Jane Betley
(Signature of Principal)
ROTHSCHILD TRUST GUERNSEY LIMITED AS
TRUSTEE AUTHORIZED SIGNATORIES
ACCEPTANCE OF AGENCY
/s/ David T. Chase DATE 10/20/95
David T. Chase
(Signature of Agent Authorized to Act)
DATE
(Branch Office Manager's approval)
OPTION ACCOUNTS:
LIMITATIONS
SENIOR ROP APPROVAL: DATE
I N A C 4 REV. 12/95 IMPORTANT - REVERSE SIDE MUST BE COMPLETED BY AGENT
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
TO BE COMPLETED BY AUTHORIZED AGENT
<S> <C> <C> <C> <C>
Age
Mr. David T. Chase 65
Home Address Home Phone
96 High Ridge Road, West Hartford, CT 06117 860-233-4446
Occupation Employer Employer's Business
Executive Chase Enterprises Financial
Business Address Business Phone
One Commercial Plaza, Hartford, CT 06103 860-549-1674
Citizen Of Agent's Relationship,
If Any, To The Principal Agent's Account No.
With PW (if any)
USA XXXXXXX
Agent's Investment Experience:
(Years of Experience) Reason for Agency
Options: 10 years
Stock/Bonds: 10 years
Commodities: 10 years /s/ David T. Chase
Other (Specify)
David T. Chase -
Authorized Agent's
Signature
</TABLE>
EXHIBIT 11
FIRST RESTATEMENT OF THE
ACCEL INTERNATIONAL CORPORATION
1987 STOCK INCENTIVE PLAN
WHEREAS, ACCEL International Corporation, a Delaware corporation,
desires to attract capable employees and directors for itself and its
subsidiaries, and to provide long range inducements for its key employees
and directors to remain in the employment of the Company, to perform
effectively, and to acquire a permanent stake in the Company with the
interest and outlook of owners; and
WHEREAS, the Company has determined that these objectives will be
promoted by the granting to key employees and directors of options to
acquire shares of the Common Stock of the Company;
NOW, THEREFORE, the Company hereby adopts the First Restatement of the
ACCEL International Corporation 1987 Stock Incentive Plan on the following
terms and conditions:
PART I - KEY EMPLOYEES
Section 1. DEFINITIONS. The following terms, when used in Part I of
the Plan, shall have the following meanings:
"Award" means a grant of any rights under the Plan
"Board" means the board of directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, or
any similar successor code.
"Committee" means the administrative committee created by the
provisions of Part I of the Plan.
"Company" means ACCEL International Corporation, a Delaware
corporation, and its present and future wholly-owned subsidiaries.
"Conditions Precedent" means the conditions contained in an award
of Restricted Stock, which would cause the forfeiture of such award if the
Participant fails to perform such conditions.
"Director" means any director of ACCEL International Corporation.
"Employee" means any employee of the Company.
"Fair Market Value" means the fair market value of a share of
Stock on a given date equal to (a) if the Stock is not listed for trading
on a national securities exchange, the closing bid prices of the Stock in
the over-the-counter market on the day prior to the date of determination
or the most recent such bid prices then available, as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or if the Stock is not then quoted by NASDAQ, as furnished by
any member of the National Association of Securities Dealers, Inc. selected
from time to time by the Company for that purpose, or (b) if the Stock is
listed for trading on a national securities exchange, the closing prices of
the Stock on such exchange on the day prior to the date of determination
or, if no prices can be determined for the day prior to the date of
determination, the most recent date for which such price can reasonably be
ascertained.
"Incentive Stock Option" or "ISO" means a Stock Option intended
to comply with the terms and conditions set forth in Section 422A of the
Code.
"Key Employee" means any full-time Employee of the Company whose
judgment, initiative and efforts contribute or may be expected to
contribute materially to the successful performance of the Company.
"Non-Performance Option" means any Option which is not a
Performance Option.
"Nonstatutory Option" or "Nonincentive Option" means a Stock
Option other than an Incentive Stock Option.
"Option" or "Stock Option" means a right granted under the Plan
to a Participant to purchase a stated number of shares of Stock.
"Participant" means any Key Employee or nonemployee Director who
is eligible to receive and has received an Award under the Plan.
"Performance Option" means an Option which is awarded or vests on
the basis of performance criteria determined prior to the period for which
performance is measured.
"Plan" means this First Restatement of the ACCEL International
Corporation 1987 Stock Incentive Plan (formerly, the Acceleration
Corporation 1987 Incentive Stock Option Plan).
"Restricted Stock" means Stock which is not transferable or may
be forfeited in accordance with the terms of the Plan under which it was
issued.
"Restriction Period" means the periods of time during which some
or all shares of Restricted Stock may not be assigned or transferred and
are subject to forfeiture on failure of Conditions Precedent.
"Rule 16b" means Rule 16b-3 promulgated under Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any successor provision
in effect at the time of grant or exercise of an Award.
"Stock" means common stock, par value $0.10 per share, of the
Company.
"Stock Bonus" means an Award of Stock or Restricted Stock under
the Plan.
Section 2. ADMINISTRATION. (a) Part I of the Plan shall be
administered by the Board or the Compensation Committee of the Board in
accordance with this Section 2.
(b) The number of members of the Committee shall be fixed by the
Board but shall not be less than three nonemployee Directors. The members
of the Committee shall be appointed by the Board and shall serve until
their resignation or removal by the Board with or without cause. A
Committee member may resign at any time by notice to the Board, which
notice may specify the date on which it will become effective. Vacancies
on the Committee shall be filled by the Board. The compensation, if any,
of the members of the Committee shall be determined by the Board, and the
members shall be reimbursed by the Company for their expenses in
administering the Plan. The Board, in its sole discretion, may ratify any
action taken by the Committee.
(c) The members of the Committee shall be nonemployee Directors
(i) who are not eligible to receive Awards under Part I of the Plan, and
(ii) who have not been eligible within one year before appointment to the
Committee for selection as Participants under Part I of the Plan.
(d) Subject to the express provisions of the Plan and in
addition to the powers granted by other sections of the Plan, the powers of
the Committee include having the authority, in its discretion, to: (i)
determine the Participants and grant Awards; (ii) define, prescribe, amend
and rescind rules, regulations, procedures, terms and conditions relating
to the Plan; (iii) make all other determinations necessary or advisable for
administering the Plan, including, but not limited to, interpreting the
Plan, correcting defects, reconciling inconsistencies and resolving
ambiguities; (iv) review and resolve all claims of Employees and
Participants; and (v) retain assistants and professional advisers. The
actions and determinations of the Committee on matters related to the Plan
shall be conclusive.
(e) No member of the Board or the Committee shall have any
personal liability to the Company, the Participants, the Employees, the
Directors, the Company or its stockholders for any action or determination
made in good faith by the Board or the Committee with respect to the Plan
or any Award. The members of the Committee shall be indemnified by the
Company as agents of the Company pursuant to its bylaws.
(f) At all meetings of the Committee, a majority of the number
of its members shall constitute a quorum for the transaction of business,
and the vote of a majority of the members present shall be the act of the
Committee. The Committee shall select a secretary, who need not be a
member of the Committee, and shall maintain a written record of its
meetings and actions. Any action required or permitted to be taken by the
Committee may be taken without a meeting if all members hereof consent in
writing thereto. Any one or more members of the Committee may participate
in a meeting of the Committee by means of conference telephone or similar
communications equipment allowing all persons participating in the meeting
to hear and speak to others at the same time.
(g) Regular meetings of the Committee may be held on at least 10
days' notice at such times and places as the members thereof or the Company
may determine from time to time. Special meetings of the Committee may be
called by the Chairman of the Board, the President or Secretary of the
Company, or the Chairman of the Committee on at least 48 hours' notice to
each member of the Committee personally, by mail, or by telephone. A
notice need not specify the purpose of any regular or special meeting of
the Committee.
Section 3. STOCK SUBJECT TO THE PLAN. (a) The aggregate number of
shares of Stock in respect of which Options may be exercised under Part I
of the Plan or which may be granted as Restricted Stock shall not exceed
750,000 (including the 300,000 shares reserved for issuance under the Plan
by the Board on April 9, 1987).
(b) If any Awards granted under Part I of the Plan are
cancelled, terminate or expire for any reason without having been exercised
in full, the shares of Stock related thereto shall be available again for
all purposes of Part I of the Plan. If any Restricted Stock issued under
the Plan shall be forfeited, the shares of Stock so forfeited shall be
available again for all purposes of Part I of the Plan.
(c) In the event of any change in the Stock, through
recapitalization, merger, consolidation, stock dividend or split,
combination or exchanges of shares or otherwise, the Committee may make
such equitable adjustments in the Plan and the then outstanding Awards as
it deems necessary and appropriate including, but not limited to, changing
the number of shares of Stock reserved under the Plan or covered by
outstanding Awards, and the prices under outstanding Awards.
(d) Shares of Stock which are to be delivered under the Plan may
be obtained by the Company from its treasury, by purchases on the open
market or from private sources, or by issuing authorized but unissued
shares of its Stock. Any issuance of authorized but unissued Stock shall
be approved by the Board. Shares of authorized but unissued Stock may not
be delivered under the Plan if the purchase price thereof is less than the
par value of the Stock, unless an amount equal to the par value of the
Stock delivered is transferred to the capital of the Company. No
fractional shares of Stock shall be issued or sold under the Plan nor shall
any cash payment be made in lieu of fractional shares.
(e) In no event may any Award be made which would have the
effect, by use of different types of Award or variations of terms, of
avoiding the restrictions on Awards of Performance Options, Non-Performance
Options and Stock Bonuses.
Section 4. ELIGIBILITY. Only Key Employees shall be eligible to be
selected by the Committee and receive Awards under Part I of the Plan.
Section 5. STOCK OPTIONS. (a) The Committee shall determine which
Participants shall receive Options, the number of Options to be so
received, the exercise price per share under the Option, the times when
Participants shall receive and may exercise them, the Option term, the
number of shares to be subject to each Option, whether or not an Option so
granted is to qualify as an Incentive Stock Option, whether or not the
Stock issuable on exercise of the Option will be Restricted Stock and the
Restriction Period and Conditions Precedent applicable to any such
Restricted Stock and the terms and conditions of individual Option grants
(which need not be identical). Options shall expire upon termination of
the Participant's employment for any reason; provided, however, that if
such employment is terminated by death or disability, the estate of the
deceased optionee (or the optionee in the case of disability) shall have
the right to exercise any award under Part I of the Plan for a period of
six months after the date of death or disability. No Option shall be
exercised after the expiration of 10 years from the date such Option is
granted.
(b) If the Committee grants Incentive Stock Options, they shall
be granted to such persons and on such terms and conditions relating to
exercise and otherwise as may be necessary to cause them to be "incentive
stock options" under Section 422A of the Code and the regulations
thereunder, as the same or any successor statute or regulations may at the
time be in effect. The aggregate Fair Market Value of the shares of Stock,
determined as of the time the Option is granted, which first became
exercisable under all Incentive Stock Options granted under plans of the
Participant's employer corporation or any parent or subsidiary (as defined
in Section 425 of the Code) thereof, in any calendar year after the 1986
shall not exceed $100,000. No person shall be eligible for the grant of an
Incentive Stock Option who owns or would own immediately before the grant
of such Stock Option, directly or indirectly, stock possessing more than
10% percent of the total combined voting power of all classes of stock of
the Company. This restriction does not apply if, at the time such
Incentive Stock Option is granted, the Incentive Stock Option exercise
price is at least 110% of Fair Market Value on the date of grant and the
Incentive Stock Option by its terms is not exercisable after the expiration
of five years from the date of grant.
(c) No shares of Stock will be issued or transferred pursuant to
an Award unless and until all applicable requirements imposed by federal
and state securities laws and by any stock exchanges upon which the Stock
may be listed, have been fully met. As a condition precedent to the
issuance of stock pursuant to the grant or exercise of an Award, the
Company may require the Participant to take any reasonable action to meet
such requirements.
(d) The Committee may, in its sole discretion, and upon such
terms and conditions as it shall determine, permit the exercise price
and/or withholding taxes to be paid in cash by the tender to the Company of
shares of Stock (including Restricted Stock, which shall be valued as if it
were not subject to restrictions on transfer or possibilities of
forfeiture) owned by the Participant. If shares of Restricted Stock are
tendered as consideration for the exercise of an Option, a number of the
shares issued upon the exercise of such Option or for payment of
withholding taxes, equal to the number of shares of Restricted Stock
tendered, shall be subject to the same restrictions as the Restricted Stock
so tendered and any additional restrictions that may be imposed by the
Committee. Each Option shall be reduced to writing in an Option Agreement
in such form as the Committee determines within a reasonable period after
the date of grant.
Section 6. RESTRICTED STOCK. (a) The Committee shall determine which
Participants shall receive awards of Restricted Stock, the number of shares
of Restricted Stock to be awarded to each Participant, and the Restriction
Period and Conditions Precedent applicable thereto. The Restriction Period
shall end on the earlier of the time set by the Committee or the death or
total and permanent disability of the Participant. The Conditions
Precedent for each award of Restricted Stock shall be determined by the
Committee and may include individual or Company performance requirements,
conditions that the Participant shall remain an active full-time Employee
and that the Participant may not during the Restriction Period compete with
the Company or misuse its confidential information. Shares of Restricted
Stock awarded under the Plan may not be transferred or assigned by the
Participant unless and until the Restriction Period has ended.
(b) If during the Restriction Period, the Participant fails to
perform any Condition Precedent in a manner satisfactory to the Committee,
any amounts paid by the Participant for the Restricted Stock under the Plan
shall be repaid, without interest, to the Participant, and thereafter all
of his right, title and interest in and to the shares of Restricted Stock
shall be forfeited and the Company shall cause such shares to be cancelled
or transferred free and clear of all restrictions to the Company treasury.
(c) Upon receipt of a notice from the Committee that an Award of
Restricted Stock has been made, the Participant shall execute and deliver
to the Company a blank stock power. On the delivery to the Company of such
stock power, a certificate for the shares of Restricted Stock awarded
hereunder bearing such restrictive legend as the Committee may deem
appropriate will be registered in the name of the Participant and delivered
to the Company which will hold it in escrow for the Participant. If such
shares of Restricted Stock are not forfeited as provided in Section 6(b)
above, the Company will deliver such certificates to the Participant or his
personal representative at the end of the Restriction Period.
(d) The Committee may, in its sole discretion, waive or reduce
any Restriction Period or Condition Precedent upon such terms and
conditions as it may, in its discretion, determine.
(e) Except for the restrictions on transfer, the delivery into
escrow, and the possibilities of forfeiture set forth above, upon the
issuance of a certificate for any award of Restricted Stock, the registered
owner thereof shall have all other rights in such shares, including rights
to vote such shares and receive dividends other than distributions of
shares of any class of stock issued by the Company which distributions
shall be delivered into escrow under the same Restriction Period and
Conditions Precedent as the shares of Restricted Stock from which they
derive.
(f) The Committee may grant a Stock Bonus to any Participant,
which shall vest and be payable at such times as the Committee may
determine. The Committee may also determine that any Stock issued in
connection with the grant of a Stock Bonus shall be Restricted Stock on
such terms and conditions as the Committee may determine under Section 6.
Section 7. CANCELLATION OF AWARDS. The Committee may permit the
voluntary surrender of all or a portion of any Award under Part I of the
Plan to be conditioned upon the granting to the Participant of a new Award
with terms the same as or different from those of the Award surrendered, or
may require such voluntary surrender as a condition precedent to a grant of
a new Award. Such new Award shall be on such other terms and conditions
permitted under the Plan as are specified by the Committee at the time the
new Award is granted. Upon surrender, the Award surrendered shall be
cancelled and the Stock previously subject to it shall be available for the
grant of other Awards.
Section 8. AMENDMENTS OF AWARDS. The Committee may, subject to the
consent of the holder where the action may impair or adversely alter the
rights of the holder, at any time and from time to time after the grant of
an Award, modify the terms of any grant under Part I of the Plan to terms
not inconsistent with the provisions of the Plan.
Section 9. GENERAL PROVISIONS.
(a) Nothing in the Plan or any Award or any instrument executed
pursuant to the Plan will confer upon any Participant any right to continue
to be employed by the Company or affect the right of the Company to
terminate the employment of any Participant at any time, without notice,
and for any reason not specifically prohibited by law.
(b) No Participant and no beneficiary or other person claiming
under or through such Participant will have any right, title or interest in
or to any shares of Stock allocated or reserved under the Plan or subject
to any Option or Award except as to such shares of Stock, if any, that have
been issued or transferred to such Participant.
(c) The liability of the Company under this Plan or in
connection with any exercise of any Award is limited to the obligations
expressly set forth in the Plan and in the grant of any Award, and no term
or provision of this Plan or of any grant of any Award shall be construed
to impose any further or additional duties, obligations or costs on the
Company not expressly set forth in the Plan or any grant of any Award.
(d) The Company may make such provisions as it deems appropriate
to withhold any taxes the Company determines are required to be withheld in
connection with any Award, including, but not limited to, the withholding
of shares from an Award upon such terms and conditions as the Committee may
provide. The Company may require the Participant to satisfy any relevant
tax requirements before authorizing any issuance of Stock or the payment of
any Award to the Participant.
(e) The Awards granted under the Plan shall become fully vested
and exercisable upon (i) the acquisition by any person (defined for the
purposes of this Section to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by its Board for the
benefit of its Employees, either directly or indirectly, of the beneficial
ownership (determined under Rule 13d-3 of the Regulations promulgated by
the Securities and Exchange Commission ("SEC") under Section 13(d) of the
Exchange Act) of securities issued by the Company having 50% or more of the
voting power of all of the voting securities issued by the Company in the
election of directors at the next meeting of the holders of voting
securities to be held for such purpose, and such person acquired such
beneficial ownership without the prior consent of the Board; (ii) the
election of a majority of the directors, elected at any meeting of the
holders of voting securities of the Company, who were not nominated for
such election by the Board or a duly constituted committee of the Board; or
(iii) the dissolution, liquidation, reorganization, merger or consolidation
with or transfer of substantially all of the assets of the Company to
another person, provided that the Board does not approve such dissolution,
liquidation, reorganization, merger, consolidation, or transfer.
(f) Notwithstanding anything else in this Plan, the grant of an
Award to any Participant subject to Section 16 of the Exchange Act, must be
held by such Participant for not less than six months or such greater
period as the Committee may determine from the date such Award was granted.
Section 10. NO TRANSFER. No Option, Restricted Stock or other
benefit under the Plan may be transferred other than by will or the laws of
descent and distribution; and no Option may be exercised during the life of
the Participant to whom it was granted except by such Participant.
Section 11. EFFECTIVE DATE OF THE PLAN. The Plan, as restated, shall
become effective upon its approval by the affirmative vote of the holders
of a majority of the outstanding shares of Stock present, or represented,
and entitled to vote at the meeting of stockholders of the Company. The
effective date of the grant of an Award shall be the date the Award is
granted by the Committee.
Section 12. AMENDMENT AND TERMINATION. No Award shall be granted
under the Plan more than 10 years after the date the restated Plan is
approved by the stockholders of the Company. The Board may at any time
terminate the Plan, or make such amendment to the Plan as it may deem
advisable; provided, however, that no amendment shall apply to the holder
of any Award if the amendment might impair or adversely alter the rights of
the holder, unless the holder consents to the amendment and no amendment
shall be made without the approval of a majority of the outstanding shares
of Stock present, or represented, and entitled to vote at a meeting of
stockholders duly held, if it would:
(i) Change the class of person eligible to receive Awards under
the Plan;
(ii) Materially increase the benefits accruing to Participants
under the Plan;
(iii) Increase the number of shares of Stock subject to the Plan;
or
(iv) Transfer the administration of the Plan to any person who is
not a "disinterested administrator" under Rule 16b.
PART II-NONEMPLOYEE DIRECTORS
Section 1. DEFINITIONS. All terms, when used in Part II of the Plan,
shall have the same meanings as used in Part I.
Section 2. STOCK SUBJECT TO THE PLAN. (a) The aggregate number of
shares of Stock in respect of which Options may be exercised under Part II
of the Plan shall not exceed
50,000.
(b) If any Options granted under the Part II of the Plan are
cancelled, terminate or expire for any reason without having been exercised
in full, the shares of Stock related thereto shall be available again for
the purposes of Part II of the Plan.
(c) In the event of any change in the Stock, through
recapitalization, merger, consolidation, stock dividend or split,
combination or exchanges of shares or otherwise, the outstanding Options
shall be automatically adjusted to equitably reflect such change including,
but not limited to, adjusting the number of shares of Stock reserved under
the Plan or covered by outstanding Options, and the prices under
outstanding Options.
(d) Shares of Stock which are to be delivered under the Plan may be
obtained by the Company from its treasury, by purchases on the open market
or from private sources, or by issuing authorized but unissued shares of
its Stock. Any issuance of authorized but unissued Stock shall be approved
by the Board. Shares of authorized but unissued Stock may not be delivered
under the Plan if the purchase price thereof is less than the par value of
the Stock, unless an amount equal to the par value of the Stock delivered
is transferred to the capital of the Company. No fractional shares of
Stock shall be issued or sold under the Plan nor shall any cash payment be
made in lieu of fractional shares.
Section 3. ELIGIBILITY. Only Directors (other than Directors who are
employed by the Company) of the Company, shall be eligible to receive
Options under Part II of the Plan.
Section 4. STOCK OPTIONS.
(a) Each nonemployee Director shall be granted an Option to
purchase 2,000 shares of Stock (i) upon the initial approval of this Plan
by stockholders of the Company if the person is a Director on such date, or
(ii) when the nonemployee Director first becomes a Director if the person
is not a Director when the Plan is initially approved by stockholders. All
grants under this Section shall be on the following terms:
(i) The Options shall all be Nonincentive Options.
(ii) Each Option will have an exercise price equal to the
Fair Market Value of a share of Stock on the date the option was granted.
(iii) Each Option shall 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.
(iv) Each Option shall lapse on the earliest of (a) the date
10 years after the date the Option was granted, or (b) the date 180 days
after the termination of the Director's status as Director.
(v) Notwithstanding the foregoing, each Option shall fully
vest and become completely exercisable upon the death or voluntary
retirement of the Director.
(b) Commencing in 1992, each nonemployee Director shall be
granted an Option to purchase 1,000 shares of Stock after the annual
meeting of the stockholders of the Company on the following terms:
(i) The Options shall all be Nonincentive Options.
(ii) Each Option will have an exercise price equal to the
Fair Market Value of a share of Stock on the date the option was granted.
(iii) Each Option shall 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.
(iv) Each Option shall lapse on the earliest of (a) the date
10 years after the date the Option was granted, or (b) the date 180 days
after the termination of the Director's status as Director.
(v) Notwithstanding the foregoing, each Option shall fully
vest and become completely exercisable upon the death or voluntary
retirement of the Director.
(vi) A nonemployee Director who receives Options under
subsection (a) by reason of initially becoming a Director at the annual
meeting of the stockholders of the Company shall not receive Options under
this subsection (b) for such year.
(c) No shares of Stock will be issued or transferred pursuant to
an Option unless and until all applicable requirements imposed by federal
and state securities laws and by any stock exchanges upon which the Stock
may be listed, have been fully met. As a condition precedent to the
issuance of shares pursuant to the grant or exercise of an Option, the
Company may require the Participant to take any reasonable action to meet
such requirements.
(d) The Company may, in its sole discretion, and upon such terms
and conditions as it shall determine, permit the exercise price and/or
withholding taxes to be paid in cash by the tender to the Company of shares
of Stock owned by the Participant. Each Option shall be reduced to writing
in an Option Agreement in such form as the Company determines within a
reasonable period after the date of grant.
Section 5. GENERAL PROVISIONS.
(a) Nothing in the Plan or any Option or any instrument executed
pursuant to the Plan will confer upon any Participant any right to continue
to serve as a Director or affect the right of the Company to terminate the
status of Director of any Participant at any time, without notice, and for
any reason not specifically prohibited by law.
(b) No Participant and no beneficiary or other person claiming
under or through such Participant will have any right, title or interest in
or to any shares of Stock allocated or reserved under the Plan or subject
to any Option except as to such shares of Stock, if any, that have been
issued or transferred to such Participant.
(c) The liability of the Company under this Plan or in
connection with any exercise of any Option is limited to the obligations
expressly set forth in the Plan, and no term or provision of this Plan
shall be construed to impose any further or additional duties, obligations
or costs on the Company not expressly set forth in the Plan.
(d) The Company may make such provisions as it deems appropriate
to withhold any taxes the Company determines are required to be withheld in
connection with any Option, including, but not limited to, the withholding
of shares from an Option upon such terms and conditions as the Company may
provide. The Company may require the Participant to satisfy any relevant
tax requirements before authorizing any issuance of Stock.
(e) The Awards granted under the Plan shall become fully vested
and exercisable upon (i) the acquisition by any person (defined for the
purposes of this Section to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by its Board for the
benefit of its Employees, either directly or indirectly, of the beneficial
ownership (determined under Rule 13d-3 of the Regulations promulgated by
the Securities and Exchange Commission ("SEC") under Section 13(d) of the
Exchange Act) of securities issued by the Company having 50% or more of the
voting power of all of the voting securities issued by the Company in the
election of directors at the next meeting of the holders of voting
securities to be held for such purpose, and such person acquired such
beneficial ownership without the prior consent of the Board; (ii) the
election of a majority of the directors, elected at any meeting of the
holders of voting securities of the Company, who were not nominated for
such election by the Board or a duly constituted committee of the Board; or
(iii) the dissolution, liquidation, reorganization, merger or consolidation
with or transfer of substantially all of the assets of the Company to
another person, provided that the Board does not approve such dissolution,
liquidation, reorganization, merger, consolidation, or transfer.
Section 6. NO TRANSFER. No Option may be transferred other than by
will or the laws of descent and distribution; and no Option may be
exercised during the life of the Participant to whom it was granted except
by such Participant.
Section 7. EFFECTIVE DATE OF THE PLAN. The Plan shall become
effective upon its approval by the affirmative vote of the holders of a
majority of the outstanding shares of Stock present, or represented, and
entitled to vote at the meeting of stockholders of the Company. The
effective date of the grant of an Option shall be the date of the
stockholder annual meeting with respect to which the Option is granted.
Section 8. AMENDMENT AND TERMINATION. No Award shall be granted
under the Plan more than 10 years after the date the restated Plan is
approved by the stockholders of the Company. The Board may at any time
terminate the Plan, or make such amendment to the Plan as it may deem
advisable; provided, however, that no amendment shall apply to the holder
of any Option if the amendment might impair or adversely alter the rights
of the holder, unless the holder consents to the amendment and no amendment
shall be made without the approval of a majority of the outstanding shares
of Stock present, or represented, and entitled to vote at a meeting of
stockholders duly held, if it would:
(i) Change the class of person eligible to receive Options under
the Plan;
(ii) Materially increase the benefits accruing to Participants
under the Plan; or
(iii) Increase the number of shares of Stock subject to the Plan.
7237T
04/01/91
EXHIBIT 12
ACCEL INTERNATIONAL CORPORATION 1987 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is between ACCEL
International Corporation, a Delaware corporation (the "Company"), and the
person whose name appears on the Schedule attached to this Agreement (the
"Optionee"), under the ACCEL International Corporation 1987 Stock Incentive
Plan (the "Plan").
Because of exceptional services provided by the Optionee to the
Company, the Optionee has been granted one or more Options on the terms and
conditions set forth in this Agreement and the Schedule.
SECTION 1. DEFINITIONS. Terms which are defined in the applicable
Plan will have the meaning set forth therein and the following terms will
have the following meanings when used in this Agreement:
"EXPIRATION DATE" is the earlier of (a) the last date on which any
Options may be exercised, as set forth Section 4 and in the Schedule, or
(1)) the date ten years after the date the Option was grant.
"SCHEDULE" means the schedule attached to the end of this Agreement
listing information about the Options being granted to the Optionee.
SECTION 2. OPTIONS. The Optionee is hereby granted Options to
purchase Stock as set forth and under the terms contained in the Schedule.
SECTION 3. EXERCISE OF RIGHTS.
3.1. TIMES WHEN SHARES CAN BE BOUGHT. Subject to the provisions
of the Plan, Options will become exercisable as set forth on the Schedule.
3.2. NOTICE. If the Optionee wishes to exercise any of the
Optionee's rights, the Optionee must give notice of exercise to the Company
at the Company's principal office. The Optionee must give the notice in
writing and must use a form provided by the Committee. The Optionee must
include with the notice full payment for any Stock being bought under any
Option. The notice and payment must be delivered to the Company before the
Expiration Date.
3.3. PAYMENT.
3.3.1. CONSIDERATION. Payment of the option price for any
Stock being bought under an Option must be made by certified or bank check
or by delivering to the Company certificates representing the Company's
Stock which the Optionee already owns. If the Optionee pays by delivering
Stock of the Company, the Optionee must include with the Notice of Exercise
the certificates for such Stock duly endorsed for transfer. The Company
will value the Stock delivered by the Optionee at their Fair Market Value
on the date of receipt as set forth in the Plan and, if the Fair Market
Value of the Stock delivered by the Optionee exceeds the amount required
under this Section 3.3, will return to the Optionee cash in an amount equal
to the Fair Market Value, so determined, of any fractional portion of a
share of Stock exceeding the amount required and will issue or cause to be
issued a certificate for any whole share of Stock exceeding the amount
required. The Company undertakes no responsibility with respect to
liability under Section 16 of the Securities Exchange Act of 1934, and the
Optionee agrees to take full responsibility with respect to such liability.
3.3.2. WITHHOLDING. The Optionee may not buy any Stock
under an Option unless, at the time the Optionee gives Notice of Exercise
to the Company, the Optionee includes with the notice payment by a
certified or bank check of all local, state or federal withholding taxes
due on account of buying Stock under the Option or gives other assurance of
the payment to the Company of those withholding taxes satisfactory to the
Committee.
3.4. TRANSFER. The Company shall deliver certificates made out
in the name of the Optionee for Stock bought under an Option as soon as
practicable after receiving payment for the Stock and for any taxes under
Section 3.3 and all documents required under the Plan and the Agreement.
If the Plan or any law, regulation or interpretation requires the Company
to take any action regarding the Stock before the Company issues
certificates for the Stock being bought, the Company may delay delivering
the certificates for those Stock for the period necessary to take that
action.
SECTION 4. TERMINATION.
4.1. EMPLOYEES. Unless indicated otherwise on the Schedule, all
Options granted to an Optionee who is an Employee will lapse 180 days after
the Optionee terminates employment with the Company but in no event later
than the tenth anniversary of the date of grant), except (a) if such
termination is the result of the Optionee's gross misconduct or neglect as
determined by the Committee, all Options will lapse immediately on
Termination, and (b) if the Termination is the result of the death of the
Optionee, all Options granted to the Optionee will lapse 180 days after the
death of the Optionee (but in no event later than the tenth anniversary of
the date of grant).
4.2. DIRECTORS. Unless the Schedule provides that an Option
will lapse later, all Options granted to an Optionee who is a Director but
not employed by the Company shall lapse 180 days after the Optionee's
status as a Director has terminated for any reason (but in no event later
than the tenth anniversary of the date of grant).
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the
Optionee confirms that Optionee has received a copy of the Plan.
SECTION 6. CHANGE OF CONTROL. The Optionee will become fully vested
in all Options and may immediately exercise all Options, notwithstanding
the rate of which such Options become exercisable under the Schedule, upon
the occurrence of one of the following events:
6.1. TAKEOVER. The acquisition by any person (defined for
purposes of this Agreement to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by the Company's board
of directors for the benefit of its Employees, either directly or
indirectly, of the beneficial ownership (determined under Rule 13d-3 of the
Regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company
having 50% or more of the voting power of all the voting securities issued
by the Company in the election of directors at the next meeting of the
holders of voting securities to be held for such purpose, and such person
acquired such beneficial ownership without prior consent of the Company's
board of directors.
6.2. PROXY DISPUTE. The election of a majority of the
directors, elected at any meeting of the holders voting securities of the
Company, who were not nominated for such election by the Company's board of
directors or a duly constituted committee of such board.
6.3. DISSOLUTION. The dissolution, liquidation, reorganization,
merger, or consolidation with or transfer of substantially all the assets
of the Company to another person, provided that the Company's board of
directors does not approve such dissolution, liquidation, reorganization,
merger, consolidation, or transfer.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and the Optionee concerning all
Options and payments granted under the Plan, and includes all earlier
negotiations and understanding. The Company and the Optionee have made no
promises, agreements, conditions or understandings, either orally or in
writing, that are not contained in this Agreement or the Plan.
7.2. EMPLOYMENT. By establishing the Plan, granting rights
under the Plan and entering into this Agreement, the Company does not give
the Optionee any right to continue to be employed by or associated with the
Company or to be entitled to any remuneration or benefits not set forth in
this Agreement or the Plan. This Agreement and the Plan will not interfere
with or limit the right of the Company to end the Optionee '5 employment or
association at any time.
7.3. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Optionee
will be deemed an original and all of which together will be deemed the
same Agreement.
7.5. NOTICE. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, at the
principal office of the Company and, if to the Optionee, at the Optionee's
last known address on the personnel records of the Company.
7.6. AMENDMENT. This Agreement may be amended by the Company as
provided by the Plan. However, unless the Optionee consents, the Company
cannot amend this Agreement if the amendment will materially change or
impair the Optionee's rights under this Agreement and such change will not
be to the Optionee's benefit.
7.7. TRANSFER AND SUCCESSION. The Optionee may not sell, give,
transfer, encumber or assign, or use as collateral, any of the Optionee's
rights under this Agreement or the Plan other than by will or the laws of
decent and distribution. If an Option is exercisable after the Optionee's
death, the personal representative of the Optionee 5 estate shall have the
right to exercise such options subject to Section 4. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of
the Company and the Optionee and their heirs, successors and assigns.
7.8. GOVERNING LAW. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of Ohio
applicable to agreements to be performed in the State of Ohio to the extent
it may apply.
IN WITNESS WHEREOF the Company and Optionee have caused this Agreement
to be signed and delivered as of the date set forth on the Schedule.
ACCEL INTERNATIONAL CORPORATION
By: /S/ R. MAX WILLIAMSON
Its:
OPTIONEE
/S/ DAVID T. CHASE
Signature
Print Name
<PAGE>
SCHEDULE TO STOCK OPTION AGREEMENT
Dated: June 4, 1991
Between ACCEL International Corporation And:
Optionee's Name: David T. Chase
Optionee's Address: 96 High Ridge Road
West Hartford, CT 06117
Optionee's Social Security No.: ###-##-####
Date of Grant of Options: June 4, 1991
Date That Each Option Expires: June 3, 2001
Shares Subject Price Per
TO OPTION SHARE
Nonincentive
Option: 2,000 $9.75
Vesting Schedule: Exercisable as to 50% of the
shares granted per year.
THIS SCHEDULE IS AN IMPORTANT PART OF YOUR STOCK OPTION AGREEMENT AND
SHOULD BE ATTACHED TO IT.
/S/ R. MAX WILLIAMSON
R. Max Williamson, President and
Chief Executive Officer
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 13
ACCEL INTERNATIONAL CORPORATION 1987 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is between ACCEL
International Corporation, a Delaware corporation (the "Company"), and the
person whose name appears on the Schedule attached to this Agreement (the
"Optionee"), under the ACCEL International Corporation 1987 Stock Incentive
Plan (the "Plan").
Because of exceptional services provided by the Optionee to the
Company, the Optionee has been granted one or more Options on the terms and
conditions set forth in this Agreement and the Schedule.
SECTION 1. DEFINITIONS. Terms which are defined in the applicable
Plan will have the meaning set forth therein and the following terms will
have the following meanings when used in this Agreement:
"EXPIRATION DATE" is the earlier of (a) the last date on which any
Options may be exercised, as set forth Section 4 and in the Schedule, or
(1)) the date ten years after the date the Option was grant.
"SCHEDULE" means the schedule attached to the end of this Agreement
listing information about the Options being granted to the Optionee.
SECTION 2. OPTIONS. The Optionee is hereby granted Options to
purchase Stock as set forth and under the terms contained in the Schedule.
SECTION 3. EXERCISE OF RIGHTS.
3.1. TIMES WHEN SHARES CAN BE BOUGHT. Subject to the provisions
of the Plan, Options will become exercisable as set forth on the Schedule.
3.2. NOTICE. If the Optionee wishes to exercise any of the
Optionee's rights, the Optionee must give notice of exercise to the Company
at the Company's principal office. The Optionee must give the notice in
writing and must use a form provided by the Committee. The Optionee must
include with the notice full payment for any Stock being bought under any
Option. The notice and payment must be delivered to the Company before the
Expiration Date.
3.3. PAYMENT.
3.3.1. CONSIDERATION. Payment of the option price for any
Stock being bought under an Option must be made by certified or bank check
or by delivering to the Company certificates representing the Company's
Stock which the Optionee already owns. If the Optionee pays by delivering
Stock of the Company, the Optionee must include with the Notice of Exercise
the certificates for such Stock duly endorsed for transfer. The Company
will value the Stock delivered by the Optionee at their Fair Market Value
on the date of receipt as set forth in the Plan and, if the Fair Market
Value of the Stock delivered by the Optionee exceeds the amount required
under this Section 3.3, will return to the Optionee cash in an amount equal
to the Fair Market Value, so determined, of any fractional portion of a
share of Stock exceeding the amount required and will issue or cause to be
issued a certificate for any whole share of Stock exceeding the amount
required. The Company undertakes no responsibility with respect to
liability under Section 16 of the Securities Exchange Act of 1934, and the
Optionee agrees to take full responsibility with respect to such liability.
3.3.2. WITHHOLDING. The Optionee may not buy any Stock
under an Option unless, at the time the Optionee gives Notice of Exercise
to the Company, the Optionee includes with the notice payment by a
certified or bank check of all local, state or federal withholding taxes
due on account of buying Stock under the Option or gives other assurance of
the payment to the Company of those withholding taxes satisfactory to the
Committee.
3.4. TRANSFER. The Company shall deliver certificates made out
in the name of the Optionee for Stock bought under an Option as soon as
practicable after receiving payment for the Stock and for any taxes under
Section 3.3 and all documents required under the Plan and the Agreement.
If the Plan or any law, regulation or interpretation requires the Company
to take any action regarding the Stock before the Company issues
certificates for the Stock being bought, the Company may delay delivering
the certificates for those Stock for the period necessary to take that
action.
SECTION 4. TERMINATION.
4.1. EMPLOYEES. Unless indicated otherwise on the Schedule, all
Options granted to an Optionee who is an Employee will lapse 180 days after
the Optionee terminates employment with the Company but in no event later
than the tenth anniversary of the date of grant), except (a) if such
termination is the result of the Optionee's gross misconduct or neglect as
determined by the Committee, all Options will lapse immediately on
Termination, and (b) if the Termination is the result of the death of the
Optionee, all Options granted to the Optionee will lapse 180 days after the
death of the Optionee (but in no event later than the tenth anniversary of
the date of grant).
4.2. DIRECTORS. Unless the Schedule provides that an Option
will lapse later, all Options granted to an Optionee who is a Director but
not employed by the Company shall lapse 180 days after the Optionee's
status as a Director has terminated for any reason (but in no event later
than the tenth anniversary of the date of grant).
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the
Optionee confirms that Optionee has received a copy of the Plan.
SECTION 6. CHANGE OF CONTROL. The Optionee will become fully vested
in all Options and may immediately exercise all Options, notwithstanding
the rate of which such Options become exercisable under the Schedule, upon
the occurrence of one of the following events:
6.1. TAKEOVER. The acquisition by any person (defined for
purposes of this Agreement to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by the Company's board
of directors for the benefit of its Employees, either directly or
indirectly, of the beneficial ownership (determined under Rule 13d-3 of the
Regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company
having 50% or more of the voting power of all the voting securities issued
by the Company in the election of directors at the next meeting of the
holders of voting securities to be held for such purpose, and such person
acquired such beneficial ownership without prior consent of the Company's
board of directors.
6.2. PROXY DISPUTE. The election of a majority of the
directors, elected at any meeting of the holders voting securities of the
Company, who were not nominated for such election by the Company's board of
directors or a duly constituted committee of such board.
6.3. DISSOLUTION. The dissolution, liquidation, reorganization,
merger, or consolidation with or transfer of substantially all the assets
of the Company to another person, provided that the Company's board of
directors does not approve such dissolution, liquidation, reorganization,
merger, consolidation, or transfer.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and the Optionee concerning all
Options and payments granted under the Plan, and includes all earlier
negotiations and understanding. The Company and the Optionee have made no
promises, agreements, conditions or understandings, either orally or in
writing, that are not contained in this Agreement or the Plan.
7.2. EMPLOYMENT. By establishing the Plan, granting rights
under the Plan and entering into this Agreement, the Company does not give
the Optionee any right to continue to be employed by or associated with the
Company or to be entitled to any remuneration or benefits not set forth in
this Agreement or the Plan. This Agreement and the Plan will not interfere
with or limit the right of the Company to end the Optionee '5 employment or
association at any time.
7.3. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Optionee
will be deemed an original and all of which together will be deemed the
same Agreement.
7.5. NOTICE. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, at the
principal office of the Company and, if to the Optionee, at the Optionee's
last known address on the personnel records of the Company.
7.6. AMENDMENT. This Agreement may be amended by the Company as
provided by the Plan. However, unless the Optionee consents, the Company
cannot amend this Agreement if the amendment will materially change or
impair the Optionee's rights under this Agreement and such change will not
be to the Optionee's benefit.
7.7. TRANSFER AND SUCCESSION. The Optionee may not sell, give,
transfer, encumber or assign, or use as collateral, any of the Optionee's
rights under this Agreement or the Plan other than by will or the laws of
decent and distribution. If an Option is exercisable after the Optionee's
death, the personal representative of the Optionee 5 estate shall have the
right to exercise such options subject to Section 4. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of
the Company and the Optionee and their heirs, successors and assigns.
7.8. GOVERNING LAW. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of Ohio
applicable to agreements to be performed in the State of Ohio to the extent
it may apply.
IN WITNESS WHEREOF the Company and Optionee have caused this Agreement
to be signed and delivered as of the date set forth on the Schedule.
ACCEL INTERNATIONAL CORPORATION
By: /S/ R. MAX WILLIAMSON
Its:
OPTIONEE
/S/ DAVID T. CHASE
Signature
Print Name
<PAGE>
SCHEDULE
TO
STOCK OPTION AGREEMENT
IDENTIFICATION.
1. Name of Optionee: David T. Chase
2. Address of Optionee: 96 High Ridge Road
West Hartford, CT 06117
3. Social Security Number of
Optionee: ###-##-####
4. Date of Option Agreement: June 2, 1992
TERMS OF GRANT.
1. Number of shares under the ACCEL International Corporation
1987 Stock Incentive Plan:
(a) Incentive Option: -0-
(b) Nonincentive Option: 1,000
2. Fair Market Value per Share as of date of grant: $5.88
3. Price per Share: $5.88
4. Date of Grant: June 2, 1992
5. Expiration Date: June 1, 2002
6. Rate at which Option becomes exercisable:
% of Total Shares as to which
DATE OPTION IS THEN EXERCISABLE
June 2, 1993 50%
June 2, 1994 50%
7. Conditions Precedent: None
THIS SCHEDULE IS AN IMPORTANT PART OF YOUR STOCK OPTION AGREEMENT AND
SHOULD BE ATTACHED TO IT.
/S/ R. MAX WILLIAMSON
R. Max Williamson, President and
Chief Executive Officer
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 14
ACCEL INTERNATIONAL CORPORATION 1987 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is between ACCEL
International Corporation, a Delaware corporation (the "Company"), and the
person whose name appears on the Schedule attached to this Agreement (the
"Optionee"), under the ACCEL International Corporation 1987 Stock Incentive
Plan (the "Plan").
Because of exceptional services provided by the Optionee to the
Company, the Optionee has been granted one or more Options on the terms and
conditions set forth in this Agreement and the Schedule.
SECTION 1. DEFINITIONS. Terms which are defined in the applicable
Plan will have the meaning set forth therein and the following terms will
have the following meanings when used in this Agreement:
"EXPIRATION DATE" is the earlier of (a) the last date on which any
Options may be exercised, as set forth Section 4 and in the Schedule, or
(1)) the date ten years after the date the Option was grant.
"SCHEDULE" means the schedule attached to the end of this Agreement
listing information about the Options being granted to the Optionee.
SECTION 2. OPTIONS. The Optionee is hereby granted Options to
purchase Stock as set forth and under the terms contained in the Schedule.
SECTION 3. EXERCISE OF RIGHTS.
3.1. TIMES WHEN SHARES CAN BE BOUGHT. Subject to the provisions
of the Plan, Options will become exercisable as set forth on the Schedule.
3.2. NOTICE. If the Optionee wishes to exercise any of the
Optionee's rights, the Optionee must give notice of exercise to the Company
at the Company's principal office. The Optionee must give the notice in
writing and must use a form provided by the Committee. The Optionee must
include with the notice full payment for any Stock being bought under any
Option. The notice and payment must be delivered to the Company before the
Expiration Date.
3.3. PAYMENT.
3.3.1. CONSIDERATION. Payment of the option price for any
Stock being bought under an Option must be made by certified or bank check
or by delivering to the Company certificates representing the Company's
Stock which the Optionee already owns. If the Optionee pays by delivering
Stock of the Company, the Optionee must include with the Notice of Exercise
the certificates for such Stock duly endorsed for transfer. The Company
will value the Stock delivered by the Optionee at their Fair Market Value
on the date of receipt as set forth in the Plan and, if the Fair Market
Value of the Stock delivered by the Optionee exceeds the amount required
under this Section 3.3, will return to the Optionee cash in an amount equal
to the Fair Market Value, so determined, of any fractional portion of a
share of Stock exceeding the amount required and will issue or cause to be
issued a certificate for any whole share of Stock exceeding the amount
required. The Company undertakes no responsibility with respect to
liability under Section 16 of the Securities Exchange Act of 1934, and the
Optionee agrees to take full responsibility with respect to such liability.
3.3.2. WITHHOLDING. The Optionee may not buy any Stock
under an Option unless, at the time the Optionee gives Notice of Exercise
to the Company, the Optionee includes with the notice payment by a
certified or bank check of all local, state or federal withholding taxes
due on account of buying Stock under the Option or gives other assurance of
the payment to the Company of those withholding taxes satisfactory to the
Committee.
3.4. TRANSFER. The Company shall deliver certificates made out
in the name of the Optionee for Stock bought under an Option as soon as
practicable after receiving payment for the Stock and for any taxes under
Section 3.3 and all documents required under the Plan and the Agreement.
If the Plan or any law, regulation or interpretation requires the Company
to take any action regarding the Stock before the Company issues
certificates for the Stock being bought, the Company may delay delivering
the certificates for those Stock for the period necessary to take that
action.
SECTION 4. TERMINATION.
4.1. EMPLOYEES. Unless indicated otherwise on the Schedule, all
Options granted to an Optionee who is an Employee will lapse 180 days after
the Optionee terminates employment with the Company but in no event later
than the tenth anniversary of the date of grant), except (a) if such
termination is the result of the Optionee's gross misconduct or neglect as
determined by the Committee, all Options will lapse immediately on
Termination, and (b) if the Termination is the result of the death of the
Optionee, all Options granted to the Optionee will lapse 180 days after the
death of the Optionee (but in no event later than the tenth anniversary of
the date of grant).
4.2. DIRECTORS. Unless the Schedule provides that an Option
will lapse later, all Options granted to an Optionee who is a Director but
not employed by the Company shall lapse 180 days after the Optionee's
status as a Director has terminated for any reason (but in no event later
than the tenth anniversary of the date of grant).
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the
Optionee confirms that Optionee has received a copy of the Plan.
SECTION 6. CHANGE OF CONTROL. The Optionee will become fully vested
in all Options and may immediately exercise all Options, notwithstanding
the rate of which such Options become exercisable under the Schedule, upon
the occurrence of one of the following events:
6.1. TAKEOVER. The acquisition by any person (defined for
purposes of this Agreement to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by the Company's board
of directors for the benefit of its Employees, either directly or
indirectly, of the beneficial ownership (determined under Rule 13d-3 of the
Regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company
having 50% or more of the voting power of all the voting securities issued
by the Company in the election of directors at the next meeting of the
holders of voting securities to be held for such purpose, and such person
acquired such beneficial ownership without prior consent of the Company's
board of directors.
6.2. PROXY DISPUTE. The election of a majority of the
directors, elected at any meeting of the holders voting securities of the
Company, who were not nominated for such election by the Company's board of
directors or a duly constituted committee of such board.
6.3. DISSOLUTION. The dissolution, liquidation, reorganization,
merger, or consolidation with or transfer of substantially all the assets
of the Company to another person, provided that the Company's board of
directors does not approve such dissolution, liquidation, reorganization,
merger, consolidation, or transfer.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and the Optionee concerning all
Options and payments granted under the Plan, and includes all earlier
negotiations and understanding. The Company and the Optionee have made no
promises, agreements, conditions or understandings, either orally or in
writing, that are not contained in this Agreement or the Plan.
7.2. EMPLOYMENT. By establishing the Plan, granting rights
under the Plan and entering into this Agreement, the Company does not give
the Optionee any right to continue to be employed by or associated with the
Company or to be entitled to any remuneration or benefits not set forth in
this Agreement or the Plan. This Agreement and the Plan will not interfere
with or limit the right of the Company to end the Optionee '5 employment or
association at any time.
7.3. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Optionee
will be deemed an original and all of which together will be deemed the
same Agreement.
7.5. NOTICE. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, at the
principal office of the Company and, if to the Optionee, at the Optionee's
last known address on the personnel records of the Company.
7.6. AMENDMENT. This Agreement may be amended by the Company as
provided by the Plan. However, unless the Optionee consents, the Company
cannot amend this Agreement if the amendment will materially change or
impair the Optionee's rights under this Agreement and such change will not
be to the Optionee's benefit.
7.7. TRANSFER AND SUCCESSION. The Optionee may not sell, give,
transfer, encumber or assign, or use as collateral, any of the Optionee's
rights under this Agreement or the Plan other than by will or the laws of
decent and distribution. If an Option is exercisable after the Optionee's
death, the personal representative of the Optionee 5 estate shall have the
right to exercise such options subject to Section 4. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of
the Company and the Optionee and their heirs, successors and assigns.
7.8. GOVERNING LAW. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of Ohio
applicable to agreements to be performed in the State of Ohio to the extent
it may apply.
IN WITNESS WHEREOF the Company and Optionee have caused this Agreement
to be signed and delivered as of the date set forth on the Schedule.
ACCEL INTERNATIONAL CORPORATION
By: /S/ R. MAX WILLIAMSON
Its:
OPTIONEE
/S/ DAVID T. CHASE
Signature
Print Name
<PAGE>
SCHEDULE
TO
STOCK OPTION AGREEMENT
IDENTIFICATION.
1. Name of Optionee: David T. Chase
2. Address of Optionee: 96 High Ridge Road
West Hartford, CT 06117
3. Social Security Number of Optionee: ###-##-####
4. Date of Option Agreement: May 25, 1993
TERMS OF GRANT.
1. Number of shares under the ACCEL International Corporation
1987 Stock Incentive Plan:
(a) Incentive Option: -0-
(b) Nonincentive Option: 1,000
2. Fair Market Value per Share as of date of grant: $3.50
3. Price per Share: $3.50
4. Date of Grant: May 25, 1993
5. Expiration Date: May 24, 2003
6. Rate at which Option becomes exercisable:
% of Total Shares as to which
DATE OPTION IS THEN EXERCISABLE
May 25, 1994 50%
May 25, 1995 50%
7. Conditions Precedent: None
THIS SCHEDULE IS AN IMPORTANT PART OF YOUR STOCK OPTION AGREEMENT AND
SHOULD BE ATTACHED TO IT.
/S/ R. MAX WILLIAMSON
R. Max Williamson, President and
Chief Executive Officer
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 15
ACCEL INTERNATIONAL CORPORATION 1987 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is between ACCEL
International Corporation, a Delaware corporation (the "Company"), and the
person whose name appears on the Schedule attached to this Agreement (the
"Optionee"), under the ACCEL International Corporation 1987 Stock Incentive
Plan (the "Plan").
Because of exceptional services provided by the Optionee to the
Company, the Optionee has been granted one or more Options on the terms and
conditions set forth in this Agreement and the Schedule.
SECTION 1. DEFINITIONS. Terms which are defined in the applicable
Plan will have the meaning set forth therein and the following terms will
have the following meanings when used in this Agreement:
"EXPIRATION DATE" is the earlier of (a) the last date on which any
Options may be exercised, as set forth Section 4 and in the Schedule, or
(1)) the date ten years after the date the Option was grant.
"SCHEDULE" means the schedule attached to the end of this Agreement
listing information about the Options being granted to the Optionee.
SECTION 2. OPTIONS. The Optionee is hereby granted Options to
purchase Stock as set forth and under the terms contained in the Schedule.
SECTION 3. EXERCISE OF RIGHTS.
3.1. TIMES WHEN SHARES CAN BE BOUGHT. Subject to the provisions
of the Plan, Options will become exercisable as set forth on the Schedule.
3.2. NOTICE. If the Optionee wishes to exercise any of the
Optionee's rights, the Optionee must give notice of exercise to the Company
at the Company's principal office. The Optionee must give the notice in
writing and must use a form provided by the Committee. The Optionee must
include with the notice full payment for any Stock being bought under any
Option. The notice and payment must be delivered to the Company before the
Expiration Date.
3.3. PAYMENT.
3.3.1. CONSIDERATION. Payment of the option price for any
Stock being bought under an Option must be made by certified or bank check
or by delivering to the Company certificates representing the Company's
Stock which the Optionee already owns. If the Optionee pays by delivering
Stock of the Company, the Optionee must include with the Notice of Exercise
the certificates for such Stock duly endorsed for transfer. The Company
will value the Stock delivered by the Optionee at their Fair Market Value
on the date of receipt as set forth in the Plan and, if the Fair Market
Value of the Stock delivered by the Optionee exceeds the amount required
under this Section 3.3, will return to the Optionee cash in an amount equal
to the Fair Market Value, so determined, of any fractional portion of a
share of Stock exceeding the amount required and will issue or cause to be
issued a certificate for any whole share of Stock exceeding the amount
required. The Company undertakes no responsibility with respect to
liability under Section 16 of the Securities Exchange Act of 1934, and the
Optionee agrees to take full responsibility with respect to such liability.
3.3.2. WITHHOLDING. The Optionee may not buy any Stock
under an Option unless, at the time the Optionee gives Notice of Exercise
to the Company, the Optionee includes with the notice payment by a
certified or bank check of all local, state or federal withholding taxes
due on account of buying Stock under the Option or gives other assurance of
the payment to the Company of those withholding taxes satisfactory to the
Committee.
3.4. TRANSFER. The Company shall deliver certificates made out
in the name of the Optionee for Stock bought under an Option as soon as
practicable after receiving payment for the Stock and for any taxes under
Section 3.3 and all documents required under the Plan and the Agreement.
If the Plan or any law, regulation or interpretation requires the Company
to take any action regarding the Stock before the Company issues
certificates for the Stock being bought, the Company may delay delivering
the certificates for those Stock for the period necessary to take that
action.
SECTION 4. TERMINATION.
4.1. EMPLOYEES. Unless indicated otherwise on the Schedule, all
Options granted to an Optionee who is an Employee will lapse 180 days after
the Optionee terminates employment with the Company but in no event later
than the tenth anniversary of the date of grant), except (a) if such
termination is the result of the Optionee's gross misconduct or neglect as
determined by the Committee, all Options will lapse immediately on
Termination, and (b) if the Termination is the result of the death of the
Optionee, all Options granted to the Optionee will lapse 180 days after the
death of the Optionee (but in no event later than the tenth anniversary of
the date of grant).
4.2. DIRECTORS. Unless the Schedule provides that an Option
will lapse later, all Options granted to an Optionee who is a Director but
not employed by the Company shall lapse 180 days after the Optionee's
status as a Director has terminated for any reason (but in no event later
than the tenth anniversary of the date of grant).
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the
Optionee confirms that Optionee has received a copy of the Plan.
SECTION 6. CHANGE OF CONTROL. The Optionee will become fully vested
in all Options and may immediately exercise all Options, notwithstanding
the rate of which such Options become exercisable under the Schedule, upon
the occurrence of one of the following events:
6.1. TAKEOVER. The acquisition by any person (defined for
purposes of this Agreement to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by the Company's board
of directors for the benefit of its Employees, either directly or
indirectly, of the beneficial ownership (determined under Rule 13d-3 of the
Regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company
having 50% or more of the voting power of all the voting securities issued
by the Company in the election of directors at the next meeting of the
holders of voting securities to be held for such purpose, and such person
acquired such beneficial ownership without prior consent of the Company's
board of directors.
6.2. PROXY DISPUTE. The election of a majority of the
directors, elected at any meeting of the holders voting securities of the
Company, who were not nominated for such election by the Company's board of
directors or a duly constituted committee of such board.
6.3. DISSOLUTION. The dissolution, liquidation, reorganization,
merger, or consolidation with or transfer of substantially all the assets
of the Company to another person, provided that the Company's board of
directors does not approve such dissolution, liquidation, reorganization,
merger, consolidation, or transfer.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and the Optionee concerning all
Options and payments granted under the Plan, and includes all earlier
negotiations and understanding. The Company and the Optionee have made no
promises, agreements, conditions or understandings, either orally or in
writing, that are not contained in this Agreement or the Plan.
7.2. EMPLOYMENT. By establishing the Plan, granting rights
under the Plan and entering into this Agreement, the Company does not give
the Optionee any right to continue to be employed by or associated with the
Company or to be entitled to any remuneration or benefits not set forth in
this Agreement or the Plan. This Agreement and the Plan will not interfere
with or limit the right of the Company to end the Optionee '5 employment or
association at any time.
7.3. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Optionee
will be deemed an original and all of which together will be deemed the
same Agreement.
7.5. NOTICE. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, at the
principal office of the Company and, if to the Optionee, at the Optionee's
last known address on the personnel records of the Company.
7.6. AMENDMENT. This Agreement may be amended by the Company as
provided by the Plan. However, unless the Optionee consents, the Company
cannot amend this Agreement if the amendment will materially change or
impair the Optionee's rights under this Agreement and such change will not
be to the Optionee's benefit.
7.7. TRANSFER AND SUCCESSION. The Optionee may not sell, give,
transfer, encumber or assign, or use as collateral, any of the Optionee's
rights under this Agreement or the Plan other than by will or the laws of
decent and distribution. If an Option is exercisable after the Optionee's
death, the personal representative of the Optionee 5 estate shall have the
right to exercise such options subject to Section 4. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of
the Company and the Optionee and their heirs, successors and assigns.
7.8. GOVERNING LAW. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of Ohio
applicable to agreements to be performed in the State of Ohio to the extent
it may apply.
IN WITNESS WHEREOF the Company and Optionee have caused this Agreement
to be signed and delivered as of the date set forth on the Schedule.
ACCEL INTERNATIONAL CORPORATION
By: /S/ R. MAX WILLIAMSON
Its:
OPTIONEE
/S/ DAVID T. CHASE
Signature
Print Name
<PAGE>
SCHEDULE
TO
STOCK OPTION AGREEMENT
IDENTIFICATION.
1. Name of Optionee: David T. Chase
2. Address of Optionee: 96 High Ridge Road
West Hartford, CT 06117
3. Social Security Number of Optionee: ###-##-####
4. Date of Option Agreement: May 24, 1994
TERMS OF GRANT.
1. Number of shares under the ACCEL International Corporation
1987 Stock Incentive Plan:
(a) Incentive Option: -0-
(b) Nonincentive Option: 1,000
2. Fair Market Value per Share as of date of grant: $4.50
3. Price per Share: $4.50
4. Date of Grant: May 24, 1994
5. Expiration Date: May 24, 2004
6. Rate at which Option becomes exercisable:
% of Total Shares as to which
DATE OPTION IS THEN EXERCISABLE
May 24, 1995 50%
May 24, 1996 50%
7. Conditions Precedent: None
THIS SCHEDULE IS AN IMPORTANT PART OF YOUR STOCK OPTION AGREEMENT AND
SHOULD BE ATTACHED TO IT.
/S/ R. MAX WILLIAMSON
R. Max Williamson, President and
Chief Executive Officer
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 16
ACCEL INTERNATIONAL CORPORATION 1987 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is between ACCEL
International Corporation, a Delaware corporation (the "Company"), and the
person whose name appears on the Schedule attached to this Agreement (the
"Optionee"), under the ACCEL International Corporation 1987 Stock Incentive
Plan (the "Plan").
Because of exceptional services provided by the Optionee to the
Company, the Optionee has been granted one or more Options on the terms and
conditions set forth in this Agreement and the Schedule.
SECTION 1. DEFINITIONS. Terms which are defined in the applicable
Plan will have the meaning set forth therein and the following terms will
have the following meanings when used in this Agreement:
"EXPIRATION DATE" is the earlier of (a) the last date on which any
Options may be exercised, as set forth Section 4 and in the Schedule, or
(1)) the date ten years after the date the Option was grant.
"SCHEDULE" means the schedule attached to the end of this Agreement
listing information about the Options being granted to the Optionee.
SECTION 2. OPTIONS. The Optionee is hereby granted Options to
purchase Stock as set forth and under the terms contained in the Schedule.
SECTION 3. EXERCISE OF RIGHTS.
3.1. TIMES WHEN SHARES CAN BE BOUGHT. Subject to the provisions
of the Plan, Options will become exercisable as set forth on the Schedule.
3.2. NOTICE. If the Optionee wishes to exercise any of the
Optionee's rights, the Optionee must give notice of exercise to the Company
at the Company's principal office. The Optionee must give the notice in
writing and must use a form provided by the Committee. The Optionee must
include with the notice full payment for any Stock being bought under any
Option. The notice and payment must be delivered to the Company before the
Expiration Date.
3.3. PAYMENT.
3.3.1. CONSIDERATION. Payment of the option price for any
Stock being bought under an Option must be made by certified or bank check
or by delivering to the Company certificates representing the Company's
Stock which the Optionee already owns. If the Optionee pays by delivering
Stock of the Company, the Optionee must include with the Notice of Exercise
the certificates for such Stock duly endorsed for transfer. The Company
will value the Stock delivered by the Optionee at their Fair Market Value
on the date of receipt as set forth in the Plan and, if the Fair Market
Value of the Stock delivered by the Optionee exceeds the amount required
under this Section 3.3, will return to the Optionee cash in an amount equal
to the Fair Market Value, so determined, of any fractional portion of a
share of Stock exceeding the amount required and will issue or cause to be
issued a certificate for any whole share of Stock exceeding the amount
required. The Company undertakes no responsibility with respect to
liability under Section 16 of the Securities Exchange Act of 1934, and the
Optionee agrees to take full responsibility with respect to such liability.
3.3.2. WITHHOLDING. The Optionee may not buy any Stock
under an Option unless, at the time the Optionee gives Notice of Exercise
to the Company, the Optionee includes with the notice payment by a
certified or bank check of all local, state or federal withholding taxes
due on account of buying Stock under the Option or gives other assurance of
the payment to the Company of those withholding taxes satisfactory to the
Committee.
3.4. TRANSFER. The Company shall deliver certificates made out
in the name of the Optionee for Stock bought under an Option as soon as
practicable after receiving payment for the Stock and for any taxes under
Section 3.3 and all documents required under the Plan and the Agreement.
If the Plan or any law, regulation or interpretation requires the Company
to take any action regarding the Stock before the Company issues
certificates for the Stock being bought, the Company may delay delivering
the certificates for those Stock for the period necessary to take that
action.
SECTION 4. TERMINATION.
4.1. EMPLOYEES. Unless indicated otherwise on the Schedule, all
Options granted to an Optionee who is an Employee will lapse 180 days after
the Optionee terminates employment with the Company but in no event later
than the tenth anniversary of the date of grant), except (a) if such
termination is the result of the Optionee's gross misconduct or neglect as
determined by the Committee, all Options will lapse immediately on
Termination, and (b) if the Termination is the result of the death of the
Optionee, all Options granted to the Optionee will lapse 180 days after the
death of the Optionee (but in no event later than the tenth anniversary of
the date of grant).
4.2. DIRECTORS. Unless the Schedule provides that an Option
will lapse later, all Options granted to an Optionee who is a Director but
not employed by the Company shall lapse 180 days after the Optionee's
status as a Director has terminated for any reason (but in no event later
than the tenth anniversary of the date of grant).
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference or conflict between
the provisions of this Agreement and the provisions of the Plan, the
provisions of the Plan will govern. By signing this Agreement, the
Optionee confirms that Optionee has received a copy of the Plan.
SECTION 6. CHANGE OF CONTROL. The Optionee will become fully vested
in all Options and may immediately exercise all Options, notwithstanding
the rate of which such Options become exercisable under the Schedule, upon
the occurrence of one of the following events:
6.1. TAKEOVER. The acquisition by any person (defined for
purposes of this Agreement to mean any person within the meaning of Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")), other
than the Company or an employee benefit plan created by the Company's board
of directors for the benefit of its Employees, either directly or
indirectly, of the beneficial ownership (determined under Rule 13d-3 of the
Regulations promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by the Company
having 50% or more of the voting power of all the voting securities issued
by the Company in the election of directors at the next meeting of the
holders of voting securities to be held for such purpose, and such person
acquired such beneficial ownership without prior consent of the Company's
board of directors.
6.2. PROXY DISPUTE. The election of a majority of the
directors, elected at any meeting of the holders voting securities of the
Company, who were not nominated for such election by the Company's board of
directors or a duly constituted committee of such board.
6.3. DISSOLUTION. The dissolution, liquidation, reorganization,
merger, or consolidation with or transfer of substantially all the assets
of the Company to another person, provided that the Company's board of
directors does not approve such dissolution, liquidation, reorganization,
merger, consolidation, or transfer.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and the Optionee concerning all
Options and payments granted under the Plan, and includes all earlier
negotiations and understanding. The Company and the Optionee have made no
promises, agreements, conditions or understandings, either orally or in
writing, that are not contained in this Agreement or the Plan.
7.2. EMPLOYMENT. By establishing the Plan, granting rights
under the Plan and entering into this Agreement, the Company does not give
the Optionee any right to continue to be employed by or associated with the
Company or to be entitled to any remuneration or benefits not set forth in
this Agreement or the Plan. This Agreement and the Plan will not interfere
with or limit the right of the Company to end the Optionee '5 employment or
association at any time.
7.3. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.4. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Optionee
will be deemed an original and all of which together will be deemed the
same Agreement.
7.5. NOTICE. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company or the Committee, at the
principal office of the Company and, if to the Optionee, at the Optionee's
last known address on the personnel records of the Company.
7.6. AMENDMENT. This Agreement may be amended by the Company as
provided by the Plan. However, unless the Optionee consents, the Company
cannot amend this Agreement if the amendment will materially change or
impair the Optionee's rights under this Agreement and such change will not
be to the Optionee's benefit.
7.7. TRANSFER AND SUCCESSION. The Optionee may not sell, give,
transfer, encumber or assign, or use as collateral, any of the Optionee's
rights under this Agreement or the Plan other than by will or the laws of
decent and distribution. If an Option is exercisable after the Optionee's
death, the personal representative of the Optionee 5 estate shall have the
right to exercise such options subject to Section 4. Each and all of the
provisions of this Agreement are binding upon and inure to the benefit of
the Company and the Optionee and their heirs, successors and assigns.
7.8. GOVERNING LAW. This Agreement shall be governed and
construed exclusively in accordance with the law of the State of Ohio
applicable to agreements to be performed in the State of Ohio to the extent
it may apply.
IN WITNESS WHEREOF the Company and Optionee have caused this Agreement
to be signed and delivered as of the date set forth on the Schedule.
ACCEL INTERNATIONAL CORPORATION
By: /S/ R. MAX WILLIAMSON
Its:
OPTIONEE
/S/ DAVID T. CHASE
Signature
Print Name
<PAGE>
SCHEDULE
TO
STOCK OPTION AGREEMENT
IDENTIFICATION.
1. Name of Optionee: David T. Chase
2. Address of Optionee: 96 High Ridge Road
West Hartford, CT 06117
3. Social Security Number of Optionee: ###-##-####
4. Date of Option Agreement: May 23, 1995
TERMS OF GRANT.
1. Number of shares under the ACCEL International Corporation
1987 Stock Incentive Plan:
(a) Incentive Option: -0-
(b) Nonincentive Option: 1,000
2. Fair Market Value per Share as of date of grant: $2.125 (2 1/8 )
3. Price per Share: $2.125 (2 1/8 )
4. Date of Grant: May 23, 1995
5. Expiration Date: May 22, 2005
6. Rate at which Option becomes exercisable:
% of Total Shares as to which
DATE OPTION IS THEN EXERCISABLE
May 23, 1996 50%
May 23, 1997 50%
7. Conditions Precedent: None
THIS SCHEDULE IS AN IMPORTANT PART OF YOUR STOCK OPTION AGREEMENT AND
SHOULD BE ATTACHED TO IT.
/S/ R. MAX WILLIAMSON
R. Max Williamson, President
/S/ DAVID T. CHASE
David T. Chase
EXHIBIT 17
ACCEL INTERNATIONAL CORPORATION
1996 STOCK INCENTIVE PLAN
Section 1. Purpose
The purpose of this Plan is to advance the long-term interests of
ACCEL International Corporation by (i) motivating executive and other
personnel and independent agents by means of long-term incentive
compensation, (ii) furthering the identity of interests of participants
with those of the stockholders of the Company through the ownership and
performance of the Common Stock of the Company and (iii) permitting the
Company to attract and retain directors, executive personnel and
independent agents upon whose judgment the successful conduct of the
business of the Company largely depends. Toward this objective, the
Committee may grant stock options, stock appreciation rights, restricted
stock awards, phantom stock and/or performance shares to Key Employees of
the Company, and shall grant stock options to non-employee directors of the
Company, on the terms and subject to the conditions set forth in the Plan.
Section 2. Definitions
2.1. "Administrative Policies" means the administrative policies and
procedures adopted and amended from time to time by the Committee to
administer the Plan.
2.2. "Applicable Market" means the Nasdaq National Market or, if the
Common Stock is no longer traded in the Nasdaq National Market, then the
principal national securities exchange, if any, on which the Common Stock
is traded as determined by the Committee, or if the Common Stock is no
longer traded in the Nasdaq National Market or on any national securities
exchange, then such other market price reporting system pursuant to which
the Common Stock is traded or quoted as designated by the Committee.
2.3. "Award" means any form of stock option, stock appreciation right,
restricted stock award, phantom stock or performance share granted under
the Plan, whether singly, in combination, or in tandem, granted, made or
awarded to a Participant by the Committee pursuant to such terms,
conditions, restrictions and limitations, if any, as the Committee may
establish by the Award Agreement or otherwise.
2.4. "Award Agreement" means a written agreement with respect to an
Award between the Company and a Participant establishing the terms,
conditions, restrictions and limitations applicable to an Award. To the
extent an Award Agreement is inconsistent with the terms of the Plan, the
Plan shall govern the rights of the Participant thereunder.
2.5. "Board of Directors" or "Board" means the directors of the
Company, as a group, serving as such from time to time.
2.6. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.7 "Committee" means the Compensation Committee of the Board of
Directors or such other committee designated by the Board to administer the
Plan under Section 3 hereof.
2.8. "Common Stock" means the Common Stock, $.10 par value, of the
Company.
2.9. "Company" means ACCEL International Corporation, a Delaware
corporation.
2.10. "Derivative Security" means any of the "derivative securities"
as defined in Rule 16a-1 under the Exchange Act as such rule may be amended
or superseded from time to time.
2.11. "Director" means a member of the Board of Directors.
2.12. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.13. "Key Employee" means an employee of the Company or a Subsidiary
who holds a position of responsibility in an executive, managerial,
administrative or professional capacity or an independent agent who markets
and sells insurance written by a Subsidiary and whose performance, as
determined by the Committee in the exercise of its sole and absolute
discretion, can have an effect on the growth, profitability and success of
the Company. For the purpose of any provision of this Plan relating to
incentive stock options, the term "Key Employee" shall be limited to mean
any employee who is eligible to receive the grant of an incentive stock
option pursuant to the provisions of Section 422 of the Code as amended or
superseded from time to time and shall exclude any independent agent unless
at the time of the Award is granted, such independent agent is eligible to
receive the grant of an incentive stock option.
2.14. "Participant" means any individual to whom an Award has been
granted by the Committee under this Plan.
2.15. "Plan" means this ACCEL International Corporation, 1996 Stock
Incentive Plan, as the same may be amended from time to time.
2.16. "Qualified Domestic Relations Order" means a qualified domestic
relations order as defined by the Code or the rules thereunder if so
defined therein, and, if not, as defined by Title I of the Employment
Retirement Income Security Act of 1974 ("ERISA"), or the rules thereunder.
2.17. "Section 16 Officer" means any Participant who is an "officer"
of the Company within the meaning of Rule 16a-1 under the Exchange Act as
such rule may be amended or superseded from time to time.
2.18. "Subsidiary" means a corporation or other business entity in
which the Company directly or indirectly has an ownership interest of
fifty-one percent or more.
2.19. "Termination" means the termination of the Participant's
relationship with the Company including termination of the Participant's
employment, status as a Director or appointment as an independent agent. A
Participant who is absent from employment or other relationship with the
Company for a reason or purpose and for a period of time approved by the
Committee, in its sole discretion, shall not for the period of such absence
be deemed, solely because of such absence, to have suffered a Termination,
unless and until the Committee otherwise determines.
Section 3. Administration
The Plan shall be administered under the supervision of the Committee
composed of not less than three Directors each of whom shall be a
"disinterested person" under Rule 16b-3 under the Exchange Act as such rule
may be amended or superseded from time to time and an "outside director"
under Section 162(m) of the Code and the regulations thereunder.
Members of the Committee shall serve at the pleasure of the Board of
Directors, and may resign by written notice filed with the Chairman of the
Board, President or Secretary of the Company. A vacancy in the membership
of the Committee shall be filled by the appointment of a successor member
by the Board of Directors. Until such vacancy is filled, the remaining
members shall constitute a quorum and the action at any meeting of a
majority of the entire Committee, or an action unanimously approved in
writing by all Committee members, shall constitute action of the Committee.
Subject to the express provisions of this Plan, the Committee shall have
exclusive and final authority to: (i) construe and interpret the Plan and
any Award Agreement entered into hereunder; (ii) establish, amend and
rescind Administrative Policies for the administration of the Plan; and
(iii) determine the "fair market value" of the Common Stock of the Company
(based on the Applicable Market, if any, for the Common Stock). The
Committee shall have such additional authority as the Board of Directors
may from time to time determine to be necessary or desirable. Employees,
agents and independent contractors of the Company or the Committee may be
assigned, or employed or retained to perform, administrative, clerical and
other duties of the Committee, subject to the supervision and control of
the Committee; provided, however, that only the Committee may grant or
award an Award under the Plan and make decisions concerning the timing,
pricing and amount of any Award, except for stock options automatically
granted to Directors who are not employees of the Company under Section 13
hereof.
For so long as Directors and/or Section 16 Officers are or may be
Participants in the Plan, the Committee shall not knowingly take any
action, or decline to take any action, which shall cause the Plan not to
meet the requirements contained in Rule 16b-3 under the Exchange Act, as
such rule is amended or superseded from time to time, which permit the
granting or making of Awards under the Plan to be exempt from Section 16(b)
of the Exchange Act as amended or superseded from time to time.
Section 4. Eligibility
Except as otherwise provided herein, any Key Employee is eligible to
become a Participant in the Plan. Directors of the Company, other than
Directors who are employees of the Company, shall be eligible only to
receive stock options pursuant to Section 13 hereof.
Section 5. Shares Available
(a) Shares of Common Stock available for issuance under the Plan may
be authorized and unissued shares or treasury shares. Subject to the
adjustments provided for in Sections 17 and 18 hereof, the maximum number
of shares of Common Stock available for grant of Awards under the Plan is
1,000,000 shares. Of this total number, up to 100,000 shares may be issued
pursuant to the exercise of Directors' Stock Options. Notwithstanding the
foregoing, at no time shall the number of shares of Common Stock deemed to
be available for grant in any fiscal year exceed ten percent of the total
number of issued and outstanding shares of Common Stock of the Company.
The number of shares of Common Stock available for grant to any individual
Participant in any calendar year shall not exceed 250,000 shares.
(b) For purposes of calculating the number of shares of Common Stock
deemed to be granted hereunder during any fiscal year, each Award, whether
denominated in stock options, stock appreciation rights, restricted stock,
performance shares or phantom stock, shall be deemed to be a grant of a
number of shares of Common Stock equal to the number of shares represented
by the stock options, shares of restricted stock, performance shares,
shares of phantom stock or stock appreciation rights set forth in the
Award; provided however
(i) in the case of any Award as to which the exercise of one
right nullifies the exercisability of another (including, by way of
illustration the grant of a stock option with Tandem SARs (as
hereinafter defined)), the number of shares deemed to have been
granted shall be the maximum number of shares (and/or cash
equivalents) that could have been acquired upon the maximum exercise
or settlement of the Award; and
(ii) in the case of Performance Share Awards (as hereinafter
defined) providing for payments in excess of 100% of the number of
shares set forth in the Award Agreement, the number of shares granted
shall be deemed to be the maximum number of shares (and/or the cash
equivalent thereof) issuable under the Award at the highest level of
performance.
(c) Shares of Common Stock covered by lapsed, canceled, surrendered
or terminated Awards shall be shares available for regrant under the Plan;
provided, however, that the portion of any Award that has been settled by
the payment of cash or the issuance of shares of Common Stock, or a
combination thereof, shall not be available for re-grant under the Plan,
irrespective of the value of the settlement or the method of its payment.
The settlement of an Award shall not be deemed to be the grant of an Award
hereunder.
Section 6. Term
The Plan shall become effective as of June 11, 1996, subject to
approval of the Plan by the holders of a majority of the shares of Common
Stock. No Awards shall be exercisable or payable before approval of the
Plan has been obtained from the Company's stockholders and no Awards may be
granted after June 11, 2006.
Section 7. Participation
The Committee shall select, from time to time, Participants from those
Key Employees who, in the opinion of the Committee, can further the Plan's
purpose and the Committee shall determine the type or types of Awards, if
any, to be made to the Participant. Any selection by the Committee of an
employee or independent agent of the Company or a Subsidiary to be a
Participant in the Plan shall irrevocably constitute the Committee's
concurrent and conclusive determination that such employee or independent
agent is a Key Employee. In addition, all non-employee Directors shall
participate in the Plan solely in the manner specified in Section 13
hereof. The terms, conditions and restrictions of each Award shall be set
forth in an Award Agreement, and no Participant shall have any rights to or
interest in an Award unless and until such Participant has exercised and
delivered an Award Agreement with respect to such Award.
Section 8. Stock Options
(a) Grants. Awards may be granted in the form of stock options.
Stock options may be incentive stock options within the meaning of Section
422 of the Code or nonqualified stock options (i.e., stock options which
are not incentive stock options), or a combination of both, or any
particular type of tax advantage option authorized by the Code from time to
time.
(b) Terms and Conditions of Options. An option shall be exercisable
in whole or in such installments and at such times as may be determined by
the Committee; provided, however, that no stock option shall be exercisable
more than ten years after the date of grant thereof. In the absence of any
provision in an option to the contrary (i) the option will become
exercisable upon as to 25% of the shares of Common Stock subject to the
option upon completion of the first full year of employment or retention of
the Participant after the date thereof and as to 25% of such shares upon
the completion of each full year thereafter prior to Termination, and (ii)
the option will lapse upon the earliest of (A) 180 days after Termination
of the Participant's relationship with the Company if the Termination is
due to death or disability or if the Participant dies within 90 days of the
Termination, (B) 90 days after Termination if the Termination is for any
reason other than death, disability or gross misconduct or neglect, (C)
upon Termination if the Termination is the result of the Participant's
gross misconduct or neglect as determined by the Committee, or (D) ten
years after the option was granted. The option exercise price shall be
established by the Committee, but such price shall not be less than the per
share fair market value of the Common Stock, as determined by the
Committee, on the date of the stock option's grant subject to adjustment as
provided in Sections 17 or 18 hereof.
(c) Restrictions Relating to Incentive Stock Options. Stock options
issued in the form of incentive stock options shall, in addition to being
subject to all applicable terms, conditions, restrictions and/or
limitations established by the Committee, comply with Section 422 of the
Code. Incentive stock options shall be granted only to those Key Employees
who are employees of the Company and its "subsidiaries" within the meaning
of Section 424 of the Code, shall not be granted to any independent agents
unless permitted by Section 422 of the Code or any successor provision and
shall be granted within ten years after the date the Plan was adopted by
the Board of Directors. The aggregate fair market value (determined as of
the date the option is granted) of shares with respect to which incentive
stock options are exercisable for the first time by an individual during
any calendar year (under this Plan or any other plan of the Company or any
Subsidiary which provides for the granting of incentive stock options) may
not exceed $100,000 or such other number as may be applicable under the
Code from time to time. Any incentive stock option that is granted to any
employee who is, at the time the option is granted, deemed for purposes of
Section 422 of the Code, or any successor provision, to own shares of the
Company possessing more than ten percent (10%) of the total combined voting
power of all classes of shares of the Company or of a parent or subsidiary
of the Company shall have an option exercise price that is at least 110
percent (110%) of the fair market value of the shares at the date of grant
and shall not be exercisable after the expiration of 5 years from the date
it is granted.
(d) Additional Terms and Conditions. The Committee may, in any
manner not inconsistent with the Plan, by way of the Award Agreement or
otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, on any stock option Award and the exercise thereof.
(e) Payment. Upon exercise, a Participant may pay the option
exercise price of a stock option (i) in cash, (ii) in shares of Common
Stock, or (iii) a combination thereof, or (iv) in the sole discretion of
the Committee, through a cashless exercise procedure involving a broker;
provided, however, that such method and time for payment shall be permitted
by and be in compliance with applicable law, or (v) such other
consideration as the Committee may deem appropriate. The Committee shall
establish appropriate methods for accepting Common Stock and may impose
such conditions as it deems appropriate on the use of such Common Stock to
exercise a stock option.
Section 9. Stock Appreciation Rights
(a) Grants. Awards may be granted in the form of stock appreciation
rights ("SARs"). SARs shall entitle the recipient to receive a payment
equal to the appreciation in market value of a stated number of shares of
Common Stock from the price stated in the Award Agreement to the market
value of the Common Stock on the date of exercise or surrender. A SAR may
be granted in tandem with all or a portion of a related stock option under
the Plan ("Tandem SARs"). Tandem SARs shall permit the optionee to
surrender a stock option or portion thereof and to receive the payment to
which he is entitled under the SAR Award Agreement with respect to the
shares of Common Stock subject to the surrendered stock option or portion
thereof. A Tandem SAR may be granted either at the time of the grant of
the related stock option or at any time thereafter during the term of the
stock option.
(b) Terms and Conditions of Tandem SARs. A Tandem SAR shall be
exercisable to the extent, and only to the extent, that the related stock
option is exercisable. The appreciation in value of a Tandem SAR shall be
the appreciation in fair market value from an amount not less than the
option exercise price of the related stock option or portion thereof being
surrendered to the market value of the Common Stock on the date of
exercise. Upon exercise of a Tandem SAR as to some or all of the shares
covered by an Award, the related stock option shall be canceled
automatically to the extent of the number of SARs exercised, and such
shares shall not thereafter be eligible for grant under Section 5 hereof.
(c) Deemed Exercise. The Committee may provide that an SAR shall be
deemed to be exercised at the close of business on the scheduled expiration
date of such SAR, if at such time the SAR by its terms is otherwise
exercisable and, if so exercised, would result in a payment to the
Participant.
(d) Additional Terms and Conditions. The Committee may, in any
manner not inconsistent with the Plan, by way of the Award Agreement or
otherwise, determine such other terms, conditions, restrictions and/or
limitations, if any, on any SAR Award.
Section 10. Restricted Stock Awards
(a) Grants. Awards may be granted in the form of Restricted Stock
Awards. Restricted Stock Awards consist of shares of Common Stock bearing
restrictions on their transfer or otherwise as authorized by Section 10(b),
below, and may be awarded to a Key Employee with or without payment of
consideration by the Key Employee.
(b) Award Restrictions. Restricted Stock Awards shall be subject to
such terms, conditions, restrictions, or limitations as the Committee deems
appropriate including, by way of illustration but not by way of limitation,
restrictions on transferability, requirements of continued employment or
individual performance or the financial performance of the Company. The
Committee may modify, or accelerate the termination of, the restrictions
applicable to a Restricted Stock Award under such circumstances as it deems
appropriate.
(c) Rights as Stockholders. During the period in which any shares of
Common Stock are subject to the restrictions imposed under this Section 10,
the Committee may, in its discretion, grant to the Participant to whom such
restricted shares have been awarded, all or any of the rights of a
stockholder with respect to such shares, including, by way of illustration
but not by way of limitation, the right to vote such shares and to receive
dividends.
(d) Evidence of Award. Any Restricted Stock Award granted under the
Plan may be evidenced in such manner as the Committee deems appropriate,
including, without limitation, book entry registration or issuance of a
stock certificate or certificates.
(e) Additional Terms and Conditions. The Committee may, in any
manner not inconsistent with the Plan, by way of Award Agreement or
otherwise, determine such other terms, conditions, restrictions or
limitations, if any, on any Award of Restricted Stock.
Section 11. Phantom Stock
(a) Grants. Awards may be granted in the form of Phantom Stock
Awards. Phantom Stock Awards shall entitle the Participant to receive the
market value or the appreciation in value of a stated number of shares of
Common Stock on a settlement date determined by the Committee.
(b) Terms and Conditions. The Committee may, in any manner not
inconsistent with the Plan, by way of Award Agreement or otherwise,
determine such terms, conditions, restrictions or limitations, if any, on
any Award of Phantom Stock.
Section 12. Performance Shares
(a) Grants. Awards may be granted in the form of performance shares.
"Performance Shares" means interests the entitlement to which is based upon
the attainment of pre-determined Performance Targets as hereinafter defined
during a Performance Period as hereinafter defined. At the end of the
Performance Period, Performance Shares shall be converted into Common Stock
(or Common Stock and cash, as determined by the Award Agreement) and
distributed to Participants based upon such entitlement.
(b) Performance Criteria. The Committee may grant an Award of
Performance Shares to Participants as of the first day of each Performance
Period. As used herein, the term "Performance Period" means the period
during which a Performance Target is measured and the term "Performance
Target" means the predetermined goals established by the Committee. A
Performance Target will be established at the beginning of each Performance
Period. If at the end of the Performance Period, the Performance Target is
fully met, the Performance Shares will be converted 100% into shares of
Common Stock (or the cash equivalent thereof, as determined by the Award
Agreement) and issued to the Participant. Award payments in excess of 100%
shall be permitted based upon an attainment in excess of 100% of the
Performance Target. If the Performance Target has not been fully met,
Performance Shares will be converted and delivered only to the extent, if
any, provided at the time of the grant of such Award for conversion based
upon partial attainment of the Performance Target and the balance of the
Performance Shares will be forfeited to the Company and available for
reissuance pursuant to Section 5 hereof.
(c) Additional Terms and Conditions. The Committee may, in any
manner not inconsistent with the terms of this Plan, by way of the Award
Agreement or otherwise, determine the manner of payment of Awards of
Performance Shares and other terms, conditions, restrictions or
limitations, if any, on any Award of Performance Shares.
Section 13. Directors' Stock Options
(a) Grants. Awards may be granted to non-employee Directors only in
the form of stock options satisfying the requirements of this Section 13.
Each person who is elected or appointed to serve as a Director of the
Company after the effective date of the Plan and who is not a Director on
the effective date of the Plan shall, upon his initial appointment or
election as a Director, automatically be granted an option for 2,000 shares
of Common Stock. At each year's annual meeting of the stockholders of the
Company commencing at the 1997 annual meeting, there shall be granted
automatically to each non-employee Director (other than any non-employee
Director who first became a Director at any time during the period
following the immediately preceding annual meeting of the stockholders of
the Company), the option to purchase 1,000 shares of Common Stock. All
stock options granted under this Section 13 shall be nonqualified stock
options.
(b) Option Exercise Price. The option exercise price of all stock
options granted under this Section 13 shall be the per share fair market
value of the outstanding shares of the Common Stock on the date such
options are automatically granted. Payment of the option exercise price
may be made in cash or in shares of Common Stock or a combination of cash
and Common Stock to the extent provided in the Award Agreement.
(c) Administration. Subject to the express provisions of this
Section 13, the Committee shall have conclusive authority to construe and
interpret any Stock Option Award granted under this Section 13 and to adopt
Administrative Policies with respect thereto; provided, however, that no
action shall be taken which would prevent the options granted under this
Section 13 or any Award granted under the Plan from meeting the
requirements for exemption from Section 16(b) of the Exchange Act, or
subsequent comparable statute, as set forth in Rule 16b-3 of the Exchange
Act or any subsequent comparable rule.
(d) Option Agreement. The options granted hereunder shall be
evidenced by an option agreement, dated as of the date of the grant, which
agreement shall be in such form, consistent with the terms and requirements
of this Section 13, as shall be approved by the Committee from time to time
and executed on behalf of the Company by the President. The Option
Agreement shall require the optionee to refrain from selling or otherwise
disposing of shares so acquired for at least six months following the date
of the grant of such option.
(e) Option Period. In the absence of any provision in an option to
the contrary (i) the option will become exercisable as to 50% of the shares
of Common Stock subject to the option upon completion of the first full
year after the date thereof and as to 50% of such shares upon the
completion of each full year thereafter prior to Termination, and (ii) the
option will lapse upon the earliest of (A) 180 days after Termination of
the Director's status as a Director, or (B) ten years after the option was
granted.
(f) Transferability. No option granted under this Section 13 shall
be transferable by the non-employee Director except by will or the laws of
descent and distribution, or pursuant to a Qualified Domestic Relations
Order, and during the Director's lifetime options may be exercised only by
him or his guardian or legal representative or his transferee under such
Qualified Domestic Relations Order.
(g) Limitations on Exercise. To the extent an option is not
otherwise exercisable at the date of the Director's death or voluntary
retirement as a Director, it shall become fully exercisable upon such
retirement provided, however, that Director Stock Options shall not become
exercisable under this sentence prior to the expiration of six months from
the date of grant. Upon such death or voluntary retirement, such options
shall be exercisable for a period of 180 days, subject to the original term
of the option.
Section 14. Payment of Awards
Except as otherwise provided herein Award Agreements may provide that,
at the discretion of the Committee, payment of Awards may be made in cash,
Common Stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine. The terms of Award Agreements
may provide for payment of Awards in the form of a lump sum or
installments, as determined by the Committee. In connection with
transactions involving the exercise and cancellation of an Award (under
this Section 14 or Section 25, or otherwise) held by or through a Director
or a Section 16 Officer (whether or not the transaction also involves the
related surrender and cancellation of a stock option) and the receipt of
cash in complete or partial settlement of the Award, or the cash settlement
of an equity security to satisfy the tax withholding consequences of a
Derivative Security, the Committee may require that such transaction be
consummated in compliance with Rule 16b-3(e) under the Exchange Act, as
such rule may be amended or superseded from time to time, unless the holder
of such Award waives such compliance in a writing executed by such holder
and delivered to the Committee and the Committee consents to such waiver.
Section 15. Dividends and Dividend Equivalents
If an Award is granted in the form of a Restricted Stock Award or
Phantom Stock Award, the Committee may choose, at the time of the grant of
the Award, to include as part of such Award an entitlement to receive
dividends or dividend equivalents, subject to such terms, conditions,
restrictions or limitations, if any, as the Committee may establish.
Dividends and dividend equivalents shall be paid in such form and manner
and at such time as the Committee shall determine. All dividends or
dividend equivalents which are not paid currently may, at the Committee's
discretion, accrue interest or be reinvested into additional shares of
Common Stock.
Section 16. Assignment and Transfer; Holding Period
The rights and interests of a Participant under the Plan, and in any
Derivative Security issued or granted under the Plan, may not be assigned,
sold, encumbered or transferred except, in the event of the death of a
Participant, by will or the laws of descent and distribution, or except
pursuant to a Qualified Domestic Relations Order.
Except as otherwise provided in the first paragraph of this Section 16
(but such exception shall not apply if its application would cause the
grant or award of the subject equity security or Derivative Security not to
be exempt from section 16(b) of the Exchange Act), an equity security of
the Company granted or awarded to a Director or Section 16 Officer as an
Award under the Plan shall not be assigned, sold, encumbered, transferred
or otherwise disposed of prior to the expiration of six months from the
date of grant, and neither a Derivative Security granted or awarded to a
Director or Section 16 Officer as an Award under the Plan, nor the
underlying equity security with respect to such Derivative Security, shall
be assigned, sold, encumbered, transferred or otherwise disposed of prior
to the expiration of six months from the date of acquisition of the
Derivative Security to the date of disposition of the Derivative Security
(other than upon exercise or conversion) or such underlying equity
security, unless, in either case, the holder of such equity security or
Derivative Security requests waiver of such restrictions in a writing
delivered to the Committee and the Committee consents to such waiver.
Section 17. Adjustments Upon Changes in Capitalization
In the event of any change in the outstanding shares of Common Stock
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or shares of the Company, the maximum
aggregate number and class of shares as to which Awards may be or are
required to be granted under the Plan and the shares issuable pursuant to
and the exercise or purchase price payable under then outstanding Awards,
shall be appropriately adjusted by the Committee whose determination shall
be final. Any such adjustments may be provided for in Award Agreements.
Section 18. Extraordinary Distributions and Pro Rata Repurchases
In the event the Company shall at any time when an Award is
outstanding make an Extraordinary Distribution (as hereinafter defined) in
respect of Common Stock or effect a Pro Rata Repurchase of Common Stock (as
hereinafter defined), the Committee may consider the economic impact of the
Extraordinary Distribution or Pro Rata Repurchase on Participants and make
such adjustments as it deems equitable under the circumstances. The
determination of the Committee shall, subject to revision by the Board of
Directors, be final and binding upon all Participants.
(a) As used herein, the term "Extraordinary Distribution" means any
dividend or other distribution by the Company of:
(i) cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and
distributions made during the twelve months preceding the date of
payment of such dividend or other distribution, when combined with the
aggregate amount of all Pro Rata Repurchases (for this purpose,
including only that portion of the aggregate purchase price of such
Pro Rata Repurchases which is in excess of the fair market value (as
determined by the Committee) of the Common Stock repurchased during
such twelve month period), exceeds ten percent (10%) of the aggregate
fair market value (as determined by the Committee) of all shares of
Common Stock outstanding on the record date for determining the
shareholders entitled to receive such Extraordinary Distribution; or
(ii) any shares of capital stock of the Company (other than
shares of Common Stock), other securities of the Company (including
evidences of indebtedness of the Company), or any other investments,
assets or property of the Company (including shares of any Subsidiary
of the Company), or any combination thereof.
(b) As used herein "Pro Rata Repurchase" means any purchase of shares
of Common Stock by the Company or any Subsidiary thereof, pursuant to any
tender offer or exchange offer subject to section 13(e) of the Exchange Act
or any successor provision of law, or pursuant to any other offer available
to substantially all holders of Common Stock; provided, however, that no
purchase of shares of the Company or any Subsidiary thereof made in open
market transactions shall be deemed a Pro Rata Repurchase.
Section 19. Withholding Taxes
The Company or the applicable Subsidiary shall be entitled to deduct
from any payment under the Plan, regardless of the form of such payment,
the amount of all applicable income and employment tax required by law to
be withheld with respect to such payment or may require the Participant to
pay to it such tax prior to and as a condition of the making of such
payment. In accordance with any applicable Administrative Policies it
establishes, the Committee may allow a Participant to pay the amount of
taxes required by law to be withheld from an Award by withholding from any
payment of Common Stock due as a result of such Award, or by permitting the
Participant to deliver to the Company shares of Common Stock having a fair
market value, as determined by the Committee, equal to the amount of such
required withholding taxes.
Section 20. Regulatory Approvals and Listings
Notwithstanding anything contained in this Plan to the contrary, the
Company shall have no obligation to issue or deliver certificates of Common
Stock evidencing Restricted Stock Awards or any other Award payable in
Common Stock prior to (a) the obtaining of any approval from any
governmental agency which the Company shall, in its sole discretion,
determine to be necessary or advisable, (b) the admission of such shares to
trading on the Applicable Market and (c) the completion of any registration
or other qualification of said shares under any state or Federal law or
ruling of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable. The Company shall have
the right to require that any certificate for Common Stock issued pursuant
to the Plan or an Award bear any restrictive legend required by law and/or
to evidence restrictions on the transfer of the shares under applicable
law, the Award Agreement or the Plan.
Section 21. No Right to Continued Employment or Grants
Participation in the Plan shall not give any Key Employee any right to
remain in the employ of, or continue to be retained by, the Company or any
Subsidiary. The Company or, in the case of employment with, or retention
by, a Subsidiary, the Subsidiary, reserves the right to terminate the
employment or retention of any Key Employee at any time, subject to the
terms of any agreement with such Key Employee. The adoption of this Plan
shall not be deemed to give any Key Employee or any other individual any
right to be selected as a Participant, to be granted any Awards hereunder
or, if granted an Award, to receive any additional Awards at any subsequent
time.
Section 22. Rights as Stockholder
No Participant shall have any rights as a stockholder as a result of
participation in the Plan until the date of issuance of and only as the
holder of a stock certificate in his name except, in the case of Restricted
Stock Awards, to the extent such rights are granted to the Participant
under Section 10(c) hereof. To the extent any person acquires a right to
receive payments from the Company under this Plan, such rights shall be no
greater than the rights of an unsecured creditor of the Company.
Section 23. Responsibility and Indemnification
No member of the Board of Directors or the Committee shall be liable
to the Company, any Participant or any third party for any action or
determination made in good faith with respect to the Plan and Awards
thereunder, or for any matter as to which the Company's certificate of
incorporation or bylaws, or any valid contract between the Company and such
member, limits or negates the liability of Directors. Such members shall
be entitled to indemnification and reimbursement in the manner provided in
the Company's certificate of incorporation and bylaws, in any valid
contract between the Company and such member, and under any directors' and
officers' liability insurance coverage which may be in effect from time to
time.
Section 24. Substitution, Extension, Renewal and Regrant of Awards
Awards may be granted under the Plan from time to time in substitution
for stock options and other rights or awards held by employees of
organizations who become or are about to become Key Employees of the
Company or a Subsidiary as the result of a merger or consolidation of the
employing organization with the Company or a Subsidiary, or the acquisition
by the Company or a Subsidiary of the assets of the employing organization,
or the acquisition by the Company or a Subsidiary of equity interests in
the employing organization as the result of which it becomes a Subsidiary.
The Committee may extend or renew outstanding Awards granted under the Plan
on terms not inconsistent with the Plan.
The Committee may accept the surrender or cancellation of outstanding
Awards (to the extent not theretofore exercised, paid or settled) and grant
or award new Awards in substitution therefor, which new Awards may be
different types of Awards than the Awards so surrendered and/or canceled.
Section 25. Amendment
The Committee may suspend, reinstate and terminate the Plan or any
portion thereof at any time. In addition, the Committee may, from time to
time, amend the Plan in any manner, but may not without stockholder
approval adopt any amendment (i) which would (a) materially increase the
benefits accruing to Participants under the Plan, (b) materially increase
the number of shares of Common Stock which may be issued under the Plan
(except as specified in Section 17 or 18), or (c) materially modify the
requirements as to eligibility for participation in the Plan, or (ii) that
requires stockholder approval in order for the Plan to comply with Section
162(m)of the Code. Notwithstanding the foregoing, the provisions of
Section 13 relating to the eligibility for, and the amount, price and
timing of, Awards to Directors thereunder shall not be amended, nor shall
the operation of Section 13 be suspended or reinstated, more than once
every six months other than to conform with changes in the Code, ERISA, or
the rules thereunder.
Section 26. Corporate Changes; Use of Funds
The grant of an Award pursuant to the Plan shall not affect the right
or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its stock, securities, capital or business
structure, or to merge, consolidate, dissolve, or liquidate, or to sell,
lease or transfer all or any part of its business or assets. The funds
received by the Company upon any exercise or settlement of an Award may be
used by the Company for any corporate purpose or purposes.
Section 27. Governing Law
The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, except as preempted by applicable Federal
law.
Section 28. Interpretation
The Plan is designed and intended to comply with Rule 16b-3
promulgated under the Exchange Act and, to the extent applicable, with
Section 162(m) of the Code and all provisions hereof shall be construed in
a manner to so comply.
EXHIBIT 18
STOCK OPTION AGREEMENT
(1996 Stock Incentive Plan)
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of June 11, 1996 by and between ACCEL International Corporation, a
Delaware corporation (the "Company"), and the undersigned director of the
Company ("Participant").
RECITALS
1. Pursuant to the provisions of Section 13 of the Company's 1996
Stock Incentive Plan (the "Plan"), a copy of which is attached hereto as
Exhibit A, Participant, as a Director of the Company who is not a corporate
employee of the Company, has been granted the option to purchase shares of
Common Stock, $.10 par value, of the Company ("Shares") on the terms and
conditions set forth in this Agreement and in the Plan.
2. In addition to capitalized terms defined herein, certain
capitalized terms used in this Agreement have the meanings set forth in the
Plan.
AGREEMENT:
The Company and Participant, intending to be bound hereby, agree as
follows:
SECTION 1. OPTIONS. Participant is hereby granted the option (the
"Option") to purchase 1 ,000 Shares, at an exercise price of $3.25 per
share (the "Option Price"). The Option shall vest and first become
exercisable as to 50% of the Shares subject to this Option on and after the
first anniversary of the date of this Agreement (which shall be deemed the
date of grant of the Option), and 100% on and after the second anniversary
of the date of grant.
SECTION 2. EXERCISE OF OPTION.
2.1. NOTICE. If Participant wishes to purchase Shares under this
Agreement, then Participant must give notice of exercise of the Option to
the Company at the Company's headquarters to the attention of Nicholas Z.
Alexander, Senior Vice President and Secretary. Participant must give such
notice in writing and must use the form attached as Exhibit B or its
substantial equivalent. The notice must have all of the blanks set forth
on Exhibit B appropriately and accurately completed and Participant must
include with the notice the full payment for the Shares being purchased.
2.2. PAYMENT.
2.2.1. GENERAL. Any notice of exercise shall be effective
only if Participant pays to the Company the Option Price for the portion of
any Option being exercised.
2.2.2 PAYMENT IN SHARES; CASHLESS EXERCISE. Subject to the
provisions of the Plan, Participant may, in his sole discretion, pay all or
a portion of the Option being exercised by surrender and delivery of
Shares. Any such Shares delivered in full or partial payment of the Option
Price shall be valued at the mean of the high and low closing price of the
Shares in the Applicable Market as of the date of receipt of the Shares by
the Company or, if the Shares are not then traded in an Applicable Market,
the fair market value of the Shares, as determined by the Committee, on
such date. In the sole discretion of the Committee, Participant may be
permitted to pay all or part of the Option being exercised through a
cashless exercise procedure involving a broker.
2.3. TRANSFER.
2.3.1. DELIVERY. The Company shall deliver certificates for
the Shares purchased under the Options as soon as possible after receiving
payment for the Shares and all documents required under the Plan and this
Agreement. The certificates will be made out in the name of Participant
or, if appropriate, in the name of Participant's executors, administrators,
or personal representatives.
2.3.2. COMPLIANCE WITH SECURITIES LAWS. The exercise of
Options and the issuance of Shares pursuant thereto shall be contingent
upon the prior registration of the Shares under the Securities Act of 1933
(the "Act") and such state laws as may be applicable, or a determination by
the Company that the issuance of such Shares will be a transaction exempt
from such registration. Accordingly, the exercise of Options and the
issuance of Shares pursuant thereto may, at the election of the Company, be
contingent upon the execution and delivery by Participant of an investment
letter, in form and substance satisfactory to the Company, which sets forth
certain representations and covenants concerning Participant upon which the
Company and its legal counsel may rely in determining the availability of
any exemption from registration of the Shares under the Act and any
applicable securities laws. In the event the Shares are issued without
registration, the transferability of the Shares by Participant may be
restricted, in which event the certificate evidencing the Shares may
contain a legend stating that the Shares have not been registered and
setting forth or referring to any restrictions on the transferability and
sale of the Shares.
2.3.3. INTERPRETATION. This Agreement shall not be
construed or executed in any way which would prevent the options granted
hereunder from meeting the requirements for exemption of Section 16(b) of
the Securities and Exchange Act of 1933 or subsequent comparable statutes
(the "Act"), as set forth in Rule 16b-3 of the Act.
SECTION 3. TERMINATION. Each Option will lapse on the earliest of (i)
180 days after Termination of the Participant's status as a Director, or
(ii) ten years after the option was granted.
SECTION 4. TAX CONSEQUENCES. The Company makes no representation or
warranty regarding the tax consequences to Participant of receipt,
ownership or exercise of Options or of sales of Shares acquired upon
exercise of Options.
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference between the
provisions of this Agreement and the provisions of the Plan, then the
provisions of the Plan shall govern. By signing this Agreement,
Participant confirms that Participant has received and read a copy of the
Plan attached hereto as Exhibit A.
SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1. ADJUSTMENT FOR STOCK DIVIDEND OR STOCK SPLIT. In the event
that a stock dividend is hereafter paid on outstanding Shares in Shares, or
in the event that the number of outstanding Shares is hereafter increased
as a result of a stock split, and the Options are then unexercised, the
number of Shares subject to the Options shall thereupon be increased by
that number of Shares which would have been distributed with respect to the
Shares subject to the Options if the Shares subject to the Options had been
outstanding at the time of the stock dividend or stock split and the Option
Price shall be adjusted to reflect such increased number of Shares subject
to the Options.
6.2. ADJUSTMENT FOR REORGANIZATION OR MERGER. In the event that
outstanding Shares are hereafter changed into or exchanged for a different
number or kind of shares of stock or securities of another corporation or
corporations, whether as a result of a reorganization, recapitalization,
reclassification, merger, consolidation or otherwise, and the Options are
then unexercised, the Options and the Option Price shall thereupon be
adjusted to cover the number and kind of Shares or securities which would
have been received for the Shares subject to the Options if the Shares
subject to the Options had been outstanding at the time of such
reorganization, recapitalization, reclassification, merger, consolidation
or any other event.
6.3. ADDITIONAL ADJUSTMENTS. In the event that there is any
change in the outstanding Shares for which an adjustment is not provided by
Sections 6.1. or 6.2. of this Agreement, and the Options are then
unexercised, the Committee may, in its sole discretion, require an
adjustment in the number or kind of Shares or securities subject to the
Options and the Option Price and such adjustment shall be binding and
effective for all purposes hereof.
6.4. ELIMINATION OF FRACTIONAL SHARES. Any addition or
adjustment provided for in Sections 6.1, 6.2 and 6.3 hereof may be limited
to the extent necessary to prevent fractions of shares from becoming
available under the Options.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and Participant concerning the
Options and incorporate all earlier negotiations and understandings. The
Company and Participant have made no promises, agreements, conditions, or
understandings about the Options, either orally or in writing, that are not
included in this Agreement or the Plan.
7.2. CAPTIONS. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not
define, limit, construe or describe the scope or intent of the provisions
of this Agreement.
7.3. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed by the Company and Participant
shall be deemed an original and all of which together shall be deemed the
same agreement.
7.4. NOTICE. Any notice or communication having to do with the
Options or this Agreement shall be given by personal delivery or by
certified mail, return receipt requested, addressed, if to the Company,
pursuant to the notice requirements of Section 2.1 and if to Participant,
at his last known address on the records of the Company.
7.5. AMENDMENT. This Agreement may be amended as provided by the
Plan.
7.6. SUCCESSION AND TRANSFER. The provisions of this Agreement
shall be binding upon and run to the benefit of the Company and Participant
and their respective heirs, personal representatives, successors, and
assigns. However, neither this Agreement nor any other right under the
Plan may be assigned, pledged, hypothecated, given or otherwise transferred
by Participant, except as permitted by the Plan.
NAME OF PARTICIPANT ACCEL INTERNATIONAL
CORPORATION
/S/ DAVID T. CHASE /S/ NICHOLAS Z. ALEXANDER
David T. Chase Nicholas Z. Alexander
Senior Vice President and Secretary
<PAGE>
EXHIBIT B
NOTICE OF EXERCISE OF OPTION
ACCEL INTERNATIONAL CORPORATION
475 Metro Place North, Suite 100
Attention: Nicholas Z. Alexander, Senior Vice President and Secretary
Dear Sir:
On __________________________ , 199__, I was granted an option
under the 1996 Stock Incentive Plan of ACCEL INTERNATIONAL CORPORATION (the
"Company") under which I may buy a total of ______________ shares of Common
Stock, $.10 par value of the Company ("Shares"), at a price of $3.25 per Share.
This letter is to notify you that I wish to buy the following Shares under the
option:
___________________________ Shares @ $3.25 per Share: $________________
Local, State and Federal Withholding Taxes
Payable to ACCEL International Corporation $________________
Total (payable by certified or bank check only) $
================
Payment in full of the amounts due as listed above is included with
this notice. Please deliver the stock certificates to me as indicated
below.
Yours truly,
_________________________________
(Participant)
Name (Please Print): _________________________________
Address: _________________________________
_________________________________
_________________________________
Area Code & Tel. No.: _________________________________
Social Security No.: _________________________________
EXHIBIT 19
STOCK OPTION AGREEMENT
(1996 STOCK INCENTIVE PLAN)
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of May 20, 1997 by and between ACCEL International Corporation, a
Delaware corporation (the "Company"), and the undersigned Director of the
Company ("Participant").
RECITALS
1. Pursuant to the provisions of Section 13 of the Company's 1996
Stock Incentive Plan (the "Plan"), Participant, as a Director of the
Company who is not a corporate employee of the Company, has been granted
the option to purchase shares of Common Stock, $.10 par value, of the
Company ("Shares") on the terms and conditions set forth in this Agreement
and in the Plan.
2. In addition to capitalized terms defined herein, certain
capitalized terms used in this Agreement have the meanings set forth in the
Plan.
AGREEMENT:
The Company and Participant, intending to be bound hereby, agree as
follows:
SECTION 1. OPTIONS. Participant is hereby granted the option (the
"Option") to purchase 1,000 shares of Common Stock, $.10 par value, of the
Company (the "Shares"), at an exercise price of $2.75 per share (the
"Option Price"). The Option shall vest and first become exercisable as to
50% of the Shares subject to this Option on and after the first anniversary
of the date of this Agreement (which shall be deemed the date of grant of
the Option), and 100% on and after the second anniversary of the date of
grant.
SECTION 2. EXERCISE OF OPTION.
2.1. NOTICE. If Participant wishes to purchase Shares under this
Agreement, then Participant must give notice of exercise of the Option to
the Company at the Company's headquarters to the attention of Nicholas Z.
Alexander, Senior vice President and Secretary. Participant must give such
notice in writing and must use the form attached as Exhibit B or its
substantial equivalent. The notice must have all of the blanks set forth on
Exhibit B appropriately and accurately completed and Participant must
include with the notice the full payment for the Shares being purchased.
2.2. PAYMENT.
2.2.1. GENERAL. Any notice of exercise shall be effective only
if Participant pays to the Company the Option Price for the portion of any
Option being exercised.
2.2.2 PAYMENT IN SHARES; CASHLESS EXERCISE. Subject to the
provisions of the Plan, Participant may, in his sole discretion, pay all or
a portion of the Option being exercised by surrender and delivery of
Shares. Any such Shares delivered in full or partial payment of the Option
Price shall be valued at the mean of the high and low closing price of the
Shares in the Applicable Market as of the date of receipt of the Shares by
the Company or, if the Shares are not then traded in an Applicable Market,
the fair market value of the Shares, as determined by the Committee, on
such date. In the sole discretion of the Committee, Participant may be
permitted to pay all or part of the Option being exercised through a
cashless exercise procedure involving a broker.
2.3. TRANSFER.
2.3.1. DELIVERY. The Company shall deliver certificates for the
Shares purchased under the Options as soon as possible after receiving
payment for the Shares and all documents required under the Plan and this
Agreement. The certificates will be made out in the name of Participant
or, if appropriate, in the name of Participant's executors, administrators,
or personal representatives.
2.3.2. COMPLIANCE WITH SECURITIES LAWS. The exercise of Options
and the issuance of Shares pursuant thereto shall be contingent upon the
prior registration of the Shares under the Securities Act of 1933 (the
"Act") and such state laws as may be applicable, or a determination by the
Company that the issuance of such Shares will be a transaction exempt from
such registration. Accordingly, the exercise of Options and the issuance
of Shares pursuant thereto may, at the election of the Company, be
contingent upon the execution and delivery by Participant of an investment
letter, in form and substance satisfactory to the Company, which sets forth
certain representations and covenants concerning Participant upon which the
Company and its legal counsel may rely in determining the availability of
any exemption from registration of the Shares under the Act and any
applicable securities laws. In the event the Shares are issued without
registration, the transferability of the Shares by Participant may be
restricted, in which event the certificate evidencing the Shares may
contain a legend stating that the Shares have not been registered and
setting forth or referring to any restrictions on the transferability and
sale of the Shares.
2.3.3. INTERPRETATION. This Agreement shall not be construed or
executed in any way which would prevent the options granted hereunder from
meeting the requirements for exemption of Section 16(b) of the Securities
and Exchange Act of 1933 or subsequent
comparable statutes (the "Act"), as set forth in Rule 16b-3 of the Act.
SECTION 3. TERMINATION. Each Option will lapse on the earliest of (i)
180 days after Termination of the Participant's status as a Director, or
(ii) ten years after the option was granted.
SECTION 4. TAX CONSEQUENCES. The Company makes no representation or
warranty regarding the tax consequences to Participant of receipt,
ownership or exercise of Options or of sales of Shares acquired upon
exercise of Options.
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference between the
provisions of this Agreement and the provisions of the Plan, then the
provisions of the Plan shall govern. By signing this Agreement,
Participant confirms that Participant has received and read a copy of the
Plan attached hereto as Exhibit A.
SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1. ADJUSTMENT FOR STOCK DIVIDEND OR STOCK SPLIT. In the event
that a stock dividend is hereafter paid on outstanding Shares in Shares, or
in the event that the number of outstanding Shares is hereafter increased
as a result of a stock split, and the Options are then unexercised, the
number of Shares subject to the Options shall thereupon be increased by
that number of Shares which would have been distributed with respect to the
Shares subject to the Options if the Shares subject to the Options had been
outstanding at the time of the stock dividend or stock split and the Option
Price shall be adjusted to reflect such increased number of Shares subject
to the Options.
6.2. ADJUSTMENT FOR REORGANIZATION OR MERGER. In the event that
outstanding Shares are hereafter changed into or exchanged for a different
number or kind of shares of stock or securities of another corporation or
corporations, whether as a result of a reorganization, recapitalization,
reclassification, merger, consolidation or otherwise, and the Options are
then unexercised, the Options and the Option Price shall thereupon be
adjusted to cover the number and kind of Shares or securities which would
have been received for the Shares subject to the Options if the Shares
subject to the Options had been outstanding at the time of such
reorganization, recapitalization, reclassification, merger, consolidation
or any other event.
6.3. ADDITIONAL ADJUSTMENTS. In the event that there is any
change in the outstanding Shares for which an adjustment is not provided by
Sections 6.1. or 6.2. of this Agreement, and the Options are then
unexercised, the Committee may, in its sole discretion, require an
adjustment in the number or kind of Shares or securities subject to the
Options and the Option Price and such adjustment shall be binding and
effective for all purposes hereof.
6.4. ELIMINATION OF FRACTIONAL SHARES. Any addition or
adjustment provided for in Sections 6.1, 6.2 and 6.3 hereof may be limited
to the extent necessary to prevent fractions of shares from becoming
available under the Options.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and Participant concerning the
Options and incorporate all earlier negotiations and understandings. The
Company and Participant have made no promises, agreements, conditions, or
understandings about the Options, either orally or in writing, that are not
included in this Agreement or the Plan.
7.2. CAPTIONS. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
7.3. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed by the Company and Participant
shall be deemed an original and all of which together shall be deemed the
same agreement.
7.4. NOTICE. Any notice or communication having to do with the
Options or this Agreement shall be given by personal delivery or by
certified mail, return receipt requested, addressed, if to the Company,
pursuant to the notice requirements of Section 2.1 and if to Participant,
at his last known address on the records of the Company.
7.5. AMENDMENT. This Agreement may be amended as provided by the
Plan.
7.7. SUCCESSION AND TRANSFER. The provisions of this Agreement
shall be binding upon and run to the benefit of the Company and Participant
and their respective heirs, personal representatives, successors, and
assigns. However, neither this Agreement nor any other right under the Plan
may be assigned, pledged, hypothecated, given or otherwise transferred by
Participant, except as permitted by the Plan.
NAME OF PARTICIPANT ACCEL INTERNATIONAL
CORPORATION
/S/ DAVID T. CHASE /S/ THOMAS H. FRIEDBERG
DAVID T. CHASE THOMAS H. FRIEDBERG
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
<PAGE>
EXHIBIT B
NOTICE OF EXERCISE OF OPTION
ACCEL INTERNATIONAL CORPORATION
475 Metro Place North, Suite 100
Attention: Nicholas Z. Alexander, Senior Vice President and Secretary
Dear Sir:
On __________________________ , 199__, I was granted an option
under the 1996 Stock Incentive Plan of ACCEL INTERNATIONAL CORPORATION (the
"Company") under which I may buy a total of ______________ shares of Common
Stock, $.10 par value of the Company ("Shares"), at a price of $2.75 per Share.
This letter is to notify you that I wish to buy
the following Shares under the option:
___________________________ Shares @ $2.75 per Share: $________________
Local, State and Federal Withholding Taxes
Payable to ACCEL International Corporation $________________
Total (payable by certified or bank check only) $
================
Payment in full of the amounts due as listed above is included with
this notice. Please deliver the stock certificates to me as indicated
below.
Yours truly,
_________________________________
(Participant)
Name (Please Print): _________________________________
Address: _________________________________
_________________________________
_________________________________
Area Code & Tel. No.: _________________________________
Social Security No.: _________________________________
EXHIBIT 20
STOCK OPTION AGREEMENT
(1996 STOCK INCENTIVE PLAN)
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
as of May 20, 1997 by and between ACCEL International Corporation, a
Delaware corporation (the "Company"), and the undersigned Director of the
Company ("Participant").
RECITALS
1. Pursuant to the provisions of Section 13 of the Company's 1996
Stock Incentive Plan (the "Plan"), Participant, as a Director of the
Company who is not a corporate employee of the Company, has been granted
the option to purchase shares of Common Stock, $.10 par value, of the
Company ("Shares") on the terms and conditions set forth in this Agreement
and in the Plan.
2. In addition to capitalized terms defined herein, certain
capitalized terms used in this Agreement have the meanings set forth in the
Plan.
AGREEMENT:
The Company and Participant, intending to be bound hereby, agree as
follows:
SECTION 1. OPTIONS. Participant is hereby granted the option (the
"Option") to purchase 2,000 shares of Common Stock, $.10 par value, of the
Company (the "Shares"), at an exercise price of $2.75 per share (the
"Option Price"). The Option shall vest and first become exercisable as to
50% of the Shares subject to this Option on and after the first anniversary
of the date of this Agreement (which shall be deemed the date of grant of
the Option), and 100% on and after the second anniversary of the date of
grant.
SECTION 2. EXERCISE OF OPTION.
2.1. NOTICE. If Participant wishes to purchase Shares under this
Agreement, then Participant must give notice of exercise of the Option to
the Company at the Company's headquarters to the attention of Nicholas Z.
Alexander, Senior vice President and Secretary. Participant must give such
notice in writing and must use the form attached as Exhibit B or its
substantial equivalent. The notice must have all of the blanks set forth on
Exhibit B appropriately and accurately completed and Participant must
include with the notice the full payment for the Shares being purchased.
2.2. PAYMENT.
2.2.1. GENERAL. Any notice of exercise shall be effective only
if Participant pays to the Company the Option Price for the portion of any
Option being exercised.
2.2.2 PAYMENT IN SHARES; CASHLESS EXERCISE. Subject to the
provisions of the Plan, Participant may, in his sole discretion, pay all or
a portion of the Option being exercised by surrender and delivery of
Shares. Any such Shares delivered in full or partial payment of the Option
Price shall be valued at the mean of the high and low closing price of the
Shares in the Applicable Market as of the date of receipt of the Shares by
the Company or, if the Shares are not then traded in an Applicable Market,
the fair market value of the Shares, as determined by the Committee, on
such date. In the sole discretion of the Committee, Participant may be
permitted to pay all or part of the Option being exercised through a
cashless exercise procedure involving a broker.
2.3. TRANSFER.
2.3.1. DELIVERY. The Company shall deliver certificates for the
Shares purchased under the Options as soon as possible after receiving
payment for the Shares and all documents required under the Plan and this
Agreement. The certificates will be made out in the name of Participant
or, if appropriate, in the name of Participant's executors, administrators,
or personal representatives.
2.3.2. COMPLIANCE WITH SECURITIES LAWS. The exercise of Options
and the issuance of Shares pursuant thereto shall be contingent upon the
prior registration of the Shares under the Securities Act of 1933 (the
"Act") and such state laws as may be applicable, or a determination by the
Company that the issuance of such Shares will be a transaction exempt from
such registration. Accordingly, the exercise of Options and the issuance
of Shares pursuant thereto may, at the election of the Company, be
contingent upon the execution and delivery by Participant of an investment
letter, in form and substance satisfactory to the Company, which sets forth
certain representations and covenants concerning Participant upon which the
Company and its legal counsel may rely in determining the availability of
any exemption from registration of the Shares under the Act and any
applicable securities laws. In the event the Shares are issued without
registration, the transferability of the Shares by Participant may be
restricted, in which event the certificate evidencing the Shares may
contain a legend stating that the Shares have not been registered and
setting forth or referring to any restrictions on the transferability and
sale of the Shares.
2.3.3. INTERPRETATION. This Agreement shall not be construed or
executed in any way which would prevent the options granted hereunder from
meeting the requirements for exemption of Section 16(b) of the Securities
and Exchange Act of 1933 or subsequent
comparable statutes (the "Act"), as set forth in Rule 16b-3 of the Act.
SECTION 3. TERMINATION. Each Option will lapse on the earliest of (i)
180 days after Termination of the Participant's status as a Director, or
(ii) ten years after the option was granted.
SECTION 4. TAX CONSEQUENCES. The Company makes no representation or
warranty regarding the tax consequences to Participant of receipt,
ownership or exercise of Options or of sales of Shares acquired upon
exercise of Options.
SECTION 5. PLAN TO GOVERN. This Agreement is made under the
provisions of the Plan and all of the provisions of the Plan are also
provisions of this Agreement. If there is a difference between the
provisions of this Agreement and the provisions of the Plan, then the
provisions of the Plan shall govern. By signing this Agreement,
Participant confirms that Participant has received and read a copy of the
Plan attached hereto as Exhibit A.
SECTION 6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
6.1. ADJUSTMENT FOR STOCK DIVIDEND OR STOCK SPLIT. In the event
that a stock dividend is hereafter paid on outstanding Shares in Shares, or
in the event that the number of outstanding Shares is hereafter increased
as a result of a stock split, and the Options are then unexercised, the
number of Shares subject to the Options shall thereupon be increased by
that number of Shares which would have been distributed with respect to the
Shares subject to the Options if the Shares subject to the Options had been
outstanding at the time of the stock dividend or stock split and the Option
Price shall be adjusted to reflect such increased number of Shares subject
to the Options.
6.2. ADJUSTMENT FOR REORGANIZATION OR MERGER. In the event that
outstanding Shares are hereafter changed into or exchanged for a different
number or kind of shares of stock or securities of another corporation or
corporations, whether as a result of a reorganization, recapitalization,
reclassification, merger, consolidation or otherwise, and the Options are
then unexercised, the Options and the Option Price shall thereupon be
adjusted to cover the number and kind of Shares or securities which would
have been received for the Shares subject to the Options if the Shares
subject to the Options had been outstanding at the time of such
reorganization, recapitalization, reclassification, merger, consolidation
or any other event.
6.3. ADDITIONAL ADJUSTMENTS. In the event that there is any
change in the outstanding Shares for which an adjustment is not provided by
Sections 6.1. or 6.2. of this Agreement, and the Options are then
unexercised, the Committee may, in its sole discretion, require an
adjustment in the number or kind of Shares or securities subject to the
Options and the Option Price and such adjustment shall be binding and
effective for all purposes hereof.
6.4. ELIMINATION OF FRACTIONAL SHARES. Any addition or
adjustment provided for in Sections 6.1, 6.2 and 6.3 hereof may be limited
to the extent necessary to prevent fractions of shares from becoming
available under the Options.
SECTION 7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT. This Agreement and the Plan contain all
of the understandings between the Company and Participant concerning the
Options and incorporate all earlier negotiations and understandings. The
Company and Participant have made no promises, agreements, conditions, or
understandings about the Options, either orally or in writing, that are not
included in this Agreement or the Plan.
7.2. CAPTIONS. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
7.3. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when executed by the Company and Participant
shall be deemed an original and all of which together shall be deemed the
same agreement.
7.4. NOTICE. Any notice or communication having to do with the
Options or this Agreement shall be given by personal delivery or by
certified mail, return receipt requested, addressed, if to the Company,
pursuant to the notice requirements of Section 2.1 and if to Participant,
at his last known address on the records of the Company.
7.5. AMENDMENT. This Agreement may be amended as provided by the
Plan.
7.7. SUCCESSION AND TRANSFER. The provisions of this Agreement
shall be binding upon and run to the benefit of the Company and Participant
and their respective heirs, personal representatives, successors, and
assigns. However, neither this Agreement nor any other right under the Plan
may be assigned, pledged, hypothecated, given or otherwise transferred by
Participant, except as permitted by the Plan.
NAME OF PARTICIPANT ACCEL INTERNATIONAL
CORPORATION
/S/ JOHN P. REDDING /S/ THOMAS H. FRIEDBERG
JOHN P. REDDING THOMAS H. FRIEDBERG
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
<PAGE>
EXHIBIT B
NOTICE OF EXERCISE OF OPTION
ACCEL INTERNATIONAL CORPORATION
475 Metro Place North, Suite 100
Attention: Nicholas Z. Alexander, Senior Vice President and Secretary
Dear Sir:
On __________________________ , 199__, I was granted an option
under the 1996 Stock Incentive Plan of ACCEL INTERNATIONAL CORPORATION (the
"Company") under which I may buy a total of ______________ shares of Common
Stock, $.10 par value of the Company ("Shares"), at a price of $2.75 per Share.
This letter is to notify you that I wish to buy
the following Shares under the option:
___________________________ Shares @ $2.75 per Share: $________________
Local, State and Federal Withholding Taxes
Payable to ACCEL International Corporation $________________
Total (payable by certified or bank check only) $
================
Payment in full of the amounts due as listed above is included with
this notice. Please deliver the stock certificates to me as indicated
below.
Yours truly,
_________________________________
(Participant)
Name (Please Print): _________________________________
Address: _________________________________
_________________________________
_________________________________
Area Code & Tel. No.: _________________________________
Social Security No.: _________________________________
