<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
ACCEL INTERNATIONAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
ACCEL INTERNATIONAL CORPORATION
12603 S.W. FREEWAY, SUITE 315
STAFFORD, TEXAS 77477
(281) 565-8010
NOVEMBER 3, 1999
1999 ANNUAL MEETING OF STOCKHOLDERS
DEAR STOCKHOLDER:
On behalf of the Board of Directors, I cordially invite you to attend
the 1999 annual meeting of Stockholders of ACCEL International Corporation to be
held at 10:00 a.m., local time on November 16, 1999, at the offices of Day,
Berry & Howard LLP, 25th floor, CityPlace I, Hartford, Connecticut. A notice of
the meeting, a proxy statement and a proxy card accompany this letter.
At the meeting, you will be asked to consider and vote upon the
election of our directors to serve until our next annual meeting.
Your Board of Directors recommends that you vote FOR the election of
the nominees for director.
Whether or not you plan to attend the meeting, please complete, sign
and date the accompanying proxy card and return it in the enclosed prepaid
envelope. If you attend the meeting, you may vote in person even if you have
previously returned your proxy card. Your prompt cooperation will be greatly
appreciated.
We are gratified by your continued support of our company.
Sincerely yours,
Douglas J. Coats
President, Chief Executive Officer and Secretary
<PAGE> 3
ACCEL INTERNATIONAL CORPORATION
12603 S.W. FREEWAY, SUITE 315
STAFFORD, TEXAS 77477
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 16, 1999
We will hold the 1999 annual meeting of stockholders of ACCEL
International Corporation at the offices of Day, Berry & Howard LLP, 25th Floor,
CityPlace I, Hartford, Connecticut, on November 16, 1999, at 10:00 am., local
time, for the following purposes:
1. To elect our directors to serve until our next annual meeting; and
2. To act on such other matters as may be properly brought before the
meeting or any adjournments, postponements or continuations of the meeting.
Your Board of Directors has fixed the close of business on September
28, 1999, as the record date for the meeting. Only stockholders of record at the
close of business at this time are entitled to notice of and to vote at the
meeting or any adjournments, postponements or continuations of the meeting. A
complete list of stockholders entitled to vote at the meeting will be available
for examination by any stockholder at the place where the meeting is to be held
for at least 10 days before the meeting and also at the meeting.
All stockholders are invited to attend the meeting. To ensure your
representation at the meeting, however, you are urged to mark, sign and return
the enclosed proxy in the accompanying envelope, whether or not you expect to
attend the meeting. No postage is required if you mail it in the United States.
In the event that you attend the meeting, you may vote in person even if you
have returned a proxy.
Your vote is important.
To vote your shares, please sign, date and complete the enclosed proxy
and mail it promptly in the enclosed return envelope.
Dated: November 3, 1999.
By Order of the Board of Directors
Douglas J. Coats
President, Chief Executive Officer and Secretary
<PAGE> 4
ACCEL INTERNATIONAL CORPORATION
12603 S.W. FREEWAY, SUITE 315
STAFFORD, TEXAS 77477
PROXY STATEMENT
This proxy statement is furnished to you in connection with the
solicitation of proxies by your Board of Directors to be used at the 1999 annual
meeting of stockholders of ACCEL International Corporation, a Delaware
corporation.
DATE, TIME AND PLACE OF MEETING
We will hold the 1999 annual meeting of stockholders on November 16,
1999, at 10:00 a.m., local time, or at any adjournment or postponement thereof,
at the offices of Day, Berry & Howard LLP, 25th Floor, CityPlace I, Hartford,
Connecticut, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders.
MATTERS TO BE CONSIDERED AT THE MEETING
At the meeting, we will ask our stockholders to consider and vote upon
the election of directors to serve until our next annual meeting.
The stockholders will also consider and vote upon such other matters as
may properly be brought before the meeting or any adjournment or postponement
thereof.
VOTE REQUIRED
A plurality of the votes cast by the stockholders present in person or
by proxy and entitled to vote will elect directors. This means that the
directors receiving the greatest number of votes cast will be elected. With
regard to the election of directors, you may vote in favor of or withhold your
vote from each nominee; and votes that are withheld will be excluded entirely
from the vote and will have no effect. There is no cumulative voting with
respect to the election of directors.
Pursuant to applicable law, broker non-votes and abstentions will not
be counted in favor of any proposal presented at the meeting or the election of
any nominee for director. Abstentions and broker non-votes will also not count
against the proposal to elect directors.
VOTING OF PROXIES
Shares of our common stock represented by properly executed proxies
received in time for the meeting, unless previously revoked, will be voted at
the meeting as specified by the stockholders on the proxies. If no specification
is made, shares represented by these proxies will be voted in favor of the
election of directors as recommended by your Board of Directors.
If any other matters properly come before the meeting for
consideration, the person or persons named in the form of proxy enclosed
herewith and acting thereunder will have discretion
<PAGE> 5
to vote on the matters in accordance with their best judgment, unless the proxy
indicates otherwise. We have no knowledge of any matters to be presented at the
meeting other than those matters referred to and described in this proxy
statement.
REVOCABILITY OF PROXIES
If you give a proxy, you have the power to revoke it at any time before
it is voted. You can do so in one of three ways. First, you can send written
notice stating that you would like to revoke your proxy to our Secretary at the
address given below. Second, you can complete a new proxy card and send it to
our Secretary at the address given below. Third, you can attend the meeting and
vote in person. You should send any written notice or new proxy card to:
DOUGLAS J. COATS
PRESIDENT, CHIEF EXECUTIVE OFFICER AND SECRETARY
ACCEL INTERNATIONAL CORPORATION
P.O. BOX 1949
STAFFORD, TX 77497-1949
You may request a new proxy card by calling Douglas J. Coats at (281)
565-8010.
RECORD DATE; STOCKHOLDERS ENTITLED TO VOTE; QUORUM
Only stockholders of record at the close of business on September 28,
1999 will be entitled to receive notice of and to vote at the meeting. As of the
record date, 8,554,966 shares of common stock were issued and outstanding. Each
share of common stock is entitled to one vote on each matter on which the
holders of common stock are entitled to vote. A majority of the outstanding
shares of common stock entitled to vote must be represented in person or by
proxy at the meeting in order for a quorum to be present.
SOLICITATION OF PROXIES
Your Board of Directors is soliciting proxies, the form of which is
enclosed, for the meeting. The cost of this solicitation will be borne by us.
Our officers, directors, or employees may communicate with stockholders
personally or by mail, telephone, telegram or otherwise for the purpose of
soliciting proxies. We and our authorized agents will request brokers and other
custodians, nominees and fiduciaries to forward proxy soliciting material to the
beneficial owners of shares held of record by these persons and will reimburse
their reasonable out-of-pocket expenses in forwarding the material. This proxy
statement is being mailed on or about November 5, 1999.
2
<PAGE> 6
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
In accordance with our bylaws, the Board of Directors has fixed the
number of directors at nine. Directors are elected annually to serve until the
next annual meeting of stockholders, and until their successors are elected and
qualified. The election of directors is decided by a plurality of the votes cast
by the shares entitled to vote in the election. In the absence of instructions
to the contrary, the persons named in the enclosed proxy intend to vote the
proxies for the election as directors of the persons nominated below. Although
the Board of Directors has no reason to believe that any of the nominees set
forth below will not serve, in the event that vacancies occur, the proxies will
be voted for the election of the nominees, if any, the Board of Directors or a
duly authorized committee of it may designate.
NOMINEES
TERM EXPIRES 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK OWNED
NAMES, POSITION WITH BENEFICIALLY, DIRECTLY OR
ACCEL AND AGE INDIRECTLY, ON SEPTEMBER
(AS OF SEPTEMBER 30, PRINCIPAL OCCUPATION FOR PAST DIRECTOR 30, 1999 (EXCEPT AS PERCENT
1999) FIVE YEARS/OTHER DIRECTORSHIPS SINCE OTHERWISE NOTED) (1) OF CLASS
- -------------------------- --------------------------------------- ----------- --------------------------- ----------
<S> <C> <C> <C> <C>
Robert Betagole President of Mike Albert Leasing, 1970 117,491 (5) 1.4%
Director, 70 Inc., Cincinnati, OH.
David T. Chase President and Director of 1985 4,343,148 (6) 50.8%
Director, 70 (2) D. T. Chase Enterprises, Inc.,
Hartford, CT.
Douglas J. Coats President and Chief Executive 1995 143,660 1.7%
President, Chief Officer of ACCEL since October 1,
Executive Officer, 1998. Prior thereto, he was
Secretary and Director, Executive Vice President of ACCEL
66 since May 23, 1995. Prior thereto,
he was Executive Vice President of
Ranger Insurance Company, Houston, TX
since August, 1987.
Raymond H. Deck Chairman of the Board of 1990 343,287 4.0%
Director, 77 ACCEL since October, 1998.
(2)(3)(4) President of Chase Insurance
Enterprises, Inc., Hartford, CT.
</TABLE>
3
<PAGE> 7
NOMINEES
TERM EXPIRES 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK OWNED
NAMES, POSITION WITH BENEFICIALLY, DIRECTLY OR
ACCEL AND AGE INDIRECTLY, ON SEPTEMBER
(AS OF SEPTEMBER 30, PRINCIPAL OCCUPATION FOR PAST DIRECTOR 30, 1999 (EXCEPT AS PERCENT
1999) FIVE YEARS/OTHER DIRECTORSHIPS SINCE OTHERWISE NOTED) (1) OF CLASS
- -------------------------- --------------------------------------- ----------- --------------------------- ----------
<S> <C> <C> <C> <C>
Richard Desich Director, President of Mid-Ohio Securities 1997 35,350 *
63 Corp., Elyria, OH
Gregory B. Grusse Elected a member of the Board of 1999 0 *
Director, 37 Directors on September 30, 1999.
Vice President, JPR Resources, Inc.
since January 1, 1999; previously,
Vice President, David T. Chase
Enterprises, Inc., Hartford, CT
Kermit G. Hicks President of Hicks Chevrolet, Inc., 1981 65,314 (7) *
Director, 63 Greencastle, PA. Also, Chairman of
(2) (3) (4) the Board of Tower Bancorp Inc., and
its wholly owned subsidiary First
National Bank of Greencastle.
Stephen M. Qua President of Qua Buick, Inc., 1970 23,958 *
Director, 66 Cleveland, OH
(2) (3) (4)
John P. Redding Senior Vice President, 1997 1,000 *
Director, 40 David T. Chase Enterprises, Inc.,
Hartford, CT
All Directors as a group (9 persons) 5,073,208 (8) 58.1%
* Less than 1 % of outstanding common stock.
</TABLE>
- -------------
(1) On September 30, 1999, there were 8,554,966 shares of ACCEL's common stock
issued and outstanding. Except as noted, includes shares owned by spouse,
minor children or some other family members, or held as custodian or
trustee for the benefit of spouse or children, or owned by corporations of
which the person is an officer or principal stockholder, over which shares
the directors have sole or shared voting or investment power. With respect
to the directors, includes an aggregate of 274,500 shares which are subject
to immediately exercisable options. Of the 274,500 shares subject to
options, the following directors have options to purchase the number of
shares indicated after their names: Mr. Betagole, 7,500; Mr. Chase, 7,500;
Mr. Coats, 135,000; Mr. Deck, 107,500; Mr. Desich, 1,000; Mr. Hicks, 7,500;
Mr. Qua, 7,500; and Mr. Redding, 1,000.
(2) Member of Executive Committee
(3) Member of Audit Committee
(4) Member of Compensation Committee
4
<PAGE> 8
(5) Includes 16,371 shares as to which Mr. Betagole disclaims beneficial
ownership.
(6) See footnotes (2) and (5) at page 7 herein.
(7) Includes 9,696 shares as to which Mr. Hicks claims beneficial ownership on
an indirect basis.
(8) This amount includes 20,537 shares owned by all officers in their
Acceleration Retirement Savings and Stock Ownership Plan accounts as of
December 31, 1998.
COMPENSATION OF DIRECTORS
Since October 1, 1998 Mr. Deck, as Chairman of the Board, is paid at
the annual rate of $100,000. He also received a grant of 100,000 options
exercisable at $2.25 per share. During 1998, we continued also to pay our
non-employee directors at the reduced compensation levels initiated in 1993.
Accordingly our non-employee directors received an annual retainer of $5,000
plus a fee of $500 per meeting for attending any regular or special meetings of
the Board of Directors. The members of each committee of the Board of Directors,
other than officers of ACCEL, received a fee of $500 for each meeting attended.
Chairmen of committees received a fee of $750 for each meeting attended.
The 1996 Stock Incentive Plan of ACCEL International Corporation
provides for options to be granted every year to our non-employee directors for
a predetermined number of shares of common stock. This plan, as amended by the
stockholders in 1998, provides that newly appointed or elected non-employee
directors are granted options for 10,000 shares in the year they are appointed
or elected, and thereafter will receive annual automatic grants of options to
purchase 10,000 shares. The exercise price is equal to the fair market value of
a share of stock on the date the option is granted. Options become exercisable
as to 50% of the shares subject to the option on completion of each full year
prior to termination of the director's status as director after the date the
option was granted. The options lapse on the earliest of the date 10 years after
the option was granted, or the date 180 days after the termination of the
director's status as director. The options shall fully vest and become
completely exercisable upon the death or voluntary retirement of a director.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
Your Board of Directors met four times during 1998. No director
attended fewer than 75% of the total number of meetings of directors and of any
committees on which he served. The Board of Directors has established an
Executive Committee, an Audit Committee and a Compensation Committee. It does
not have a Nominating Committee.
The Executive Committee, which exercises the powers of the Board of
Directors between regular meetings of the Board, did not meet during 1998. The
membership of the Executive Committee consists of Messrs. Chase, Coats, Deck
(Chairman), Hicks and Qua.
The Audit Committee met one time during 1998 to review the results of
the audit of our 1997 financial statements by our independent auditors, review
the scope of the 1998 audit, consider relevant matters pertaining to internal
controls and accounting procedures, perform other customary functions of Audit
Committees, and to make a recommendation to the Board of
5
<PAGE> 9
Directors on the engagement of independent auditors for fiscal year 1998. The
membership of the Audit Committee consists of Messrs. Deck, Hicks, and Qua
(Chairman).
The Compensation Committee met four times during 1998 for the purpose
of reviewing employee compensation and benefit arrangements. The membership of
the Compensation Committee consists of Messrs. Deck (Chairman), Hicks and Qua.
The Report of the Compensation Committee is contained below under "EXECUTIVE
COMPENSATION."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
We have provided in the following table some information as of
September 30, 1999 (except as otherwise noted) with respect to stockholders
known to us to be the beneficial owners of more than 5% of any class of our
voting securities.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT OF BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS
- -------------- ------------------- ------------- --------
<S> <C> <C> <C>
Common Stock David T. Chase 4,343,148 Shares (2) 50.8%
D. T. Chase Enterprises, Inc.
One Commercial Plaza
Hartford, CT 06103
Arnold L. Chase 1,167,824 Shares (3) 13.7%
D. T. Chase Enterprises, Inc.
One Commercial Plaza
Hartford, CT 06103
The Darland Trust 1,167,824 Shares (4) 13.7%
P.O. Box 472
St. Peter's House, Le Bordage
St. Peter Port
Guernsey GYI6AX
Channel Islands
Rhoda L. Chase 2,000,000 Shares(5) 23.4%
c/o Chase Enterprises, Inc.
One Commercial Plaza
Hartford, CT 06103
Spitzer Profit Sharing and 750,250 Shares (6) 8.7%
Savings Plan
150 E. Bridge Street
Elyria, OH 44035
Dimensional Fund Advisors Inc. 427,724 Shares (7) 5.0%
1299 Ocean Avenue
Santa Monica, CA 90401
- -------------------
</TABLE>
6
<PAGE> 10
(1) Except as otherwise noted, we have no reason to believe that any
beneficial owner listed above does not have sole voting and investment
power with respect to these shares.
(2) Includes 7,500 shares of common stock subject to immediately exercisable
options. According to a Schedule 13D filed with the Securities and
Commission, David T. Chase has, to the extent temporarily transferred to
him, sole power to vote and dispose of 880,000 shares of common stock
loaned to him by his wife, Rhoda L. Chase, and shares the power to
dispose or to direct the disposition of:
o 1,120,000 shares beneficially owned by Rhoda L. Chase;
o 1,167,824 shares beneficially owned by his son, Arnold L. Chase, and
o 1,167,824 shares beneficially owned by The Darland Trust, a trust
whose beneficiaries are his daughter, Cheryl A. Chase, and her
children.
(3) According to a Schedule 13D filed with the Securities and Commission,
Arnold L. Chase shares the power to dispose or to direct the disposition
of the 1,167,824 shares owned by him with David T. Chase and has the sole
power to vote or direct the vote of these shares. These shares are also
included in the above table in David T. Chase's shares.
(4) According to a Schedule 13D filed with the Securities and Commission, The
Darland Trust shares the power to dispose or to direct the disposition of
the 1,167,824 shares owned by it with David T. Chase and has the sole
power to vote or direct the vote of these shares. These shares are also
included in the above table in David T.
Chase's shares.
(5) According to a Schedule 13D filed with the Securities and Commission,
Rhoda L. Chase has the sole power to vote or to direct the vote of all
these shares, except to the extent that she may be deemed to have
temporarily transferred the sole power to vote or to direct the vote of
the 880,000 shares loaned to David T. Chase. Rhoda L. Chase shares with
David T. Chase the power to dispose or to direct the disposition of
1,120,000 of the shares of common stock owned by her. Rhoda L. Chase has
the sole power to dispose or to direct the disposition of the 880,000
shares loaned by her to her husband, except to the extent that she may be
deemed to have temporarily transferred such power to David T. Chase. The
shares of common stock owned by Rhoda L. Chase are also included in the
above table in David T. Chase's shares.
(6) Spitzer Profit Sharing and Savings Plan under agreement dated December
31, 1973, is an Employee Benefit Plan, Pension Fund subject to the
provisions of the Employee Retirement Income Security Act of 1974.
(7) Dimensional Fund Advisors Inc., an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, is deemed to have
beneficial ownership of 427,724 shares of our common stock as of December
31, 1998. All of these securities are owned by advisory clients of
Dimensional, no one of which, to the knowledge of Dimensional, owns more
than 5% of the class of securities. Dimensional disclaims beneficial
ownership of all these securities.
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS
We have listed in the following table the name, age and principal
position of each of our executive officers.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL POSITION
---- --- ------------------
<S> <C> <C>
Douglas J. Coats 66 President, Chief Executive Officer and
Secretary
</TABLE>
7
<PAGE> 11
NAME AGE PRINCIPAL POSITION
---- --- ------------------
Walter J. Kozuch 46 Vice President
Robert A. Estlund 44 Vice President, Controller and Treasurer
Mr. Coats joined us on May 23, 1995, when he was appointed Executive
Vice President and a member of your Board of Directors. Prior thereto, he was
Executive Vice President of Ranger Insurance Company, Houston, Texas for more
than five years.
Mr. Kozuch joined us on August 1, 1999, when he was appointed Vice
President. Prior thereto he was a Vice President of Ranger Insurance Company for
more than five years.
Mr. Estlund joined us in March of 1997 and was elected Vice President
and Controller. Previously he was Chief Accountant of Highlands Insurance
Company for more than five years. On July 1, 1999 Mr. Estlund was also appointed
to the office of Treasurer.
SUMMARY COMPENSATION TABLE
We have summarized in the following table some information concerning
the compensation awarded or paid to, or earned by, our current Chief Executive
Officer and each of our other most highly compensated executive officers whose
total annual salary and bonus for the fiscal year ended December 31, 1998,
exceeded $100,000 (the "named executives") during each of the last three fiscal
years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
SECURITY
UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/ COMPENSATION
NAME, AGE, AND PRINCIPAL OCCUPATION YEAR ($) ($) SAR'S (#) ($)(1)
- --------------------------------------------- -------------- --------------- ----------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Thomas H. Friedberg, 60 (2) 1998 250,688 -- 60,000 3,037
Chairman of the Board, President 1997 275,000 -- 60,000 14,300
and Chief Executive Officer 1996 140,000 -- 110,000 2,183
Douglas J. Coats, 66 (2) 1998 162,728 -- 30,000 6,318
President and Chief Executive 1997 137,500 -- 30,000 12,980
Officer 1996 71,250 -- 55,000 2,611
Nicholas Z. Alexander, 63 (3) 1998 129,200 -- 10,000 4,740
Senior Vice President, Secretary and 1997 119,600 -- 10,000 11,514
General Counsel 1996 115,000 -- 10,000 8,628
Bryce E. Farmer, 48 (4) 1998 112,333 -- 10,000 1,012
Senior Vice President 1997 109,200 -- 10,000 3,151
Administration 1996 97,125 -- 10,000 318
William E. Merritt, Jr. 64 (5) 1998 110,867 -- 10,000 4,083
Senior Vice President 1997 107,362 -- 10,000 10,243
Claims 1996 60,480 -- -- 3,067
</TABLE>
8
<PAGE> 12
(1) Represents approximate amounts contributed on behalf of each named
executive to the Acceleration Retirement Savings and Stock Ownership
Plan.
(2) Mr. Friedberg retired as Chairman of the Board, President and Chief
Executive Officer of ACCEL on September 30, 1998. Mr. Coats was appointed
President and Chief Executive Officer of ACCEL, and named Chairman of the
Board of Acceleration National Insurance Company on October 1, 1998.
(3) Mr. Alexander left employment with ACCEL on June 30, 1999.
(4) Mr. Farmer commenced employment with ACCEL on February 5, 1996 and left
its employment on July 31, 1999.
(5) Mr. Merritt commenced employment with ACCEL on June 7, 1996, and due to
illness, went on long term disability on January 1, 1999.
OPTIONS GRANTED IN LAST FISCAL YEAR
We have provided in the following table information concerning
individual grants of options to purchase our common stock made to the named
executives in 1998:
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS IN 1998 FOR OPTION TERM
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS
OPTIONS/ GRANTED TO EXERCISE OR
SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YEAR ($ SH) (1) DATE 5% ($) 10% ($)
- --------------------------- --------------- ---------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg 60,000 35.6% $3.218 9/30/99 12,597 25,473
Douglas J. Coats 30,000 17.8% $3.218 6/16/03 26,678 58,952
Nicholas Z. Alexander 10,000 5.9% $3.218 6/16/08 20,243 51,299
Bryce E. Farmer 10,000 5.9% $3.218 6/16/08 20,243 51,299
William E. Merritt, Jr. 10,000 5.9% $3.218 6/16/08 20,243 51,299
- ------------------
</TABLE>
(1) Market price of our common stock on date of grant.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
We have provided in the following table some information regarding
individual exercises of stock options during 1998 by each of the named
executives:
9
<PAGE> 13
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE
NUMBER OF REALIZED NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES (MARKET PRICE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED AT EXERCISE OPTIONS AT FISCAL YEAR END FISCAL YEAR END (1)
ON LESS EXERCISE -------------------------- ---------------------
NAME EXERCISE PRICE) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------ ----------------- -------------- ------------------- --------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Friedberg --- --- 175,000 60,000 $48,750 N/A
Douglas J. Coats --- --- 135,000 30,000 $61,875 N/A
Nicholas Z. Alexander --- --- 37,628 42,627 $17,236 $10,360
Bryce E. Farmer --- --- 7,500 22,500 $2,188 $2,813
William E. Merritt, Jr. --- --- 7,500 22,500 $2,188 $2,813
</TABLE>
(1) Represent the amount by which the market price of our common stock on
December 31, 1998 ($2.875) exceeded the exercise prices of unexercised
options on that date.
BENEFICIAL OWNERSHIP OF MANAGEMENT
We have provided in the following table some information regarding the
named executive's beneficial ownership of our common stock as of September 30,
1999 :
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK OF
COMPANY BENEFICIALLY OWNED
--------------------------
TITLE OF CLASS NAME OF OFFICER NUMBER (1) PERCENT OF CLASS
-------------- --------------- ---------- ----------------
<S> <C> <C> <C>
Common Stock Douglas J. Coats 143,660 1.67%
Common Stock Walter J. Kozuch 10,000 *
Common Stock Robert A. Estlund 0 0%
</TABLE>
(1) The amounts shown represent the total shares owned outright by the named
individuals together with shares which are issuable upon the exercise of
all stock options which are currently exercisable. Specifically, the
following individuals have the right to acquire the shares indicated
after their names upon the exercise of stock options:
Mr. Coats, 135,000; and Mr. Kozuch 10,000.
* Less than 1 % of outstanding common stock.
REPORT OF THE COMPENSATION COMMITTEE
Our compensation package for our executive officers consists of base
salary, participation in a profit sharing plan for senior officers, and periodic
stock option grants or awards. The committee fixed and determined the base
salary for Mr. Friedberg, former Chairman of the Board, President and Chief
Executive Officer, after a performance review was conducted. As of June 1, 1996,
the committee had formulated a compensation arrangement for Mr. Friedberg to
include base salary and a stock option to be granted. A similar compensation
arrangement was approved for Mr. Coats, our current President and Chief
Executive Officer, on
10
<PAGE> 14
the recommendation of Mr. Friedberg. Our Chief Executive Officer determines and
recommends to the committee base salary levels for all other executive officers.
The committee also determines the amount of profit sharing compensation and
stock option grants or awards, if any.
Based on Mr. Friedberg's experience and performance, the committee
established a total aggregate annual compensation level for Mr. Friedberg of
$350,000, subject to an annual review, with an allocation of the $350,000
between cash compensation and stock options to be determined annually by the
committee. Until his retirement, Mr. Friedberg was paid at the rate of $300,000
and was granted 60,000 options at $3.218. The stock options granted for this
purpose were valued by calculating the difference between the book value and
market value per share as of the date of grant. The annual review took into
account ACCEL's performance, comparative industry data and various subjective
considerations of individual performance as well as corporate goals.
Mr. Friedberg retired from the Company effective September 30, 1998 and
Mr. Coats took over the responsibilities of President and CEO. His salary was
increased from an annual rate of $150,000 to $200,000 based on his increased
responsibilities. Mr. Deck, an outside director, became Chairman of the Board. A
special meeting of the Compensation Committee with Mr. Qua acting as Chairman
established Mr. Deck's compensation as executive Chairman at $100,000 annually
and granted him 100,000 options at $2.25, the current market price of the stock.
In previous years, profit sharing plans had been adopted for all
employees of ACCEL and for senior officers. The overall objectives for
establishing ACCEL's incentive compensation programs were to enhance total
compensation without adding fixed expense, modify the corporate reward systems
and give managers the discretion to reward contributors, better focus
management's attention on the achievement of objectives and drive accountability
to all levels of ACCEL, and foster teamwork. For 1998, no profit sharing goal
was set for employees and senior officers. Accordingly, no profit sharing
compensation was paid to any employees or senior officers in 1998.
Raymond H. Deck, Chairman Kermit G. Hicks, Member Stephen M. Qua, Member
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
our common stock from January 1, 1993, until December 31,1998, with the
cumulative total return of (a) the Russell 2000 Index and (b) the NASDAQ
Insurance Index. The graph assumes the investment of $100 in our common stock,
the Russell 2000 Index and the NASDAQ Insurance Index.
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<PAGE> 15
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG ACCEL INTERNATIONAL CORPORATION, THE RUSSELL 2000 INDEX
AND THE NASDAQ INSURANCE INDEX
[LINE GRAPH]
*$100 INVESTED ON 12/31/93 IN STOCK OR INDEX
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
ACCEL $100 $47 $73 $73 $97 $77
Russell 2000 Index $100 $98 $126 $147 $180 $179
NASDAQ Insurance Index $100 $94 $134 $152 $224 $199
</TABLE>
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<PAGE> 16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our officers and directors,
and persons who own more than 10% of the common stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than 10% stockholders are required by Securities
and Exchange Commission regulations to furnish us with copies of all Section
16(a) forms they file.
Based solely on our review of the copies of the forms received by us or
written representations from some reporting persons that no Forms 5 were
required of them, we believe that during the fiscal year ended December 31,
1998, all filing requirements applicable to our officers, directors and greater
than 10% stockholders were complied with.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has served as our independent auditor for each of
the years in the three-year period ended December 31, 1998. In recent years, it
has been the practice of the Board of Directors to annually review and select
independent auditors of ACCEL. The Board of Directors intends to continue this
practice and to make the selection of the independent auditors later in the
year. The selection of the independent auditors has not therefore been made for
the current fiscal year. Representatives of KPMG Peat Marwick LLP will be
present at the meeting, will have an opportunity to make a statement, if
desired, and will be available to respond to appropriate questions, if any, of
our stockholders.
STOCKHOLDER PROPOSALS
Stockholders wishing to submit proposals for inclusion in our 2000
proxy statement may do so prior to July 5, 2000 by letter addressed to us in
care of our corporate secretary. If we change the date of our 2000 annual
meeting by more than 30 days from the date of our 1999 annual meeting, then
stockholders must submit proposals a reasonable time before we begin to print
and mail the proxy statement for our 2000 annual meeting.
On May 21, 1998, the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Exchange Act. The amendment to
14a-4 (c)(1) governs our use of discretionary proxy voting authority with
respect to a stockholder proposal which the stockholder has not sought to
include in our proxy statement. The new amendment provides that if a proponent
of a proposal fails to notify us at least 45 days prior to the month and day of
mailing of the prior year's proxy statement, then the management proxies will be
allowed to use their discretionary voting authority when the proposal is raised
at that meeting, without any discussion of the matter in the proxy statement. It
also provides that if the date of the 2000 annual meeting has changed more than
30 days from the 1999 annual meeting and if the proponent of a proposal fails to
notify us a reasonable time before we mail our proxy statement for the 2000
annual meeting, then the management proxies will have the same discretionary
voting authority.
With respect to our 2000 annual meeting of stockholders, if we are not
provided notice of a stockholder proposal which the stockholder has not
previously sought to include in our proxy
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<PAGE> 17
statement by September 20, 2000, or within a reasonable time before we mail our
proxy statement if we change the date of our 2000 annual meeting by more than 30
days from the date of this year's meeting, the management proxies will be
allowed to use their discretionary authority as outlined above.
OTHER MATTERS
As of the date of this proxy statement, we do not expect any matters
other than these described in this proxy statement will be brought before the
meeting. If any other business properly comes before the meeting, or any
adjournment of the meeting, the proxy holders will vote in regard to the other
business according to their discretion insofar as the proxies are not limited to
the contrary.
YOU SHOULD RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT TO DECIDE HOW TO VOTE ON THE MATTERS TO BE
CONSIDERED AT THE ANNUAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION THAT IS DIFFERENT FROM OR IN ADDITION TO WHAT IS CONTAINED IN
THIS PROXY STATEMENT. THEREFORE, IF ANYONE DOES GIVE YOU INFORMATION OF THIS
SORT, YOU SHOULD NOT RELY ON IT. THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT SPEAKS ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY
INDICATES THAT ANOTHER DATE APPLIES.
By Order Of The Board Of Directors
Douglas J. Coats
President, Chief Executive Officer and Secretary
November 3, 1999
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<PAGE> 18
ACCEL INTERNATIONAL CORPORATION
PROXY
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Douglas J. Coats and Raymond H. Deck, or
either of them acting singly, as Proxies, with power of substitution, for and in
the name of the undersigned to vote, as designated below, all the shares of
common stock of ACCEL International Corporation, a Delaware corporation, held of
record by the undersigned as of September 28, 1999 at the annual meeting of
stockholders to be held November 16, 1999 or any adjournment thereof.
<TABLE>
<S> <C>
(1) ELECTION OF DIRECTORS.
FOR all nominees listed below [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary below) to vote for all nominees listed below
Robert Betagole, David T. Chase, Douglas J. Coats, Raymond H. Deck, Richard Desich, Gregory B. Grusse, Kermit G.
Hicks, Stephen M. Qua and John P. Redding.
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
----------------------------------------------------------------------------
(2) OTHER BUSINESS. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting or any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1.
(Continued, and to be signed on other side)
(Continued from other side)
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement. Please sign exactly as name appears hereon.
When shares are held by joint tenants, both should sign.
Dated , 1999
----------------
----------------------------
Signature
----------------------------
Signature
(When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If
a corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.)
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
Proxy Card
