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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 1997
ACCEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-8162 31-078834
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
475 Metro Place North
Dublin, Ohio 43017
(Address, including zip code, of registrant's principal executive offices)
(614) 764-7000
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective as of December 31, 1997, ACCEL International Corporation (the
"Company") consummated (i) the sale by the Company to Lyndon Insurance Group,
Inc. and Lyndon Life Insurance Company (collectively, "Lyndon") of all of the
outstanding capital stock of the Company's wholly owned subsidiaries,
Acceleration Life Insurance Company, Acceleration National Service Corporation
and Dublin International Limited (collectively, the "Target Corporations"), for
the consideration and upon the terms set forth in the Stock Acquisition
Agreement dated October 20, 1997 by and between the Company and Lyndon (the
"Stock Acquisition Agreement"), as amended by a certain Amendment No. 1 to Stock
Acquisition Agreement dated as of January 2, 1998, and (ii) the sale by the
Company's wholly owned
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subsidiary, Acceleration National Insurance Company ("ANIC"), to Lyndon Property
Insurance Company ("Lyndon Property"), of ANIC's vehicle extended service
contract business, for the consideration and upon the terms set forth in the
Asset Purchase Agreement dated October 20, 1997 among Lyndon Property, the
Company and ANIC (collectively, the "Transaction"). The Company received total
consideration of $40.5 million in cash in connection with the Transaction.
However, as more fully described in the Company's Proxy Statement dated December
18, 1997 relating to the Special Meeting of Stockholders held on December 30,
1997 at which the Company's stockholders approved and authorized the Transaction
(the "Proxy Statement"), within 125 days after the closing, the purchase price
will be decreased by the amount, if any, by which the Target Corporations'
combined GAAP stockholders' equity as of December 31, 1997 (the "Combined GAAP
Equity") is less than $31.6 million or, alternatively, in the event that the
Combined GAAP Equity is greater than $31.6 million, the purchase price will be
increased by the amount by which the Combined GAAP Equity exceeds $31.6 million.
Copies of the Stock Acquisition Agreement and Asset Purchase Agreement
were included in the Proxy Statement as Annex I and Annex II, respectively. The
consideration paid by Lyndon and Lyndon Property was determined through
negotiation of the parties, as more fully described in the Proxy Statement. A
copy of the Proxy Statement has been previously filed with the Securities and
Exchange Commission pursuant to the provisions of the Securities Exchange Act,
as amended (the "Exchange Act").
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
The financial statements of the Company, as well as certain
pro forma financial information, are contained in the Proxy Statement. In that
respect, the information appearing under the captions "Unaudited Pro Forma
Consolidated Financial Information" (pages 24 through 29) and "Index to
Consolidated Financial Statements" (pages F-1 et seq.) in the Proxy Statement is
incorporated herein by reference pursuant to Rule 12b-23 promulgated under the
Exchange Act.
(c) Exhibits
2.1 Stock Acquisition Agreement dated October 20, 1997 by
and among ACCEL International Corporation, Lyndon
Life Insurance Company and Lyndon Insurance Group,
Inc. Incorporated by reference to Exhibit 99.1.
2.2 Asset Purchase Agreement dated October 20, 1997 by
and among ACCEL International Corporation,
Acceleration National Insurance Company and Lyndon
Property Insurance Company. Incorporated by reference
to Exhibit 99.1.
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2.3 Amendment No. 1 to Stock Acquisition Agreement dated
January 2, 1998 by and among ACCEL International
Corporation, Acceleration National Insurance Company,
Lyndon Life Insurance Company and Lyndon Insurance
Group, Inc. Filed herewith.
99.1 ACCEL International Corporation's Definitive Proxy
Statement, dated December 18, 1997, related to the
special meeting of stockholders held on December 30,
1997. Incorporated by reference pursuant to Rule
12b-32 promulgated under the Securities Exchange Act
of 1934, as amended.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ACCEL INTERNATIONAL CORPORATION
By: /s/ CYNTHIA ANNE MOORE
----------------------------
Cynthia Anne Moore
Chief Financial Officer
Dated: January 15, 1998
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EXHIBIT INDEX
Exhibit
No. Description
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2.1 Stock Acquisition Agreement dated October 20, 1997 by and among ACCEL
International Corporation, Lyndon Life Insurance Company and Lyndon
Insurance Group, Inc. Incorporated by reference to Exhibit 99.1.
2.2 Asset Purchase Agreement dated October 20, 1997 by and among ACCEL
International Corporation, Acceleration National Insurance Company and
Lyndon Property Insurance Company. Incorporated by reference to
Exhibit 99.1.
2.3 Amendment No. 1 to Stock Acquisition Agreement dated January 2, 1998
by and among ACCEL International Corporation, Acceleration National
Insurance Company, Lyndon Life Insurance Company and Lyndon Insurance
Group, Inc. Filed herewith.
99.1 ACCEL International Corporation's Definitive Proxy Statement, dated
December 18, 1997, related to the special meeting of stockholders held
on December 30, 1997. Incorporated by reference pursuant to the
Definitive Proxy Statement of ACCEL International Corporation filed on
December 18, 1997.
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EXHIBIT 2.3
AMENDMENT NO. 1 TO
STOCK ACQUISITION AGREEMENT
This Amendment No. 1 ("Amendment") dated as of January 2, 1998 to that
certain Stock Acquisition Agreement ("Agreement") dated as of October 20, 1997,
is entered into among the parties to the Agreement, Lyndon Life Insurance
Company, a Missouri corporation, Lyndon Insurance Group, Inc., a Missouri
corporation, ACCEL International Corporation, a Delaware corporation, and also
Acceleration National Insurance Company, an Ohio corporation. All capitalized
terms used but not defined in this Amendment shall have the meanings defined for
them in the Agreement.
WHEREAS, Lyndon and Accel are the parties to the Agreement; and
WHEREAS, subsequent to the execution of the Agreement, ALIC has been
made a defendant in the North Dakota suit Hanson et al. v. ALIC et al.
("Hanson"); and
WHEREAS, Lyndon and Accel have been unable to agree as to the nature
and size, if any, of the contingent liability to which ALIC may be exposed as a
result of Hanson;
NOW, THEREFORE, the parties agree as follows:
1. Additional Indemnification. In addition to and not in place of the
obligations of Accel to indemnify Lyndon pursuant to Section 11.1(a)(i) of the
Agreement, Accel hereby agrees to (i) fully assume and to directly pay, without
further demand by ALIC or Lyndon, all defense costs of Hanson and of any other
litigation which may be filed against ALIC in the future in any jurisdiction
which asserts claims for damages arising out of the same class of policies
written by ALIC which are at issue in Hanson ("Future Litigation"), and (ii)
directly pay any settlement costs, judgments and/or fines or other liabilities
incurred in connection with the disposition of Hanson and in the disposition of
any Future Litigation. The defense of Hanson shall continue to be conducted by
Messrs. Squire, Sanders & Dempsey, L.L.P. ("SS&D"). It is understood and agreed
that upon closing of the transactions contemplated by the Agreement and this
Amendment, SS&D shall continue to represent both ALIC and Accel. The parties to
the Agreement waive any conflict of interest, or potential conflict of interest,
which may arise by virtue of SS&D's concurrent representation of ALIC and Accel.
Further, the parties waive any objection and shall not seek to disqualify SS&D
from representing Accel in any matter in which Accel's interests may be adverse
to the interest of any other party.
The indemnification provided by this Section 1 shall expire by its
terms when and if there is a final, non-appealable determination that class
certification in Hanson is denied.
2. Insurance. The obligations of Accel undertaken pursuant to Section 1 of this
Amendment shall be insured by a surety bond written by Acceleration National
Insurance Company in favor of ALIC ensuring performance by Accel of the
foregoing obligations, which bond shall have a coverage limit of $3,000,000 and
which shall expire by its terms when and if there is a final,
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non-appealable determination that class certification in Hanson is denied, or
else when there has otherwise been a final, non-appealable resolution of Hanson
and all amounts to be paid by Accel. The policy limit of such surety bond shall
not be construed to limit the dollar amount of the primary obligations of Accel
pursuant to this Amendment.
3. Confirmation of Agreement. Except as expressly modified by this Amendment,
the Agreement is otherwise ratified and reconfirmed as of the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
LYNDON LIFE INSURANCE COMPANY
By: /s/ Peter H. Foley
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Peter H. Foley,
Authorized Signatory
LYNDON INSURANCE GROUP, INC.
By: /s/ Peter H. Foley
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Peter H. Foley,
Authorized Signatory
ACCEL INTERNATIONAL CORPORATION
By: /s/ Thomas H. Friedberg
--------------------------------
Thomas H. Friedberg,
President
ACCELERATION NATIONAL INSURANCE COMPANY,
as to Section 2 only
By: /s/ Thomas H. Friedberg
--------------------------------
Thomas H. Friedberg,
President
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